Question

STEPS TAKEN BY RUSSIAN GOVERNMENT TO PREVENT COVID-19​

Answer 1

Answer:

The key financial measures are described further and in Annex I.

Bank loans for systemically important companies at reduced rates  

Working capital bank loans can be provided to systemically important companies for up to 12 months and for no more than RUB 3 billion per each borrower. The interest rate may not exceed 5%. The state would cover the banks' loss of interest through subsidies. Borrowers can also apply for state guarantees to secure the repayment of the loan.4  

In addition, the Government plans to support systemically important companies on an individual basis (e.g. for those in the transportation, manufacturing and energy sectors). The Minister of Economic Development announced that the state would provide individual support to systematically important companies, if needed, provided that no dividends are paid by those companies and that their owners and banks first exhaust their own ability to support the company.5

Interest-free bank loans to cover wage payments  

This measure covers entrepreneurs and companies regardless of size operating in the most affected sectors. Banks are entitled to state subsidies to compensate for the loss of interest on such loans for a six-month period. The amount of the loan depends on the minimum statutory monthly wage and the number of the employees. In order to qualify, borrowers (other than small and micro-enterprises) are required not to make redundant more than 10% of their employees during this six-month period.6 VEB.RF, the national deve

 

 

Conclusions

The Russian state authorities are continuously considering new measures to adapt to the rapidly changing situation, so more details may follow once the relevant laws and regulations are adopted.

We encourage our clients to consider the opportunities presented by the different measures and to consult us if any assistance is needed.

In addition, White & Case has carried out an analysis of global governmental responses to the COVID-19 crisis. These vary considerably from country to country and are being updated and amended regularly.

Explanation: