Today in Russian Business – July 8, 2011

Will the court change its verdict on Alexei Kozlov, who has already served four years of his seven-year sentence for embezzlement?  The medical insurance tax will be reduced by 4%, but the government nonetheless will stick to its $16.5 billion plan to buy medical equipment and raise doctors’ salaries, says Vladimir Putin.  The Moscow Times discusses a new UBS survey, which apparently reveals that wealth creation, not preservation, is a primary driver of Russian business, in contrast with mature capital markets in the U.S. and Europe ‘where a majority of the very wealthy wanted their children to carry on the family firm.‘  Responding to the same survey, the WSJ notes its suggestion that wealthy business leaders are moving their capital out of Russia and into European real estate, viewing it as ‘the safest asset‘.  A Russia-focused investment banker at Citigroup anticipates that Russian companies could raise over $40 billion in share sales by the end of 2013 – not quite a match for the surge of 2006/7, but an improvement in activity.  As prices hit new highs, Russia is selling – not hoarding – its gold.  According to a UniCredit report, VTB’s takeover of Bank of Moscow puts it at risk of a default on two bonds.  Defense Minister Anatoly Serdyukov wants all contracts on the 2012 state defense order to be signed by the end of the year ‘for the first time in the entire history of state defense order‘. A new bill will enable the Federal Tax Service to control transfer prices for goods and services traded between parent and affiliate companies, thereby closing a traditional tax loophole.