Putin Eases Procedure for External Borrowing

Russian President Vladimir Putin has signed the bill on changes of the terms for ratification of external borrowings agreements into law.

The document passed by the State Duma (lower house of parliament) on July 25 and approved by the Federation Council (upper house) on July 28 was published on the official website of legal information on Friday, Tass reported.

The law that amends Russia’s Budget Code as it reduces the list of grounds for obligatory ratification of such agreements, was spearheaded by a group of deputies anchored by First Deputy Head of the United Russia faction Andrei Isayev.

Currently the agreements on Russia’s state external borrowings are subject to ratification if envisioned borrowings are not included in the program of Russia’s state external borrowings, if raised funds exceed $10 million for the whole loan term, if implementation of such agreements leads to exceeding the budgeted ceiling of the state external debt, and on other grounds.

The law only stipulates obligatory ratification for agreements on state external borrowings with international financial organizations that have founding documents not ratified earlier on the grounds as provided for in Russia’s legislation on international agreements.

Moreover, amendments to the budget code cancel the requirement to reflect all loans exceeding $10 million for the whole loan term in the program of Russia’s state external borrowings.

The law also removes the requirement to specify particular loans in the amount no less than 85% of the total amount of external borrowings, as well as to include loan agreements made in previous years if such agreements are still valid.

It also repeals the rule enabling the finance ministry and the government to make external financial borrowings outside of Russia’s program of state external borrowings as part of restructuring of the country’s external public debt, which reduces expenditures on its servicing within the imposed ceiling of the state external debt.