MOSCOW, January 23 (RIA Novosti
Officials Should Bank With National Bank Subsidiaries: Gref
Sberbank President Herman Gref asked the State Duma to allow public officials to bank with Russian banks’ foreign subsidiaries. He believes that this will make it possible to monitor operations involving these assets and to accumulate money in banks whose performance influences the Russian banking system. Bank market participants believe that Gref is defending the interests of Sberbank, which has considerably strengthened its positions on the international market.
Gref, who advocates a ban on public officials owning foreign assets, believes that this would ensure genuine sovereignty for Russia, rule out any conflict of interests in managerial decisions and help with the fight against corruption and money laundering. In his letter to senior State Duma officials, Gref notes that a ban on opening accounts by civil servants in foreign banks that are not subsidiaries of Russian loan agencies could become the most effective method for achieving this goal.
In the summer of 2012, State Duma deputies proposed that public officials, members of parliament, employees of law enforcement agencies, their spouses and minor children be banned from opening accounts in foreign banks abroad, and from buying and owning foreign real estate and securities of foreign companies. In his December 12, 2012 state of the nation address, President Vladimir Putin supported this initiative, saying that owning foreign real estate should not be banned, but that it should be strictly declared. On December 21, the State Duma approved the first version of this draft law.
Gref proposes to allow Russian to open accounts in foreign banks, provided at least 75% of their assets are held in Russian banks. This would help Russian lenders accumulate additional assets. Gref’s initiative fits nicely into Sberbank's development strategy. Sberbank has purchased several assets in the past two years and has expanded its foreign presence.
Three years ago, its foreign assets were worth less than $1 billion while today that figure is over $50 billion.
Other major banks do not believe that Gref’s initiative will help them expand their foreign operations. Very few Russian lenders have subsidiaries abroad. Their subsidiaries mostly service corporate businesses, rather than private clients from Russia, such as public officials.
As for Gref’s proposal, it is unclear why Russian officials cannot be allowed to keep their assets at foreign bank subsidiaries in Russia.
If approved, Gref’s initiative would only enable Russian officials to keep their assets at Russian bank subsidiaries where such assets are completely legal. Moreover, Russian bank subsidiaries in some countries insure bank deposits worth 100,000 euros (4,020,000 RUB). Russian banks insure deposits worth up to 700,000 RUB ($23,179).
Those officials who do not want to declare their incomes will be able to transfer money to the accounts of legal entities controlled by them or to their relatives. However, the new law could seriously limit the foreign investment opportunities of Russian officials.
Prime Minister and Parliament Talk Spring Goals
The State Duma’s spring session will focus mainly on the federal state procurement system, migration policy and Russian business leaving offshore zones. This was the decision made at yesterday’s meeting with Dmitry Medvedev in his out-of-town residence Barvikha. The State Duma deputies and the prime minister agreed they would meet at least once before the session ends.
Regular meetings with leaders of parliamentary parties were a common practice for Dmitry Medvedev when he was president. However, no party leaders were at yesterday’s meeting. Four parties delegated four members each, all deputy speakers or heads of committees. The conversation thus centered only on legislation. The prime minister suggested several topics for discussion.
They included a federal contract system, migration policy issues, anti-smoking laws and drunk driving.
“I strongly believe that the parliament must adopt the toughest measures for offenders,” the prime minister said about the drunk driving law.
The smoking ban, added Medvedev, “has been topped up with so many rules invented by smoking lobbyists that the current wording does not make any sense.”
There was no time, however, for the drinking and smoking issues. The federal contract system was discussed in detail though. The prime minister was aware that the state procurement system “does not protect the customer from the non-fulfillment of contract terms and successful evaluation of the efficiency of work.”
This “opens up possibilities for corruption and money laundering practices. The meeting revealed that a law is not enough for the new state procurement system to be launched next year. The government will have to develop and approve some 35 regulations, and dozens of existing laws will have to be amended. Otherwise the new system will still have loopholes for turning a profit illegally.
The most critical problems discussed yesterday concerned, in Medvedev's words, “our jurisdiction, the benefits and flaws of the existing system.” The jurisdiction in question is the one preferred by Russian businesspeople whose companies are registered offshore.
The draft law “must not be adopted because it contains some oppressive measures,” claims A Just Russia member Mikhail Yemelyanov, who is concerned that the federal finance watchdog may be granted authorities it will be able to use outside court. Deputy Speaker Igor Lebedev suggested continuing with Dmitry Medvedev’s intention of “not intimidating business.”
Similarly, the members of parliament expect consistency in migration policy. While some bills introduce restrictions (such as Russian language and culture requirements) that favor the flow of skilled foreign workers, others remove restrictions for citizens of former Soviet republics and are therefore conducive to uncontrolled migration flows.
It is not yet clear how the laws and bills will change as a result of yesterday’s discussion. The members of parliament think the meeting was a success though. It was agreed that Dmitry Medvedev would make such meetings a regular event. The next one is expected before the end of the spring session, with deputies acting as hosts.
IOC Demands Russia Turn Back Clock Next Winter
The International Olympic Committee has asked Russia to reintroduce standard time so that European television viewers can better enjoy the 2014 Winter Olympics.
Jean-Claude Killy, head of the coordination commission for the Sochi games, made this request in a letter to Deputy Prime Minister Dmitry Kozak, who is overseeing the Olympics. The IOC believes the ideal time difference for European viewers is two hours instead of three, the current winter difference since Russia switched to what is referred to as ‘eternal summer time.’ Killy is actually insisting on a decision before the World Broadcasters Meeting where the organizers will present the final schedule for the games.
“The Winter Olympics is especially popular in European countries such as Germany, Norway, Finland and Russia,” Vasily Kiknadze, CEO of the Sport Broadcasting company, said.
The Sochi 2014 Organizing Committee is working on the game schedules in close cooperation with the Olympics Broadcasting Services and international sports federations. The IOC request could be the final nudge the Russian Government needs to restore standard time.
"It’s one thing when deputies, ministries or public organizations ask about this. It’s a totally different thing when the International Olympic Committee raises the issue because of the international community's interest in television coverage for the most important sporting event in four years," a government source said.
President Vladimir Putin met with Killy in Sochi last December after traveling by train from Sochi to Krasnaya Polyana and examining the new Olympic facilities. "I think the president will meet the IOC’s request and issue an order to resolve the problem," a source close to the Russian Olympic Committee said.
Izvestia reported earlier that the Communications Ministry and Russian TV channels have asked Putin to reinstate standard time. With an extra hour’s time difference between Russia and European countries in winter, live broadcasts of European sporting events start too late for Russian viewers.
Last December, the Ministry of Industry and Trade submitted a report to the Government showing the results of its surveys of various agencies’ and regions’ reactions to the change. Many of them cite economic reasons for turning the clock back again in the winter. Energy savings in Russia shrank a meager 0.45%. Some regions reported an increase in health problems. The ministry proposed returning to the time change question a year from now after gathering more information.
The international broadcast of the Sochi Olympics will be carried by Olympic Broadcasting Services, OBS, which is financed by the IOC. The Autonomous Non-Commercial Organization Sport Broadcasting will be responsible for the games coverage in Russia. The company was founded by Channel One, VGTRK, NTV+ and RIA Novosti.
Kozak’s spokesman could not immediately comment on the IOC’s request.
RIA Novosti is not responsible for the content of outside sources.
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