24.10.2015 — Government Policy to Let Ancient Mansions for 1 RUB Successful, 14 Mansions Leased in Moscow Already
Fourteen cultural heritage sites have been leased to Moscow businessmen under the programme “1 RUB for 1 sq.m per year” established by the Russian Government a month ago. Under the programme, the annual lease payments shall amount to 1 RUB per 1 square metre provided that the tenant carries out renovation works within 5 years.
On October 22, the Moscow Department of economic policy and development announced that another 3 landmarked buildings in the centre of Moscow had been leased out for 49 years. as a result of an open auction carried out under the programme “1 RUB for 1 sq.m per year”. Thus, a 700 square metre building on Sytinsky per. was leased out to Limited liability company “GALS” for RUB 13.1 mln, an 800 square metre site on Gusyatnikov per. was leased out to Limited liability company “FAMILY HOUSE” for RUB 16 mln., and a 150 square metre house on Goncharnaya street was leased out to Limited liability company “REATON” for RUB 4.7 mln.
In order to be eligible for the preferential lease rate of 1 RUB per square metre, successful bidders shall renovate the building in accordance with the preservation obligations within 5 years. 14 buildings have already been leased out under the program, and 4 of them have been fully renovated.
At the end of September, the Russian Government issued a Regulation regulating the lease of cultural heritage sites, and establishing that annual lease payments thereof shall amount to RUB 1 per square metre, provided that the tenant carries out renovation works within 5 years. According to the Ministry of Culture, the new Regulation is aimed at increasing the number of businessmen interested in leasing monuments and other landmarks. After the tenant performs its renovation obligations, it will be entitled to dispose of it as it wishes, e.g. it may sublease the building. Therefore, interested persons may be able to compensate incurred costs and make a profit form the lease.
23.10.2015 — Russia Changes Law on Seizure of Foreign State Property after Enforcement of Yukos Award
A bill allowing countermeasures following the arrest of Russian property abroad has passed its second and third readings in the Russian State Duma. Russian courts will be entitled to limit the jurisdictional immunity of a foreign state based on the reciprocity principle. The bill was developed as a result of the Yukos award by the PCA in Hague in Summer of 2014, which obliged Russia to pay USD 50 bln of damages. Russia refused to enforce the award voluntarily, however Russian state assets were arrested in Belgium and France based on the ruling by the Hague court.
The bill considered by the State Duma proposes a new approach to absolute immunity regarding the property of foreign states. Under the bill, Russian courts will be entitled to limit the jurisdictional immunity of a foreign state based on the reciprocity principle, provided that they conclude that Russia’s immunity in the relevant state is limited to a greater extent than the immunity of that foreign state in Russia.
When the bill was considered by the State Duma Property committee, Deputy Justice Minister, Dmitry Aristov, noted that this bill is especially relevant considering the “growing number of often unlawful actions taken against the Russian Federation and its property abroad”.
According to Vladimir Afonsky, Deputy Chairman of the State Duma Property committee, should the bill be passed into law, it will protect Russia’s property interests to a greater extent. He noted that the bill specifies the meaning of the term ‘foreign state’s property’, thereby ensuring full liability of foreign states.
The Head of the State Duma Property committee, Sergey Gavrilov, stated that the new bill would eliminate the lack of balance when protecting property interests of Russian enterprises and state-owned companies abroad, and the interests of foreign states in Russia.
The bill was developed as a result of the Yukos award by the PCA in Hague, which obliged Russia to pay USD 50 bln of damages. Russia refused to enforce the award voluntarily, however Russian state assets were arrested in Belgium and France based on the ruling by the Hague court.
19.10.2015 — Employers Encouraged to Pay for Employees’ Tours Inside Russia
The Russian Government has approved a bill offering employers to pay for trips of their employees and their families within Russia during vacation leave, in order to receive tax benefits. Should the bill be passed into law, employers will have an opportunity to encourage their employees to travel during the off-season, thereby distributing employees’ leave throughout the year. Moreover, the bill is aimed at supporting travel agencies during the off-season.
Although the Russian Government approved the idea of the bill as a whole, it recommended a few amendments. Thus, it suggested that costs incurred through payment for trips within Russia, together with costs incurred from voluntary private and medical insurance, should be limited, so as not to exceed 6% of the total payroll expenses.
The new bill was introduced in August 2015, by two members of the Federation Council, Igor Chernyshov and Valery Ryazansky. Under the bill, employers that made a contract with a travel agency, under which tourism services within Russia are rendered to employees, shall be entitle to reduce the payable corporate income tax accordingly. The authors of the bill proposed to limit the relevant expenses at RUB 50.000 for each employee or his/her family member for the relevant tax period.
According to the authors of the bill, should the bill be passed into law, employers will have an opportunity to encourage their employees to travel during the off-season, thereby distributing employees’ leave throughout the year. Moreover, the bill is aimed at supporting travel agencies during the off-season.