G/SCM/Q2/RUS/19  
 
7 May 2019  
(19-3132) Page: 1/6 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
REPLIES TO QUESTIONS1 POSED BY THE EUROPEAN UNION  TO THE RUSSIAN FEDERATION  
REGARDING THE SUPPOR T MEASURES TO THE AUTO MOTIVE SECTOR  
The following communication, dated 6 May 2019 , is being ci rculated at the request of the D elegation 
of the Russian Federation.  
 
_______________  
 
 
Subsidies to the car sector under the "Industrial assembly mode"  
Decrees No. 29 -32 of 15 January 2014  
In its replies to Japan's questions (G/SCM/Q2/RUS/9), the Russian Federation states that 
the provisions of the Decr ees No. 29 -32 of 15 January 2014 "do not contain any "local 
content" requirements". Moreover, the Russian Federation declare themselves2 that the  
term "industrial assembly" was referred to in the Resolutions No. 29 -32 for the purposes 
of scoping the support to the Russian big car manufacturers . 
1. Could the Russian Federation present in details the eligibility criteria to receive the 
subsidies? Could the Russian Federation clarify why the measure is only targeted to 
the Russian big car manufacturers?  
Reply: 
 
The eligibility criteria to receive the mentioned subsidies are the following.  
 
Paragraph 4 of the Resolution of the Government of the Russian Federation № 29 of 15 January  2014 
establishes that "a subsidy is granted to a manufacturer when the followi ng conditions are met:  
a) the manufacturer is a legal entity registered on the territory of the Russian Federation;  
b) ceased to be in force – Resolution of the Government of the Russian Federation of 5 March 2018 
No. 226;  
c) the manufacturer has been giv en a World Manufacturer Identifier (WMI) code and the 
manufacturer marks Vehicle Identification Numbers on non -detachable components of bodies 
(cabins), chassis or specially manufactured number plates of vehicles;  
d) the manufacturer satisfies one of the f ollowing requirements:  
- the manufacturer has concluded a special investment contract (SIC) in accordance with the Rules 
of concluding special investment contracts established by the Resolution of the Government of the 
Russian Federation of 16 July 2015 No . 708 "On Special Investment Contracts for Certain Branches 
of Industry" (hereinafter referred to as "Special Investment Contracts");  
- the manufacturer performs production in the industrial assembly mode;  
- the manufacturer is an affiliated person of an organization, which produces in the industrial 
assembly mode, in accordance with the legislation of the Russian Federation in the area of 
competition;  
e) the manufacturer performs works on his own on the basis of his own science and technical center, 
which  is situated on the territory of the Russian Federation and possesses (on the right of ownership 
                                                
1 G/SCM/Q2/RUS/ 16. 
2 G/TRIMS/Q/RUS/2 . G/SCM/Q2/RUS/19  
 
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  or other legal basis) equipment which is necessary to perform works with the involvement of other 
organizations situated on the territory of the Russian Federa tion (registered in the 
Russian  Federation) and which perform works by using equipment which is necessary for performing 
works and which they possess on the right of ownership or other legal basis (hereinafter referred to 
as "other organizations");  
f) the number of producer 's employees engaged in performing works is not less than 100 people or 
the producer has a contract for performing works with other organizations, total amount of 
employees (engaged in performing works) of which is not less than 300 peopl e; 
g) the manufacturer carries out an investment project, the business plan of which provides for:  
- the beginning of automobile production not later than 5 years from the date of conclusion of the 
contract for granting a subsidy;  
- the receipt of profit f rom sales of automobile production for the period from conclusion of the 
contract for granting subsidy until 31 December 2025 in an amount exceeding the sum of requested 
subsidy no less than twice ". 
 
