The Baikal Lobridge Analytical Center has prepared an overview of the key regulatory trends determining the business and regulatory agenda in Russia in 2025–2026.

During the period under review, regulatory policy was shaped by several factors at once — economic, domestic political, and geopolitical — and was characterized by an increasing fiscal burden, increased control of certain types, the development of counter-sanctions mechanisms, and a restructuring of operating rules in a number of industries.

The results of the study can be found at the link. Below is a summary of the key trends.

Macro context: economics, politics, geopolitics

The economic background remains tense. In 2025, the federal budget deficit was consistently revised from 0.5% to 2.6% of GDP, and in 2026 it is expected to remain at about 1.6% of GDP. The main reasons were the reduction in oil and gas revenues, sanctions pressure, lower world prices for hydrocarbons and the strengthening of the ruble. Against this background, the government is increasingly focusing on internal sources of income – business and the public.

An additional factor is the "cooling" of the economy. According to the estimates of the Ministry of Economic Development of Russia, the growth of exports, industrial production, investments, retail trade and real incomes of the population is slowing down. The GDP growth forecast for 2025-2026 has been significantly lowered compared to the estimates of 2024. In these circumstances, regulatory policy is increasingly being used as a tool for fiscal and structural adjustment of the economy.

The domestic political framework for 2025-2026 is determined by preparations for the State Duma elections. This increases the sensitivity of the government to the social and electoral effects of regulatory decisions. The risks of industries that are traditionally under the close attention of both regulators and society are increasing. For example, in the tobacco and alcohol industries. In addition, there will be increased attention to digital platforms, including marketplaces. Special attention is expected to be paid to retail chains in terms of product margins.

At the same time, a party agenda is being formed, which will determine the contours of legislative work for the next political cycle. For businesses, this means an increased importance of institutional dialogue with parliamentary structures and increased attention to the political timing of initiatives.

The geopolitical factor remains a key source of uncertainty. In 2025, the negotiation process with the United States resumed, including on economic issues, but the trajectory of the situation remains unstable. The basic scenarios are preservation of the status quo, escalation or slow normalization. The most likely scenario is to maintain a strict foreign policy framework, which increases the state's emphasis on import substitution, technological sovereignty, and special economic measures.

These processes are reflected in a number of stable regulatory trends that have already emerged in 2025 and will continue in the medium term.

Key regulatory trends

Fiscal tightening

A further increase in the tax and quasi-tax burden is expected in 2025-2026. The focus is on the expansion of the excise range, the possible introduction of VAT on cross–border e-commerce, increased environmental and resource payments, and new fees in certain industries. A characteristic feature is the delegation of part of the regulation to the level of the Russian Government, which increases the role of by-laws and operational decisions.

Whitewashing the economy and strengthening control

The growing fiscal burden is accompanied by a large-scale program to reduce the share of the shadow sector. A set of measures has been prepared to "whitewash" trade, the labor market, cash turnover, as well as certain sensitive markets. An important element is the introduction of digital control tools, including a system for confirming the expectation of goods (SPOT) when moving products within the EAEU.

Regulation of the platform economy

E-commerce remains one of the fastest growing areas, which leads to more complex regulation. After the adoption of the basic law "On Certain issues of regulating the Platform Economy in the Russian Federation," attention is shifting to by-laws. At the same time, there remains a competitive confrontation between online platforms, classical retail, Russian manufacturers, and banks. The discussion focuses on the responsibility of platforms, the conditions of competition and the expansion of the list of regulated goods.

Counter-sanctions measures and protection of the domestic market

The government remains committed to limiting imports and supporting Russian manufacturers. In 2025, work on changing customs, tariff and non-tariff measures has noticeably intensified. The main tool is to increase duties on categories of goods from "unfriendly" countries through amendments to Russian Government Decree No. 2240. In 2026, the trend will continue, while more complex market protection mechanisms are being discussed, including linking restrictions not only to HS codes, but also to trademarks.

Foreign investment: a two-circuit model

The regulation of foreign investments develops according to a double logic. On the one hand, control over strategic assets and transactions is being strengthened, and counter-sanctions restrictions remain in place. On the other hand, more flexible modes are being formed to attract "new" investments, for example, the In account mechanism. At the same time, possible conditions for the return of foreign companies are being discussed in the public field, with an emphasis on a selective approach and protection of the interests of Russian players.

Redistribution of property

In 2025, the development of asset circulation mechanisms continued, in relation to both foreign and Russian companies. The practice of seizing and transferring assets to the State is complemented by targeted exceptions, which increases the importance of communications and individual solutions.

Consumer market and traceability

The labeling system is expanding, control over certificates and supply chains is being strengthened, and attention to marketplaces is increasing. The Honest Sign system continues to integrate into the regulatory field not only at the level of expanding product categories, but also through increased control and automated detection of violations. Regulation is largely focused on fiscal goals and digital traceability of turnover.

Government support and localization

Support volumes, especially for SMEs, are decreasing and becoming more targeted. In 2026, government support will continue, but it will increasingly be linked to specific investment commitments, KPIs, and participation in national projects, as the regulator aims to use federal budget funds more efficiently and will be able to maintain them only with proven support measures in a specific industry. At the same time, the requirements for localization of products and criteria of "Russian origin" in the fields of pharmaceuticals, medical products, electronic products, etc. are being tightened. The main tool is the localization scoring system.

Labor market and migration

The regulatory framework is shifting towards limiting low-skilled migration, strengthening control over employment, and involving businesses in the demographic agenda. The main event in this regard is the adoption of a new Concept of state Migration Policy for 2026-2030. In addition, there is increasing attention to platform employment and substitution of labor relations.

Strengthening antimonopoly control

In 2025-2026, the antimonopoly agenda is intensifying and the hardware weight of the FAS of Russia is growing. Against the background of weakening external competition, the government pays more attention to the risks of market concentration and abuse of market power, especially in the IT industry. At the same time, tools for identifying anti-competitive practices are being expanded (including through AI), and tougher approaches to responsibility are being discussed. For businesses, this means an increased importance of preventive assessment of antimonopoly risks.

Digital sovereignty

Regulation continues to evolve towards digital sovereignty and increased control. The agenda focuses on import substitution in critical information infrastructure, increased security requirements and increased responsibility in the field of personal data. A separate area is the formation of regulatory approaches to the use of artificial intelligence technologies, for which 2026 may be crucial.

New regulation for "old" industries

A separate trend in 2025-2026 is the formation of a comprehensive regulatory framework for industries that were previously in the zone of fragmented or limited regulation. We are talking about dietary supplements, tourism, nicotine-containing products, ready meals and a number of other segments. The government consistently eliminates legal uncertainties by consolidating business requirements, control mechanisms, and responsibilities. This work will be continued in 2026.

These regulatory trends were the subject of an open discussion at the Corporate GR Forum, held on February 5, 2026 in Moscow. The forum participants described how these changes are already affecting business and what solutions companies have to look for in a rapidly changing regulatory environment.

For the first time, sociologists focused not on the positions of specialized GR and lobbying specialists, but on top business executives. This allowed us to assess how the GR function is perceived within companies, what role it plays in strategic management, and how involved the management of organizations is in dialogue with the state.

The study was conducted with the support of the Russian Union of Industrialists and Entrepreneurs (RSPP), the American Chamber of Commerce (AmCham), and the Center for Eurasian Cooperation (CEC). At the same time, personalized offers to complete the survey became the most effective way to attract the attention of respondents — 15% of the 150 invitations received a response.

Below we reveal the key results of the study.

