Interview with Andrey Slepnev, General Director of Russian Export Center JSC

One of the most important events in the field of export is the implementation of the national project "International Cooperation and Export". What is the significance of this document for promoting our products to foreign markets?

Unfortunately, there is still an opinion in the conventional wisdom that Russia exports only energy resources. Although this is a big misconception. Non-primary goods account for one third of exports. Last year alone, exports totaled about 151 billion rubles. We export food, metals, fertilizers, timber and chemical products, and much more. The potential is huge: there are many Russian companies that could successfully conquer global markets. However, now they often build their model, focusing on the regions of Russia. At the very least, they look at their closest neighbors: Kazakhstan, Belarus, and only a few are building their business model based on the global market. At the same time, we see that those who are starting to develop in this direction are achieving impressive results. The national project "International Cooperation and Export", which was prepared pursuant to the May Presidential Decree, is intended to promote the development of exports in Russia. For the first time, an unprecedented amount of financing has been allocated to support export–oriented companies - 956 billion rubles.

Are there any results of the national project yet?

— A lot has already been done. For example, starting from July 1, the zero VAT rate applies to exports of works and services. The relevant changes were made to the Tax Code with the direct participation of the REC. Since the recipient of Russian services is located abroad, it makes perfect sense to exempt the exporter from paying VAT, especially since they previously had to pay the appropriate taxes within the country on the costs of creating their export product, for example, when purchasing the necessary equipment.

On June 18, Russian Prime Minister Dmitry Medvedev signed an order to introduce a bill to the State Duma on the liberalization of currency control. The draft law provides for the abolition of the requirement for residents to repatriate export earnings in Russian currency for non-primary goods from January 1, 2020, and the phased abolition of this requirement for the export of raw materials. We hope that the business will respond positively to these changes.

The state support measure for companies implementing corporate competitiveness Improvement programs (CPPC) has also begun to operate. For companies that participate in this program, the commercial rates of banks will be reduced to 4.5%. It is important that the government gives a very specific signal to business - a preferential loan rate will be fixed for several years. The Government of the Russian Federation has allocated more than 327 billion rubles under this program.

In addition, the REC, together with the Ministry of Industry and Trade of Russia and the Ministry of Economic Development, are creating a unified export promotion System abroad and in the constituent entities of the Russian Federation.

What is its essence?

— This system will cover 52 countries in the future. REC Bureaus are already operating in Mumbai, Tashkent, and Hanoi. In the future, they will be opened in Asia, Europe, the Middle East and the CIS. The uniqueness of the system is that it will connect Russian regions with foreign countries. It creates the possibility of end-to-end interaction between export support points abroad and in the constituent entities of the Russian Federation. In other words, the exporter will be able to come to the support center in his region and, if necessary, promptly consult with a representative of the bureau of his country of interest abroad. Today, this communication "region-foreign country" is being built with the direct participation of the central link - the Russian Export Center. This should shorten the time frame for providing support measures to exporters and simplify the scheme for applying to foreign representative offices for support. The effectiveness of this system will increase significantly as part of the implementation of our digital platform: "one window" will connect all participants in the export process using modern technologies.

Obviously, the focus of the REC's attention has shifted significantly towards the regions. Tell us about the points of presence of the REC?

— In 2021, it is planned to create export support centers in all regions of Russia. To date, there are already 79 of them. Just recently, the Government of the Russian Federation approved for submission to the State Duma a draft law on granting the REC the authority to control, monitor and analyze the work of the CPE. This legislative initiative will accelerate the integration processes between the REC and the regional CPE network, streamline and scale up support for exporters, ensuring access to it in all regions of the country. The regions now have a wide pool of tools. All this will make it possible to speed up the process of entering foreign markets, as well as significantly reduce time and financial costs. In addition, by contacting the CPE, exporters can already receive professional advice on export activities and access to all REC support measures.

What other support measures can the REC offer to domestic exporting companies?

— Firstly, we are the "headquarters" of the national project "International Cooperation and Export". REC, part of the VEB group.The Russian Federation has a high competence in developing regulatory measures aimed at eliminating excessive requirements and restrictions for businesses involved in export activities.

Secondly, the REC is an agent of the Government of the Russian Federation and implements a number of special export support programs related to international convention and exhibition activities. In other words, exporters can apply to the REC and get the opportunity to participate in international exhibitions and business missions. The REC also has the opportunity to provide support for the transportation of export products.

Thirdly, by contacting the REC, exporters can receive high-quality advice, they will be offered services to find partners abroad, and analytics on potential export markets. Exporters can benefit from assistance in certification, patenting, and licensing. Equally important is consulting on customs administration. The REC Export School is open for novice exporters. Companies can count on the REC's assistance in the field of intellectual property rights protection.

Fourth, our financial support measures are the most popular. The EXIAR Agency provides protection against risks associated with export activities. ROSEXIMBANK provides various forms of export financing. In addition, bank guarantees, export contract settlements, and currency risk hedging are available to exporters.

In total, we provide about a hundred services, offering a specific pool of tools for each target audience. Last year, the REC provided support to more than 10,000 exporters.

