VEB.RF approved the coordinating role

The State Duma yesterday approved in the second reading a bill defining a new scheme for coordinating development institutions under the auspices of VEB.RF. The state corporation is empowered to control the development of strategies for the “sponsored” structures and their achievement of performance indicators. VEB.RF will also be able to provide development institutions with financial and guarantee support. During the second reading of the bill, VEB’s functionality was somewhat expanded – to its tasks were added to the promotion of improving the quality of life and support of social entrepreneurship.

The bill establishing a new scheme for coordinating development institutions united in the framework of the reform on the basis of VEB.RF was approved yesterday in the second reading, the third will be held on June 9. According to the project, the state corporation will receive the powers of the sole executive body and the founder of the organizations transferred to its jurisdiction, as well as the right to determine the priorities of their work. Recall that the reform announced in November 2020 was explained by the need to improve the efficiency of development institutions and their reorientation to achieve national goals. Some organizations were transferred under the control of VEB, others were enlarged or liquidated with the transfer of functions to departments.

The bill stipulates that VEB.RF will participate in the management of development institutions, defining strategies and directions of their activities. The state corporation will control decision-making in relation to large investment projects and the achievement of performance indicators transferred to it for management of organizations. VEB is also empowered to determine the risk management policy, to manage the temporarily free funds of sponsored organizations, as well as to provide them with financial and guarantee support. In turn, development institutions can open accounts and deposits with VEB.

By the second reading, the deputies clarified the goals of VEB.RF. In addition to those specified in the law on the state development corporation – this is assistance in ensuring the long-term socio-economic development of the country, creating conditions for sustainable economic growth, expanding investment in the economy – the task is to help improve the quality of life of citizens. When carrying out income-generating activities, VEB.RF should proceed “from the priority of achieving socially useful economic and social development goals, creating conditions for solving social problems.” To this end, the draft law includes provisions on VEB’s support for social entrepreneurship (this is a business aimed at solving any social problems). As the Deputy Minister of Economy Ilya Torosov explains, if earlier VEB.RF supported large projects, now its sphere of activity is expanding up to granting grants to start-ups or supporting small and medium-sized businesses.

Finally, the bill clarifies the functions of VEB.RF as a trustee (now the law stipulates that when implementing projects, a state corporation can manage funds or other property, which is also state-owned). The amendments clarify that in order to facilitate the achievement of national goals and to attract investment in projects, VEB.RF, based on the decision of the board, has the right to manage the property of Russian and foreign individuals and companies, including making transactions and taking other actions in the interests of such persons.

Evgeniya Kryuchkova

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