THE EASTERN ECONOMIC FORUM-2018 PROGRAM IS CONFIRMED
The 4th Eastern Economic Forum (EEF-2018) will be held in Vladivostok on 11-13 September 2018. The Forum will focus on four main areas:
1. «Tools to support investors: next steps», includes following issues:
- development results and prospects in territories of advanced social and economic development (TASED) and the Free Port of Vladivostok (FPV);
- protection of investors' rights;
- support to small and medium-sized enterprises and high-tech projects;
- possible creation the first Russian offshore zone in Russian Far East; and
- prospects for a leap forward by the FEFD regions in the national ranking of investment attractiveness.
2. «Industry Priorities of the Russian Far East»:
- the development various industrial sectors, in particular: timber; agriculture; fishing; oil and gas; tourism and port infrastructure; mining and refining of solid minerals; mineral exploration.
3. «Global Russian Far East: International Projects for Cooperation»:
- prospects for economic convergence between Russian Far East region and neighboring countries;
- development of transport connections in the Russian Far East territory with the Asia-Pacific Region; and
- establishment of the International Medical Cluster in Vladivostok.
4. «Improving Living Conditions»:
- issues concerning demography, healthcare, education and science, housing, culture and urban development projects in the Russian Far East;
- improvement of the region’s labor market; and
- new measures for land development through the Far Eastern Hectare program.
The EEF-2018 program includes a format for inter-state business dialogues, which allows representatives from Russian and foreign business communities (including the countries of the Asia-Pacific region and Europe) to discuss important issues of cooperation.
Project proponents have submitted to the EEF-2018 179 applications totaling 1.7 billion rubles. Most of the projects are concerned with the tourism industry, agriculture, transport, and logistics. Projects will be presented at EEF-2018 in the framework of pitching sessions – short presentations for potential investors.
Song Young-gil, who is the Chairman of the Committee for the Development of Cooperation with the Countries of the North, and who reports to the President of the Republic of Korea, announced that the action plan for the implementation of the initiative to guide the «nine bridges» of cooperation between the Republic of Korea and Russia will be signed during EEF-2018.
PRESIDENTS OF RUSSIA AND THE REPUBLIC OF KOREA MEET IN MOSCOW
On 22 June, during the visit of the President of the Republic of Korea Moon Jae-in to the Russian Federation, the Russia–Korea business forum was held. The event was organized by the Korean International Trade Association (KITA), the Korean Trade and Investment Promotion Agency (KOTRA), the Roskongress Foundation, and the Chamber of Commerce and Industry of Russian Federation.
The Russian part included representatives of such companies and organizations as the Far East Investment and Export Agency, the Association of Producers, Suppliers and Consumers of Aluminium, the Far East and Baikal Region Development Fund, Basic Element Group, PJSC Novatek, PJSC Rosseti, United Company RUSAL, JSC Russian Railways, JSC United Shipbuilding Corporation, and JSC AtomInvest.
Discussions during the forum covered economic, technological and investment cooperation, including the development of the Northern Sea Route. Korean companies Hyundai, POSCO DAEWOO, KCC, and Dagro World announced their intention to invest in the development of port infrastructure, timber processing, and agricultural production in the Far East. In addition, the director of the Roskongress Foundation, Alexander Stuglev, and the chairman of KITA, Kim Young Ju, signed an agreement on cooperation between their organizations. A similar agreement also was signed between the Korean Institute of Science and Technology (KAIST) and the Russian Venture Company (RVC).
Also, аt the meeting of the presidents of Russia and the Republic of Korea, Leonid Mikhelson, Chairman of the Board of PJSC «NOVATEK» (NOVATEK) and Son Il Chong, President of Korea Gas Corporation (KOGAS), signed a Memorandum of Understanding for the joint development of LNG-2.
This Memorandum reflects the parties' intentions to explore the opportunities for KOGAS to purchase liquefied natural gas (LNG) from the LNG-2 project. The Memorandum also expresses the intentions of the Korean partners to participate in the LNG terminal construction project for transshipment in Kamchatka and other infrastructure projects, as well as to develop cooperation in the field of LNG trade and logistics development.
During the Korean president’s visit to Moscow, Russian Railways and Korean Train eXpress also signed a Memorandum of Mutual Assistance. The sides discussed the peculiarities of the organization of rail transportation in the Republic of Korea and communication with Russia and Europe. Special interest focused on a tripartite project of the Democratic People's Republic of Korea, the Republic of Korea, and the Russian Federation to connect the Trans-Korean Railway to the Trans-Siberian Railway.
The meeting also noted that efforts are currently underway to sign a Memorandum of Mutual Assistance in tourism for the period 2019-2023, between the Federal Agency for Tourism (Russian Federation) and the Ministry of Culture, Sports and Tourism of the Republic of Korea.
THE RESULTS OF THE FAR EASTERN RUSSIAN-KOREAN FORUM
In May 2018, the 8th Far Eastern Russian-Korean Forum was held in Vladivostok, the main theme of which was joint plans for the development of the fishing industry.