How is the project on the introduction and implementation of acceleration programs progressing?

— It is launched and effectively piloted. Having studied the best international practices, we are launching our own acceleration projects that allow us to adapt participants to all complex processes of international trade, but most importantly, it is important for us to show Russian enterprises that exports are a reality and not difficult at all.

At the beginning of the year, we presented a joint online accelerator with Sberbank. We are also implementing a pilot project on our own infrastructure in the Nizhny Novgorod and Orel regions. Pilot co-branding programs are being launched with the Skolkovo Business School, Pricewaterhousecoopers. Other programs are also being prepared for launch.

The export maturity is determined for each accelerator participant and an individual action plan is drawn up. The program includes an educational module, consulting support, logistics support and other services popular with exporters. Its goal is to develop comprehensive export competencies, as well as create conditions for seamless access to foreign markets.

Both companies that do not export, but they have such potential, and firms that already supply foreign markets can get into the accelerator.

How are things going with the entry of Russian entrepreneurs into foreign markets in online trading?

One of the easiest and fastest ways to start an export business is to trade through electronic trading platforms. This is evidenced by the positive dynamics: the volume of retail export of electronic commerce in Russia increased by a third and amounted to $746 million. According to eBay's expert data, the export retail e-commerce market has a growth potential of $10 billion. over the next few years.

For example, a joint project between REC and Alibaba Group was recently launched, in which the most promising Russian products were selected. They will be purchased by a Chinese company from Russian suppliers, transported to warehouses in China, and then sold through the online infrastructure. This scheme allows you to deliver Russian goods to local customers within one day. The first wholesale batch of goods has already been purchased and shipped to China for further retail sale.

In addition, the Export Regions project is being implemented jointly with the eBay international electronic platform and the regions of Russia (Yaroslavl Region, Novgorod Region, Udmurtia). A promotional page for the region is being created on eBay, and local entrepreneurs are being trained in export e-commerce.

Realizing the importance of this area, the REC has created a training course on "Online Trading opportunities for exporters." It provides an opportunity for current and potential exporters to learn full-time and remotely how to launch online export trading.

How actively has the business responded to the invitation to participate in the Exporter of the Year award?

Interest in the Award is extremely high, and more than 800 companies have already applied to participate in the award. The district stages were held in the Southern Federal District, Northwestern Federal District, and Ufa. You can join the award on the website of the Russian Export Center (https://www.exportcenter.ru/awards ) by filling out an electronic questionnaire.

Its unique advantage is the recognition of the achievements of exporters at the state level. And we are grateful that the Government of the Russian Federation has decided to support exporters with such an award. This is a really important step towards promoting exports and well-deserved recognition of the success of exporters in working in foreign markets. In November, we are waiting for the federal finals, where, within the framework of the international export forum "Made in Russia", the best of the best - export champions – will receive the coveted award for their achievements from the hands of the Prime Minister.

For reference

A national project on international cooperation and export is being implemented in the Omsk Region, which includes three regional ministries – the Ministry of Economy, the Ministry of Agriculture and the Ministry of Industry. The essence of the project is to stimulate the creation and development of export-oriented enterprises, the development of international cooperation.

"The Omsk Region has significant opportunities and potential as a barrier–free region for the development of international trade, as well as cooperation between enterprises in the region that produce high−quality products that are competitive on world markets," the regional Ministry of Economy believes.

It should be noted that the Omsk region is actively developing international cooperation. Since the beginning of the year, negotiations have been held with foreign partners in the framework of more than 30 events. This year, the region will become a venue for the Forum of Cross-border Cooperation between Russia and Kazakhstan with the participation of the two heads of state. In addition to the activities implemented by the Regional Government, a regional infrastructure organization, the Export Support Center, operates in the region on the basis of the Omsk Region Development and Investment Agency, whose tasks include stimulating and supporting export−oriented enterprises by organizing their participation in foreign exhibitions, fairs, contact exchanges, as well as training in the basics of export activities. An educational project to teach Omsk companies the basics of foreign economic activity is being implemented in the region thanks to the cooperation agreement signed by Omsk Region Governor Alexander Burkov at the St. Petersburg Economic Forum, which aims to help Omsk entrepreneurs become active exporters. So, for example, this year, Vladimir Nikolaevich Chuvakin, an individual entrepreneur who manufactures paint thickness gauges on cars, after studying at the REC Export School, established product supplies to the Republic of Belarus and opened an enterprise in London. Another example is the manufacturer of charcoal under the trademark Bugol, Stanislav Alexandrovich Buga, an individual entrepreneur, who, as a result of a visit to the Pavlodar region, established charcoal supplies to the Republic of Kazakhstan.

According to the results of the first half of the year, Kazakhstan, Saudi Arabia, Belarus, the Netherlands, China, Germany, and Poland are among the most active trading partners in the region. In total, Omsk entrepreneurs have collaborated with 84 countries around the world.

Omsk enterprises export barley, rapeseed oil, confectionery, chocolate, sausages, alcoholic beverages and installations.

There are 18 agreements and agreements with foreign partners in the region aimed at developing trade relations.