Implementation of the GR function

The majority of the surveyed managers (75%) of large and medium-sized businesses reported that their company has a GR function. However, the ways of its implementation turned out to be diverse. In about half of the cases (52%), it is represented by a GR division, and in a quarter of companies (24%) it is represented by one specialist. In other cases, companies do not have a GR division, but the function itself is present. It is represented either by the CEO himself or his deputy, or by related departments (for example, lawyers).

At the same time, despite the increasing complexity of the regulatory and political environment, there is currently no trend towards strengthening and actively developing the GR function. And in companies where the GR function is not implemented, there is rather no trend towards its creation.

Involving management in the GR function

The study showed two main types of involvement of top officials of companies in the implementation of the GR function. The majority of companies surveyed (58%) practice an active CEO role in its implementation, involving setting goals and participating in their solution. In 17% of cases, the direction is perceived by the management as completely autonomous. In 13% of CEOs, they sometimes participate in his work, but only at the level of meetings with high-ranking officials.

Budget issues

Among the heads of companies that have a GR function, the overwhelming majority of respondents (83%) noted that a separate budget is allocated for it. First of all, this applies to large companies. The most popular items of expenditure for GR functions are membership fees to industry associations or business associations, representative expenses, and payroll.

Audit of the GR function

42% of the heads of companies that have a GR function noted that they consider the economic effect of its implementation. There is currently no single calculation methodology in Russia, and the approaches of the companies differ significantly.

The following methodological frameworks can be distinguished:

• prevented financial losses due to reduction or elimination of risks;
• increasing financial results due to the created GR opportunities;
• the amount of government support involved: both direct and through benefits;
• calculation of added value in financial terms;
• the financial effect of removing or reducing barriers to business when entering markets, etc.

The strategic role of GR

The study revealed differences in the perception of the strategic role of the GR function due to both the size of the business and the jurisdiction of the company. Large Russian businesses see its role as maximally comprehensive. The emphasis is on institutional sustainability, synergy with the government, image management, leveling regulatory risks and rulemaking, as well as creating opportunities to increase profits.

Large foreign companies in "unfriendly" jurisdictions also emphasize the strategic role of the GR function in supporting business and its smooth functioning. At the same time, the conceptual position of low profile is noted, which means a restrained and modest approach, the absence of vivid public statements.

Foreign and Russian medium-sized businesses see the role of the GR function as less ambitious. For such companies, it usually comes down to obtaining state support, participating in the development of the industry, and building interaction with specific stakeholders.

GR strategies

As it turned out, in Russia, 42% of companies with a core function have a GR strategy. Among companies that do not have such a strategy yet, 29% feel the need to create one. At the same time, half (50%) of the heads of such companies found it difficult to answer the question about the prospects of strategic planning in the field of GR.

Those who declare the need to create a GR strategy are more likely to develop it on their own. But there are managers who plan to involve consultants to create a strategy. And in this case, they are more likely to turn to specialized GR consulting.

Satisfaction with the GR function

We asked the supervisors to rate the work of the GR function on a 10-point scale, where 10 means that the respondent is completely satisfied with its work. Only a few CEOs rated the work of their subordinates below average. The confidence interval, in which the average value of the satisfaction level is located, turned out to be in the range of 7.1–8.2.

This means that most managers of companies that have a function of interacting with the government see its effectiveness. But this does not mean that GR specialists lack growth points. Attention is drawn to the problem that some managers articulate: specialized specialists sometimes lack immersion in the problems of business and industry.

Other notable growth points include the creation of cases showing financial results, proximity to decision—making centers, and increased lobbying expertise. A business from an "unfriendly" jurisdiction also spoke about a problem specific to such companies: global restrictions on the use of PR tools affect the effectiveness of GR.

Working with consultants

Among companies with a GR function, one in three managers (33%) noted that businesses allocate a budget to attract GR agencies and lobbyists. External specialists are invited to cooperate most often for consulting on interaction with authorities (75%), for legal support (rulemaking) (50%), to promote legislative initiatives (50%) and to assist in obtaining state support (50%).

Among the advantages of working with consultants are a deep understanding of the media space and expertise in positioning issues in dialogue with the state. In addition, the respondents emphasized the high level of awareness of consultants and effective monitoring of initiatives. The honest approach of the consultants was also noted.

As negative aspects of working with consultants, the CEOs noted the lack of coordination of work with the business, the level of responsibility for the result, and the sometimes formal approach to work.

Eduard Voytenko, CEO of Baikal Lobridge:

The results of the study can be found in the Vedomosti edition. The full text of the study is also available.

Read about the previous two Baikal Lobridge sociological studies on the development of GR in Russia in the GR-research section.

Former director of GR at Mikhailov & Partners Eduard Voytenko announced the launch of a private integrated communications enterprise Baikal Lobridge, which is going to deal with a wide variety of issues, ranging from GR, Strategic and Political Communications to Business Consulting and Legal Expertise.

During the interview for Sostav.ru, an advertising & marketing industry news agency, Eduard Voytenko told the story of his new venture, elaborated on the peculiarities of corporate identity and positioning concept. The founder of Baikal Lobridge explained thoroughly his decision to found a communications company in the current tumultuous period of time, revealed his methodology, spoke about the innovative principles of building mutually beneficial relationships with customers.

Eduard Voytenko particularly stressed the value of communications solutions that combine classic PR with insertions of unusual consulting, research, auditing and other techniques of interaction with a client that are not typical for “major” communications companies, which operate on the conveyor belt’s basis.

Full text is available here.

According to Eduard Voytenko, branding of large subjects implies the necessity to produce an extremely strong message. It cannot be done with PR-tools only, it is important to utilize all the range of means to persuade and compel the audience.

In the nation and region branding, the role of visual tools and techniques that form compelling images with strong perception potential has increased every year. This is due to the fact that imaging is capable of producing a common perception worldwide.

Full text is available here.

In his column for Sostav.ru, CEO of Baikal Lobridge Eduard Voytenko writes about the compression of the corporate PR market and the focus of communications consulting on politics.

Major Russian PR companies approach the market of political projects, they hire new managers and analysts, deliver speeches and reports on political communications. In particular, they deal with the 2016 parliamentary elections. At the same time, for over a decade, these companies stayed away from political technologies and were busy building their reputation that is crucial for enterprise customers.

The situation is rather vague: many top managers of large PR companies used to be spin-doctors, but have already adapted themselves to new working methods. Will the Russian communications market return to the era of rough political technologies or will the “migration” of these PR experts into the sphere of politics form a new political culture? The question remains open.

Full text is available here.

In his column for Sostav.ru, CEO of Baikal Lobridge Eduard Voytenko described the new framework of political PR in Russia.

Crisis in the field of PR and Advertising triggered the increased interest of communications experts in politics. In addition to that, the active period of political confrontation (that is, the election race) is combined with the traditional period of summer passivity in the market which will be particularly quiet this year. We can expect a great deal of political advertising and political PR. However, it will certainly affect the demand for new meanings. The deficiency of meanings is obvious, since the rules of parliamentary elections have changed: it is difficult to prove a connection of a candidate or a deputy with particular benefits for localities or regions.

Political heavyweights are forced to compete with bright and politically overconfident newcomers. For them it is a very difficult situation. Many candidates will be vulnerable to compromising materials, even in spite of huge investments in advertising and PR. The upcoming election race is a great time for outstanding and innovative campaigns, but it is unlikely that we see lots of such campaigns.

For more information, please visit Sostav.ru.

Eduard Voytenko, CEO of Baikal Lobridge, shared his view on the situation in a number of Russian regions within the framework of an expert study by Ura.Ru.

According to Eduard Voytenko, the surge of conflicts between clans has been noticeable in the Irkutsk region and the Far East. In Irkutsk, this surge is caused by the popular dissatisfaction with the new “opposition” governor. The actual political weight of the Communist Party in parliamentary elections is very much open to question at present. The region has become bogged down in the current severe war of mud-slinging: political ground is being aggressively explored. In the Far East, political life has been distorted at all levels by federal investigations involving major officials.

