Regional network development
Geographical remoteness and concentration of export-oriented enterprises in different Russian regions suggest the development of the REC Group’s regional network. Regional representations allow ensuring operational interaction between the REC Group’s headquarter and the customers, reduce the load on the front office by processing the applications in the regions and improve the processing rate.
REC’s own regional subdivisions provide consultations in accordance with the Group’s product catalog and examine documents for issuing export licenses for certain types of goods in accordance with the agreement with the Ministry of Industry and Trade of Russia. Regional subdivisions also interact with regional executive bodies and business community on export development and support issues.
REC Group’s main task is to develop cooperation with foreign export development and support institutions, improve Russian brands awareness and perception, reveal new opportunities for Russian exporters in foreign economic projects and foreign tenders.
To create the most favorable conditions for the development and expansion of the geography of Russian export, REC makes efforts to create a network of points of presence abroad, namely creates a network of comprehensive competence centers involving all instruments available to the REC Group of companies in the markets of top priority for Russian export. In particular, REC focuses on the needs of exporters, since the task is to strengthen support in those regions where Russian companies need substantive assistance.
As of the end of 2018, there were 9 foreign points of presence of REC in Belarus, Tajikistan, Kazakhstan, Vietnam, Azerbaijan, Uzbekistan, China, Iran, and India, which was established in late 2018.
International network development
The target model assumes 52 countries of foreign presence of the USEP (the unified system for export promotion in the constituent entities of the Russian Federation and abroad) by 2021.
To expand the geography of Russian export, REC, the Ministry of Industry and Trade of Russia and VEB.RF create the Unified System for Export Promotion in the constituent territories of the Russian Federation and abroad (hereinafter the “USEP”), which suggests the integration of existing export support and promotion tools, including the functions of Export Support Centers in the constituent territories of the Russian Federation, and Russian trade missions abroad.
The USEP will allow to use rationally the existing infrastructure, information technology and technological capabilities, while ensuring the unity of business processes.
Key anticipated results:
- single quality standard for the provision of products and services;
- diversification of the geography of Russian export, coverage of more than 100 foreign countries and 85 constituent territories of the Russian Federation;
- quick access of regional exporters to foreign markets.
The main functions of the unified system:
- assistance to Russian exporters and foreign buyers of Russian products in the selection of relevant partners, participation in exhibitions, trade shows and business missions;
- assistance in financial and non-financial support for the implementation of joint projects, in particular, aimed to enter the markets of third countries;
- analytical and consulting assistance for Russian exporters and foreign buyers of Russian products;
- assistance in eliminating emerging barriers to implement joint projects.
REC as a coordinator of the USEP will create and ensure the implementation and support of the “one-stop-shop” information system, which is a technological basis for the USEP. Besides, it will create a unified line of services and unite the regional and foreign institutions for the USEP promotion.
In late 2018, REC and the Ministry of Industry and Trade of Russia prepared a draft Concept for the USEP development (approved by the project committee of the “International Cooperation and Export” Federal project on 21 December 2018). The target model assumes the integration of the USEP in 52 countries, which are of top priority for Russian export, by 2021.
To implement the plan for the USEP introduction, in the fall of 2018, REC took steps to implement the plan for the pilot launch of its new points of presence based on the infrastructure of the trade missions of the Russian Federation abroad& Such new points of presence were called export support groups. They were first launched in China, Germany, Turkey, India, Vietnam, Uzbekistan and Singapore.
Besides, to expand cooperation between Russian and foreign companies, REC is going to develop interaction with companies that could act as the business providers with specific market knowledge. Such companies will have to be certified and accredited and connect to the “one-stop-shop” system.
Interaction with foreign partners, export development and support institutions, export credit agencies
The REC group is working on the creation of mechanisms, platforms and channels for promoting Russian export in the format of affiliate programs. The affiliate programs in Germany, China, Japan, Singapore, Turkey and other countries are under consideration.
To improve the efficiency of cooperation with international institutional partners, REC is working on the mechanisms, platforms and channels for promoting Russian export through partnership programs, which parameters depend on the specific capabilities of partners in different countries, e.g. access to partner trading infrastructure, availability of databases of potential contractors, integration into production chains. REC develops the affiliate for Germany, China, Japan, Singapore, Turkey and other countries.
