The Russian Government has approved the general approach to providing state support measures to systemic companies

The Russian Government’s Resolution No. 651 “On measures of support for systemic companies” (“Resolution No. 651”) was adopted and published on 10 May 2020 approving the Rules for selecting companies included in the lists of systemic companies of the Russian economy that are eligible to receive state support measures in 2020 (the “Rules”).

The Rules stipulate an opportunity to receive support in the form of subsidies[1], a deferral (an instalment plan) with respect to taxes and advance tax payments[2], Russian state guarantees with respect to loans or bonded loans that systemic companies attract within the scope of measures aimed at ensuring a sustainable economy[3].

The Rules establish criteria which systemic companies must meet to receive measures of support:

• companies with over 50% foreign ownership may apply for support only if the Government Commission to Ensure Sustainable Economic Development adopts a special decision, i.e. it is impossible for such companies to receive support measures under the general rules;
• a stress test (an analysis of financial and business activity) must be passed in accordance with the procedure established by the Russian Ministry for Economic Development (expected to be approved by 15 May);
• companies that apply for state support should not have any arrears in taxes, levies and other mandatory charges exceeding RUB 10,000, as well as any outstanding subsidies that were granted in accordance with other regulations.

Moreover, when it applies for measures of support, a systemic company must submit the following information:

• regarding its obligations to implement a plan of action (attaching to the application) to reduce (minimise) the costs of the systemic company if measures of support are granted. Such an action plan, in turn, must include, among other things:
• measures to minimise the costs from the servicing of fixed assets of the systemic company;
• measures to reduce the credit burden on the systemic company which is determined in accordance with the procedure for analysing the activity of such company;
• measures to minimise other expenses of the systemic company, including those that are not related to capital investments;
• regarding all persons who are beneficial owners of a systemic company under article 6.1(8) of the Federal Law “On combating the legalisation (laundering) of the proceeds of crime and financing of terrorism”;
• on the consent of a systemic company to submit and disclose information in the application, as well as information regarding its activity, including trade secrets, to various competent authorities, including when the latter subsequently monitor whether the conditions to grant support measures have been met.

The Rules establish the procedure for filing and handing applications, the procedure for adopting a decision as to whether measures of support should be granted and for monitoring compliance with such procedures.[4] The information regarding decisions on granting support measures to systemic companies will be registered in the register of the Russian Ministry for Economic Development.