For more information, please visit Ura.Ru.

In his column for GR-NEWS, CEO of Baikal Lobridge Eduard Voytenko shared his view on lobbying in Russia.

Lobbying and GR are becoming popular areas for conventional communications companies. This is explained by the crisis in the PR market and the increased political tensions that PR consultants are trying to exploit as a pretext of effectively negotiating about the provision of GR-services (mainly for foreign companies). But, due to the lack of extensive GR-experience, these companies provide the same standard services, but with an obvious political bias. There is a risk that the very concept and essential meaning of communication between business and government may be lost.

Efficient GR, that is neither a disguised PR, nor a smokescreen for corruption, is a rare thing in the Russian market. Eco GR in Russia is based on the understanding of cultural contradictions between business (foreign, in particular) and the State. The task of a competent GR specialist is to eliminate mistrust and create an environment where they would be able to speak the same language.

For more information, please visit GR-NEWS.

According to CEO of Baikal Lobridge Eduard Voytenko, the upcoming Year of Ecology in Russia will not become another ceremonial event, as federal authorities are going to find out how deeply the FIG lobbyists have penetrated the All-Russia People’s Front, who preys on environmental agenda in the regions, and how political opposition exploits this topic for its point-scoring.

Declaration 2017 as the Year of Ecology, just before the presidential election, is fraught with a plethora of risks, given the current situation in domestic and foreign policy. Growing social and economic crisis, inflation of conventional parties’ political capital, loss of support by regional leaders who are seen as staying too long in their offices, obvious failures of well-known inefficient public figures — all that can have a negative impact on the planning and implementation of projects within the framework of the Year of Ecology.

Due to the focus on environmental initiatives, we may see unfair competitive practices penetrate the state activity, as well as defamation of real environmental problems, revelation of insoluble contradictions in the regions where criminal organizations still control waste disposal. The risk of failure is significant, and one should not believe that it will pass unnoticed by foreign green parties and movements that are a priori hostile to Russia.

More information you can find on the website.

CEO of Baikal Lobridge Eduard Voytenko gave an interview to the Urban Report magazine where he spoke about a wide range of management challenges arising in the process of creating favorable urban environment in Russian metropolitan cities.

A sustainable, continuous vision of their identity is a big rarity for Russian cities and regions, said Mr. Voytenko. He named the key challenges that management teams are facing: the necessity of a holistic approach to the city, the ability to master the advantages of a project-based approach, and the liberation from the old problems — corruption that deters investors and inflexibility of opinions. Advanced solutions would contribute a lot to the optimization of urban management, but there is a lack of faith in the speed of their deployment. In order to improve the situation, it is advisable to turn to professional management standards, to reprioritize the creation of motivated and qualified management teams, states Mr. Voytenko. Even "radical" solutions are possible, for instance, a legislative initiative that gives foreign specialists access to municipal management.

Eduard Voytenko, CEO at Lobridge, in his interview with GR-News shared his views on the lobbying market in Russia, told about GR educational projects run by the company, and explained why Chinese communication market today represents a capacious niche for the development of Baikal Lobridge.

According to Eduard Voytenko, the sustainable development of the company in recent years is increasingly connected with the global “turn to the east.” A wide field of applied communication tasks derives from economic and political intentions.

Baikal Lobridge’s CEO believes that Chinese direction for Russian PR-companies can be very extensive, it “has enough space for everyone”, but only those PR-specialists who profoundly and professionally “understand China” will be able to successfully realize their potential in the work with the Chinese media field.

Speaking about the development of GR in Russia, Eduard Voytenko pointed out contradictions accumulating in the industry. On the one hand, lack of regulation and consequently insufficient financial capacity of the market. On the other hand, the lack of professionals inflicts no less damage to business and government relations than the absence of a law on lobbying. “Spreading best practices by the best practitioners is what the industry needs,” he adds, referring to the company’s educational projects. The improvement of GR communications quality in the current legal field can significantly increase mutual understanding between professionals and the credibility of GR-activities in Russia in general.

At the end of the interview, Eduard Voytenko spoke about the activities of the Lake Baikal Foundation, where he is the head of supervisory board. Read more about Baikal and participation of private philanthropists’ in environmental projects in full interview on the link.

The Federal Antimonopoly Service of Russia (FAS) has approved a new methodology for setting maximum wholesale and retail markups on drugs listed in the Essential Medicines List (ЖНВЛП). The updated rules replace FAS Order No. 820/20 from September 9, 2020, and give regional authorities more flexibility in managing medicine prices.

Valery Afanasyev, Partner, GR & Risk at Baikal Lobridge, explains:

In addition, the new system allows regions to adjust markups based on location, which is especially useful for remote areas.

Read more in the Pharmaceutical Bulletin.

According to Ksenia Iuranova, an expert in GR & Risk at Baikal Lobridge, the proposed simplified procedure for introducing domestically produced veterinary immunobiological products into circulation could help Russian manufacturers speed up both registration and market launch of new medicines.

“Introducing a notification-based approach for market entry would allow producers to bypass testing in overloaded state laboratories at the early stage of production launch, without compromising quality control, as this function would be carried out by accredited independent centers,” the expert notes.

Russia’s Ministry of Agriculture has prepared a draft government resolution introducing amendments to the decree adopted on March 12, 2022. The document proposes introducing a notification procedure for placing the first two production batches of veterinary immunobiological medicines — manufactured in Russia for the first time — into civil circulation.

Under the proposed rules, manufacturers would be required to notify Federal Service for Veterinary and Phytosanitary Surveillance within five days after the company’s authorized representative confirms that the product complies with state registration requirements.

If the product is a domestically developed veterinary immunobiological medicine created as part of import substitution efforts, manufacturers will also have to provide sample testing protocols.

The initiative is aimed at accelerating import substitution in the vaccines and sera segment, which remains highly dependent on foreign suppliers.

More details are available in the report by Pharmaceutical Bulletin.

The Russian Ministry of Economic Development has drafted new rules making premoderation of product listings mandatory on marketplaces, as part of Federal Law No. 289-FZ “On the Platform Economy.” Under the proposal, digital platforms will be required to verify the legality of products and block any listings that fail the check before they go live. This applies to medicines, medical devices, and dietary supplements.

According to the draft, a product listing can only be published after passing all required checks. If a listing is rejected, the marketplace must block it and notify the seller within one day, explaining the reasons. Sellers will then have the chance to correct the information and resubmit the listing.

Zhanna Logacheva, Project Lead, GR & Risk at Baikal Lobridge, notes that the boom in online sales has also led to more counterfeit and non-compliant products. Mandatory premoderation will help ensure safety requirements are met before sales begin, though it may also create significant technical and organizational challenges for platform operators.

Read more in the Pharmaceutical Bulletin.

Eduard Voytenko CEO at Baikal Lobridge commented on the current state of the lobbying and GR-industry in Russia for the Internet media Medusa.

According to him, the demand for GR and lobbying services varies in different industries. And estimating the degree of this demand, we can judge how much the development of state regulation responds to the business interests and how full is the expertise that accompanies state decisions adoption.

But, at the moment, there are still no ready-made solutions for “legalizing” lobbying. Attempts to regulate the industry are nothing more than a desire to create niches for business.

The full version of the publication on lobbying in Russia can be read by reference.

Eduard Voytenko CEO of Baikal Lobridge expressed his opinion on the prospects for regulating lobbying in Russia at RBK live.

