Friday 15 December 2017

Eb games trading system


Dzieci, dorośli, a nawet młode kobiety. (JP) Ta gra śmierdzi. (US) W 1995 r. RPG utknęły w rutynie, którą wykopał Dragon Quest. Większość z nich wciąż była osadzona w średniowieczu, a rycerze i magowie walczyli z mitycznymi potworami o miecze i magię. Niewiele gier odważyło się przeciwstawić tej formie aż do EarthBound (MATKA 2, jak jest znana w Japonii). Żadna inna gra się nie podobała, może poza jej poprzednikiem, MATKĄ. który nie został wydany poza Japonią. EarthBound przedstawił, a nawet dzisiaj, nadal wprowadza fanów RPG do zupełnie innego doświadczenia. Historia rozgrywa się w latach 90. w Eagleland, kiczowatej i romantycznej parodii Ameryki (doskonałe trawniki i spokojne przedmieścia). W tej grze nie pojawiają się smoki, mistyczni rycerze ani magowie posługujący się personelem. Jesteś tylko przeciętnym 13-letnim dzieckiem z przedmieść. aż do nocy meteor ląduje na twoim podwórku. Lokalna przyroda zaczyna cię atakować, gang miejscowych bandziorów zaczyna powodować kłopoty w centrum, zdajesz sobie sprawę, że masz moce psychiczne, a tajemniczy posłaniec z przyszłości mówi ci, że jesteś przeznaczony do ratowania świata. Ale zanim staniesz twarzą w twarz z tym, twoja mama przypomina ci, żebyś przebrał się w piżamę. Uzbrojeni w pęknięty kij bejsbolowy, talizman dla ochrony i jedzenie, które można znaleźć (w tym wszystko, co zostanie wrzucone do kosza na śmieci poza stawem burgerowskim), rozpoczynasz swoją misję, aby powstrzymać złego kosmitę Giygasa przed zniszczeniem świata. Kilka ważnych wydarzeń z gry: obsesyjno-kompulsywne blokady dróg policyjnych przekupywanie przekrzywionych polityków, uratowanie dziewczyny porwanej przez kult obsesję na punkcie koloru niebieskiego rozwiązującego problem z zombie miasta uwalniając rasę kosmitów zniewoloną przez gadającą kupę hipopotamów rzygających ze szczoteczkami do zębów wędrującymi wewnątrz psychodeliczny minus-świat rządzony przez złą posąg nauczany przez mówiącą małpę, jak teleportować się po przeszczepieniu twojej duszy w ciało robota, aby ułatwić podróż w czasie. Ale zanim się zbytnio w to zaangażujesz, powinieneś pamiętaj, aby zadzwonić do swojej matki. Jeśli pójdziesz za długo, nie słysząc jej głosu, wpadniesz w tęsknotę. Poza tym wszechświat EarthBound w dużej mierze opiera się na popkulturze. Kilka wskazówek-porad, które możesz podnieść, jeśli zwracasz uwagę: The Beatles Chuck Berry Monty Python Blues Brothers Little Rascals The Loch Ness Monster Stonehenge Więcej horrorów science-fiction z lat 50. XX wieku niż możesz liczyć Ogromny sukces MATKI 2 w Japonii skłoniło Nintendo do Ameryki, aby dała EarthBound bardzo ciężką kampanię marketingową - plakaty w sklepach z grami wideo i sieciach wypożyczalni, reklamy w czasopismach, kupony na 10 dolarów od zakupu gry, a nawet reklamy telewizyjne (wciąż dość rzadkie w przypadku filmów gry w 1995 roku). Najlepsze jest to, że hasłem kampanii była This Game Stinks. Oprócz materiałów marketingowych, świetni ludzie z NOA wylali swoje serce i duszę do jednego z najzabawniejszych i najdokładniejszych przewodników dla graczy, jaki kiedykolwiek trafił do gry. Przyszedł nawet z kartami do gry w chusteczkę z nosem, z których jeden był tajemniczym zapachem (który okazał się pizzą), że możesz wysłać pocztą na Nintendo i dostać odświeżacz powietrza (na którym widnieje wizerunek pizzerii z gry). Nawet pole EarthBounds było reklamą: zamiast zwykłego pudełka do gry SNES, EarthBound pojawił się w ogromnym, jaskrawo zabarwionym pudełku, w którym znajdowała się zarówno gra, jak i przewodnik dla darmowych graczy. Pomimo szumu i wysiłku, EarthBound nie sprzedawał się dobrze w Ameryce. Było to częściowo spowodowane