Vladimir Putin: Good afternoon dear colleagues.
The law on currency regulation came into force on June 18. I would ask Alexei Leonidovich [Kudrin] to say a few words on it, giving particular attention to the Central Bank’s proposals aiming at ensuring that the whole system set out in this legislation functions reliably.
Alexei Kudrin: The law on currency regulation and control came into force on June 18. It aims at removing barriers and simplifying the movement of capital into and out of the Russian Federation. This is a step towards integrating Russia into the global financial system and making greater use of the possibilities this financial system offers, including for developing the Russian economy. This definitely also represents a serious step towards making the Russian rouble convertible.
At the same time, we must keep in mind that the Russian financial system is also becoming more dependent on the situation on global markets. This means that we must develop the appropriate instruments, boost our immune capacity, I would say, so that negative tendencies on the world market, when they arise, do not negatively affect our own system and do not increase risks for our investors and for our citizens.
This is the aim of our tax and budget policies and this does give some guarantees. Also, the new law gives the Central Bank the power to introduce limited restrictions that are not applied on an authorisation basis and concern all market participants. The law sets out the restrictions that the Central Bank has the power to impose. In this respect the Central Bank will come to its decisions on these matters but as things stand now it already introduced last Friday a series of procedures that enable it to make use of these possibilities it has, although concrete measures taken will depend on the market situation and on the grounds and need to take preventive measures regarding the movement of speculative capital on the market that could create an imbalance in the balance of the payments or influence the exchange rate or inflation rate in the country in just a short period of time.
Vladimir Putin: How long will these restrictive measures last?
Alexei Kudrin: They can only remain in effect over a two-year period. After two years, after a transition period, these measures will be abolished by law and will no longer be able to be imposed. When this happens we will have completely free movement of capital in and out of Russia and investors will see their rights and guarantees increase even further.
Vladimir Putin: Good. As you know, a number of important events took place just recently, first the G-8 summit and then events connected to our work in the Shanghai Cooperation Organisation, the Eurasian Economic Community and the Collective Security Treaty Organisation. All of these events enabled us to resolve a good many important issues. We have a lot of interests in all these areas. First of all, I would like to thank everyone who helped prepare for these events. All your predictions proved correct and we achieved the objectives we set ourselves. We have made a lot of headway in strengthening the partnership relations we have in all these areas. I would particularly like to note our work with Uzbekistan. Together with the Uzbek leadership we have signed a very important document, a strategic partnership agreement. This brings an overall new quality to relations between Russia and Uzbekistan. That is the first point I wanted to note. Second, following a process of negotiations, including talks that took place at the G-8 summit, we have signed agreements that simplify the visa regime between France and Russia and Italy and Russia. These documents have now been signed by the Foreign Minister. Sergei Viktorovich [Lavrov], could you please say a few words on this.
Sergei Lavrov: On June 15 we signed these two agreements that carry through the decisions you reached with President Jacques Chirac and Prime Minister Silvio Berlusconi. The agreements come into force from the moment of their signature, though they still need to be ratified. But they are already being applied and they considerably simplify travel for such categories of people as members of the business community and participants in scientific, cultural, educational and sports exchanges. They also make it possible to obtain a multi-entry visa for a period of up to five years, something that was never possible before. One-off trips will also become simpler: visas will be issued much more quickly and invitations need no longer be issued by the country’s interior ministry but can come from the inviting party – a university, cultural centre, or, in the case of sportspeople, for example, an invitation from the sports tournament’s organisers. The agreements also make it possible to issue visas free of charge on a mutual basis.