Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Business in Brief

New VAT Cut Mulled



MOSCOW (Bloomberg) -- Finance Minister Alexei Kudrin said the country may cut the value added tax to 16 percent in 2006 from the current 18 percent if the country ends VAT tax breaks for companies, Vedomosti reported Friday, citing Kudrin at a press conference.

The country's largest companies want the value added tax to be cut to between 10 percent and 12 percent, the newspaper said without naming the companies. Some companies, such as drug producers and companies making products for kids, currently pay the tax at a 10 percent rate, the newspaper said.

The country lowered the tax from 20 percent in January 2004, to help sustain economic growth. The cut let domestic companies "keep billions of rubles" to spend on technical upgrades and other needs, said Gennady Yezhov, Kudrin's press secretary.

The country, the world's biggest oil producer, has said its economy will probably grow as much as 7.1 percent this year, compared with 7.3 percent last year.




EU Meat Talks



BRUSSELS (Reuters) -- The European Union's food safety chief is likely to travel to Moscow next week to end a long-running trade row with Russia over meat imports, officials at the European Commission said Friday.

Negotiations between the two sides have continued through the summer to try and reach a deal before an end-September deadline that would see Russia resuming its EU meat ban.

Moscow blocked meat exports on June 1 from a host of EU states including key producers Denmark, Ireland and France, by refusing to sign food safety certificates for the shipments. EU meat exports to Russia are worth 1.3 billion euros ($1.57 billion) annually.

Now that signs for a deal were looking better, EU Health and Consumer Protection Commissioner David Byrne would probably visit Moscow, with Dutch officials representing the rotating EU presidency, to wrap up the negotiations, officials said.




Itera Courts Belarus



MOSCOW (Bloomberg) -- Itera, the country's third-largest gas supplier, said Friday that it is in talks with Belarus on selling the fuel to the country in 2005.

Belarus President Alexander Lukashenko and Itera chairman Igor Makarov met in Minsk on Thursday, Itera said in an

e-mailed statement. Belarus proposed that Itera deliver gas in accordance with an agreement Lukashenko and President Vladimir Putin reached last Monday.

Putin and Lukashenko said they will hire an independent appraiser for the Belarusian pipeline system, Beltransgaz, to reorganize the network as a Russian-Belarusian joint venture. Russia will start selling gas to Belarus at Russian domestic prices after the joint venture is set up, Putin said, according to the Kremlin web site.

Itera is seeking to maintain its presence at the Russian and Belarus markets. Its sales plunged 51 percent in 2003 as Gazprom squeezed it out of some markets and regained some gas fields.

Itera is being pushed out of former Soviet states such as Turkmenistan and its output declined after Gazprom regained control of two units that Itera was allowed to take over under former Gazprom CEO Rem Vyakhirev.




TNK-BP Loan Saved



LONDON (Bloomberg) -- Japanese and German banks have agreed to join a group of banks lending $600 million to Anglo-Russian oil company TNK-BP after Societe Generale SA withdrew support last week, the Financial Times reported Friday.

Two banks from Japan and one from Germany will join the group, making it probable the loan will go ahead on the original terms next week, the report said, citing an unnamed person working on the agreement. The newspaper did not name the banks.

The Japanese and German lenders' involvement shows bankers' opinions are divided on the risk of investment in Russia after the government's treatment of oil company Yukos, the report said.

Yukos, the country's biggest oil exporter, this week cut its production target and capital spending plan for this year as it tries to meet a $3.4 billion tax bill.

The original bank group for the TNK-BP loan was made up of eight lenders including Citigroup and ING Groep.




Norilsk Orders Tanker



MOSCOW (Bloomberg) -- Norilsk Nickel, the world's top nickel miner, ordered a 14,500-ton Arctic container ship from a unit of Norway's Kvaerner on Friday as the company starts to replace existing cargo ships built in the 1980s.

The contract price of an Arctic container ship is about 70 million euros ($84.7 million), Moscow-based Norilsk said in an e-mailed statement.

The ship will be built by Kvaerner Masa-Yards Inc. in Helsinki and should be ready in 2006, the company said.

"The new ship will be the first in a possible series of several vessels that will replace the CA-15 cargo ships that were built in Finland at Vartsila and Valmet in the 1980s and have worked successfully on the northern route for the past 20 years," Norilsk said.




Slowdown Predicted



MOSCOW (Bloomberg) -- Russia's economic growth may slow even more than predicted by the government next year, if the country further restricts competition in its gas and electricity industries and fails to limit capital flight, Raiffeisenbank Austria said Friday.

The $434 billion economy will probably expand as much as 5 percent next year, less than the government's forecast of 6.3 percent, Raiffeisenbank Austria said in an e-mailed report.

Consumer prices will probably increase by 10 percent next year, the bank said, exceeding the government's inflation target by as much as 8.5 percent.

An increase in producer prices should slow to an annual rate of 15 percent next year, from 26 percent this year, Raiffeisenbank predicted in the report.

The government has been delaying a reorganization of Unified Energy Systems and Gazprom, its electricity and gas monopolies, because of disagreements within the government over when and how to reform the industries.

"The major concern is that the reforms are being designed and never implemented," said Madina Butaeva, analyst at the bank, in a telephone interview.

"They should end the monopoly position of Gazprom and RAO UES, which would increase effectiveness of these two sectors and help sustain economic growth."




Black Sea Oil Dispute



BUCHAREST, Romania (AP) -- Romania said last week it would take a dispute with Ukraine over oil and natural gas exploration rights in the Black Sea to the World Court, officials said.

Romanian Foreign Minister Mircea Geoana notified Ukrainian Ambassador Teofil Bauer of the suit Thursday, according to a statement from the Foreign Ministry.

Romania also demanded Ukraine to stop the construction of a shipping channel in the Danube Delta, the same day Ukraine officially inaugurated works on the project, the statement said. Romania controls more than 90 percent of the delta, the rest is Ukrainian.