On the air of the program “ChEZ” Eduard Voytenko noted the necessity to create “rules of the game” for lobbyists but also emphasized that the community and the state are not ready for this yet. Currently lobbyists’ activity is somehow regulated by indirect federal laws, but there are still no worked out solutions for “legalizing” lobbyism. Mr. Voytenko is sure that correct regulation, in turn, will open the market, will help increase the actors’ transparency and increase competitiveness between them. Moreover, the financial capacity of the market will increase: Western corporations, for example, will be able to allocate budgets to Russian offices for the lobbying companies’ services, which in turn will give substantial tax revenues for the state budget. The legislative and executive branches of power will benefit from lobbying regulation too: lobbyists will become the fulcrum of expertise in the most sensitive industries, where the dialogue between the authorities and business is broken.

The program “ChEZ” is available via the link.

Eduard Voytenko, CEO at Baikal Lobridge, commented to the TASS news agency what will happen in the country’s pharmaceutical market if the State Duma of the Russian Federation passes the law "On measures of influence (counteraction) to unfriendly actions of the US and (or) other foreign states".The bill, in particular, provides for the prohibition or restriction on imports of agricultural products, raw materials, food, alcohol, tobacco or drugs into Russia from the US and other unfriendly countries. However, medicines, which have no analogues in Russia, will not affect the limitations.

More information is available here.

On air of RBC CEO of Baikal Lobridge Eduard Voytenko shared his opinion on how it is possible for the deputies of the State Duma of Russian Federation to lobby the interests of law enforcement agencies and services.

On air of the “CHEZ” program Eduard Voytenko commented on the results of the research conducted by the Center for Anti-Corruption Research and Initiatives of “Transparency International”. According to them, the organization assigned every fifth parliamentarian to the “power lobby”. Mr. Voytenko stressed that the interest of “Transparency International” in analyzing lobby technologies in our country is largely explained by the wrong idea of connection between lobbying and corruption. The speaker noted that in spite of the absence of lobbying legislation, lobbyism is indirectly regulated by a number of laws, e.g. Federal Law № 74 “On Civil Service”, Federal Law № 224 “On Public-private Partnership” and other normative legal acts and regulations. Assigning several deputies of the State Duma of Russian Federation to “power lobby” is not entirely correct because all decisions of the Lower House of Russian Parliament on increasing budgetary allocations for the “power” ministries and departments today fully correspond with the state policy on strengthening the defense capability of Russia. The State Armaments Programs-2020 and -2027 make evidence to this statement. Upon these programs, dozens of trillions rubles are spent on rearmament of Russian Armed Forces and is considered in the federal budget for a year ahead. There simply cannot be a “closed circle of deputies of the power lobby”. All deputies are elected by the people, not appointed by the law enforcement agencies. Finally, statistics shows that since the middle of the 2000s the federal budget, worked out by the Government of the Russian Federation in accordance with the provisions of annual Budget Message of the President, has been adopted by the State Duma, as it was introduced by the Government without changes. This fact once again confirms that the deputies of the State Duma do not influence the content of the federal budget.

Speaking about the possibility of lobbying through the Lower House of the Russian parliament in general, Eduard Voytenko noted that its committees, subcommittees and commissions, its law-making power, discussion of any proposal of the Government of Russian Federation, gives to it certain opportunities to influence one or another legislative initiative. Communication with profile committees should be based on high-quality expertise and readiness to provide objective information to parliamentarians, useful to discuss and adopt legislative resolutions. However, it should be noted that most laws passed in Russian Parliament are the laws initiated by the Government. And federal authorities are ready to hear expert opinions from its representatives.

The air of the “CHEZ” program is available via the link.

Eduard Voyenko, CEO of Baikal Lobridge, wrote a column about modern aspects of IT companies competition on the global market for The Dialogue of Civilizations Research.

The United States’ efforts to squeeze out Chinese IT companies from Europe are no different from a similar policy regarding Russian energy projects. According to the logic of the US government, if Nord Stream 2 threatens the EU’s energy independence (and liquified natural gas from the US does not), then Chinese telecom equipment threatens EU cybersecurity as well. The US has explicitly advised Europeans to switch providers, avoiding Chinese-owned Huawei and ZTE.

The need to diversify energy suppliers for the benefit of Europe’s stability and political independence from Russia has been talked about for a long time. The United States also needs European markets to fuel its own economic growth. Therefore, US policy in this case is really just unfair competition.

China can compete in terms of price with Western IT products as effectively as Russia can regarding the European energy market.

The political paradigm in which Russia and China are a vital threat to Western civilisation helps cut these two countries off from European and, of course, US consumers. But the economic interests of the United States in relation to Europe extend much further. They even affect areas of competition with strong European companies, which are not currently accused of belonging to the new ‘axis of evil’.

Just look at the list of ‘special industry agreements’ that should have been developed within the framework of the Transatlantic Trade and Investment Partnership: textile and chemical industries; pharmaceuticals; cosmetics; medical products; the automotive industry; electronics; engineering; plant protection products; and agricultural and food products. For each of these areas, the US has interests in Europe, but European manufacturers can also compete with the US under current European protectionist conditions. What will the US do in the future to expand its sectoral influence within the EU? It is difficult to say, but we can assume it will be interesting. What we cannot deny the US though, is leadership in terms of public relations and political pragmatism.

Russia only plays a secondary role in the struggle for domination of European and US high-tech markets. Due to the size of its market, Russia simply cannot be an alternative avenue for growth on its own, only in conjunction with other developing countries. Russia alone is too small for global companies to further their development and see progress there as a way of overcoming the financial consequences of losses in US and European markets. If one of the East’s high-tech giants was to ‘squeeze’ its US competitors from developing country markets (including Russia), then perhaps Russia could count on some degree of technological localisation and transfer. However, this would not be too profitable for the firm itself.

And if corporations themselves determine the degree of their readiness to enhance loyalty for the sake of markets maintenance, China’s political elite will draw definite conclusions about the prospects for fair international competition in the developed market economies.

The COVID-19 pandemic will keep Russia entranced for at least another month. Business will continue its struggle for survival, and the government will issue a few more packages of support measures that will be available only for certain companies. Most experts are unanimous in their forecasts: Russia is heading for a prolonged recession. Many companies will reduce their costs, large business areas will be frozen, let alone single projects.

In this context it’s worth figuring out the prospective GR trends in Russia both in-house and outsourced. What will serve as the development driver for the relations between the government and the business in the near future?

GR has always served as an instrument that helped advance business development. Improving market conditions by involving public authorities in order to gain a foothold in new niches: this mission made GR the privilege of large players at the federal and regional levels. During the periods of economic recession or increase of state control, GR takes on the protective function and becomes a tool for maintaining the scale of business and its financial indicators.

It is obvious that the GR experts are in high demand working at the top of their capacity at the moment. Due to the pandemic, some sectors need urgent state aid; some, unfortunately, cannot count on it, but are trying to accumulate a reserve in order to ease their financial burden during the recovery period once the restrictions are lifted. In connection with the President’s latest initiative to develop a roadmap for recovery once the COVID pandemic is over, a lot of companies will attempt to influence the government’s strategy in favor of their industries.

However, every step taken at the moment shall count as force majeure and anti-recession communications, and it is hardly possible to imagine the form that the dialogue between business and government will take in the coming years. However, it is essential to start examining the pattern in order to strengthen the trust between the companies and important industry and political stakeholders in the future competitive environment of a comprehensive and long-term recession.

In recent years, the framework of GR communications has often followed the following scenario: the government strived to achieve certain goals (their own KPIs) from business, and the business easily involved in such self-motivated work with the goal to stay close to the government bodies. The dialogue was channeled mainly around national projects. Today we can hardly count the weeks since national projects were mentioned by the government. We can also hardly imagine that these growth drivers of sectoral public management will not undergo significant fundamental changes in the new economic reality.