The group in close cooperation with the Russian-German Chamber of Commerce is trying to integrate the partners’ capabilities into its own business processes to provide services for searching partners and Russian suppliers abroad. The relevant agreements were stated in the memorandum of understanding in April 2018. The memorandum suggests the establishment of the Russian-German trade bureau by the Russian Export Center and the Russian-German Chamber of Commerce. The Contact Bureau has been launched in 2019 and will allow Russian companies to receive high-quality consultations on the prospects of product supply to the German market, information on the market potential, products in demand and potential partners. Further the projects will be supported in the one-stop-shop mode.
Simultaneously, REC takes efforts to build new export channels for Russian companies in foreign markets in cooperation with partners. In November 2018, on the sidelines of the First International Import Exhibition in Shanghai, REC signed a series of agreements on the organization of a supply system for Russian products to the Chinese provinces of Sichuan, Hubei and Gansu. SKYMAX Group, operating the exhibition pavilion for Russian agricultural products in Shanghai, which was opened by REC and the Ministry of Agriculture of the Russian Federation, became the REC’s partner under three agreements. To implement the signed agreements, REC is establishing the channels for the regular distribution of Russian products, in particular, agricultural.
Cooperation with Afreximbank
Entering into the Afreximbank’s capital in December 2017 allowed Russia to find a powerful and authoritative partner in Africa, the cooperation with which is designed to actively promote Russian export in the continent.
As from the date of agreement conclusion, the Russian party and Afreximbank elaborated more than 10 projects in various industries, including civil aviation, chemical industry, infrastructure projects, railway industry.
In 2018: 10+ projects in various industries were elaborated by REC and Afreximbank.
Aside from the cooperation in the financial sector, the Group enjoys the opportunities for promoting Russian companies via the Afreximbank’s channels. For example, in April 2018, there was organized a business mission of Russian aviation industry enterprises in Africa. The mission visited Kenya, Uganda and Nigeria. Besides, in December 2018, a comprehensive business mission to Egypt (Cairo) was organized, which was dedicated to the first international exhibition called The Intra-African Trade Fair 2018. Thus, the group takes comprehensive efforts to ensure the necessary level of interaction in accordance with its strategic objectives for promoting Russian export in African markets.
If to speak about corporate affairs and exercising the powers of the Russian Export Center as a shareholder, the representative of REC, Senior Vice-President N.V. Gusakov, was appointed as an alternative member of the Board of Directors of Afreximbank on behalf of the "C" class shareholders.
The high level of cooperation with the Russian Federation allowed Afreximbank to hold the next General Shareholders Meeting in Russia in 2019. The fact that such an event will be held in Russian indicates a serious interest of the African region in close long-term business relations with Russian partners and, of course, will allow bringing Russia-Africa relations to a whole new level.
In the second half of 2018, the REC started to implement the Russian-Egyptian intergovernmental agreement on the establishing and enabling of the Russian Industrial Zone in the Arab Republic of Egypt (hereinafter the “RIZ”).
RIZ is a comprehensive production and logistics cluster in the Suez Canal Economic Zone, which will enable Russian exporters and suppliers to Egypt, Africa and the Middle East markets to localize their assembly and production facilities in close proximity to the target markets.
RIZ is not focused on any specific industry, rather it will strengthen cooperation with regional partners in various fields. The potential residents of the RIZ are the representatives of a wide range of industries and production areas, including the agricultural and industrial sector, food production, pharmaceuticals and metallurgy.
Cooperation with international organizations
The REC Group actively cooperates with international organizations such as the WTO, the OECD International Working Group on Export Credits (IWG), the International Chamber of Commerce.
Since 2012, Russia is a member of the WTO. Therefore, it is obliged to comply with the requirements of the organization when carrying out activities related to financial exports support. At present, the REC Group is providing expert support to federal government bodies through the WTO in terms of officially supported export credit schemes.
As the REC Group is guided by the provisions of OECD norms containing recommendations and regulatory principles for officially supported export crediting, Group’s representatives regularly participate in the activities of the Russian coordination and advisory bodies on the interaction between Russia and the OECD, as well as in the OECD working groups on officially supported export credits to develop cooperation and share the experience, such as:
- meetings of members of the working group on export crediting and credit guarantees (including meetings of experts on social and environmental assessment);
- meetings of the members of the working group on OECD Arrangement on officially supported export credits (hereinafter the “AOSEC”) (including meetings of technical experts, country analysis experts and members of the sectoral agreement under the AOSEC on civil aviation).
International Working Group on Export Credits (IWG)
Besides, in 2018, the representatives of the REC Group discussed export credit issues, in particular, within the framework of the International Working Group on Export Credits (IWG), which had been created on the initiative of the United States and China to develop the most optimal international standards for export credit regulation. This working group brings together the members and non-members of the OECD Arrangement on Officially Supported Export Credits and provides an opportunity for a closer discussion of the conditions for granting export credits and the development of international standards, taking into account the interests of different countries and the best world practices.