prostą grafiką EarthBounds, która nie została zaprojektowana, aby przesuwać graficzne możliwości SNES, tak jak inne tytuły tej epoki (Chrono Trigger, Final Fantasy VI). Nawet dzisiaj prosta grafika stanowi przeszkodę dla wielu potencjalnych graczy, ale wierzący w EarthBounds genialną fabułę i dialog. Departament Stanu Russiarsquos aneksja Krymu w marcu 2017 r. Nie jest uznawany przez rząd USA i doprowadził do umieszczenia sankcji USG na różnych rosyjskich urzędnikach państwowych i ograniczonej liczbie podmiotów, a także na nałożeniu surowszych kontroli licencyjnych na niektóre produkty eksportowane do Rosji. Rozmowy polityczne z rosyjskim rządem dotyczące środków mających na celu zwiększenie dwustronnych stosunków handlowych i inwestycyjnych oraz na forum wielostronnym, takim jak G8, zostały również zatrzymane po ukraińskich działaniach rosyjskich w sprawie niewolniczej. Rząd Rosji nadal wyraża zainteresowanie przyciąganiem wyższych inwestycji krajowych i zagranicznych. Spoglądając na inwestycje krajowe, rząd rosyjski ustanowił szereg regulacji, które penalizują rosyjskie osoby i firmy za inwestycje za granicą, po części prawdopodobnie kompensując niższe poziomy bezpośrednich inwestycji zagranicznych w Rosji w 2017 r. Jak przedstawiono poniżej, rosyjski rząd aktywnie działał na poziomie technicznym w celu poprawy klimatu biznesowego i inwestycyjnego. Pomimo licznych nowych programów i inicjatyw postępy są nierównomierne, a rząd musi jeszcze podjąć działania, aby dokonać niezbędnych reform strukturalnych. Przedstawiciele rządu rosyjskiego publicznie i prywatnie wyrazili swoje pragnienie inwestycji zagranicznych i transferu technologii. Jednocześnie rząd nadal ogranicza inwestycje zagraniczne w sektorach o dużej konkurencji i utrzymując kontrolę nad ponad połową PKB w Rosji poprzez przedsiębiorstwa państwowe. Amerykańskie firmy, które chcą zainwestować w Federację Rosyjską, powinny mieć świadomość, że rosyjski klimat inwestycyjny wciąż charakteryzuje się wysokim poziomem korupcji i politycznego ryzyka, dokładając należytej staranności i dobrej rady prawnej niezbędnej dla każdej potencjalnej inwestycji. Różnorodne regulacje wymagają również zgody rosyjskiego rządu na zagraniczne firmy do inwestowania w sektorach strategicznych i, w niektórych przypadkach, do blokowania większościowych udziałów zagranicznych. Rosyjski system prawny i orzecznictwo ulegają poprawie, ale ostatnie zmiany w strukturze rosyjskiego sądu najwyższego budzą wątpliwości co do jego ostatecznej autonomii. Biorąc pod uwagę kontynuację działań Russiarsquos na Ukrainie, nie można wykluczyć dodatkowych sankcji ze strony społeczności międzynarodowej, które mogłyby mieć wpływ na potencjalne inwestycje. Ponadto starsi rosyjscy urzędnicy rządowi grozili, że mogą podjąć działania odwetowe przeciwko sankcjom, chociaż nie sprecyzowali w jaki sposób. 1. Otwartość na inwestycje zagraniczne i restrykcje dotyczące inwestycji zagranicznych Krym w aneksie Russiarsquos w marcu 2017 r. Nie jest uznawany przez rząd Stanów Zjednoczonych i doprowadził do umieszczenia sankcji USG na różnych rosyjskich urzędnikach państwowych i ograniczonej liczbie podmiotów, a odroczenie terminu kluczowego dwustronne i wielostronne zaangażowanie w reformy gospodarcze. Stany Zjednoczone ogłosiły pierwszą rundę sankcji wobec wpływowych rosyjskich urzędników i podmiotów na początku marca, a przy kolejnych okazjach dodały dodatkowe nazwiska do listy sankcji. Rozmowy polityczne z rosyjskim rządem dotyczące środków mających na celu zwiększenie dwustronnych stosunków handlowych i inwestycyjnych zostały również zatrzymane w następstwie nielegalnych działań rosyjskojęzycznych na Ukrainie. Pod koniec marca senator