It is vital that Russia is in a strategically vulnerable position. In the long run, we do not have an external or reliable natural source (similar to oil in the “fat 2000s”) that would fuel economic growth. The coming recession is caused not only by the pandemic and the falling prices for “black gold”; it is also fueled by less visible, but no less influential trends. In particular, a sharp decline in foreign investment in Russia, especially after the so-called “Michael Calvey Case”. Investors will not return to Russia in the near future and not only because of the political risks and a decrease in confidence, but also because of the world economy shrinking. Thus, in addition to the traditional decline in investment activity in the emerging markets (Russia), there will remain additional lack of trust on the part of international business, even among similar economies.

We will be forced to search for the sources of development within Russia, and the government’s poor mobilization in efficient achievement of goals through national projects after some time will force the government and the business to engage in a dialogue on the new principles for establishing preferences. Vladimir Putin has already mentioned the new core values of development: the roadmap that the government will prepare should be aimed at increasing citizens’ incomes and economic growth. Of course, it will be impossible to set the political and managerial aims at these goals explicitly and immediately, although the President called for taking into account the “long-term consequences for Russia’s economy”.

After the pandemic there will be several influencing trends simultaneously. We can expect that the first, short-term trend will be the communication gap. It arises from the difference of views on the situation after the pandemic in many sectors. Many state bodies, individual officials will be sure: the government has taken every effort and even more than that, to help entrepreneurs minimize the losses (nobody takes into account the media noise) and survive during several months of the COVID-19 lockdown. The business has a completely different point of view. Both the difficulty of obtaining state aid and the band-aid nature of the solutions, as well as the reduction of development prospects in the Russian market: all these reasons will generate a number of common requests for updating the state policy in various industries. At some point the authorities will not be ready for this; and those who will be able to maintain communications and wait for the leadership of the country to change their guidelines will benefit from the situation.

The second reactionary trend will be predetermined by a mutual attempt to reverse to pre-recession communications at the previous pace and with the principles of imposing the framework on the business by the state, as well as the attempt to fit into the government’s initiatives by gaining some profit or at least less damages on the part of the business. However, as the medium and long-term effects of the recession manifest themselves, the relevance of this model will soon decline.

The third trend, which is just starting to take shape in the outline of new strategic documents, will be based on the new “national idea”, which will be very simple. For citizens it will stand for increase in material well-being and a strategic increase in living standards. For the state it will stand for increasing fiscal revenues, reducing costs while maintaining the level of development of the social sphere, developing of legal safeguards and efficient “technical” mechanisms for implementing the citizens’ needs. The authorities will be willing to engage in a dialogue with those major players that top up the budget, do not withdraw funds unduly, and can secure well-paid jobs. All these factors will soon become no less significant argument for a successful dialogue than the willingness to engage in labeling experiments.

We should probably mention workplaces separately. This is an important aspect, building a dialogue around which will promote both part of the business (both large and state-owned companies) and the authorities (especially in the regions). It is a very profitable future communication niche for the companies showing stable or increasing employment rate at the background of the growing unemployment. Overcoming unemployment is the most important socio-economic task. However, there is a risk that such important indicators as, for example, labor productivity, innovativeness, export orientation, transparency will be moved to the background, and large players will try to develop a system to access the resources based on the quantitative employment indicators while applying GR techniques.

And this is a chance for the government to take an effort and avoid the mistakes of the “full-fledged socialism”. They should unite with the business to develop mutual understanding about the essential aid and sufficient measures of state control and administrative influence on the strategies of companies with growth prospects in the domestic and foreign markets using highly productive labor as their main advantage. The businesses that create conditions for the growth of small companies and self-employed will also be in high demand. Those are trading platforms, services that facilitate business, the banking sector and its representatives that address the needs for the entrepreneurs (the banks offering anti-crisis loans are being carefully monitored). All these business activities will serve as the useful aid to start efficient interaction with the authorities in the post-COVID era.

At the same time, one should not forecast GR benefits only for innovative companies with a developed IT factor. Some industries always stand apart. It is clear that the deeper and wider the recession will develop, the wider window of opportunities we will witness, according to the tradition, for the tobacco and alcohol industries, which secure stable and large-scale fiscal revenues. The pressure on these industries may be eased, and the fight against counterfeit goods, especially in the cigarette and alcohol market, can be significantly strengthened for better collection of excise taxes. But the fuel and energy industry as well as aviation, for example, which will take a long time to recover, will do as much as possible for the sole purpose of obtaining state money. And this, of course, will also result in successful GR, largely due to the fact that the government is held hostage by the powerful industrial giants.

Most likely, the public policy in the social sphere, especially in the pharmaceutical industry and in the healthcare system, will be revised. The insurance companies that have been criticized by Valentina Matvienko, as well as pharmaceutical companies, especially suppliers of expensive drugs, shall get ready for active GR communications. Due to the state’s shrinking financial means, the long-discussed strategically significant decisions can be made that are related to manufacture of the Russian analogues of drugs under patent protection, on the sharing of risks between the state and the pharmaceutical manufacturer in the treatment of patients with most expensive drugs.

In general, whatever industry we consider separately, a fairly predictable list of issues will determine the state’s interest in the dialogue. Can the industry or its specific representative contribute to the growth of well-being and pumping up the budget? Can the proposed solution potentially reduce financial and administrative costs? Can it contribute to the development of (preferably) high-performance jobs?

As a conclusion, one may note that the best outcome of the recession that Russia is facing can be the improvement of both state policy and business strategies. With cautious optimism, one can count on the government finally putting the development of better and more transparent conditions for entrepreneurs at the forefront. And the business will have an extra chance to appeal to the state for solving its problems and to promote the ideas for development rather than participate with their costly initiatives in the implementation of government’s plans that often prove to be far from the economic and financial reality.

On 27th of June, 2020 Ms. Anastasia Tsvetkova, Director of International Communications and CSR Practice of Baikal Lobridge, gave an interview to Mr. Richard Levick, Chief Executive Officer of Levick Strategic Communications, and concurrently the host of the daily business podcast “In House Warrior” of the Corporate Counsel Business Journal.

The parties discussed all the different aspects of doing business in Russia with regard to the Government Relations’ domain. Ms. Anastasia Tsvetkova told about the sector-related political challenges, touching upon the specifics of Baikal Lobridge’s professional activity. Besides, Ms. Anastasia Tsvetkova advised of the possibilities to promote the international firms’ intentions, aimed at bolstering their positions in the Russian market under the circumstances of the current governmental policy to buttress import substitution and protectionism.

During the interview Ms. Anastasia Tsvetkova shared some recommendations, regarding the highly successful business adaptation of overseas firms within the Russian Federation. So, particularly, Ms. Anastasia Tsvetkova highlighted the importance of the detailed and thorough analysis of the regulatory legislation and the existing sectoral risks and challenges at the background of electoral campaigns and the rotation of governmental personnel. Moreover, Ms. Anastasia Tsvetkova highlighted the significance of collaboration with the local partners that are able to elaborate the response strategy, which addresses all the risks and challenges according to the national specific features.

As Baikal Lobridge specializes in lobbying on behalf of not only business, but also nonprofit sector, Mr. Richard Levick was interested in the role and positions of national and international NGOs in Russia.

Ms. Anastasia Tsvetkova informed that despite some sporadic negative effects of legislation in the field of NGOs (mainly, provisions on “foreign agents”), activity of the Russian nonprofit sector has intensified and the NGO’s expertise is supported by state authorities.

In the conclusion, Mr. Richard Levick and Ms. Anastasia Tsvetkova made inferences about the drastic similarity of lobbying and GR-approaches to international business in Russia and the USA.

The complete audio version of the podcast “In House Warrior”

in English is available on Spotify.