Paragraph 4 of the Resolution of the Government of the R ussian Federation № 30 of 15 January  2014 
establishes that "a subsidy is granted to a manufacturer when the following conditions are met:  
a) the manufacturer, affiliated persons and other organizations, the expenses of which are included 
in calculation of the amount of subsidies are legal entities registered on the territory of the Russian 
Federation;  
b) ceased to be in force – Resolution of the Government of the Russian Federation of 
24 December  2016 No. 1473;  
c) the manufacturer, affiliated persons and ot her organizations, the expenses of which are included 
in calculation of the amount of subsidies, do not have debts for consumed electric energy for a 
quarter prior to the accounting period;  
d) the manufacturer has been given a World Manufacturer Identifier  (WMI) code, and the 
manufacturer marks Vehicle Identification Numbers on non -detachable components of bodies 
(cabins), chassis or specially manufactured number plates of vehicles;  
e) the manufacturer produces or used to produce means of transport as of 1 January 2015 provided 
that one of the following conditions are met:  
- in the industrial assembly mode;  
- in a mode provided for in paragraph 2 of article 10 of the Agreement on Free (Special) Economic 
Zones on the Customs Territory of the Customs Union and  Free Customs Zone Procedure of 
15 June 2010;  
f) the manufacturer is not on the list of affiliated persons provided for in subparagraph "e" of 
paragraph 5 of the present Rules ". 
 
Paragraph 4 of the Resolution of the Government of the Russian Federation № 31 of 15 January  2014 
establishes that "a subsidy is granted to a manufacturer when the following conditions are met:  
a) the manufacturer is a legal entity registered on the territory of the Russian Federation;  
b) ceased to be in force – Resolution of the Government of the Russian Federation of 
24 December  2016 No. 1473;  
c) the manufacturer has been given a World Manufacturer Identifier (WMI) code and the 
manufacturer marks Vehicle Identification Numbers on non -detachable components of bodies 
(cabins), chas sis or specially manufactured number plates of vehicles;  
d) the manufacturer produces or used to produce means of transport as of 1 January 2015 provided 
that one of the following conditions are met:  
- in the industrial assembly mode;  
- in a mode provided for in paragraph 2 of article 10 of the Agreement on Free (Special) Economic 
Zones on the Customs Territory of the Customs Union and Free Customs Zone Procedure of 
15 June 2010". 
 
Paragraph 4 of the Resolution of the Government of the Russian Federation № 32 of 15 January  2014 
establishes that "a subsidy is granted to a manufacturer when the following conditions are met:  
a) the manufacturer, affiliated persons and other organizations, the expenses of which are included 
in calculation of the amount of subsidies, are legal entities, registered on the territory of the Russian 
Federation;  
b) ceased to be in force – Resolution of the Government of the Russian Federation of 
24 December  2016 No. 1473;  
c) the manufacturer has been given a World Manufacturer Id entifier (WMI) code and the 
manufacturer marks Vehicle Identification Numbers on non -detachable components of bodies 
(cabins), chassis or specially manufactured number plates of vehicles;  G/SCM/Q2/RUS/19  
 
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  d) the manufacturer produces or used to produce means of transport a s of January 1, 2015 provided 
that one of the following conditions are met:  
- in the industrial assembly mode;  
- in a mode provided for in point 2 of article 10 of the Agreement on Free (Special) Economic Zones 
on the Customs Territory of the Customs Union  and Free Customs Zone Procedure of 15 June 2010;  
e) the manufacturer is not on the list of affiliated persons provided for in subparagraph "d" of 
paragraph 5 of the present Rules ". 
The measures target only large car manufacturers in accordance with the industrial policy of the 
Russian Federation. Economic activity of such producers positively influences the development of 
the Russian automotive production and creates new modern high -technology jobs. The Government 
of the Russian Federation strives to low er influence of any negative external economic factors on 
such producers and provides them with financial support. It should be noted that support can be 
provided not only to domestic producers, but also to those controlled by foreign investors.  
2. Could the Russian Federation explain how this scheme can be considered compatible 
under WTO rules and, in particular, with the provisions of the ASCM?  
Reply : 
 
These support schemes are in full compliance with the WTO rules, including the provisions of the 
Agreement on Subsidies and Countervailing Measures. In particular, they are not contingent upon 
export performance or the use of domestic over imported goods.  
 
