Economic pulse: Russia plans to develop business rights to increase global trade

Protecting the interests of businesses and investors, as well as a fair approach to resolving disagreements in the tax and customs spheres, are considered key factors without which effective development of international economic cooperation is impossible, Russian President Vladimir Putin said. Izvestia investigated what specific mechanisms currently exist in Russia to protect the rights of entrepreneurs and investors, as well as what changes could increase the confidence of international investors.

Areas of work

A reliable system for protecting the rights of entrepreneurs is the foundation for the functioning and growth of small and medium-sized businesses in any economy, Alexander Isaevich, CEO of the SME Corporation, told Izvestia. In fact, we are talking about a basic condition, a kind of "hygienic minimum", without which other support measures lose their effectiveness. This aspect is considered as one of the key priorities for the Corporation.

— In particular, we have created a special service on the SME digital platform.RF — "Service 360". This is a direct communication channel "entrepreneur — SME Corporation". It allows any business representative to quickly and simply report a problem, violation of their rights and promptly receive a response. To date, through this service, you can address eight categories of issues, including reporting violations by regulatory authorities, customers in the framework of purchases, marketplaces, unjustified prosecution and other issues," he said.

Over 9.6 thousand requests have been received through the 360 Service, of which more than 9.3 thousand have already found a solution. Most often, entrepreneurs pointed to delays in payments under contracts, cases of administrative pressure, as well as unjustified refusals to provide financial assistance.

— The majority — 37% of the requests — are related to payment arrears or violations of the rights of entrepreneurs by customers. We have already helped to recover about 5.48 billion rubles of debt in the framework of purchases under 223-FZ in favor of SME suppliers and to cancel fines of more than 37 million rubles," Alexander Isaevich said.

At the same time, with the support of individual entrepreneurs who have asked for help, according to him, an analysis of all incoming signals is being carried out, which makes it possible to identify systemic problems. For example, together with business representatives and the Ministry of Economic Development, it was possible to reduce administrative pressure on small and medium-sized businesses through amendments to the Code of Administrative Offences.

— Thanks to these changes, businesses today have the "right to make mistakes" — when a warning is first issued at the first frivolous violation. In addition, the amount of fines for SMEs has been reduced to the level set for sole proprietors," he clarified. "Plus, the simultaneous responsibility of an official and a legal entity for a violation committed through the fault of an employee has been abolished, and the principle of "one check, one sanction" has been established so that fines for the same type of violations within the framework of one check do not multiply.

Protection options

In Russia, both state instruments and institutional structures are functioning to protect entrepreneurs, Sergey Katyrin, President of the Chamber of Commerce and Industry of the Russian Federation, told Izvestia. The most significant of them include the system of arbitration courts, associations belonging to the so-called "big Four", as well as the institute of the Commissioner for Business Rights.

— There are specialized platforms at the Chamber of Commerce and Industry of the Russian Federation - the International Commercial Arbitration Court (ICAC) and the Maritime Arbitration Commission (IAC). These structures have a high international reputation, work according to the principles of independence and equality of the parties and consider disputes involving Russian and foreign companies," he said.

According to him, special attention is paid to agreements on protection and promotion of investments. Such a mechanism provides investors with the opportunity to fix the immutability of key conditions for long—term projects, including tax obligations, tariff rates, as well as rules for the exploitation of land and natural resources. It is advisable to give the provisions of the NWPC a higher legal status in international arbitration, which will increase investor confidence in the system of protecting their interests, Sergey Katyrin believes.

Currently, a system for protecting business rights has been formed and is gradually being improved in Russia, Petr Shcherbachenko, associate professor at the Financial University under the Government of the Russian Federation, confirmed in an interview with Izvestia. It is based on both judicial and non-judicial instruments. Judicial mechanisms include arbitration courts, which specialize in commercial conflicts between companies and individual entrepreneurs, which ensures more qualified consideration of such disputes.

There are several important areas of non-judicial protection mechanisms, the expert noted. Among them is the Institute of the Commissioner for Entrepreneurs' Rights, which operates at both the regional and federal levels and acts as an intermediary between business and government agencies. Additionally, there are public councils and working groups attached to relevant departments, where representatives of the business community can discuss the application of legislation. The "regulatory guillotine", a reform aimed at eliminating unnecessary and outdated requirements, has also become a significant step, which has reduced administrative pressure on entrepreneurs.

— The main vector is the movement from the creation of point—based protective mechanisms to the formation of an integrated, transparent and stable ecosystem, where the rights and obligations of all participants, including the state, are clearly defined and strictly observed, — explained Peter Shcherbachenko.

Strategic directions

Various benefits are provided for investors working in strategically important industries, Anastasia Melnikova, senior lecturer at the Department of Entrepreneurship and Logistics at Plekhanov Russian University of Economics, told Izvestia. This takes into account the long-term nature of many investment projects, which may change legislation over time. In such situations, an important guarantee of stability for investors is the principle that excludes the possibility of retroactive effect to laws on benefits if such amendments worsen their situation.

–– However, after the imposition of sanctions, Russian legislation was forced to introduce retaliatory measures. For example, the so-called "Lugovoy's law" allows companies under foreign sanctions to conduct trials in Russia, even if international arbitration was stipulated in the contract. Moreover, it has become more difficult to obtain recognition of foreign arbitral awards from unfriendly countries. This leads to the unwillingness of foreign counterparties to conclude contracts," the expert emphasized.

Izvestia sent a request to the Ministry of Energy and the Ministry of Finance, but no response had been received at the time of publication.