The fact that one of the alternative options for financial servicing of the state defense order through authorized banks can become a cash settlement center on the basis of the Federal Treasury, RBC told two sources in state agencies. "This option is being discussed by the Russian authorities," - also knows the source of RBC in one of the banks that work with the state defense order. According to the interlocutors of RBC, this is one of the options considered insurance against the risks of possible expansion of anti-Russian sanctions against banks that work with the defense order.
All profile departments did not want to discuss the option of circumvention of possible sanctions. The Federal Treasury, the Central Bank and the Ministry of Finance did not respond to RBC's requests. The Defense Ministry refused to comment on the situation.
The functions of the Federal Treasury now include the escorting of funds in rubles that are received when making payments under the state defense order. But the Treasury serves only those orders that do not go through the bank. Such a minority. The source of RBC in one of the state-owned banks says that "the volume of contracts that are being accompanied by the Treasury is only a tenth of the volume of financing of the Defense Ministry's projects." As Deputy Minister of Defense Yury Borisov reported in February 2017 in an interview with Rossiyskaya Gazeta, more than 1.4 trillion rubles should be allocated for the implementation of the state defense order in 2017.
In August 2017, the US adopted the second package of anti-Russian sanctions that apply to certain sectors of the Russian economy, as well as natural persons. They provide for the prohibition for any person to carry out "significant transactions" with Russian military or intelligence. The list of enterprises whose operations are banned is determined by the US Department of State. This list was published on October 27, it includes 39 Russian enterprises, concerns and organizations.
The definition of transactions that can be recognized as significant, as well as the criteria for their assessment in the law there. "The lack of a clear formulation gives US state authorities sufficient freedom of action and approaches when imposing sanctions," says Oleg Bychkov, partner and head of capital markets practice at Linia Prava. "Such formulations make it difficult for companies to interpret the law."
The consequences can be very serious, bankers say. The law has an extraterritorial effect, that is, it extends not only to American residents. "The main risk for a Russian bank working with the defense industry in this case is to be included in the sanctions list with SDN status (included in the List of Specially Designated Nationals - RBC)," says lawyer, partner of the EMPP law firm Mergen Doraev. "This will actually lead to the impossibility of making settlements in dollars, blocking accounts in foreign banks."
The Russian authorities were concerned about this situation. In September, Bloomberg reported with reference to sources that the Russian authorities postponed the allocation of part of the funds to the weapons program because of the threat posed by new potential sanctions of disrupting the financing of the state defense order. According to a number of RBC sources in state-owned banks, in case sanctions are toughened, in order to avoid risks for state banks, the possibility of creating a new bank to service the defense industry complex (OPK) was considered, which risks would not be terrible. As Kommersant reported, the creation of such a bank was considered on the basis of one of the structures of Rostecha. So far, none of the options have been implemented. And now the number of options has been replenished by the settlement center under the Treasury.
Who is at sight
The number of banks servicing the state defense order, according to the Law on State Defense Order No. 275-FZ, includes banks with a capital of 100 billion rubles that are under the control of the Russian Federation or the Central Bank, which requires the disposal of more than 50% of shares, a license to work with a state secret. The executors of the state defense order are selected from the approved Central Bank in accordance with these criteria of the list of banks to accompany the order.
The list of authorized banks was published by the Central Bank on a monthly basis, but at the beginning of December the publication was updated without any explanations from the regulator, moreover, the previously placed list disappeared from the site. In November, the government introduced a package of amendments to several laws that provide for the government to empower companies to release compulsory disclosure of information required by law (for public borrowers, joint-stock companies, etc.) in a number of cases. The proposed amendments to the law on the state defense order exclude the previously valid formal criteria for the selection of the authorized to work with the defense order of banks, as well as the provision on the monthly publication of the Central Bank of data on the list of these banks.
As of November 1, these banks included VTB, Sberbank, Rossiya bank, Gazprombank, St. Petersburg bank, Novikombank, RRDB, Rosselkhozbank. In November, RIA Novosti, referring to a document sent to the government signed by the first deputy chairman of the Central Bank, Dmitry Tulin, said that the Central Bank did not object to the inclusion of Promsvyazbank in the list of authorized banks.
RBC sent inquiries to all the banks that were on the list of commissioners for November 1 about how they assess their risks and the benefits of alternative options, including the Treasury clearing house.
VTB and Sberbank declined to comment, the other banks on the list did not respond to the messages. Unofficially one of the top managers of one of the banks explained the situation: "No one will comment on this topic, as any comments will play against the commentator and will exacerbate the risks as a whole." Therefore, a new idea to bypass sanctions with the help of the center under the Treasury, RBC discussed with experts.
Prospects of the Treasury
Creation of a separate structure on the basis of the Federal Treasury to finance the state defense order experts consider possible. "I admit that the authorities really can go on creating a cash settlement center in the structure of the Treasury in order to save banks from additional sanctions," says Alexander Danilov, senior director of Fitch Ratings.
This option experts consider generally functional. "Work through the Treasury clearing house is actually a scheme in effect during the Soviet Union when the defense order is directly financed by the government," recalls Alexander Losev, CEO of Sputnik. The law on sanctions did not mention the government and state bodies, only companies, state debt and physical persons, so sanctions can not be imposed on the Treasury under this law, says Losev. If such a settlement center under the Treasury is created, its tasks are most likely to be purely financing for executing companies, sell their products under export contracts and conduct cross-border payments to enterprises independently.
At the same time, the transition to a new system of work contains additional difficulties, experts say. "For the full operation of enterprises, credit funds are needed, and this function can only be implemented by banks," reminds the managing director of the National Rating Agency Pavel Samiev. "Probably, the Treasury could be a kind of intermediary between banks and enterprises, but as it will be realized formally, it is difficult to guess, because banks must enter into loan agreements with the direct borrower."
In addition, as experts point out, the idea with the Treasury was somewhat belated. According to a source from RBC in one of the state-owned banks, the Defense Ministry's contractors are currently contracting for 2018, with 80% contracted by the end of 2017. Under these conditions, possibly, next year the system will continue to function in the current form with all the ensuing risks, RBC's interlocutor summed up.