Russia’s Economy Ministry is continuing with the sale of state assets despite new US sanctions and this week closed the bidding from banks for advising on the privatization of United Grain Company.
Under the Russian privatization plan, aimed at plugging holes in the state budget and approved before new US sanctions were signed by President Donald Trump earlier in August, UGC should be privatized in 2017-2019, Reuters reported.
In an email, a spokeswoman for the economy ministry which is in charge of the privatization said the ministry had been taking bids for an adviser role until Aug. 14. The winning bidder chosen by the ministry will work on issues related to the structure, methodology and parameters of the deal, the spokeswoman said, without providing further details.
Under the new law, Trump could impose sanctions against US firms or citizens if they invest $10 million or more in Russian assets during the privatization.
Russia was actively preparing to reduce its stake in the shipping company Sovcomfot this year but postponed privatization plans before new sanctions were signed.
The latest package of sanctions remains too weak as an instrument to punish Russia’s leaders. For instance, the financial sector will see a certain reinforcement of last year’s restrictions and sanctions against the use of America’s financial system. This can make it more difficult for the Russians to use financial innovations in order to show the international community how well they are doing and what is needed to accelerate the recovery that started this year.
Some examples of such financial innovations include complex international transaction schemes: the biggest one was implemented by the Russians in the recent “privatization” of a 19.5% stake in Rosneft.
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