Russian Finance Research Articles

Institutions and instruments of green financing in Russia and foreign countries

Subject. This article analyzes the accumulated experience of various foreign countries to create a national system of green financing in Russia. Objectives. The article aims to identify the main instruments and institutions of green financing in world practice and determine the directions of their development in Russia to reduce potential threats to economic development in the long term. Methods. For the study, we used general scientific cognition methods and a systems analysis. Results. The article offers certain recommendations on the development of green financing in Russia. Conclusions and Relevance. In Russia, the trust management industry is poorly developed. The investment policy of management companies does not provide green instruments and directions of green financing. The total volume of green bonds in Russia is at the level of funds of one foreign investment fund. The proposed recommendations can help accelerate the implementation of the ESG concept in all companies.

Особенности правового регулирования финансового обеспечения здравоохранения на территории города Байконур

One of the main sources of health care financing in Russia is the means of compulsory medical insurance. Accumulation of financial resources of obligatory medical insurance occurs through functioning of Federal Fund of obligatory medical insurance, and direct management of them in the territory of subjects of the Russian Federation is carried out by territorial funds of obligatory medical insurance. At present, there are 86 territorial funds of compulsory medical insurance, but only 85 operate on the territory of our country. There is also a fund outside Russia - a territorial Fund of compulsory medical insurance of the city of Baikonur. The city of Baikonur is an administrative-territorial unit of the Republic of Kazakhstan, which is under lease and is endowed for this period with the status that corresponds to the city of federal importance of the Russian Federation. The article discusses the gaps in the legal regulation of budgetary relations between the Russian Federation and Baikonur city, especially the recognition of international treaties as sources of financial law and financial legal regulation of the compulsory health insurance, as well as issues of ensuring the rights of citizens of the Russian Federation in the process of legal regulation of financial providing of free medical care on the territory of Baikonur.

Development Trends of Project Finance in Russia

The article discusses the history of the development and establishment of project finance in Russia, existing approaches to the periodization of its development are described. The starting point for the deve­lopment of project finance is the exploration of Siberia and Alaska. The concession period of the Russian Empire and NEP, methods of attracting foreign capital in the development of telecommunications, railways and oil fields are examined. The similarity of long-term finan­cing of capital investments in the USSR and project financing according to the basic principles is revealed. A parallel with the global experience in the application of project finance in the 20th century is drawn. An overview of the volume and structure of the global project finance market and current Russian trends in the application of the project finance mechanism is provided.

Deyatel'nost' tamozhennyh dosmotrshchikov i korchemnyh strazhnikov v kachestve vypolneniya policejskih funkcij na vostoke strany v gody Pervoj mirovoj i Grazhdanskoj vojn

The article aims to study the activities of customs inspectors and korchem guards as police units of the Ministry of Finance of the Russian Empire during the First World War, as well as to trace the subsequent transformation of this law enforcement unit during the Civil War. The object of the study in the article was the operational services of the Ministry of Finance of Russia (customs inspectors, korchem guards) who performed directly police functions during the protection of the customs border of Russia.

GREEN FINANCING AS A CONDITION FOR SUSTAINABLE ECONOMIC GROWTH

Purpose of the study: The purpose of the study is to assess the current state of green financing in the Russian Federation and the extent of its impact on economic growth in the country.
 Methodology: The main research methods utilized were the regression and cluster analysis and principal component analysis (PCA). Cluster analysis implies dividing the set of studied objects and features into groups or clusters that are homogeneous in some way. We used it to determine regional differentiation of subjects from the Russian Federation according to the level of green financing. The clustering of subjects was performed using the ward method. This method is aimed at combining closely located clusters. Regression analysis was used to build an econometric model for assessing the degree of influence of green Finance on economic growth.
 Main Findings: The authors proved that stimulating green financing in Russia requires the following: creating a regulatory framework and roadmap for the development of green financing, active state participation in financing green projects, creating a “green bond market,” and a specialized banking institution.
 Application of the study: In this article, the authors assessed the impact of green financing on Russia’s economic growth. As part of the study, the authors analyzed the dynamics of green financing in the Russian Federation from 2000–2018, developed an integrated indicator for sustainable economic growth based on three components of sustainable development (economic, social, and environmental), and estimated the impact of environmental investments on the integral indicator of sustainable economic growth.
 Novelty/Originality of the study: The proposed methodology for calculating the integrated indicator of sustainable economic development allowed us to assess sustainable development, taking into account economic, social, and environmental indicators. Such an approach has several advantages over the current methods: it is universal, indicators are available, and calculations are clear.