3. Could the Russian Federation inform Members whether, at present, the list of 
beneficiaries has been publis hed?  
Reply : 
 
The list of beneficiaries has not been published.  
 
Resolution of Government of the Russian Federation of 18 March 2015 N o. 244 
4. Could the Russian Federation list, in detail, all the eligible criteria for benefitting of 
the subsidies under the Resolution of Government of the Russian Federation of 
18 March 2015 No. 244?  
Reply : 
 
The eligibility criteria to receive the mentioned subsidies are established in accordance with 
paragraphs 4 and 5(1) of the Rules of granting subsidies established by the Resolution of the 
Government of the Russian Federation No 244 of 18 March 2015 (herei nafter referred to as "Rules "). 
 
Paragraph 4 of the Rules establishes that  "a subsidy is granted to the organization when the following 
conditions are met:  
a) the organization has no outstanding taxes, fees and other obligatory payments to the budgets of 
the budget system of the Russian Federation;  
b) the organization has been given a World Manufacturer Identifier (WMI) code and the manufacturer 
marks Vehicle Identification Number (VIN) on non -detachable components of bodies (cabins), 
chassis or specially manufactured number plates of vehicles;  
c) the organization was performing production of wheeled vehicles in the industrial assembly mode 
in accordance with an agreement on the industrial assembly of motor vehicles (supplementary 
agreement to it) active as  of 1 July 2014 concluded by the Ministry of Economic Development of the 
Russian Federation with the organization;  
d) the organization has an approved production plan for 2017 ". 
 
Paragraph 5(1) of the Rules establishes that "on the first day of the month p receding the month in 
which the conclusion of the subsidy agreement is planned, the organization must comply with the 
following conditions:  G/SCM/Q2/RUS/19  
 
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  a) the organization has no outstanding taxes, fees and other obligatory payments to the budgets of 
the budget system  of the Russian Federation, the deadline of which has come in accordance with 
the legislation of the Russian Federation;  
b) the organization has no arrears in terms of returning subsidies to the federal budget, budget 
investments, including those provided in accordance with other legal acts, and other overdue debts 
to the federal budget;  
с) the organization is not in the process of reorganization, liquidation, bankruptcy and has no 
restrictions on the implementation of economic activity;  
d) the organization  is not Russian legal entity in the authorized (share) capital of which the share of 
participation of foreign legal entities whose place of registration is a state or territory included in the 
list of states and territories approved by the Ministry of Fina nce of the Russian Federation that 
provide preferential tax treatment of taxation and (or) not providing the information for financial 
transactions (offshore zones) in relation to such legal entities, in total exceeds 50 %; 
e) the organization does not rece ive funds from the budgets of the budget system of the Russian 
Federation in accordance with other regulatory legal acts, municipal legal acts for compensation of 
part of the costs in connection with the production of wheeled vehicles ". 
 
5. According to the a vailable information, the EU is aware that, among other criteria, 
the beneficiary shall be assigned with a World Manufacturer Identifier (WMI) code 
and marks Vehicle Identification Numbers on car chassis. Could the Russian 
Federation confirm this?  Should it be the case, could also the Russian Federation 
explain whether recipients of all WMI codes can benefit or if only certain WMI 
recipients (e.g. from certain geographical areas or certain countries or regions) can 
be eligible?   
Reply : 
 
In accordance with subparagraph (b) of paragraph 4 of the Resolution of the Government of the 
Russian Federation No 244 of 18 March 2015, the beneficiary shall be assigned with a World 
Manufacturer Identifier (WMI) code  and shall mark Vehicle Identification Numbers  on non -detachable 
components of bodies (cabins), chassis or specially manufactured number plates of vehicles. All 
recipients of the WMI codes are entitled to receive subsidies.  
 
