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MIL OSI Translation. Region: Russian Federation –

The agenda includes draft federal laws and budget allocations.

Opening remarks by Mikhail Mishustin:

Greetings, colleagues,

Government meeting

Yesterday the Government presented its annual report to the State Duma. We reviewed last year’s results and had a detailed discussion of many key issues, primarily about how our work is progressing in fulfilling the President’s instructions contained in his Address.

We focused on combating the coronavirus and the efforts taken to overcome the aftermath of the virus and to help people and businesses. We discussed in detail changes in the operation of the Government and the federal authorities. Overall, we identified our plans for advancing the social sphere and the economy, and supporting the regions.

The State Duma deputies voiced proposals on a number of crucial issues during the presentation of the report. Mr Grigorenko (addressing Dmitry Grigorenko), we must sum up all the initiatives by the Duma deputies, look into them and submit a list of instructions based on the report. The Government should certainly consider these proposals when making decisions.

We will promote the interaction between the legislative and executive branches of authority since we have a common objective – increasing our citizens’ quality of life and wellbeing.

And now let’s get to the agenda. Today we will review the draft law on support for the regions that was written following the President’s instruction. This law would primarily make it possible to bring down the debt burden in their budgets, to restructure accumulated debt, replace commercial loans with budget loans and apply for low-interest infrastructure loans. We had a detailed discussion of this in the State Duma yesterday.

The draft law also includes the MPs’ proposal that the report on budget execution for the past year should be moved to the spring session and our suggestion to move the deadline for presenting the next three-year draft budget from 1 October to 15 September. 

This would create greater predictability for the regions and would allow them more time to prepare their own budgets, and expedite the signing of agreements and contracts with federal agencies. It would also solve the main problem of budgetary fund availability starting from 1 January. 

In his Address to the Federal Assembly, the President stressed that special attention should now be given to maintaining children’s health. We discussed this issue yesterday with the deputies during the report on the Government’s activities. Last year, not all children were able to go to summer recreation camps, so this year all of them should be offered this opportunity.

Following the President’s instructions, today we will allocate 5 billion roubles for a programme to support affordable trips within the country for children’s summer camps. We are talking about refunding half the cost of a summer camp voucher to the Mir card.

We expect that more than 370,000 people will be able to take advantage of this programme by the end of this year. This will also contribute to the development of domestic tourism and will give many children the opportunity to enjoy recreation and improve their health.

I would ask Rostourism (the Federal Agency for Tourism), along with the Ministry of Finance and the Ministry of Education, to promptly develop and submit to the Government a draft resolution on approving the rules for granting subsidies for this purpose.

Today we will also discuss new measures to support tour operators. In connection with the recent outbreaks of the coronavirus in Turkey and Tanzania, air traffic with these countries was again suspended. We need to compensate tour operators, those who evacuated our fellow citizens from these countries, for their losses. This is over 50,000 people. We will allocate one billion roubles to companies that operated return flights to compensate for their costs.

We will also support tour operators who organise domestic charter programmes in Russia. We will earmark 1.2 billion roubles to reimburse half the cost of such transit to destinations, the list of which will be determined by Rostourism.

Another draft law will draw the attention of all those who witnessed the events in the “whale jail” in Srednyaya Bay in Primorye Territory two years ago, where about a hundred of beluga whales and orcas were held captive.

At that time, experts started drafting amendments to laws on the catching and utilisation of marine mammals, including whales and dolphins, following the intervention of the President and his instructions. At the end of last year, the Government toughened the rules for catching these mammals that are used in educational or entertaining events. Now it is possible to receive a catch quota only after the government commission on the development of the fisheries industry reviews an application for it. Incidentally, no permits have been issued this year.

Today, we are proposing additional rules – this time for industrial and coastal fishing that primarily concerns whales and dolphins. The new draft law prohibits catching them. We hope this will save them from being hunted to extinction.

Today, we will review two documents for implementing our long-term Energy Strategy.

The first one is a draft master plan for the development of the oil industry in the next 15 years. It contains potential scenarios for the production of oil and associated gas, changes in the demand for oil products, and paths for the development of oil processing and pipeline transfer. In addition, the document lays out the main areas of innovative development and import substitution, including regulation.

Serious tasks lie ahead. We must create products and services with fundamentally new features. We must remain highly competitive on traditional energy markets and contribute to the advancement of our own economy. We must substantially increase the share of domestic technology, equipment and software – to no less than 80 percent. We must produce more quality petrol, kerosene and diesel fuel at our oil refineries – not below 70 percent by 2030.

The second document is the master plan for the development of the gas industry in the next few years. It is based on the Energy Strategy that was adopted last year and sets clear-cut parameters of work at all technological stages.

The drafted comprehensive plan will allow all these segments to work as a single smooth mechanism, without any distortions or mishaps. It will create the conditions for the steady growth of financial indicators for the gas industry and increasing its contribution to the GDP.

Importantly, the document accounts for different scenarios of gas market development. Hence, the conditions for doing business will become more predictable and clearer. And, of course, it is necessary to closely watch compliance with current contracts for the supply of natural gas to foreign countries.

The Government has prepared a bill on adjustments to the bankruptcy procedure. Its primary goal is to help the owner save their business. This is not just about the debtor, since bankruptcy hurts all the participants in the process. Over the past year, only 5 percent of creditors’ claims were satisfied, while employees of bankrupt companies have lost a total of 1.5 billion roubles over that period, mainly as salary shortfall. With the current bankruptcy practice, the liquidation of a business takes years in most cases.

The bill balances the interests of all parties as much as possible. We propose cancelling such procedures as supervision, financial turnaround, and external management because they have not proved effective. Instead, we propose using rehabilitation and liquidation procedures. Now the creditor or the debtor will be able to go to court not only with a bankruptcy petition, but also with a request for debt restructuring.

In cases where the business cannot be saved, it should be liquidated as quickly as possible, and the debtor’s assets should be auctioned according to clear rules. Auctions will be announced through the new information system. It will operate as an e-commerce platform to increase the transparency of the procedure and reduce the risks posed by unscrupulous arbitration managers. Their data will be available in a special state register.

We hope that the proposed measures will help to reduce the government’s as well as the business owners’ losses and will help take bankruptcy procedures out of the shadow sector.

Also today, we will take a closer look at the systematic work to protect the rights of co-investors in residential construction projects. They are supported through a special fund, which guarantees that the project they have invested in will be completed and they will have their new apartments or their money back. The Government earmarked over 50 billion roubles in the three-year state budget to finance the fund; half of this sum has already been provided.

The construction industry came under serious pressure last year due to the coronavirus restrictions. The situation significantly increased the risk of such investors losing both their money and their new property. However, with the fund’s support, the rights of over 45,000 future apartment owners who co-financed the construction have been upheld over the year.

I already cited in my report to the State Duma yesterday a few figures describing the construction industry performance. For the first time in many years, the industry survived a crisis without losses and commissioned over 80 million square metres of new housing.

It is important to continue to protect bona fide homebuyers from becoming homeless. Indeed, many of them invest virtually everything they have in planned residential projects.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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