Russia Briefing News

Russia, China Set up New RMB Investment Fund to Support Far East Russia and North-East China

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rmb-rubleRussia and China agreed last week to establish a new investment fund holding an initial RMB 1.5 billion (US$234 million) with the aim of supporting and managing financial and industrial projects in both countries.

The agreement was signed by the Russia-China Investment Fund, Capital, and the Dazheng Investment Group, during the Russian President Vladimir Putin’s visit to Beijing, while the new fund will have a target capital of RMB 5 billion (US$780 million).

“The Fund will engage in the implementation of strategically important investment projects, focused on the Central Federal District, the Far East of Russia and the north-eastern part of China,” CEO of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev said.

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Putin and Xi Sign Off on Increasing Ruble/RMB Trade Use, US$100 Billion in Potential Bilateral Trade Turnover

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putin-xiFollowing the meetings held between presidents Putin and Xi in Beijing, the two countries issued a joint statement stating they had agreed to raise the share of national currencies in trade payments.

The statement discusses “further strengthening of the Russian-Chinese cooperation in the financial sector, promoting increase of the share of national currencies in trade payments, investments and financing, expanding collaboration in such fields as payment systems and insurance,” among the tasks faced by the two countries.

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Comments on the Russia-India Summit in Sochi

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By P.S.Raghaven Former Indian Ambassador to Russia (2014-16)

summit-modi-visits-russiaLike those of the stream of Eurasian leaders heading to Russia in May, PM Modi’s informal summit with President Putin on May 21 was in the background of the disruptive global impact of recent actions and decisions of US President Trump. In India’s case, there was the additional strong motivation for frank consultations on worrying developments in India’s neighborhood, to discuss responses to US sanctions threatening India-Russia defense and energy, and to rescue the relationship from perceptions of a drift.

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Russia and Pakistan Agree to US$10 Billion Gas Pipeline Deal, Potential for EAEU FTA

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russiapakistanflagsIn a significant deal, Russia and Pakistan are set to to sign a US$10 billion offshore gas pipeline deal, a project planned by the latter to capture the energy market of Pakistan. Russia has nominated Gazprom for implementation of the project.

Pakistan’s cabinet has also permitted the company to conduct the feasibility study at its own cost and risk. These projects are called a game changer for Pakistan as they will not only lead to regional connectivity, but will also meet growing energy needs of the country.

Amid a long-running tussle with Europe and the United States over the annexation of the Ukrainian region of Crimea, Russia is looking for alternative markets and wants to capitalize on the growing energy demand in South Asia. The two countries are both members of the Shanghai Co-Operation Organisation, a regional bloc that also includes China and India and is gaining considerable traction as a trade and infrastructure facilitator throughout Eurasia.

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Russia to Create Tax Free Zone near Shanghai

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bridge-to-russky-islandRussian Prime Minister Dmitry Medvedev has confirmed plans to create a special administrative tax free zone in Primorsky Krai in Far Eastern Russia.

Speaking at the International Legal Forum plenary session at the recent St. Petersburg International Economic Forum, he stated: “We are planning to create a special legal status and special tax regimes in the Primorsky Krai region; this status will be available on the Russky Island soon”.

Primorsky Krai is a federal subject of Russia, located in the Far East of the country and is a part of the Far Eastern Federal District. The city of Vladivostok is the administrative center, as well as being the largest city in the Russian Far East. The region has the largest economy among the federal subjects in the Russian Far East. Russky Island lies just south of the main city of Vladivostok and is connected to the city by the world’s longest cable-stayed bridge.

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Association of European Businesses: “Investment Climate in Russia is Good”

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aeb-logoFrank Schauff, the General Director of the Association of European Businesses has stated: “The Investment climate in Russia is now favorable but sanctions pose the main risk for development of this climate’s potential”.

The AEC is the main European representation of foreign investors in Russia. It is an independent non-commercial organisation that represents and promotes the interests of European companies conducting business in and with the Russian Federation, and carries out activities to improve the Russian business and trade environment and to promote economic integration and partnership between the Russian Federation and the European Union.

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Russia Postpones Law Criminalizing Managers of Russian Companies Implementing Sanctions

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russian-companies-implementing-sanctionsThe Russian government has been debating a potential new law that would create criminal liability for companies and their managers following foreign sanctions; however, it has currently been shelved as “counterproductive.” Last week, Russia’s State Duma considered two bills related to counteractive measures against Western sanctions. The first bill provided for imposing counter-sanctions and the second one envisaged criminal liability for compliance with Western sanctions on Russian soil, effectively targeting managers of companies impacted by the sanctions.

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Russia to Create Tax Free Zone on Border with EU

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klgdRussian Prime Minister Dmitry Medvedev has confirmed plans to create a special administrative tax free zone in Kaliningrad. Speaking at the International Legal Forum plenary session at the Saint Petersburg International Economic Forum last week, he stated: “We are planning to create a special legal status and special tax regimes in the Kaliningrad region; this status will be available on the Oktyabrsk Island soon”.

Kaliningrad has been hit hard by EU sanctions upon Russia. Several EU funded manufacturing facilities have had to close over the past few years. However, its strategic position on the Baltic sea, yet surrounded by EU nations of Lithuania and Poland, has made it potentially a boom-town for Russia-EU trade. In light of the continuing sanctions, however, the tax free positioning of Kaliningrad will alter from the previous policy of attracting foreign investors from the EU to offering a safe return home for Russian money and investments currently held overseas and especially in London.

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Russia, India Strengthen Bilateral Ties as Putin and Modi Meet in Sochi

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Prime Minister Narendra Modi met Russian President Vladimir Putin last week for an ‘informal summit’ in Sochi, a resort city located in southern Russia, on the shores of the Black Sea.

statement released by India’s Ministry of External Affairs (MEA) stated that the meeting presented an opportunity for both Putin and Modi to “exchange views on international matters in a broad and long-term perspective with the objective of further strengthening our Special and Privileged Strategic Partnership”.

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Russia Issues New Augmented Reality Banknotes

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2000-rublesRussia has issued two new 200 and 2000 rubles banknotes featuring a new “augmented reality” feature. The banknotes can have 3D moving images activated by using a smart phone with the pertinent app. Images such as bridges, printed on the paper, then become 3D animations with vehicles being seen travelling along the bridge, ships passing underneath, and seagulls flying. The 2000 ruble banknote also depicts the planets circling around a 3D image of Russia’s Vostochny Cosmodrome.

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