Eduard Voytenko, CEO and Managing Partner at Baikal Lobridge, provided expert commentary in an article by Vedomosti on the consequences of foreign companies leaving Russia between 2022 and 2025. We publish the extended version of his comment below.

What the Vedomosti article is about

According to the publication, between 2022 and 2025 companies from countries classified by Russia as “unfriendly” lost more than $610 billion in revenue and at least $16 billion in net profit in Russia after leaving the market or suspending their operations. At the same time, businesses from friendly countries expanded their presence and doubled their revenue, occupying market niches that had become available.

Assessing the losses: $600 billion is a realistic figure

The losses stem from several factors: asset write-offs, sales of businesses at a discount, the transfer of property to the state, payment of the so-called exit tax, as well as revenue and profits that companies failed to earn after leaving the market.

An analysis by country and sector confirms that the estimate of $600 billion in unrealized revenue appears justified and corresponds to the actual dynamics of the market.

Why large companies left more often, while small and medium-sized businesses stayed

Large corporations, especially publicly listed ones, faced unprecedented pressure from shareholders and investors. For them, remaining in the market meant reputational risks that outweighed any short-term profits, as well as the threat of secondary sanctions that could affect their global operations. Decisions were therefore made at the level of boards of directors and majority shareholders, who prioritized protecting the global portfolio rather

Small and medium-sized businesses, by contrast, were more likely to maintain their presence in the market. Such companies are less visible to sanctions authorities and public campaigns. They often occupy niche specializations that make them critically important for local markets. They also do not face the same obligations to stock market regulators and institutional investors, while the cost of existing the market may be economically unjustified.

At the same time, the division between “large companies that left” and “smaller ones that stayed” is not absolute: a significant number of major players also maintained their presence — either in their original form, through rebranding, or by transferring operations to local management.

Will Western companies return after sanctions are lifted?

Baikal Lobridge expects Western businesses to return actively if a significant portion of sanctions is lifted and the geopolitical situation stabilizes. This forecast is based on several factors. The Russian market remains highly profitable for a number of sectors, which continues to attract pragmatic business interest. Strategic interest in resource projects also remains strong.

In addition, Baikal Lobridge is already receiving requests for analytical assessments from companies considering potential re-entry scenarios. Businesses are conducting preparatory work in order to enter the market as quickly as possible once restrictions are lifted.

Who will return first

The first candidates for a return are likely to be companies that managed to sell their assets at a favorable price while securing clear buyback conditions. They have retained both their understanding of the market and the legal framework necessary for reintegration.

Players in sectors with high barriers to entry — such as technological complexity, high investment thresholds, and long development cycles — are also likely to return, particularly where these barriers proved too difficult for local companies and prevented a full replacement of the departing players.

According to Baikal Lobridge’s assessment, the strongest interest is likely to come from companies in the resource sector, including oil and gas and energy. For example, TotalEnergies continues to hold stakes in LNG projects. A separate decree by the Russian president technically leaves open the possibility of ExxonMobil returning to the Sakhalin-1 project.

High-tech sectors — including IT, pharmaceuticals, electronics, and specialized equipment — are also likely to see renewed activity. Major FMCG companies may also return: many of them have buyback options, retain strong consumer loyalty, and operate in mass-market segments where some niches remain unfilled.

More details are available in the article by Vedomosti.

Senior Partner at Baikal Lobridge, Anastasia Tsvetkova, has shared her insights in the Vedomosti column “A Poor Harvest Year”.

In the article, the author examines how geopolitical instability and growing resource constraints are reshaping the discussion around sustainable development.

Developments in the Middle East are gradually changing the very framework in which ESG and sustainability are discussed. What was once viewed as largely optional is increasingly being considered through the lens of a state’s fundamental resilience — from energy and water to food security.

Today’s economy critically depends on uninterrupted access to resources and logistics. When this chain is disrupted, the impact quickly moves beyond individual sectors and begins to affect the macro level — from inflation to social stability.

Anastasia Tsvetkova highlights several factors that are bringing resource sovereignty to the center of the agenda:
disruptions in energy supplies and rising energy costs;

• instability in fertilizer and agrochemical markets;
• logistical constraints and higher freight rates;
• rising costs of food processing and packaging;
• pressure on cold-chain infrastructure;
• higher insurance premiums and persistent structural costs;
• currency volatility in food-importing countries;
• vulnerabilities in water infrastructure and desalination systems.

The key shift, the author notes, is that resilience is no longer defined solely by production volumes, but increasingly by a country’s ability to manage resources, control costs, and maintain critical infrastructure.

Even if the current crisis de-escalates quickly, the underlying logic has already changed: issues such as self-sufficiency, access to resources, and the ability to manage them are likely to play an increasingly central role in national economic strategies — regardless of ideological frameworks.

The full column is available on the Vedomosti website.

On February, 26^th, 2021 the analytical article by Baikal Lobridge on Litigation PR in Russia was published on the website of the Crisis and Litigation Communicator’s Alliance (CLCA). The material was prepared at the request of the Alliance for the purpose of enhancing the international communication competencies of the CLCA. The publication was authored by Director of Litigation PR Practice Nina Danilina.

The text of the article, titled “Litigation PR in Russia: cases, figures, trends” may be found below:

More and more public litigation disputes in Russia have been resolved through media coverage. Litigation PR comes to the rescue of plaintiffs and legal experts as the management of the communication processes during the course of any legal dispute or adjudicatory processing, aimed at creating beneficial background information around certain legal positions as well as achieving justice.

Russian cases

Just a few years ago plaintiffs and legal experts were ignoring the press, trying not to discuss their litigation disputes on social media. However, now in 2020 it is obvious to everyone – the probability to obtain an impartial and objective judiciary decision drastically increases if the public follows litigation proceedings.

High-profile cases of Mr. Ivan Golunov, an investigative journalist, and Mr. Mikhail Efremov, an actor, demonstrated the following: public opinion influences the outcomes of litigation disputes. A well-thought-out PR-strategy, which supplemented the conventional legal activities, set Mr. Ivan Golunov free. Meanwhile, the jail time of Mr. Mikhail Efremov was extended owing to the inconsistent PR-legal activities of his lawyer.

One of the most vivid examples of Litigation PR – lawsuit of Olympic freestyle skier Ms. Maria Komissarova against the clinic of Dr. Blum. Ms. Maria Komissarova broke her spine in a training crash at the Winter Olympics in Sochi in 2014. Dr. Evgeny Blum promised her the full recovery of all motor functions. Nevertheless, a 50 million rubles treatment, which turned out to be just a gym training within 1,5 years, has not brought any results: Maria is still confined to a wheelchair and not able to move on her own.

To win the case against the owner of the international network of clinics with wide connections and administrative resources, the large-scale information victory was needed.

Following the release of an episode of “The Man and the Law” TV program, after the publication of over 450 articles and the petition to support Maria (signed by more than 5000 ordinary people as well as many bloggers), eventually, Chairman of the Investigative Committee of Russia Mr. Alexander Bastrykin took charge of this case, and Maria received financial compensation. Thus, the aforementioned communication strategy buttressed and bolstered the legal position.

Another recent case – PR-support of the first Russian class-action lawsuit. Blogger Ms. Katya Konasova revealed that the acne treatment manufacturer FemFatal had misinformed consumers, hiding a cheap cosmetic antibiotic in the composition.

The news, regarding the lawsuit against FemFatal, generated buzz across Russian TV channels and business publications. Thematical programs, based on the case, garnered, in total, over 5 million views on YouTube, the main investigative video hit the Top-3 list of most-viewed YouTube videos within the Russian segment. As a result, the lawsuit was won, Rospotrebnadzor (Russian Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing) prosecuted FemFatal for a number of violations, the class action lawsuit is still under consideration.