Islamic finance in Russia: A market review and the legal environment

Islamic finance in Russia: A market review and the legal environment

Green Financing in Russia: Current Status and Development Prospects

The aim of the work is to assess the current state of green financing in the Russian Federation and develop proposals to stimulate its further development. The methodological basis of the research was modern economic and mathematical methods : cluster analysis, building a regression model. This helped obtain results that possess both a certain scientific novelty and practical significance. The authors considered the evolution of scientific consensus about the concept of sustainable development and the formation of a green economy. They analyzed the current state of green financing in the Russian Federation for 2000–2018. Clustering the constituent entities of the Russian Federation by environmental investments and current environmental expenditures allowed for identifying the regions, leaders and outsiders in these processes, as well as revealing a high regional differentiation in financing green projects. The regression model helped prove that with increased investments in fixed assets aimed at environmental protection and rational use of natural resources by 1 million rubles, Russia’s GDP will increase by 0.1 billion rubles. Increasing current environmental expenditures in organizations by 1 million rubles will raise Russia’s GDP by 0.3 billion rubles. The authors concluded that to stimulate the development of green financing in Russia, it is necessary to implement policies providing for an appropriate regulatory framework; development and use of new tools for financing green projects; creation of a specialized banking institution.

Project finance in Russia: The status, international practices, and public-private partnership

Subject This article considers the issues related to project financing in Russia, its current status, foreign practices in this area, as well as in the context of public-private partnership. Objectives The article aims to explore the current state and development of project financing in Russia and foreign countries, analyze and identify risks, and consider trends in the further development of project financing. Methods For the study, I used the methods of comparative, logical, and statistical analyses, and graphical interpretation of information. Results The article defines project financing, identifies risks, and denotes trends in its global and domestic development. Conclusions and Relevance The introduction and application of public and market management models, or their combination, may be an incentive for further development of project financing. Today, the most promising direction is the use of project financing as a method of financing investment activities. The results of the study are theoretically relevant for further research into the financing of infrastructure projects in Russia.

Theoretical Content of the Finance Category

Subject. The article deals with the analysis of the contemporary status of the economic category Finance in Russia. Objectives. The article seeks to disclose the internal content of the category in relation to the current level of development of the national economy. Methods. For the study, we used the dialectic method of examining objective economic laws, patterns and phenomena in their constant development and interrelationships, and the systems approach, as well. Results. We present our own concept of the economic category, the essential functions of finance, financial system of the State and its structural elements. We formulate the objectives and framework of financial policy and public financial management system at various levels, and propose a methodological approach to the study of financial management as an independent scientific discipline. Conclusions. We conclude about the need for an equable approach to the theoretical aspect of the category Finance both in the economic theory and practice.

Statistical form contents for selective survey of procurements with high corruption risks at the federal and municipal levels

The main purpose of the study is to identify the types and volumes of purchases for state and municipal needs with high corruption risks. Based on the studies, proposals have been prepared on the content of the sample statistical monitoring of procurements with high corruption risks. The expansion of statistical research in this area is provided by the National Anti-Corruption Plan for 2018–2020.The research materials include data from statistical observations, summary analytical reports of the ministries for 2014–2019, speeches by representatives of the government and science on corruption and the effectiveness of public procurement, as well as scientific publications. General scientific empirical and theoretical research methods were used. Empirical methods include the steps of collecting information and collecting official data, materials from scientific conferences and interviews. Theoretical methods provide for the formalization of the heterogeneous information received on the processes under study in the public procurement system.The results of the studies showed the need for selective statistical observation, despite the cancellation of continuous monitoring since 2015 due to the start of the full functioning of the unified information procurement system (hereinafter – the UIPS) on the website www. zakupki.gov.ru. Reports based on data from the UIPS, as well as the Federal Antimonopoly Service of Russia and the Treasury of Russia from 2015 to 2017 had been prepared by the Ministry of Economic Development of Russia and from 2018 by the Ministry of Finance of Russia. During such a transfer of authority, for example, the number of applications submitted per one competitive procedure dropped out of the number of the monitored indicators. However, since 2018, more attention has been paid to procurement on the basis of paragraphs рр. 24, 25 part 1 of article 93 of 44-FZ, providing for the possibility of concluding a contract with a single supplier due to failed tender procedures. The value of contracts on these grounds amounted to 2,755 billion rubles (or 43.78 billion US dollars) in 2018 with an upward trend in 2019, and amounted to 29% of the total value of the concluded contracts. A common way of making such purchases with high corruption risks is to conspire with participants in procurement procedures that have received the name «Battering ram operation» at electronic auctions, as well as formulating difficult conditions and high requirements for performers, with poor public examination of the state contract.In conclusion, it should be noted that selective statistical surveys should supplement the available information of the UIPS with data on procurement from a single supplier, and the selection of a separate category of contracts concluded as a result of failed procedures of a massive nature. The prepared proposals contribute to the implementation of order of the President of the Russian Federation to strengthen the effectiveness of control in the procurement of goods, works and services to ensure state and municipal needs dated December 17, 2018 No. Pr-2417 and implementing of national anti-corruption plan.