6. According to the available information, the EU is aware that, among other critera, 
the production shall take place under industrial assembly mode in accordance with 
valid investment agreement. Could the Russian Federation explain what such a 
"valid investment agreement" is and on what legal basis such agreements can be 
concluded?  
7. What are th e assembly agreements mentioned in point 4c of Decree 244/2015? 
Could the Russian Federation present a list of the agreements signed and which are 
valid in 2014 and  2015? Could the Russian Federation indicate how many such "valid 
investment agreements" are  currently in force?  
Reply to questions No. 6 and 7 : 
 
Clarifications regarding assembly (investment) agreements are contained in paragraph 1077 of the 
Report of the Working Party on the Accession of the Russian Federation to the World Trade 
Organization (W PR). In particular, Tables 42, 43 and 44 of the WPR provide for an exhaustive list of 
agreements concluded under Auto Investment Programs 1 and 2.  
 
It should be noted that in accordance with the decision of the Council of the Eurasian Economic 
Commission N o. 73 of 14 September 2018, customs duty rates with respect to goods "for industrial 
assembly " have been raised. Thus, the regime was brought in conformity with the commitments of 
the Russian Federation provided for in paragraph 1090 of the WPR and the relevant 
WTO Agreements.  
 G/SCM/Q2/RUS/19  
 
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  The Russian Federation states3 that the term "industrial assembly" of m otor vehicles was 
defined as a system of batch production on the basis of technological processes, achieving 
a production capacity of no less than 25,000 units per year in double -shift operation.  
8. What is the rationale of referring to an "industrial assembl y mode" in the measures 
listed below and its further connection with "industrial assembly 
agreements"  (Decree 1433 of 19/12/2014 amended by Decree 244 of 18/03/2015) 
as a criterion for receiving subsidies?  
a. the subsidy scheme introduced on 15 January 2014 ( Resolutions 29, 30, 31 
and 32);  
b. the cost -compensating subsidy scheme introduced end 2015 (Decree 1433 
of 19  December 2014, amended by Decree 244 of 18 March 2015 and 
subsequently by Decree 351 of 25 April 2016);  
c. the subsidised car loan and car leasing int roduced in April 2015 (Decree  
344 of  23 April 2016  amending  Decree 364 of 16 April 2015).  
Reply : 
 
Legal entities that have concluded agreements on industrial assembly with the Ministry of Economic 
Development of the Russian Federation guaranteed the develo pment of the car production on the 
territory of the Russian Federation. Having an interest in investment projects under this program, 
the Government of the Russian Federation strives to lower influence of stressful economic factors on 
stability of economic  activities carried out by the entities on the territory of the Russian Federation 
by means of support measures with regard to different aspects of their activity.  
 
Preferential automobile leasing and loans  
1. The EU understands that the legal basis for granting preferential automobile leasing 
and preferential loans is the Resolution of 451 of 8 May 2015 and the Decree  No. 
344 of 23 April 2016, amending Decree 364 of 16 April 2015. Could the Russian 
Federation c onfirm and/or indicate what the relevant legal acts are?  
Reply : 
 
The legal basis for granting preferential automobile leasing and loans is formed by the Resolution of 
the Government of the Russian Federation No 451 of 8 May 2015 and the Resolution of the 
Government of the Russian Federation No 364 of 16 April 2015.  
 
2. What are the eligible criteria for receiving preferential automobile leasing and loans 
as provided by Resolution of 451 of 8 May 2015 and/or any other legal basis 
currently in force? In particu lar, could the Russian Federation clarify whether the 
automobile production plants shall be located in Russia?  
Reply : 
 
The eligibility criteria to receive preferential automobile leasing and loans are contained in 
paragraph  3 of the Resolution of the Gove rnment of the Russian Federation No 364 of 16 April 2015 
and paragraph 5 of the Resolution of the Government of the Russian Federation No 451 of 
8 May 2015.  
 
