State Duma extends operation of SPIC in automotive industry until 2024

MOSCOW. April 18 (Interfax) - The State Duma adopted in the third reading a law that extends until December 31, 2023, the validity of special investment contracts (SPIC) in the automotive industry.

The government submitted draft law No. 293482-8 to the parliament in February.

"Because of hostile actions carried out by a number of foreign states, the automotive industry enterprises that have concluded a special investment contract have encountered conditions that do not allow them to fulfill their obligations fully in order to handle critical technological operations and achieve an appropriate level of product localization, calculated in points, by the end of term of the special investment contract," according to the explanatory note to the adopted law.

"The main goal remains the same that it is necessary to achieve those indicators, including those in terms of localization, that were prescribed in the SPIC. Under the current conditions, automotive industry enterprises will, of course, have to do much additional work in order to handle critical technologies, set up the production of components, find suppliers in Russia and attract new partners from friendly countries," Russian Prime Minister Mikhail Mishustin said earlier when explaining the need to adopt the law.

The Industry and Trade Ministry rendered in August last year a proposal to extend the SPIC for the automotive industry until the end of 2023. The ministry indicated the difficulties faced by industry enterprises owing to sanctions, and the inability to fulfill obligations under contracts on time.