Andrei Klishas z Rady Federacji, wyższa izba prawodawcy krajowego w Russiarsquos, powiedział, że Rada planuje opracować przepisy, które pozwolą na konfiskatę mienia, majątku i rachunków amerykańskich i unijnych firm, w tym prywatnych firm, jako środek odwetowy dotyczący możliwych sankcji ze strony USA i UE. Chociaż nie zaproponowano ani nie przyjęto żadnego konkretnego aktu prawnego, takie oświadczenie wyraźnie dodaje dodatkowy element niepewności do każdej perspektywy inwestycyjnej w Rosji, ponieważ oznaczałoby gotowość rosyjskiego rządu do łamania norm krajowych i międzynarodowych, gdy uzna to za politycznie celowe. . Jednak rząd Rosji nadal wyraża zainteresowanie przyciąganiem większych inwestycji krajowych i zagranicznych przez prywatne firmy. Patrząc na inwestycje krajowe, rosyjski rząd ustanowił szereg regulacji, które penalizują rosyjskich obywateli i firmy za inwestycje za granicą, być może w celu zrównoważenia niższych bezpośrednich inwestycji zagranicznych w Rosji w 2017 r. Nie jest jasne, jaki sukces odniosła ta inicjatywa polityczna, nazwana ldquode-offshorizationrdquo przez Prezydent Putin do tej pory. W pierwszym kwartale 2017 r. Odpływ kapitału z Rosji wyniósł około 63,7 mld, co stanowi najwyższy kwartalny odpływ od ostatniego kwartału 2008 r. W okresie największego globalnego kryzysu finansowego. Jak przedstawiono poniżej, rosyjski rząd aktywnie działał na poziomie technicznym w celu poprawy klimatu biznesowego i inwestycyjnego. Pomimo wielu nowych programów i inicjatyw postępy są nierównomierne, a rząd nie podejmuje jeszcze żadnych działań, aby dokonać niezbędnych reform strukturalnych. Rosyjska nielegalna aneksja Krymu osłabiła perspektywy rozwoju rosyjskiej gospodarki. Międzynarodowy Fundusz Walutowy przewiduje, że w 2017 r. Gospodarka rosyjska wzrośnie o powolne 0,2%. Biorąc pod uwagę niepewność związaną z działaniami Russiarsquos na Ukrainie, Bank Światowy dostarczył w 2017 r. Dwa szacunki dotyczące PKB. Scenariusz niskiego ryzyka przewiduje 1,1% wzrostu PKB i wysoki poziom PKB. scenariusz ryzyka przewiduje skrócenie o 1,8 proc. w 2017 r. Rosja zakończyła 2017 r. wzrostem o 1,3 proc., najniższym od czasu kryzysu finansowego w 2009 r. i znacznie niższą od połowy z 3,6 proc. prognozowanych przez rosyjski rząd na początku roku. Gospodarka Russiarsquos jest nadal szczególnie podatna na wahania cen energii na świecie i utrzymującą się słabość europejskiej gospodarki, ponieważ UE reprezentuje ponad 50 procent całkowitego obrotu w Rosji. Według raportu ONZ ds. Handlu i rozwoju (UNCTAD) Global Investment Trends Monitor ze stycznia 2017 r. Napływ BIZ do Rosji skoczył o 83 procent do 94 miliardów w 2017 r. Z 51 miliardów w 2017 r. Przedstawiciele rosyjskiego rządu wielokrotnie podkreślali, że zagraniczne inwestycje i technologia transfer ma kluczowe znaczenie dla modernizacji gospodarczej Rosji. Jednocześnie rząd nadal ogranicza inwestycje zagraniczne w sektorach uważanych za mające strategiczne znaczenie dla obrony narodowej i bezpieczeństwa państwa poprzez prawo sektorów strategicznych z 2008 roku. Ustawa określiła początkowo 42 działania i od tego czasu była zmieniana w pięciu różnych okazjach. Od kwietnia 2017 r. 45 działań wymaga zatwierdzenia przez rząd inwestycji zagranicznych. Inwestorzy zagraniczni, którzy chcą zwiększyć lub przejąć własność powyżej określonych progów, muszą uzyskać uprzednią zgodę od komisji rządowej na czele z premierem Rosji. Podczas gdy Komisja zatwierdziła 129 ze 137 wniosków o inwestycje zagraniczne od 2008 r., Liczba transakcji zatwierdzonych z warunkami znacznie wzrosła. Rosja nadal promuje korzystanie z parków zaawansowanych technologii, specjalnych stref ekonomicznych i klastrów przemysłowych, które