Paragraph 3 of the Resolution of the Government of the Russian Federation No 364  
of 16 April 2015  establishes that "s ubsidies are provided to credit organizations in the amount of 
shortfall in income arising from the provision of discounts for loans to borrowers in 2015 -2017 for 
the purchase of cars and collateral insurance, and in the amount of costs  incurred by the credit 
institution for providing the borrower with discounts for the initial fee of the loan, issued in 2018 - 
2020, under the following conditions:  
                                                
3 P.1075, WT/ACC/RUS/70 . G/SCM/Q2/RUS/19  
 
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  a) loans are issued in rubles from 1 April 2015 to 31 December 2020 inclusive;  
b) the total mass of the purchased car does not exceed 3.5 tons and its cost is:  
- not more than 1000 thousand rubles - for cars purchased in 2015;  
- not more than 1150 thousand rubles - for cars purchased in 2016;  
- not more than 1450 thousand rubles - for cars purchased in 2017 and 2018;  
c) the purchased car has not been registered in accordance with the legislation of the 
Russian  Federation and has not been owned by any individual as of the date of the loan;  
d) the purchased car has been produced:  
- in 2015 or in 2016 - for cars purchased in 2015 or in 2016;  
- in 2016 or in 2017 - for cars purchased in 2017;  
- in 2017 or in 2018 - for cars purchased in 2018. At the same time, the vehicle passport for a car 
produced in 2017 must be issued not earlier than on 1 December 2017;  
e) the loan security is the pledge of the purchased car;  
f) the individual made a repayment in the amount of not less than 20 % of the cost of the purchased 
car – for cars purchased in 2015 and 2016;  
g) loan agreement validity period does not exceed 36 months – for loan contracts concluded until 
31 December 2017 inclusive;  
h) the borrowing rate stipulated by the loan agreement is defined as the difference between the rate 
of the credit institution effe ctive at the date of issuance of the loan and:  
- two thirds of the key rate of the Central Bank of the Russian Federation that is valid on the loan 
issue date - for loan contracts concluded in 2015 or in 2016;  
- discount of not more than 6,7 percentage poi nts – for loan contracts concluded in 2017".  
 
Paragraph 5 of the Resolution of the Government of the Russian Federation  No 451 of 8 May 2015 
establishes that "s ubsidies are granted under the following conditions:  
a) the lease contract is concluded from 1 January 2018;  
b) the lease contract establishes a leasing period of at least 12 months;  
c) as of the moment of transfer in leasing the wheeled vehicle has not been owned by any individual 
and has not been registered in accordance with the legislation of the  Russian Federation, except 
when registration is made in pursuance of a lease contract with this lessee;  
d) the wheeled vehicle was produced:  
- in 2017 or in 2018 – in case of the provision of subsidies in 2018. In this case, the vehicle passport 
or vehicl e chassis passport must be issued no earlier than 1 December 2017;  
- in 2018 or in 2019 – in case of the provision of subsidies in 2019. In this case, the vehicle passport 
or vehicle chassis passport must be issued no earlier than 1 December 2018;  
- in 2019 or in 2020 – in case of the provision of subsidies in 2019. In this case, the vehicle passport 
or vehicle chassis passport must be issued no earlier than 1 December 2019;  
e) advance payment under the lease contract is not less than 10 % and not more  than 50 % of the 
value of the wheeled vehicle;  
f) the wheeled vehicle has not previously been leased under leasing contracts for which the subsidy 
was granted".  
 
The Resolutions of the Government of the Russian Federation No 451 of 8 May 2015 and No 364 of  
16 April 2015 do not contain any requirements concerning location of automobile production plants.  
 
3. Could the Russian Federation present the list of the beneficiaries under this scheme?  
Reply : 
 
The list of beneficiaries has not been published.  
 
__________