G/SCM/Q2/RUS/12
17 April 2015
(15-2064)  Page: 1/3
Committee on Subsidies  
and Countervailing Measures 
 Original: English
 
SUBSIDIES 
REPLIES TO QUESTIONS1 POSED BY JAPAN REGARDING THE NEW 
AND FULL NOTIFICATION OF THE RUSSIAN FEDERATION2 
The following communication, dated 15 April 2015, is being circulated at the request of the 
Delegation of the Russian Federation. 
 
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1.2 Auto Investment Programme 
 Question 1 
 
Joint Order No.73/81/58n of 15 April 2005 amended by Joint Order No.678.1289/184n of 24 December 2010 ("Auto Investment Program" ) provides preferential tariffs or tariff 
exemptions for imports of parts and componen ts used in "industrial assembly" programs 
for motor vehicles and parts and components thereof, imposing a local content requirement. "Industry assembly mode" is de fined as a system of batch production on 
the basis of technological processes in double-shift operation under the Auto 
Investment Program.  (i) Are there any other subsidy programs execut ed or planned with regard to automobile 
manufacture industry for the target companies of Auto Investment Program? For 
example, Decrees 29 to 32 as of 15 January 2014 with regard to subsidies to Russian 
auto producers require "industry assembly mode" as one of the conditions to obtain the 
subsidies. Are the target companies of Decr ees of 15 January 2014 and Auto Investment 
Program the same? Please describe th e difference between them, if any. 
 
(ii) (a) Decrees of 15 January 2014 do not prov ide the definition of "industrial assembly 
mode". Please describe the difference of th e definition of "industrial assembly mode" 
between Auto Investment Program and Decrees of 15 January 2014, if any. (b) Is there 
any local content requirement to obta in the subsidies under Decrees of 
15 January 2014? If so, please describe  the details of such requirement. 
 Reply 
 Both the original and revised notification s provided by the Russian Federation in 
G/SCM/N/253/RUS and G/SCM/N/253/RUS/Rev.1 co ver the period of 2012, whereas question 
No. 1 of Japan is in respect of the Decrees No. 29 to 32 introduced on 15 January 2014 which is 
well beyond the covered notified period and the scope concerned. However, in view of general transparency principles and without prejudice to any relation whatsoever of this question to the subsidy programs covered by the notified period , the Russian Federation provides the following 
information: 
 
                                               
1 G/SCM/Q2/RUS/9. 
2 G/SCM/N/253/RUS/Rev.1. G/SCM/Q2/RUS/12 
 
- 2 - 
 
  (i)  Scope of the state aid provided under the Decrees 29 to 32 as of 15 January 2014 differs 
from the list of target companies under the Auto investment program: 
 
1. in terms of motor vehicles producers, the support under the Decrees was provided not 
only to the target companies of the Auto investment program, but also to car 
manufacturers producing under the mode provided for in subparagraph 6 of paragraph 2 of article 10 of the Agreement on Free (Special) Economic Zones on the 
Customs Territory of the Customs Union an d the Customs Procedures of the Free 
Customs Zones of 18 June 2010; 
 2. target companies under the Auto investment program consist not only of car 
manufacturers but also of car parts producers; however only Russian big car 
manufacturers are eligible to receive the subsidies under the Decrees. 
 
(ii)  a. The term "industrial assembly mode" was used in the Decrees of 15 January for the 
purposes of defining Russian big car manufacturers subject to the support. In order to be eligible for receiving the subsidies under the Decree an entity should produce 
motor vehicles "in the industrial assembly mode" or otherwise under the production 
mode established by the Agreement on Free (Special) Economic Zones on the Customs Territory of the Customs Union an d the Customs Procedures of the Free 
Customs Zones of 18 June 2010. The provisio ns of the Decrees of 15 January, instead 
of requiring mandatory fulfillment of the "local content" provisions according to the 
Joint Order No. 73/81/58n, merely indicate that the production itself should be "in the industrial assembly mode", i.e. that the producer should possess a valid agreement on 
industrial assembly which is sufficient for receiving the support. 
 
b. The Decrees of 15 January do not contain any "local content" requirements. 
 
1.3  Support of sales volume in the automobile industry 
 
Question 2 
 
According to the notification, the recipient of  this subsidy is Russian credit institution 
and the policy objective of this programme is the support of sales volume and income of 
the domestic motor vehicle producers. 
(i) Please provide the detailed eligibility cr iteria for receiving the support from the 
government and describe the performance re quirement required to receive the support. 
(ii) Is the subsidy provided based on transa ction to transaction on an application from 
credit institutions to the government or automatically granted based on an umbrella 
contract between the government and a credit  institution whereby the credit institution 
conducts the support on a behalf of the government? 
(iii) Please explain the purpose of the limitatio n of eligible vehicles based on weight and 
price and please provide a percentage of the eligible vehicles in total. 
 
Reply 
 
(i)  In accordance with the Resolution of th e Government No. 244 of 19 March 2009 any Russian 
credit organisation was eligible to receive a subsidy under condition that this organisation 
had provided loans to private persons for the purchases of new cars and had properly 
provided the application to the Ministry of In dustry and Trade of the Russian Federation.  
 
(ii)  The subsidies were granted to credit organisations on a transaction to transaction basis after 
submission of the application forms with attached calculations of the subsidy amount. Preliminary agreement on lending conditions with a credit organization was not required. 
 
(iii) Eligible vehicles were limited basing on weight and price in order to ensure social and 
financial efficiency of funding from the Fede ral budget by focusing the support on the 
particular segment of automobile industry that suffered the most from sales deterioration 
due to high price sensitivity of this particular category of consumers. 
 G/SCM/Q2/RUS/12 
 
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  1.4  Encouragement of Private Persons to Purchase New Cars 
 
Question 3  
According to the notification, the recipient of this subsidy is Russian trading 
organization and the policy objective of this  programme is improvement of road safety 
and stabilization of the ecological si tuation in the Russian Federation. 
 
(i) Please provide the detailed eligibility criter ia for receiving the support and definition 
of "Russian trading organization". (ii) Is the subsidy provided based on an  application from the organizations or 
automatically granted based on the condition under such as an agreement with the 
government?  
Reply 
 
The programme was terminated in 2012. 
 
(i)  In accordance with the Resolution of the Government of the Russian Federation of 
31 December 2009 № 1194 the term "Russian trading organization" was defined as an 
organization engaged in sales of new vehicles under conditions set forth in the contracts 
concluded between such organisations and the car manufacturers (or their authorized 
entities) enlisted in the roster approved by the Ministry for Industry and Trade. 
 
Subsidies were provided to the Russian trading organizations, if: 
 
• Subject car was new; 
• Weight of a vehicle did not exceed 3.5 tons; 
• Price of the vehicle did not exceed the level, recommended for a specific period by a 
producer; 
• Producer of a sold vehicle was listed in the rost er approved by the Ministry of industry and 
trade; 
• Weight of an obsolete vehicle subject to recycling (end-of-life vehicle (ELV)) was no more 
than 3.5 tons, and it was older than 10 years; 
• Private owner of an ELV had put it into recycling; 
and other technical requirements. 
 
(ii)  To receive a subsidy, a trading organization  had to apply to the Ministry of Industry and 
Trade each quarter, but no later than the 10th of a first month of a new quarter. The 
following documents had to be attached to the application: 
 
• Report on sales of new cars; 
• Proof of recycling of ELVs; 
and other certain documents. 
 
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