oferują dodatkowe zachęty podatkowe i infrastrukturalne w celu przyciągnięcia inwestycji. Jeden z prezydentów Putinrsquos stwierdził, że aby przesunąć Rosję z 120 (w 2017 r.) Na 20 miejsce w rankingu Bankrsquos Doing Business Index do 2020 r., Odnotowano postępy poczynając od Rosji, która osiągnęła 92 miejsce w 2017 r. Prawdopodobnie ponownie wzrośnie w szeregach, głównie dzięki poprawie w uzyskaniu połączenia z energią elektryczną dla nowych firm i łatwości rejestracji firmy. Polityka Russiarsquos wspierająca innowacje trwa, ale wydaje się, że maleje entuzjazm i finansowanie tej polityki. Flagowy projekt, Skolkovo Innovation Center, został zaprojektowany jako rosyjski odpowiednik Doliny Krzemowej i zapewniono finansowanie do 2018 r. Z przyszłym finansowaniem niepewnym. Około tuzina firm amerykańskich podjęło spore zobowiązania do inwestycji w część parku technologicznego projektu, a Massachusetts Institute of Technology kontynuuje program o wartości wielu milionów dolarów z Skolkovo Institute of Science and Technology (SkolTech) w celu opracowania programów edukacyjnych i badań programy, działania innowacyjne, polityki i struktury administracyjne, procesy rekrutacyjne oraz operacje i infrastruktura kampusu. Jak dotąd konkretne wyniki projektu były skromne. Co więcej, w 2017 r. Fundacja Skolkovo, która prowadzi finansową część projektu, spotkała się z oskarżeniami o korupcję, choć żadna sprawa nie została wniesiona do sądu. Na początku 2017 r. Rosyjski rząd ogłosił nową inicjatywę stworzenia centrum innowacji na Russkiej Wyspie we Władywostoku. Dopiero okaże się, czy ten najnowszy projekt przyniesie rezultaty. Chociaż istnieje struktura prawna wspierająca inwestorów zagranicznych, przepisy nie zawsze są egzekwowane w praktyce. Kodeks inwestycyjny z 1991 r. I ustawa o inwestycjach zagranicznych z 1999 r. Gwarantują inwestorom zagranicznym prawa równe prawom inwestorów rosyjskich, chociaż niektóre branże mają ograniczenia dotyczące własności zagranicznej (patrz sekcja "Zakład"). Rosja dążyła do wzmocnienia mechanizmów konsultacji z międzynarodowymi przedsiębiorstwami (na przykład za pośrednictwem Rady Doradczej ds. Inwestycji Zagranicznych, której członkowie są dyrektorami generalnymi dużych przedsiębiorstw) w odniesieniu do wpływu ustawodawstwa krajowego i przepisów dotyczących klimatu biznesowego i inwestycyjnego. W czerwcu 2017 r. Prezydent Putin stworzył stanowisko Rzecznika Praw Przedsiębiorstw, który miał być dodatkowym środkiem ochrony i rzecznictwa przedsiębiorców, a odpowiednie przepisy wykonawcze zostały podpisane przez prezydenta Putina 7 maja 2017 r. krajowe mechanizmy rozstrzygania sporów inwestycyjnych pozostają w toku i obecnie mogą wydawać się nieprzejrzyste i nieprzewidywalne (patrz rozdział dotyczący rozstrzygania sporów). Rząd nadal posiada znaczące pakiety akcji w wielu sprywatyzowanych przedsiębiorstwach, w których przedsiębiorstwa państwowe (SOE) stanowiły około 50 procent PKB Russiarsquos w 2017 r. W czerwcu 2017 r. Rosyjski rząd przedstawił swój plan prywatyzacji na lata 2017-2018. aktualizacja oryginalnego planu prywatyzacji Russiarsquos, który został opracowany w 2017 r. i zmieniony w 2017 r. Jednakże rząd podjął niewielkie działania w celu wdrożenia dodatkowych prywatyzacji, argumentując, że obecne wyceny przedsiębiorstw państwowych są zbyt niskie, aby uzasadnić przeprowadzenie prywatyzacji. Nowy plan znacznie ograniczył zakres prywatyzacji i w dużej mierze polega na utrzymaniu przez rosyjski rząd udziałów w kilku najbardziej prestiżowych przedsiębiorstwach publicznych. Dotychczasowe traktowanie zagranicznych inwestycji w nowe prywatyzacje było niespójne: udział zagraniczny był często ograniczony do