Prime Minister Vladimir Putin conducted a meeting of the Government Commission for Control of Foreign Investments in Russia
10 october 2008
Transcript of the beginning of the meeting:
Good afternoon, colleagues.
Before we proceed to today's agenda, I would like to say a few words about the current economic situation in the country and the world. As you know, complex processes continue in North America, Europe, and now also in Asia. In this context, the Russian Government, the Central Bank and the State Duma are taking steps to support the interests of Russian citizens and the Russian economy. I would like to remind you of some of the steps taken and tell you about the decisions we made yesterday.
Up to $50 billion will be earmarked to refinance the companies that took out loans abroad. Part of them will be able to get loans at Vneshekonombank.
A subordinated 10-year loan of 950 billion roubles is designed to enhance the stability of the banking system. These funds will increase the banks' capital by guaranteeing the required liquidity.
Finally, the Central Bank has been granted permission to give unsecured loans to commercial banks for a term of up to six months. It goes without saying that this applies only to reliable banks.
Moreover, the Central Bank has worked out additional measures to encourage interbank lending, which involve taking on part of the risk. We hope that this measure will build up trust in the national banking system.
The Law on the Budget will be amended. I hope that this amendment will be put to vote next week. We will increase Vneshekonombank's capital by 75 billion roubles by the end of this year. These funds can be used both to purchase securities on the national stock exchange, and to insure such deals. This means that it will be able to buy Russian corporate bonds, and I would like to draw your attention to this.
Furthermore, business representatives, many State Duma deputies and experts have been asking the Government for a long time to put part of its money into Russian rather than foreign securities. In view of the current complications in the Western economy, I consider this request justified today.
This decision has been made. This year, 175 billion roubles will be placed in Russian securities. This process will start next week. Vneshekonombank will be the operator. In addition, at least 175 billion rubles will be reserved in the next year's budget to support the financial market's stability.
Finally, an amendment will be introduced to the Law on Deposit Insurance to guarantee the interests of Russian citizens. Deposit insurance is a very important social measure. We have decided that starting from October 1 bank deposits will be fully insured for up to 700,000 roubles.
By law, privately-owned banks can accept deposits from citizens only if they are covered by the insurance. So, no matter what happens to a particular bank where a citizen has up to 700,000 roubles, he or she has the right to be fully reimbursed by the Central Bank within several days.
I would like to emphasise that 75% of Russian investors do not have more than 700,000 roubles in their bank accounts. In other words, they are the majority, and that is what we proceeded from here.
These are the Government's decisions which are going to be passed by the State Duma today. To repeat, part of these decisions should be endorsed on Tuesday, when the Duma will approve amendments to the next year's budget. In this context, I would like to thank the Duma and the deputies, who show great responsibility in resolving these problems, and promptly endorse the decisions proposed by the Government to curtail the threats emanating from the world financial markets and exchanges.
Now let us proceed to today's agenda. This is the first meeting of the Government Commission for Control of Foreign Investment.
I would like to remind you that the new law sets out a new order for placing foreign investment in the strategic branches of the national economy. However, they are not closed to foreign investors. Quite the contrary, we are developing transparent and clear procedures for them.
Legal approval has been given to a list of spheres in which to gain control over enterprises foreign investors will have to receive permission from the Government Commission.
This is done to make sure that a potential investor is reliable and honest, and that a deal in strategic assets will not threaten our defence capability and security.
If need be, certain demands can be made to the future foreign owner of a strategic company. These include commitments to guarantee the preservation of state secrets, to process raw materials on Russian territory, to preserve jobs and carry out in full the business plan for production development.
I would like to add that many foreign countries have similar laws. Russian investors also have to comply with them. We understand this unless the market is closed to our companies because of a politically motivated biased approach.
Today, we will review the first two requests for the purchase of shares of companies which build civil aircraft and develop diamond deposits.
I hope that we will conduct the discussion in a constructive and businesslike manner, and that it will set the tone for further reviews of such questions by the Government.
Let us go over to debates. I would like to give the floor to Mr Artemyev, head of the Federal Antimonopoly Service (FAS). Go ahead, please.