Life path and the formation of scientific and political horizons of the scientisr-mechanic, minister of finance of the Russian empire I. A. Vyshegradsky

The article briefly describes the life path, as well as the history of the formation of the horizons of the famous Russian scientist-mechanic, professor, Minister of Finance of the Russian Empire Ivan Alekseevich Vyshnegradsky.
 By 1862, Ivan Alekseevich had already visited several European countries and received the title of professor. From the same year, Vyshnegradsky’s activity began at the St. Petersburg Practical Technological Institute, in which he lectured on mechanical theory of heat and the theory of steam engines, was appointed a member of the study committee.On his initiative, the Department of Metal and Wood Technology was restored. In 1871, a mechanical laboratory was founded at the institute for scientific research on the resistance of building materials and for hydraulics experiments.In 1875, Vyshnegradsky was appointed director of the institute, continuing his teaching activities. Among the machines he designed: an automatic press for the manufacture of prismatic powder, lifting machines, a press for testing materials, a mechanical material handler (for a river port), etc. 
 Features of economic policy of I. A. Vyshnegradsky consisted in the desire to increase the gold reserve of the empire and increase Russia's influence on the international economy and politics.For him, the most important and only task was the visible improvement of Russian finance in a short time. Favorable conditions were artificially created for heavy industry, which became a priority among the interests of the Ministry of Finance, often to the detriment of the interests of all agriculture.Under Vyshnegradsky, the export of Russian bread more than doubled. Stimulated the export of not only surplus bread, but also part of the necessary stocks of peasants. As a minister, he led the redemption of unprofitable railways, undertook control and financial (1889-1890) and tariff (1889) reforms in the railway sector.Conducted the conversion of state (external and internal) loans, which helped to reduce payments on public debt, lower interest, streamline public debt.

Islamic Finance in Russia: Between Past and Future

Russia interested in alternative partnership finances as early as the 90s of the XX century. The first attempts to apply the principles of Islamic finance were made by individual banks. The second wave of initiatives began after the global financial crisis of 2008–2009, with increasing interest in 2014 in the face of a complicating foreign policy situation and the imposition of economic sanctions. In such conditions, it became necessary to search for alternative sources of attracting investment, which, inter alia, became Islamic finance. From 1992 to the present, Russia has gained some experience in Islamic finance. This article provides a comprehensive review of the more than 25-year history of the development of the Islamic financial market in Russia in the context of the analysis of its problems and prospects. After introducing the main definitions, concepts, features and principles of Islamic finance, as well as citing numerical and geographical data on the industry, the author describes all the initiatives for the development of Islamic finance in Russia, divided into 4 levels: international, federal, regional and individual. The history of the development of the Islamic financial market in Russia is presented in chronological order with a division into industry components and Russia’s experience in developing each of them — Islamic banking, Islamic insurance and the Islamic capital market. At the end, a brief analysis of the current state of the Russian Islamic financial micro-market is made and the main opportunities that Islamic finance can give Russia are also indicated.

Fiscal potential of the investment mechanism of Islamic Finance

Abstract-the Research focuses on the application of Islamic Finance abroad, as well as in Russia. The authors present the history of Islamic Finance, its restrictive principles, and analyze in detail the majority of Islamic investment contract models. As such, the following were considered separately: partnership (Mudaraba, Musharaka, Agency-Wakala), acquisition (deferred payment sale-Murabaha, musavami and tawarruk, deferred delivery sale-Salam, delivery-istijrar, contract – istisnaa), lease (Ijara), credit operations (loan-Kadr, debt transfer-hawala, debt sale-Bai-al-DIN), public promise of a reward or competition (juaala), as well as financial instruments (sukuk). It is pointed out that the fiscal potential does not fully allow stimulating the use of models, and requires further development both from the point of view of tax and non-tax (quasi-fiscal) payments of the corporate sector of the state economy. The paper considers the classical model for evaluating financial assets with a tax corrector, as well as the standard approach to assessing the effect of financial leverage, which require modification in the absence of loan interest, as well as the task of stimulating economic activity in the post-quarantine period. In the final part, we describe the prospects and formulate forecasts for the application of the principles of Islamic Finance in Russia.