The three most effective channels of Litigation PR in Russia

Research on the effectiveness of PR-support of litigation disputes, held among plaintiffs and legal experts by PLATFORMA and BGP Litigation in 2020, indicated that over 60% of all plaintiffs and legal experts had already used media coverage and publicity during a number of litigation disputes, and these instruments were considered effective. 78% of all respondents confirmed that PR-support had influenced the outcomes of litigation disputes.

In the majority of cases, respondents exploited simultaneously several channels for promotion. 56% of respondents utilized media publications, 47% of respondents arranged PR-campaigns on social media, 26% of respondents embarked upon TV, 21% of respondents used Telegram-channels.

Television was used for the maximum media coverage and attention at the highest governmental level, Telegram – in case of the rapidly distributed information, large-sized online media – to stamps out the negative information on the internet.

According to the aforementioned research, the most effective channels of PR-support of litigation disputes are conventional media resources, social media (the second place), and Telegram-channels (the third place). The most vivid examples of effective PR-support of litigation disputes are cases of Mr. Ivan Golunov (journalist) and Mr. Kirill Serebrennikov (stage and film director).

Main trends of Litigation PR in Russia

Nowadays in 2020, the 4 main trends of Litigation PR-2021 are quite obvious: active engagement of bloggers and influencers, the publication of discrete information (private correspondence, etc.), exploitation of technologies (contextual and targeted advertising), more aggressive behavior of defendants, who are doing their best to win as leaders of the modern information agenda.

In 2021 both individuals and companies will actively exploit Litigation PR. In particular, Litigation PR will be used to criminalize business disputes and resolve disputes between business and public authorities as well as disputes “David vs Goliath” (when small and medium-sized business is in legal disputes with large companies). Besides, Litigation PR will be more often exploited by NGOs, trade unions, and ecological movements.

The high necessity to summon the public’s attention will remain with regard to consumer protection disputes, class action lawsuits as well as in case of highly probable impartial and objective judiciary decisions.

GR specialists (Government Relations), who work closely with government bodies and regulators, are steadily gaining prominence. As laws and government regulations become more complex, companies are increasingly viewing GR as a key managerial function.

Research by Baikal Lobridge shows that around 75% of large and medium-sized companies already have GR function.

Today, GR goes far beyond communicating with authorities. Specialists analyze legislative initiatives, assess risks, and help businesses adapt to changing regulatory requirements.

Read the full Business FM article for more insights.

Baikal Lobridge in collaboration with a team of sociologists prepared expert study on the Russian GR-industry for the purpose of determining the key trends and functional work specifics of specialists in Government Relations.

Within the study it was possible to identify the fundamental activity domains of corporate GR-specialists as well as their ongoing objectives; unveil the most popular communicational channels between business entities and public authorities; determine the major personal attributes and professional skills, which reflect the image of GR-specialists; analyze the trends of how a GR-department (a GR-specialist) operates within a company as well as recruitments methods with regard to GR-specialists; assess the present state of affairs within the industry of GR-services in Russia.

The study was carried out through the online survey and expert interviewing of GR-specialists of Russian and international companies and chief executive officers of large business structures.

The study’s results made it possible to build well-founded conclusions with regard to the “portrait” of Russian GR-specialists , the most effective work methods in GR and the current market state of GR-services.

The study and its results in greater detail are available within our report.

The reference to the source is obligatory upon the use of the published material.

New reality, where the world has found itself, unprecedented sanctions, outflow of western companies from the Russian market, financial instability – all these factors have already changed the internal market of Russia and trigger new challenges for Russian actors.The major question – who will occupy the vacant niches? What are the export prospects of the Russian manufacturers? More detailed information, regarding the China-oriented import substitution and the promotion of Russian goods and services in China, is available in the materials of the CEO of Baikal Lobridge Eduard Voytenko for the RosBiznesConsulting media group (1st and 2nd material).

Today, the state pays increasingly more attention to the IT-industry, while the sector is one of the most active and consolidated in promoting its interests in the government. More detailed information, regarding GR-tasks and KPIs of the specialists, GR-tools and the most successful lobbying practices in the industry, the ways relations between business and government are built in the IT-sector, as well as the ways the GR-function is organized in IT-companies, is available in the big review of TAdviser with comments of the CEO of Baikal Lobridge Eduard Voytenko.

Today, the interaction between government and business, which intends to continue working in Russia, is reaching a new level. Quick solutions are needed to rebuild the economy. Officials are looking for them, among others, in Russian private and state-owned companies.

The speed of preparation of constructive proposals for the authorities, the quality of expertise and active participation in the discussion of initiatives are the main success factors in GR and business as a whole.

Turbulent periods can work for rapprochement and cooperation. Even if the current result of the joint efforts of business and the state is not as effective as it could be, it will become a foundation for systematic joint work in the future.

Read more about the specifics of business interaction with authorities during the sanctions regime in the author’s column (for the RosBiznesConsulting media group) of the CEO of Baikal Lobridge Eduard Voytenko.

The transformative swings of the economy, society and management practices in 2022 could not but influence the relationship framework between business and public authorities. All the changes manifested themselves in an uneven manner in a variety of segments, as well as differed in Russian and foreign companies.

Trend 1. The position of Western companies is shifting

It is feasible to start with the back-story outlines. Prior to 2014 the Government, mainly, listened to the needs of overseas companies. In the time following 2014 – the import substitution strategy has become the state high-priority vector, so resultantly it has affected the position of foreign corporate entities.

The State has found itself be interested in issues of the Russian business, while ignoring the foreign companies’ critical remarks of some initiatives. The burning examples – preinstallation of the Russian software for smartphones, as well as the introduction of the rule «The unnecessary second» in terms of the medical equipment. The foreign business aspired to preserve the ‘status quo’, but at the same time, it was already impossible for these entities to attain some substantial preferences. However, the sustainable and constructive dialogue with public authorities was still underway. In 2022, the situation has finally shifted for a number of companies.

Back in spring last year lots of foreign brands expressed the very desire to leave the Russian market. The upper management representatives of some of these entities confined themselves to just «loud» declarations, but there were those, who launched the process of leaving the market.

Decisions of headquarters of transnational corporations disrupted the trust level between the Russian Government and foreign business structures. As was eyed by the Russian bureaucrats, declarations, concerning the aspiration to leave the Russian market (even in the case when these intentions were not executed) discredited the international brands. From the standpoint of public authorities, such a course of action jeopardized the Russian officials within these companies, their clients, as well as the development process of some industries, including those, which were of paramount significance for the country.

As a result, in 2022 the foundation for maintaining the constructive dialogue between the State and a part of companies from «unfriendly» countries was eliminated. Hope it is the phenomenon of temporary nature.

In these circumstances, the Government made it much more difficult for foreign companies to leave the Russian market. In particular, among measures, which were adopted, – the special deal harmonization procedure with regard to international companies, restrictions associated with the sale of strategic entities’ shares, as well as strict policy in terms of the currency legislation. In addition to that, the import substitution trend’s strengthening took place.

At the background of the restrictive activity in the country, companies «freeze» their GR-function, so it takes its toll on the development of the profession, on the whole. The functionality of relevant specialists is substantially narrowed down, as well as the budget volume decreased. The relocation of employees with regard to other countries is observed (for example, Central Asia).

We remember that the GR-profession itself in our country has been formed under the influence of international business. While leaving the Russian Federation, the large-size companies simultaneously withdraw the established GR-traditions. It refers to the high-level compliance culture, the skill of interacting with stakeholders, understanding of the specific outlines of working with consultants, etc. All these features are common to Western companies, because their headquarters are located within the US and Europe, where all the GR and lobbying traditions, as well as the sectoral legislative regulation exist.