ograniczonych pozycji w spółkach. Następnie wiele osób napotykało problemy z niewystarczającą ochroną akcjonariuszy mniejszościowych i ładem korporacyjnym. Potencjalnym zagranicznym inwestorom zaleca się bezpośrednią i ścisłą współpracę z odpowiednimi lokalnymi, regionalnymi i federalnymi agencjami, które sprawują władzę nad firmami, których akcje mogą chcieć nabyć. (Zobacz przedsiębiorstwa państwowe) We wrześniu 2017 r. Stany Zjednoczone i Rosja podpisały nową dwustronną umowę wizową, która przedłużyła ważność wizy turystycznej do 36 miesięcy dla podróżujących z USA i Rosji. Porozumienie to zmniejszyło również wymogi dokumentacyjne dla Amerykanów ubiegających się o wizę i wyeliminowało potrzebę zaproszenia w niektórych przypadkach. Proces zatwierdzania i przedłużania wiz i zezwoleń na pobyt dla zagranicznych przedsiębiorców i inwestorów pozostaje uciążliwy z powodu licznych wymogów dokumentacyjnych. Ponadto w określonych branżach obowiązują przepisy, które wymagają, aby pewien procent pracowników był obywatelami Rosji, co może mieć negatywny wpływ na zagranicznych inwestorów. Jednak sytuacja się poprawia. W ramach wysiłków Rosji mających na celu zachęcanie do inwestowania w innowacyjne sektory, GOR złagodził przepisy dotyczące wiz i zezwoleń na pobyt dla pracowników o wysokich kwalifikacjach, a także zlikwidował roczne kwoty dla zagranicznych pracowników, którzy zaliczają się do tej kategorii (określanej na podstawie wysokości wynagrodzenia, stanowiska i wykształcenia ). Potencjalni inwestorzy powinni skonsultować się z Departamentem Stanu w Kraju Informacje dotyczące podróży do Rosji. który zawiera najnowsze informacje na temat rosyjskich wiz. Korupcja pozostaje dużym wyzwaniem dla Rosji. Ukierunkowane wysiłki w 2017 r. Mające na celu wykorzenienie korupcji przez urzędników państwowych oraz w ramach transakcji biznesowych doprowadziły do ​​szeroko zakrojonych dochodzeń w Ministerstwie Obrony i Ministerstwie Rolnictwa. Ranking Russiarsquos poprawił sześć punktów do 127 w Transparency Internationalrsquos 2017 Indeks postrzegania korupcji (CPI). Narodowy plan antykorupcyjny na 2017ndash2017 zawiera wskazówki i zalecenia dla rządu dotyczące przeciwdziałania korupcji, w tym ustanowienie ram prawnych dla lobbingu i zwiększenie przejrzystości urzędników państwowych, takich jak finanse osobiste i przyjmowanie prezentów. W szczególności, projekt ustawy wymaga od wszystkich urzędników państwowych deklarowania dużych wydatków lub rozwiązania umowy. Urzędnicy ci muszą również przedstawić informacje na temat wydatków ich małżonków i dzieci, jeśli wydatki dotyczą nabycia ziemi, pojazdów lub papierów wartościowych. Wydatki, które nie odpowiadają deklarowanym dochodom, będą badane przez organy ścigania. Jeżeli dana osoba nie udowodni, że dana nieruchomość została nabyta legalnie, mienie zostanie skonfiskowane i przekazane państwu. Przekupywanie funkcjonariusza publicznego było w Rosji nielegalne od maja 2017 r. (Patrz sekcja o korupcji). Poniższa tabela zawiera najnowsze dane z indeksów mierzących klimat inwestycyjny i biznesowy w Rosji: 2. Zasady dotyczące konwersji i transferu Chociaż rubel jest jedynym prawnym środkiem płatniczym w Rosji, firmy i osoby fizyczne zasadniczo nie napotykają znaczących trudności w uzyskaniu wymiany walut. Tylko autoryzowane banki mogą przeprowadzać transakcje w walutach obcych, ale znalezienie banku licencjonowanego nie jest trudne. Zgodnie z przepisami dotyczącymi kontroli dewizowej bank centralny zachowuje prawo do nakładania ograniczeń na zakup waluty obcej, w tym wymóg dokonania transakcji za pośrednictwem specjalnego rachunku. Bank Centralny nie wymaga depozytów zabezpieczających na zakupach walutowych. Rosja nie ma