Recent government initiatives have focused on further increasing localization in the automotive and pharmaceutical sectors. Regulators are considering a tax on sales of imported goods, while a presidential decree has introduced special rules for the privatization of state property. Discussions are also continuing over possible ways to use Russia’s frozen assets.
Import Substitution and Localization
- The Ministry of Industry and Trade has proposed a tax on sales of imported non-food goods. The measure would be introduced in two stages. From July 1, 2026, the tax would apply to sales through online marketplaces, and would later be extended to sellers using the simplified tax system (STS) in offline retail. The ministry says the measure is intended to make the STS a tax benefit for Russian manufacturers.
- The ministry has also proposed lowering the target localization threshold for vehicles produced in Russia from 7,000 to 5,500 points. A preliminary list of vehicles that meet the requirements of the taxi localization law has also been published. It includes more than 20 models from Lada, UAZ, Sollers, Evolute, Voyah and Moskvich.
- The Minister of Industry and Trade said that almost all car plants left by foreign investors are now operating, with Russian investors running them.
- The Government has approved the integration of the medicine tracking system with the Chestny ZNAK labeling system to verify compliance with localization requirements.
- The Ministry of Industry and Trade is proposing a new mechanism to support the development of new medicines in Russia starting in 2027. Companies that register such medicines would be eligible for grants of up to RUB 250 million to cover the final stages of clinical trials.
- The Ministry of Digital Development has announced the launch of the third round of selecting strategically important IT projects aimed at replacing foreign software. The Government has also updated the criteria for selecting projects.
- The EU has transferred a EUR 4 billion tranche to Ukraine from proceeds generated by frozen Russian assets, with EUR 2 billion earmarked for drone production. The European Commission President had previously announced the plans, stressing that the move did not amount to confiscation. The Russian President’s press secretary said those involved in the appropriation of Russia’s frozen assets would be held accountable.
- The European Commission has proposed providing Ukraine with EUR 140 billion in the form of a “reparations loan” backed by frozen Russian assets. The German Chancellor has supported the initiative. The EU is looking for ways to use the Russian assets without being blocked by Hungary’s veto. The proposal has raised concerns in several countries, including France. The EU has acknowledged that there is still no consensus on the issue.
- A resolution has been introduced in the U.S. Senate calling on the U.S. administration and G7 and EU leaders to confiscate frozen Russian assets and transfer the proceeds to Ukraine every month. This is not the first initiative of its kind to be put forward in the U.S. Congress.
Sanctions and Counter-Sanctions
- The President of Russia has signed a decree introducing special rules for the privatization of state property in cases covered by a presidential decision. Market valuations will have to be completed within 10 days, property re-registration procedures will be accelerated, and PSB will handle the sales. Bloomberg reports that the measure could allow foreign assets to be nationalized quickly in response to EU actions.
- As the EU prepares its 19th package of sanctions, it has shifted “from gradually increasing pressure to tougher measures” targeting the energy sector, financial services and trade, according to the European Commission President.
The presidential decree could allow the government to quickly raise additional budget revenue through the sale of confiscated assets. Valuations will be carried out by organizations approved by the state.
The proposed tax on imported goods sold by businesses using the simplified tax system could also generate additional budget revenue. The measure would primarily affect marketplace sellers. Some businesses selling imported non-food goods may be forced to close, while those that remain are likely to raise their prices.
