Implementation of investment projects under investment protection and promotion agreements: Financial issues

Abstract

Subject. The article addresses financial relations arising from the implementation of Federal Law On Protection and Promotion of Investments in the Russian Federation (FZ-69), as amended. Objectives. The purpose is to identify subjects and objects of financial relations, as well as financial instruments affecting the feasibility of proposed measures of State support to investors during implementation of Investment Protection and Promotion Agreement (IPPA). Methods. We employed general scientific methods of cognition (analysis, generalization, description) and the systems approach to unveil financial and economic relationships between all participants in the process, i.e. Project Implementation Unit (PIU), its counterparties, Public Law Entity (PLE), regulated organizations, and other entities. Results. We determined subjects and objects of financial relationships arising from the IPPA implementation, systematized financial instruments and considered the specifics of their application during the IPPA implementation, identified financial effects from using a stabilization clause and legislation on taxes and fees, examined the impact of amendments to the said law. Conclusions. The findings can be used by subjects of financial relations (in particular, the PIU, creditors, regulated organizations, the PLE) to justify the IPPA feasibility. The proposed recommendations (on discounting the reimbursable costs for creation of related infrastructure facilities, on real damage caused to PIU and losses of PLE, etc.) can be taken into account when making subsequent changes to the current legislation on investment protection and promotion.