kontroli kapitału i nie ma barier ograniczających zwroty z inwestycji za granicą, w tym dywidendy, odsetki i zwroty kapitału. Niemniej inwestorzy powinni zasięgnąć porady ekspertów w momencie dokonywania inwestycji. Kontrola walutowa dotyczy wszystkich transakcji, które wymagają odprawy celnej, która w Rosji dotyczy zarówno transakcji importowych i eksportowych, jak i niektórych pożyczek. Firma musi otworzyć tymczasowy paszportrdquo z upoważnionym rosyjskim bankiem, za pośrednictwem którego otrzyma i obsłuży transakcję lub pożyczkę. Indywidualny paszportrdquo to zestaw dokumentów, które importerzy i eksporterzy udostępniają upoważnionym bankom, które umożliwiają bankowi monitorowanie płatności w związku z transakcją lub pożyczką, a także informują bank centralny o zgodności z przepisami dotyczącymi kontroli dewiz. Regulacje Russiarsquos dotyczące paszportów dotyczących transakcji są określone w instrukcji Banku Centralnego Rosji nr 117-I z 15 czerwca 2004 r. Na początku 2017 r. Centralny Bank Rosji rozszerzył wykaz powodów, na podstawie których paszport transakcji nie musi być składany . W dniu 4 czerwca 2017 r. Bank Centralny wydał Instrukcję nr 138-I, która wprowadziła pewne zmiany do rozporządzenia. W szczególności, upoważniony bank nie jest już zobowiązany do przedstawienia dodatkowej dokumentacji, jeśli upoważniony bank obciąża pieniądze za operację walutową z istniejącego rachunku bankowego rezydenta lub nierezydenta. W przypadku wielostronnych umów z wieloma stronami i udziałem nierezydentów, tylko jeden uczestnik będący rezydentem jest zobowiązany do wykonania paszportu umowy w odniesieniu do tej umowy, a nie od wszystkich stron będących rezydentami, od których wymaga się złożenia dokumentacji. Bank Centralny dokonał dalszych zmian w rozporządzeniu, wydając dyrektywę numer 3016-U z 14 czerwca 2017 r., Która weszła w życie jesienią 2017 r. Paszport ofertowy jest teraz potrzebny tylko wtedy, gdy wartość umowy bazowej jest równa lub przewyższa wartość odpowiednik 50 000. 3. Wywłaszczenie i rekompensata Kodeks inwestycyjny z 1991 r. Zabrania nacjonalizacji inwestycji zagranicznych, z wyjątkiem następujących działań legislacyjnych i gdy uważa się, że leżą one w interesie krajowym. Takie nacjonalizacje mogą być zaskarżane do sądów rosyjskich, a inwestorowi należy odpowiednio i szybko rekompensować. Na szczeblu subfederalnym od czasu do czasu problemem było wywłaszczenie, podobnie jak ingerencja władz lokalnych i brak egzekucji orzeczeń sądowych chroniących inwestorów. Niektórzy posłowie do parlamentu rosyjskiego zasugerowali w marcu 2017 r., Że Rosja może wywłaszczyć firmy zachodnie w reakcji na sankcje USA i UE, ale w tym celu nie podjęto żadnych działań rządowych. 4. Rozstrzyganie sporów Rosja posiada zbiór sprzecznych, pokrywających się i często zmieniających się przepisów, dekretów i rozporządzeń, co komplikuje otoczenie do rozwiązywania sporów. Niezależne rozstrzyganie sporów w Rosji może być trudne, ponieważ system sądownictwa wciąż się rozwija. Sądy czasami podlegają politycznej presji. Według licznych doniesień korupcja w systemie wymiaru sprawiedliwości jest rozpowszechniona i przybiera wiele form, od przekupstwa sędziów i prokuratorów po sfałszowanie dowodów. Jednak korupcja prawdopodobnie nie odgrywa roli w przeważającej większości przypadków, z których większość dotyczy stosunkowo niskich stawek. Do połowy 2017 r. Rosja będzie nadal miała dwie równoległe struktury sądowe: jedną, która specjalizuje się w sprawach gospodarczych i zwanych sądami arbitrażowymi, odpowiedziami do Wyższego Sądu Arbitrażowego oraz drugim systemem sądowym karnym i cywilnym, który odpowiada na rosyjski Najwyższy Boisko. Pod koniec czerwca 2017 