Sergei Bakeshin has commented to Delovoy Peterburg on measures to support business

Sergei Bakeshin Senior Associate

On Wednesday, 25 March, the Russian President addressed the nation regarding the spread of the coronavirus. The President announced measures to support small and medium-sized businesses, the key ones of which were commented on by Senior Associate, Sergei Bakeshin, for Delovoy Peterburg.

According to Sergei a delay in payment of all social fees and taxes, excluding VAT, may become the most useful for business. “In order for the proposed measures to work effectively, the relevant bills must be passed in the next two weeks. At the same time, a decrease in social contributions does not make life easier for business in the short term, but rather stimulates the payment of officials salaries and reduces untaxed earnings”, said Sergei.

Sergei also drew attention to the proposal to introduce a moratorium on insolvency proceedings. “A moratorium on insolvency will be at the same time a moratorium on administrators’ actions, and it is not said that only for monetary sanctions”, he explained. “The accrual of forfeits and other financial sanctions is suspended. And if an insolvency case is filed against a company within 3 months after the moratorium, then all transactions made during the moratorium for up to 1% of the debtor’s assets will be declared null and void, regardless of whether they are recognised as such by the court”. In the opinion of Sergei Bakeshin, the proposed mechanism might turn out to be a kind of time bomb under the economy. Theoretically, the debtor can file for insolvency during the moratorium and then apply for approval of a settlement agreement providing for a deferment of payments for up to 3 years, regardless of the presence or absence of a decision by creditors to enter into a settlement agreement. So lenders who want to get back their money should carefully analyse the law together with their lawyers.

Sergei also commented on a joint project of the government, VTB and Sberbank on issuing loans to small businesses to pay salaries to employees on the basis of subsidised rates, which in especially critical cases could amount to 0%. “It is not known what requirements will be imposed on the recipients of these loans and how it will be necessary to prove compliance with these requirements. Oleg Deripaska’s proposal to lower the key rate, make all loans more accessible and flood the economy with money sounds more logical and understandable”, summed up Sergei.

To read the article (in Russian), please see the Delovoy Peterburg website >>>