Kremlin decided not to relocate back to Russia companies operating abroad
The government of Russia has decided not to transfer large businesses from abroad to the jurisdiction of the country.
Previously, it was proposed that 'deoffshorization' would be compulsory for backbone Russian companies.
Interfax, referring to a source in the Cabinet, reported that the bill was voted down. Officials came to the conclusion that “compulsory measures of transferring a wide range of systemically important organizations to the jurisdiction of the Russian Federation will create significant risks for the country’s economy.”
There will be risks due to the weakening of competitive positions in world markets and non-fulfillment of contracts in the foreign economic sphere, according to a report by First Deputy Prime Minister Igor Shuvalov.
The issue involves about 199 legal entities, accounting for 70% of the gross national income. This list includes Alrosa, Gazprom, Bashneft, Norilsk Nickel, Rosneft, major retail chains, cellular operators and other companies.
The bill proposed to deny state support and state contracts to companies with Russian assets that are registered in foreign jurisdictions.
According to the United States National Bureau of Economic Research, Russia is a world leader in terms of the amount of funds that are offshore. In 2016, Russian citizens kept about 60 trillion rubles – about 60% of the country's GDP – offshore.