r. Wyższy Sąd Arbitrażowy zostanie zlikwidowany, a niższe sądy arbitrażowe będą następnie odpowiadały przed rosyjskim Sądem Najwyższym. Wiele osób w środowisku biznesowym wyraziło zaniepokojenie tą zmianą, ponieważ sądy arbitrażowe znane są z profesjonalizmu i reputacji niezależności sądowej (chociaż nie były całkowicie wolne od korupcji). Proces nominacji do Wyższego Sądu Arbitrażowego dokonany za pośrednictwem struktur regionalnych, a nie struktur federalnych, ndash również był bardziej niezależny od centralizacji władzy w rosyjskim rządzie. Po wprowadzeniu tej zmiany łańcuch prawny dla niższych sądów arbitrażowych trafi do Sądu Najwyższego, który składa się z sędziów federalnych, którzy są powszechnie przekonani, że szczególnie zwracają szczególną uwagę na życzenia Kremla. Jest zbyt wcześnie, by stwierdzić, czy zmiany te utrudnią zagranicznym inwestorom niezależne rozstrzyganie sporów w ramach tego nowego systemu. Nie jest również jasne, w jaki sposób zniesienie Wyższego Sądu Arbitrażowego wpłynie na istnienie sądów o niższym arbitrażu. Nie wskazano, czy te wyspecjalizowane sądy zostaną ostatecznie wyeliminowane na niższych poziomach. Jest jednak jasne, że poziom sądowej niezależności sądów zostanie zmniejszony. Próbując rozwiązać niektóre z tych wyzwań, przed którymi stoi społeczność biznesowa, GOR utworzył w 2017 r. Biuro Rzecznika Praw Przedsiębiorcy, któremu przewodniczy Borys Titow, biznesmen i były przewodniczący grupy biznesowej Delovaya Rossiya. Mandat Titovrsquos obejmuje opowiadanie się o zagranicznym i krajowym prawie gospodarczym w sądzie oraz żądanie zawieszenia oficjalnych działań, jeśli firma uzna, że ​​jej prawa zostały naruszone. Każdy rosyjski okręg federalny ma również Rzecznika ds. Inwestycji, który składa sprawozdania narodowemu Rzecznikowi Praw Obywatelskich i nadzoruje działania na rzecz poprawy klimatu biznesowego, w tym ochronę inwestorów zagranicznych i krajowych. Rząd zachęcił również międzynarodowych liderów biznesu, w ramach ich pracy w Radzie Doradczej ds. Inwestycji Zagranicznych, do wzięcia udziału w dyskusji na temat mechanizmów rozstrzygania sporów i indywidualnych sporów handlowych. Chociaż te kroki dają pewne obiekcje, ogólnie krajowe mechanizmy rozstrzygania sporów inwestycyjnych pozostają słabo rozwinięte iw dużej mierze nieprzejrzyste. W 2008 r. Ówczesny prezydent Miedwiediew przeprowadził szereg reform prawnych zmierzających do ograniczenia korupcji w sądach. Środki te obejmowały prawo, które wymaga od sędziów ujawnienia ich dochodów i aktywów nieruchomości, w tym należących do ich małżonków i małoletnich dzieci. Kolejny element obejmował serię poprawek do kodeksu postępowania karnego ndash w 2008, 2009 i 2017 r., Które miałyby na celu ograniczenie aresztu przedprocesowego osób oskarżonych o przestępstwa gospodarcze. Realizacja tych reform przyniosła mieszane rezultaty. Prokuratorzy czasami unikali ich, oskarżając oskarżonych za artykuły techniczne nie objęte poprawkami, a sędziowie czasami odmawiali ich stosowania. Niemniej jednak dostępne statystyki wskazują na znaczny spadek liczby aresztów przedprocesowych w sprawach dotyczących przestępstw gospodarczych od czasu przyjęcia przepisów. W czerwcu 2017 r. Prezydent Putin ogłosił plany powszechnej amnestii dla osób skazanych za przestępstwa gospodarcze. Jednakże, po upływie lat, w tym programie zwolniono jedynie stosunkowo niewielką liczbę osób. Sądy arbitrażowe w sprawach handlowych są wymagane przez prawo do stosunkowo szybkiego rozstrzygania sporów gospodarczych, a wiele spraw jest podejmowanych na podstawie pisemnych dowodów i niewielkich lub żadnych żywych zeznań świadków. Obciążenie pracą sądu arbitrażowego jest zdominowane przez względnie