REC presents tools to support high-tech exports

The Agency for Strategic Initiatives (ASI) has launched a series of workshops for entrepreneurs, the first of which was organized in cooperation with the Russian Export Center (REC) at the Moscow-based "Boiling Point" co-working center on April 14th, 2017.

The REC experts have presented five tools for target support of projects to fund the costs relating to the promotion of high-tech products in foreign markets. The experts have told us a bit about what they do. The REC is the Russian Government’s agent that subsides exporters’ expenditures.

Promotion of exporters by means of trade fairs

Mariya Zazulinskaya, Director for Industrial Exports Development at AO REC, says that currently businesses can gain financial support from the state to compensate their costs of taking part in international trade fairs; the REC currently lists some 700 businesses it supports this way. As a part of the contract with the organizers of such events, they will make a national stand branded Made in Russia and co-finance such participation by compensating 80% of costs for small and mid-size enterprises, 50% for big businesses. This compensation covers rent of premises, translation services, and delivery of products.

Compensation of certification costs for Russian exporters

REC accepts entrepreneurs’ applications to assist in certifying Russian products abroad. It also helps carry out conformity certifications, says Andrey Schreiber, expert for international adaptation of exported goods at AO REC.

Earlier, Decree of the Russian Government No. 1388 dd. Dec. 17, 2016 defined the rules of providing federal budget funds to subside the foreign market certification costs of high-tech manufacturers.

Accordingly, it can compensate up to 90% of approval and test costs whereas such tests shall be carried out in Russia. The key condition here is that such exporters shall further report supplying products whose value is ten times the amount of such financial aid.

Transport cost compensations for Russian enterprises

In 2017, high-tech manufacturers can get up to 80% of their total transport costs compensated.

Pavel Burlachenko, senior expert for engineering exports development, says: “Certification and logistics support is compensatory, i.e. you have to incur those costs first, then you prove them with relevant documentation, and only after your expenditures are compensated.”

Compensation of costs Russian manufacturers incur when registering intellectual assets abroad

In accordance with Decree of the Russian Government No. 1368 dd. Dec. 15, 2016, Russian high-tech companies that own intellectual assets and plan to enter new markets can have their foreign copyright protection costs compensated.

Such subsidies are available to any legal entities registered in Russia and producing goods, services, technology, and works that include intellectual property assets, i.e. inventions, useful models, and engineering specimen. Beside the full compensation of registration fees, the Government can compensate up to 70% of document drafting and submission costs.

“We currently have eight accredited organizations we can recommend. Those are the partners that match the knowledge and market experience criteria. Regardless of whether it is your patent attorney or our accredited attorney, you can get those subsidies anyway. By approaching our partners, you’re guaranteed timely provision of high-quality services,” says Oleg Dyachenko, Head of the Intellectual Property Project at AO REC.

Financial Services of EXIAR and Eximbank of Russia

Olga Kruchyonova, Director for Short-Term Loan Insurance at AO REC, comments about financial support for exporters. There are two institutions that offer this service: Russian Agency for Export Credit and Investment Insurance (EXIAR) provides risk insurance; Eximbank of Russia provides loans and bank guarantees for exporters.

EXIAR grants insurance for commercial and political risks relating to the sales of Russian-made goods and services to foreign counterparties. Commercial risks are about the foreign counterparty’s failure to pay for the services rendered. Political risks about the political situation of the country receiving the exports, such as embargoes, military actions, etc.

Companies having an EXIAR policy are not subject to sanctions for untimely return of currency revenue. For banks, EXIAR policies are of the first quality category; such policies enable banks to lower their risk reserves which reduces the costs of bank funding for the exporter.

In its turn, OAO Roseksimbank offers products designed to make Russian manufacturers more competitive in foreign markets. Those include standard services (loans for the exporter, funding for its foreign partners) and specialized services (funding the exporter’s export contract costs, letters of credit, various guarantees for bidding and performance of financial duties under export contracts).

In case of high-tech exports (see Order of the Ministry of Trade and Industry of the Russian Federation No. 672 dd. March 10, 2017), Eximbank of Russia is a subsidy operator that offers special foreign purchasers funding for them to buy Russian products at a reduced rate that is comparable to that of major foreign banks.

“Our today’s task is to advise and inform entrepreneurs not only on those aids that the ASI can offer, but also on the financial and non-financial tools that various development institutions wield. The REC is a single ‘window’ for export projects, and it offers a range of products exporters need. This topic is to open a series of workshops we are organizing at our platform,” says Svetlana Yegelskaya, Head of the New Business Leader Project Department at the ASI.