МЕЖБЮДЖЕТНЫЕ ТРАНСФЕРТЫ И НАЛОГОВЫЕ ЛЬГОТЫ КАК ИНСТРУМЕНТЫ ОБЕСПЕЧЕНИЯ СОЦИАЛЬНО-ЭКОНОМИЧЕСКОГО РАЗВИТИЯ РЕГИОНОВ

The subject of this study is to analyze the impact of interbudgetary transfers and tax incentives on strengthening the financial stability of regions, as well as on the formation of the dependent sentiments of regional authorities as a barrier to the socio-economic development of regions. The aim of the study is to substantiate the possibilities for regions with high and low budgetary stability of combining interbudgetary transfers as a way to cover current expenditures of regional budgets and to provide tax benefits as a tool to expand the tax base of regions. In the course of the study, general methods of cognition (deduction and induction, analysis and synthesis, description and generalization) and private scientific methods of cognition (comparison method, tabular and graphical methods of data presentation) were used. Improving the system of indicators for assessing the effectiveness of regional tax incentives will allow monitoring the activities of regions to increase the financial stability of requests for transfers from the higher budget. Currently, in the Russian Federation, interbudgetary transfers have become an integral part of budgetary relationships. The analysis of the financial stability of all 85 subjects showed that the regions cannot fulfill their current expenditure obligations only at the expense of their own revenues. The overwhelming majority of the subjects of the Federation need to increase their financial independence. Subsidies as a type of interbudgetary transfers can lead to dependent sentiments of regional authorities. Regional tax policy based on the use of regional tax incentives helps to strengthen the tax base in the region and increase financial stability. Subsidies as a type of interbudgetary transfers carry a latent threat to the formation of the dependent sentiments of regional authorities. The way to reduce this threat is to develop a system of effective tax incentives to stimulate the socio-economic growth of the regions. The results obtained can be taken into account in the activities of the Ministry of Finance of Russia when developing the main directions of fiscal policy.

The Constitutional Principle of Uniform Economic Area and Centralization of Public Finance in the Russian Federation: Analysis of the Russian Federation Constitutional Court’s Rulings

The paper is devoted to the issue of centralization in public finance in Russia, and highlights one of the problems of interpretation of the Russian Constitution clauses. The Rulings of the Russian Federation Constitutional Court from the period 1997–2006 created legal grounds for the process of centralization and reduction of the regional powers regarding budgeting and taxation. But all arguments of the Court are debatable. Wherein, the centralization is justified by the constitutional principle of uniform economic area. The author argues that the Russian Constitution does not have clauses establishing the uniform budget and tax systems directly, and any model of intergovernmental relations might comply with the Russian Constitution. Uniformity of economic area does not imply uniformity in taxation and budgeting in the sense of sameness. Study of foreign practices shows different approaches to the understanding of uniformity in economy, and in taxation and budgeting. The contemporary Russian public finance law is formed under the influence of the Constitutional Court’s legal positions, and the process of centralization is still evolving. The Russian history of intergovernmental relations (1991–1997) shows another model of fiscal federalism – the decentralized federalism. Replacement of the fiscal federalism models is determined by the political considerations, not by constitutional requirements.

The Constitutional Principle of Uniform Economic Area and Centralization of Public Finance in the Russian Federation: Analysis of the Russian Federation Constitutional Court’s Rulings

The paper is devoted to the issue of centralization in public finance in Russia, and highlights one of the problems of interpretation of the Russian Constitution clauses. The Rulings of the Russian Federation Constitutional Court from the period 1997–2006 created legal grounds for the process of centralization and reduction of the regional powers regarding budgeting and taxation. But all arguments of the Court are debatable. Wherein, the centralization is justified by the constitutional principle of uniform economic area. The author argues that the Russian Constitution does not have clauses establishing the uniform budget and tax systems directly, and any model of intergovernmental relations might comply with the Russian Constitution. Uniformity of economic area does not imply uniformity in taxation and budgeting in the sense of sameness. Study of foreign practices shows different approaches to the understanding of uniformity in economy, and in taxation and budgeting. The contemporary Russian public finance law is formed under the influence of the Constitutional Court’s legal positions, and the process of centralization is still evolving. The Russian history of intergovernmental relations (1991–1997) shows another model of fiscal federalism – the decentralized federalism. Replacement of the fiscal federalism models is determined by the political considerations, not by constitutional requirements.