Trend 2. The new most-favored countries

The position of international companies from «friendly» countries (for instance, China, India, and Turkey) is slightly different. Some of them are inclined to relocate their manufacturing facilities to the Russian Federation. It is feasible to find a number of burning examples in such domains, as automotive industry, production of special equipment, medical devices’ segment, etc.

The Russian public authorities are enthusiastic about establishing the constructive dialogue with the management circle of these corporate entities. For example, GR-professionals from Chinese companies, who are ready to invest in the Russian economic sector, are actively invited to take part in meetings with the participation of federal ministers, deputy ministers and heads of large federal districts. It is obvious that a greater emphasis is currently put on these companies. The investment agenda is of paramount importance for Russia this is why the Government is open for collaboration with corporate structures from «friendly» countries at the highest level possible.

At the same time, it does not mean that international companies from these countries do not face obstacles within the Russian market. The import substitution trend exerts the risk for them as well. For example, the application of the rule «The unnecessary second» – when the public entities are unable to purchase the international medical equipment if, at least, one domestic manufacturer participates in the tender process – affected the Chinese business as well.

What is more, some companies from «friendly» countries withdraw their business capabilities in the Russian Federation due to the looming risk of secondary sanctions. It takes its toll on the relationship with the Government. Although the number of such companies is much less, compared to the amount of Western ones.

Trend 3. The new and unexpected functions of GR

External conditions in 2022 facilitated the emergence of new vectors of the crisis GR – in both Russian and international companies.

One of them, for example, was associated with the partial mobilization, which was announced in September last year. All the corporate resources were utilized to fight off the «local excessive enthusiasm». It was necessary to advise the regional public authorities on jeopardies of stopping the manufacturing processes, as well as it was of paramount importance to demonstrate their significance for the Russian economic sector. Simultaneously, GR-professionals participated – as experts – in the procedure of forming the list of sectors, where officials should not be drafted for the partial mobilization from.

Moreover, many companies encountered the necessity of withdrawing persons, who were somehow related to «unfriendly» countries, from the corporate management framework. In some cases their share decreased, sometimes the Russian representatives began to exert the full-fledged control over the business. It is a difficult process and, very often, the assistance of GR-specialists is much required. They support it through the interaction with regulators – first of all, with the governmental commission on control over the implementation of foreign investments. The range of their objectives comprises the obtainment of necessary explanatory outlines from public authorities, which are subsequently passed on to stakeholders. Overall, as stated by the Centre for Strategic Research, the largest 89 international companies made a decision to pass the business ownership on to new individuals.

Along with the crisis policy, the strategic work, regarding the long-term regulatory risks in companies staying in Russia, was underway. The business entities, who are strongly related to the most regulated domains, such as tobacco, pharmaceutical industries, medical devices, cannot but take it into account.

It refers to the restrictive measures with regard to the state procurement, elaboration of new technical regulations, some production prohibitions, etc. These spheres are being currently considered during the work with regulators within Russia, as well as at the supranational level, in particular, at the level of the European Economic Commission (EEC). The activity is exacerbated at the backdrop of a plethora of tactical risks and the challenging economic state of affairs.

Trend 4. Elevation of the role of GR

One of the major this-year trends, which is observed in our practice, – the GR-function is being born in the companies, where it has not existed before.

The overriding explanation for this phenomenon is that the public support degree with regard to a variety of sectors increases at the backdrop of the current crisis. The public authorities offer new protective options for the Russian business, including subsidies, concessional loans, preferences under the procurement framework and others. By June the first-priority action plan, aimed at supporting the Russian economy, already contained over 300 measures. According to the Prime-Minister Mikhail Mishustin, the general volume of the budget stimulus ought to exceed 8 trillion rubles in 2022.

At the same time, as was practically showed, not all companies were capable of utilizing such support measures, incl. due to the difficult report system or the necessity of the legislative substructure.

Very often, it is GR-specialists, who participate in discussing the future support measures. And last year these GR-professionals were of special importance. The brightest example – IT-segment. The Russian public authorities paid greater attention to the support of the sector, and the GR-function helped Russian companies use all the opportunities, provided by the Government.

Apart from that, the competition between Russian structures within vacated niches has become tougher and stricter. In these circumstances, GR-professionals help create the competitive advantages and overcome administrative barriers. They collaborate with regulators, while telling them about business challenges, as well as they elaborate the cooperation mechanisms with public companies.

Trend 5. The bureaucratic acceleration

In 2022, the Russian economy faced the large-scale challenges, which required the acceleration of the decision-making process both at the federal and regional levels. In these circumstances, the interactive format of interaction between public authorities and business entities has been established, when all the public decisions have been made in a real-time manner. It is possible to provide some last-year worked examples.

Firstly, some agencies aspired to establish the direct cooperative channels with business entities from the most regulated domains. Sometimes, the collection of proposals was implemented directly through the messengers’ chats. As a result, through the assistance of the massive business engagement and the expertise use, some important decisions were made in an accelerated manner. For instance, the prompt economic support measures were adopted within a week, following the 24^th of February: cancellation of business inspections, perks for the IT-sector, credit holidays, etc. During the «business as usual» period it would took 6 months to adopt such measures.

Secondly, the collection of business proposals was carried out in a prompt manner without weekend-breaks within different platforms, in particular, through such large organizations, as the Russian Union of Industrialists and Entrepreneurs or the All-Russia Public Organization «Business Russia», as well as through sectoral associations, development institutes, working groups under federal executive authorities.

Thirdly, the Government aspired to explain its policy. For instance, in March the portal «Obyasnayem.rf» was launched, where answers to the most relevant questions, including business queries, were published. In Moscow, the call centre for entrepreneurs for the purpose of assisting them amid the crisis events was established.

In conclusion, we would like to note that the GR-practice in Russian companies is still the function in its infancy. Lots of companies do not have such professionals yet. However, nowadays it is obvious that in the near future the Russian business is going to encounter new challenges, and the range of GR-tasks is to be extended. As a result, the market advantage is to be possessed by those corporate entities, who will be able to attract the professional personnel and establish an excellent rapport with public authorities.

In GR and lobbying activities colleagues often appeal to communication technologies while law is the main tool for harmonizing private and public interests. High-quality legal and industry expertise is the key to effective dialogue with public authorities, while individual projects also need technologies from other areas, including PR, media business management, crisis communications, event management and others.

The Baikal Lobridge CEO Eduard Voytenko and the director of the Legislation practice and Legal Research Anastasia Parfenchikova talk on the pages of Kommersant about the ways to form optimal strategies for achieving the goals for each client, using the law in GR and lobbying projects.

Agroinvestor reports on the Russian agricultural machinery market, which has been experiencing a steady decline in demand for several seasons in a row. The main factors behind this trend are limited access to financing for farmers, a high key interest rate, and weaker investment activity in the sector.

The article features a comment from Vyacheslav Kharitonov, expert in GR and regulatory risk assessment at Baikal Lobridge. He noted that the current system of support for agricultural machinery manufacturing is undergoing structural changes, but that targeted measures are no longer sufficient to offset the accumulated constraints in the industry.

In his view, the key issue remains declining profitability among farmers and restricted access to credit. Under these conditions, support measures for machinery manufacturers tend to play a stabilising rather than growth-stimulating role.

He also stressed that restoring investment activity in the sector will require broader measures aimed at improving overall profitability in agriculture. Without this, demand for agricultural machinery is likely to remain under pressure, and fleet renewal will continue to slow.

Among the possible solutions, he suggests considering lower export duties on key export crops and bringing back support for agricultural machinery exports through a buyback guarantee mechanism. This could help improve overall profitability in the agricultural sector and naturally stimulate demand for farm machinery.

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