Today in Russian Business – July 27, 2009

The EU Ambassador to Russia, Marc Franco, has suggested that Russia will remain a ‘third world economy’ unless the rule of law and democracy are re-enforced.  Whilst Russia is hoping that higher taxes from the energy sector will help reduce budget deficit, it is also considering borrowing $18 billion abroad in 2010.  According to Reuters, the total borrowed domestically and abroad next year may amount to $52 billion.  Vladimir Putin has vowed to protect the Russian steel industry, possibly through rendering state firms’ purchases of their products compulsory.  VTB has taken control of 1,200 hectares of prime real estate in lieu of repayment for a loan to businessman Sergei Pugachev.  Russia is planning to revise its bankruptcy laws to protect the integrity of companies in the event of default.  Natural Resources Minister Yuri Trutnev has suggested that Russia should improve the accessibility of foreign companies to the country’s resources; possibly by amending a 2008 law that curtailed foreign involvement in resource exploitation.  Former owner of Arbat Prestige cosmetics, Vladimir Nekrasov, and alleged crime chief Semyon Mogilevich, wanted in the US, may have been released from custody last week as their arrest warrants for tax evasion charges expired.