Особенности аудиторской проверки бухгалтерской (финансовой) отчетности организаций, досрочно применяющих в бухгалтерском учете балансовый метод учета временных разниц

Th e article is devoted to the topical practical issues of accounting and auditing arising in connection with the amendments to the Federal accounting standard 18/02 «Accounting of calculations of profi t tax» by the Ministry of Finance of Russia No. 236h from 20.11.2018, the essence of which is that in national accounting practices is being promoted balance method of determining the amount of the current income tax, deferred tax assets and liabilities. The article deals with the principal provisions of the balance sheet method of accounting for diff erences between accounting and tax financial results, the use of which will be mandatory from 2020, while in 2019 it is possible to early voluntary application of the balance sheet method by reporting organizations.

Challenging the liberal international order by chipping away at US Structural power: China’s state-guided investment in technology and finance in Russia

This paper examines China’s investments in Russia as a case study of China’s challenge to the liberal order. It surveys the political economy of China’s state-owned enterprises—the primary vehicles for China’s investments in Russia—in a global context. It argues that China’s investments in Russia constitute an emerging structural economic challenge to the liberal international order. The trend of China’s investments in Russia illustrates Beijing’s strategy of fostering global economic integration that ultimately may not conform to the geopolitical underpinnings of a liberal international order. It looks at two cases of China’s investments in Russia: the technology sector and the financial sector. It shows that the liberal order’s tension with China’s strategy vis-à-vis globalization is rooted in its impact on US structural power and suggests that the active presence of Chinese state-guided capital in Russia’s high-tech development and its financial system illustrate the nature of this challenge.

IMPROVEMENT OF THE MECHANISM OF SELECTION OF SUBSOIL PLOTS TO TRANSFER TO TAX ON ADDITIONAL INCOME FROM THE EXTRACTION OF HYDROCARBONS

Since 2019, in pilot mode (a list of pilot projects — 35 subsoil plots, the volume of production of which is about 4% of Russia’s annual oil production), a federal tax on additional income from the extraction of hydrocarbon raw materials (TAI) has come into effect. TAI refers to tax mechanisms based on economic results, in contrast to the current mineral extraction tax, where taxable items are gross indicators of the amount or cost of hydrocarbons produced. The transition from tax mechanisms based on gross figures to taxation based on economic results has been the global trend of the last fifty years. TAI can be an effective tax incentive mechanism that can ensure the involvement in the development of low-margin hydrocarbon reserves in the current taxation, as well as the introduction of promising methods to increase oil recovery. Currently, according to the Tax Code of the Russian Federation, the TAI can be applied to IV groups of subsoil plots (indicating their location and the degree of depletion of reserves). At the same time, the selection criteria for these plots do not fully take into account the tasks facing the state (budget, public, technological, etc.). Considering that the Ministry of Finance of Russia, based on the results of the implementation of pilot projects, envisages a gradual transition of the oil industry to TAI, an urgent task is to improve the selection mechanism of mining projects to provide this tax preference, including by developing a comprehensive system of selection criteria and a transparent methodology for ranking projects. The proposed approach to competitive selection of subsoil plots for transfer to TAI is based on weighted sum and combinatorial optimization methods.

Participatory budgeting in Portugal: development prospects

Introduction. The relevance of the study is caused by the spread of participatory budgeting practices in Russia and abroad. In 2017 the joint project ‘Development of initiative budgeting in the Russian Federation’ of the Ministry of Finance of the Russian Federation and the World Bank has been launched. More than 50 Russian regions are involved in this project today. In March 2018 the need to develop citizen engagement was reflected in state program of the Russian Finance Ministry ‘Public Finance Management and Regulation of Financial Markets’. Since citizen participation in the budget process is still new, scholars and practitioners take interest in foreign experience, in particular, in the mechanisms used in European countries. Portugal is of a particular interest because the only nationwide practice of participatory budgeting is being implemented there.Materials and methods. The article is based on the comparative historical analysis and case-study method. Academic articles, thematic books and monographs, official websites of the state and local authorities of Portugal, specialized online-participation portals, reports of foreign experts at the Moscow Financial Forum 2018 were involved as sources. The author also relied on oral information received from the representatives of the Branding and Communication Department of Lisbon during an in-person meeting at the City Hall in June, 2018.Results. The historical and political context of the development of modern mechanisms of direct democracy in Portugal was identified. The nationwide program, national programs of school and youth participatory budgeting are analyzed. The specificity of the projects, the target audience and the results within each of the directions are described. Special attention is paid to the city of Lisbon, in which several crowdsourcing and participatory practices are implemented.Discussion and conclusions. The most original approaches that are interesting from the point of view of the procedures used for engaging citizens or specifics of local issues that are presented for discussion in the framework of participatory practices are identified.