The promising areas for further cooperation, in the view of participants, are: the development of fishing shipbuilding and ship repair; the formation of a fish processing cluster; the creation of a complex for the auction and exchange trade of aquatic biological resources; logistics and the expansion of cargo transportation along the Northern Sea Route; joint projects in the gas industry; and joint investment projects within the Free Port Vladivostok and territories of advanced economic growth.
Chang Hong Sock, who is the Director of the Marine Policy Research Department of the Korean Maritime Institute, and a representative of CJ Logistics company, Son Ghi Sock, focused on the willingness of Korean business to finance the construction of the fish processing cluster in Vladivostok.
Sergey Lelukhin, the General Director of JSC «Far East Auction Fish House», presented a project to build a complex for the auction and exchange trade of aquatic bioresources and processed products in the domestic and international markets. This construction would be financed under an agreement between the Russian Agricultural Bank and the China Development Bank, with the participation of South Korean investors; but Sergey Lelyukhin said that the project is still open to new participants.
Ksenia Zaburghina, who is the representative of the Agency of the Far East for Attracting Investments and Supporting Exports, noted that, at the moment, the Agency has a pool of regional fishing companies that suppose that it is possible to attract foreign investments for enhancing the business in various fields.
EXTENDED REDUCED RATES FOR INSURANCE PREMIUMS FOR INVESTORS
On 3 August 2018, Federal Law No. 300-FZ of 03.08.2018 Оn amendments to Article 5 of part one and Article 422 and 427 of part two of the Tax code of the Russian Federation was signed, aimed at improving the conditions for business activities by residents of territories of advanced economic growth and residents of the Free Port of Vladivostok. The law was developed at the direction of Russian President Vladimir Putin and is based on the results of the 3rd Eastern Economic Forum in 2017.
The Tax Code of the Russian Federation now includes provisions for reduced insurance premiums from the effective date of becoming a resident of territories of advanced economic growth or of the Free Port of Vladivostok the terms of payment the insurance premiums by the resident within the next 10 years remain invariable.
The amendments also relate to the specifics how the reduced rates are applied. In particular, reduced premiums apply only with respect to the coverage of individuals employed in new jobs.
At the same time, the new legislation provides that the new provisions of the Tax Code of the Russian Federation regarding the immutability of the terms of payment of insurance premiums apply only to investments of at least 500 thousand rubles by residents of territories of advanced economic growth, and to investments of at least 5 million rubles by residents of the Free Port of Vladivostok. The amendments will come into force on 1 January 2019.
THE DATE OF THE NEXT RUSSIAN INVESTMENT FORUM IS ANNOUNCED
On 20 July 2018, a meeting of the Organizing Committee for the preparation and holding of the Russian Investment Forum was held in Sochi. Deputy Prime Minister Dmitry Kozak, who chaired the meeting, announced the dates of the next Russian Investment Forum on 14-15 February 2019.
The Russian Investment Forum is a convenient platform for inter-country business dialogues. At the Russian Investment Forum 2018, participants and guests visited the exhibition of investment projects, and got acquainted with the investment and economic situations in 52 of the Russian regions. 538 agreements and protocols of intent were signed for a total amount of 794 trillion rubles (excluding trade secrets). 63 countries, including the Republic of Korea, participated.
INNOPROM-2018 HELD IN EKATERINBURG
The 9th International Industrial Exhibition (INNOPROM-2018) was held in Ekaterinburg on 9-12 July 2018. The conference theme was “Digital Manufacturing” and the Republic of Korea was a major partner.
Korean delegation to INNOPROM-2018 included about 400 representatives of business and government, who held more than 670 negotiations within the framework of the exhibition. Five bilateral memoranda were signed between: Joy Drone and Copter Express; IREA Chemicals and GK "Group O3"; U-Jin Tech and "SD Group"; Jin Sung Ent and the Siberian Technological Company; and Hwaseung Exwill and Ledger "Leotek." KITA and the Development Corporation of the Middle Urals also signed a Memorandum of Understanding.
Korean participants displayed 105 stands for leading Korean enterprises, including: Doosan Infracore, PT Coupling, Hyundai Motors, IRROBOT, TagTec, Jungwoo Motor, and Yongsung Electric.
The exhibition also included, on 11 July 2018, a Russian-Korean forum on cooperation in the field of robotic research, which resulted in a signed memorandum for cooperation of robotic organizations of the two countries.
The next exhibition, INNOPROM-2019, will be held on 8-11 July 8 2019 at the “Ekaterinburg-EXPO” international exhibition center.
KOREAN CONSTRUCTION COMPANIES AND GOVERNMENT OFFICIALS MEET IN KHABAROVSK
In early August 2018, a delegation of Korean construction representatives traveled from Hwaseong to Khabarovsk to discuss the construction of a golf club there.
The President of Hwaseong Urban Corporation, Kang Phal Mun, proposed to the First Deputy Mayor for Investment Development, Valeriy Lebed, a project that South Korean companies predicted would have a good economic effect. This facility will attract tourism from many golf fans from the Republic of Korea to the Russian Far East.
The Russian side proposed that the Korean companies implement investment projects to build social and sports facilities, as well as projects to develop land for housing construction. Hwaseong Urban Corporation has extensive experience in the implementation of this type of project and expressed its interest in further cooperation.