03.09.2016 — East Economic Forum 2016 to Revive Investment Climate

The II East Economic Forum 2016 (EEF-2016), which took place in Vladivostok in September 2-3, 2016, hosted 4,6 thousand delegates from 56 countries, thus proving its relevance in the business community. According to the Ministry for Development of the Russian Far East, 214 investment agreements for the total amount of 1,85 trillion rubles have been signed.

Results of the EEF-2016 showed that the instruments that the Russian government implemented to support businesses in the Far East started to work to the full extent. Apart from the already introduced improvements, such as territories of regional development (TOR) and the Vladivostok free port (SPV), officials obviously show interest in the region, thus increasing efficiency of the administrative management. Other promises include new roads, lowered energy tariffs, simplified visa regime, and even inexpensive loan plans for businesses. Besides, starting in October, Vladivostok free port will introduce a single point of contact through which all formalities and procedures, such as passing checks and submitting electronic declarations, can be easily completed.

Broadly speaking, the EEF-2016 has shown that despite political uncertainties the economy can and will develop, and there are solid grounds for the investments to grow proportionally to the appeal of the region.

02.09.2016 — If You Do Not Care About Fire Safety You Risk Your Business Shutting Down for Three Months

The commission for legislative drafting activities has approved a bill that will allow fire inspectors to shut down companies and sole entrepreneurs for up to 90 days for a single violation of fire fighting requirements during particularly dangerous fire fighting regimes, and for repeated violation during any other period.

At the same time, the bill reduces penalties for violations of the fire fighting requirements to 200 000–400 000 rubles for companies and to 20 000–50 000 rubles for sole entrepreneurs. Besides, local officials will not be able to initiate unscheduled fire inspection of small and medium-sized businesses. Initiation of such unscheduled inspections will only be possible at the request of affected legal entities, citizens and media, as well as by the Ministry of the Russian Federation for Civil Defence and Emergency Situations.

Businessmen are now afraid that shutting down the company for three months might inevitably result in its bankruptcy. Yet, the State Fire Control Service assures that three months is the minimum term which is required to diligently implement all fire fighting instructions.

01.09.2016 — There Is an Alternative: Arbitration Reform to Bring Russian Arbitration Courts in Line with International Standards

In September 1, 2016, amendments to the Arbitrazh Procedure Code and the Civil Procedure Code came into force introducing a list of matters which cannot be considered in arbitration institutions. Besides, these amendments elaborate on the position of the arbitration courts in the Russian legal system and in particular define the procedure for enforcing arbitral awards, collecting evidence and implementing provisional (interim) measures ordered by arbitration courts.

Thus, disputes on insolvency (bankruptcy), protection of intellectual property rights, disputes deriving from public law, certain categories of corporate disputes, and also family, labor and hereditary disputes are excluded from the jurisdiction of arbitration courts.

According to the legislators, such comprehensive amendments are supposed to preclude disputes regarding jurisdiction of arbitration courts and to accurately delineate the jurisdiction of arbitration courts and jurisdiction of state courts, as well as other public authorities’ and organizations’ areas of responsibility.

31.08.2016 — Supreme Court: Ruble Fall Not Hard Enough to Review Credit Contract

Ruble devaluation increasingly becomes a reason for disputes. Recently the Supreme Court has for the first time considered a dispute regarding the terms of a loan agreement. As a result, the Supreme Court considered lawful the bank’s unilateral increase of the loan interest by 100% due to ruble devaluation in 2014-2015.

Avangard bank and the Transfin-M company entered into a dispute regarding revision of a loan agreement, under which the bank loaned 4 billion rubles with the interest rate of 9.5% per annum to the company. The agreement also envisaged that if ruble devaluation occurs before the loan is repaid, the bank will be able to increase the interest rate. Ruble devaluation happened at the end of 2014, when dollar exchange rate doubled, and the Central Bank raised its key interest rate from 10.5% to 17%. As a result, the Avangard bank also increased its interest rate to 21%.

Transfin-M called such an increase in interest a violation of the parties’ balance of interests. Nevertheless, the courts of three instances did not agree with this argument and obliged the Transfin-M company to pay off the loan to the bank at the new rate. The Judicial Panel for Economic Disputes of the Supreme Court of the Russian Federation dismissed Transfin-M’s complaint, thus putting an end to the dispute.

30.08.2016 — New Database of Persons Dismissed for Corruption Offences to Be Available Soon

The Ministry of Labour of the Russian Federation (Mintrud RF) has drafted a bill which provides for creation of a new register of persons dismissed for corruption offenses due to loss of trust. Mintrud RF hopes that the register will be an indispensable tool for solving HR-related matters as it will allow to quickly and without extra expenses determine an applicant’s reputation in terms of compliance with anti-corruption and ethical standards.

The head of Mintrud RF Maxim Topilin noted that the register will be located in the state information system ( and that the entire procedure of inclusion and exclusion of data from the register will be controlled by the Government of the Russian Federation.

Please be reminded that since 2011 loss of trust has become a legal ground for dismissal of officials. Thus, during this period from 2012 to 2015 about 1,2 thousand employees were dismissed on this basis. Nevertheless, hiding information about the reason of dismissal from previous workplace is common practice. Besides the employment history specified in labour books does not contain entries on disciplinary penalties unless such penalty results in dismissal. The proposed amendments are aimed precisely at eliminating these deficiencies of the current employment system.