International Chamber of Commerce
In 2018, the representatives of the REC Group continued to work within the Russian National Committee of the International Chamber of Commerce (ICC Russia) on the economics of climate change and sustainability, which main focus was to facilitate the expert elaboration of a wide range of issues related to economic instruments for addressing the climate agenda and principles of sustainable development.
To promote the “green” agenda, in December 2018, the representatives of the REC Group took part in the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change in Katowice.
Compliance with international standards in providing financial exports support
Combating bribery of foreign public officials
The need to comply with requirements of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions is stipulated by the obligations undertaken by the Russian Federation as a result of the ratification of the said Convention (hereinafter the “The OECD Anti-Bribery Convention”).
Therefore, there has been introduced a system into the process of concluding and supporting the REC Group agreements to combat bribery and ensure noninvolvement of applicants and exporters in bribes to foreign officials.
In 2018, the REC Group updated the data on the implementation of anti-corruption assessment procedures to inform the OECD of the status of implementation of the relevant provisions of the Anti-Bribery Convention.
Project social and environmental impact assessment
- When providing financial support, the REC Group assesses social and environmental risks of export and investment transactions.
- 41 projects were assessed and ranked in terms of social and environmental risks.
When providing financial support, the REC Group assesses social and environmental risks of export and investment transactions guided by the general provisions of the OECD Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (hereinafter the “OECD Common Approaches”) and internal regulations.
In 2018, 41 projects were assessed in terms of social and environmental risks. Those projects were classified in accordance with the OECD Common Approaches.
Besides, the implementation of socio-ecological covenants is monitored for the projects characterized as those with high (A-type projects) and moderate (B-type projects) social and environmental risks.
B-type projects are monitored without the participation of third-party consultants by analyzing reports on the implementation of established requirements, including the implementation of the developed plans for social and environmental measures.
A-type projects monitoring involves the analysis of reports and regular audit of construction sites.
Information on A- and B-type projects is published on the EXIAR’s and EXIMBANK’s OF RUSSIA external website.
Cooperation with Russian development institutions
To develop and promote export of key industry-specific products and services, REC coordinates the efforts and develops relationships with a wide range of the largest Russian business associations, non-profit organizations, state institutions and innovative development funds, which provide support to Russian companies at various stages of their development and tools and solutions to improve the competitiveness of products and services.
Together with the above state institutions and funds, REC is working on the shared platforms for systemic support in the form of shared services, customer sharing channels, joint inter-institutional companies for the promotion and marketing of state support tools. It also uses platforms and customer bases of major business associations, participates in the activities of non-profit organizations to stimulate innovative development of Russian companies and the subsequent export of their products and services.
REC cooperates with more than 25 federal partners. This cooperation allowed REC to increase exports with official support by 1.7 times in 2018.
To fulfill the strategic objectives and to become a key element for the national support and development system, the REC Group pays great attention to the development of the communication system.
REC regularly publishes comments, interviews, and articles on behalf of the Group management in the most authoritative Russian social and political, business and industry media. These materials contain comprehensive information on measures to support domestic exporters, data on current and estimated non-resource exports. PR department regularly implements special projects with leading Russian media, the purpose of which is to inform exporters and general public about the available support tools that can be used to approach foreign markets and about the results of the REC Group's activities. The management of the REC Group provide regular expert assessment to export activities.
Daily export-related news, statements and guidelines of the REC Group are regularly published on the official website of the company. The site involves special sections, in which video interviews, text and photo materials are collected.
The REC Group has official accounts on:
The Group uses its accounts to publish news from all its companies and relevant information for exporters in all areas of support. Thus, Russian companies have another convenient online channel for obtaining all information, as well as the opportunity to communicate with the representatives of the REC Group online.
The Russian exporter magazine
The Russian exporter magazine covers the main trends in export and foreign trade. Each issue contains the examples of major transactions, tips for newbies, interesting interviews with industry experts, instructions for entering foreign markets. The magazine is published four times a year, its electronic version is available on the REC website. The magazine publishes country and industry reviews, successful cases of Russian exporting companies, information about mechanisms and tools for export support. Thus, the magazine is useful to both existing exporters and those who are just planning to enter foreign markets.
Russian Export Center issues the monthly Russian Export News newsletter, which contains analytical materials, news and announcements of all companies of the REC Group. Newsletter is published on the REC website and e-mailed under the subscription.