proste niesporne sprawy dotyczące ściągania długów między firmami i spory z organami podatkowymi i celnymi, funduszem emerytalnym i innymi organami państwowymi. Firmy płatnicze często przeważają w sporach z rządem w sądzie. Liczba rutynowych spraw ogranicza czas potrzebny na podjęcie bardziej skomplikowanych spraw. W systemie sądowym obowiązują specjalne procedury dotyczące zajęcia nieruchomości przed rozprawą, tak aby nie można było ich pozbyć przed sądem wysłuchanym przez sąd, a także w celu egzekwowania nagród pieniężnych za pośrednictwem banków. Wielu obserwatorów uważa, że ​​przez dwadzieścia lat istnienia systemu sądownictwa arbitrażowego jego sędziowie stali się bardziej kompetentni i lepsi w pisaniu decyzji. Wielu prawników zgłasza jednak, że z powodu niewystarczających szkoleń, zwłaszcza w przypadku złożonych sporów biznesowych, wielu sędziów często podejmuje niewłaściwie uzasadnione lub po prostu błędne decyzje. Podobnie jak w przypadku międzynarodowych procedur arbitrażowych, słabość rosyjskiego systemu arbitrażowego polega na egzekwowaniu decyzji. Nieliczne firmy dobrowolnie wypowiadają się przeciwko nim, a pogłoski o korupcji dotyczące komorników, którym powierzono egzekwowanie decyzji, są częste, choć trudno jest znaleźć dowody. Ustawa Federalna 262, obowiązująca od 2017 r., Wymaga, aby sądy publikowały swoje decyzje w Internecie i w inny sposób udostępniały publicznie informacje o swoich działaniach. Wszystkie rosyjskie sądy mają obecnie strony internetowe, które zazwyczaj zawierają wykaz spraw, które należy przesłuchać, nazwisko sędziego, lokalizację sądu, formularze dokumentów, które mogą być wykorzystane przez strony sporu i kopie decyzji. Dane osobowe są usuwane, zanim decyzje dotyczące spraw zostaną zamieszczone w Internecie. Lepsze strony internetowe sądów umożliwiają obywatelom obliczanie opłat za złożenie wniosku i poszukiwanie analogicznych decyzji. Sądy arbitrażowe odgrywają wiodącą rolę w dostarczaniu informacji w Internecie i przy użyciu technologii informacyjnej. Elektroniczne składanie dokumentów umożliwia obywatelom rejestrację w celu otrzymywania powiadomień e-mail o zmianach w interesujących ich sprawach. Organizacje pozarządowe oceniły zgodność sądów z obowiązkami wynikającymi z prawa i stwierdzili, że dostarczone informacje różnią się znacznie w poszczególnych regionach, ale zauważyły ​​gotowość niektórych sądów do reagowania na pytania i krytykę poprzez ulepszanie swoich stron. Chociaż istnieją luki i niepowodzenia w dostarczaniu informacji, ogólna przejrzystość sądowa wzrosła, ponieważ prawo weszło w życie w 2017 r. Wielu prawników odnosi się do zachodnich klientów, którzy prowadzą spory inwestycyjne lub handlowe w Rosji do międzynarodowego arbitrażu w Sztokholmie lub do sądów za granicą. Rosyjska ustawa z 1997 roku zezwala na egzekwowanie zagranicznych orzeczeń arbitrażowych w Rosji, nawet jeśli nie ma wzajemnego traktatu między Rosją a krajem, w którym wydano nakaz. Rosja jest członkiem Międzynarodowego Centrum Rozwiązywania Sporów Inwestycyjnych (ICSID) i akceptuje wiążący arbitraż międzynarodowy. Rosja jest również sygnatariuszem Konwencji nowojorskiej z 1958 r. O uznawaniu i egzekwowaniu zagranicznych orzeczeń arbitrażowych (UNCITRAL). Jednak międzynarodowe orzeczenia arbitrażowe nadal wymagają od sądów rosyjskich egzekwowania nagród i komorników przy przyłączaniu aktywów, które sądy te muszą jeszcze stać się konsekwentnie skutecznymi organami egzekwującymi wyroki sądowe, zarówno krajowe, jak i międzynarodowe. W styczniu 2017 r. Weszła w życie nowa ustawa, która zezwala na stosowanie mediacji w różnego rodzaju sporach, w tym w sporach handlowych, oraz zapewnia poufność postępowań mediacyjnych i ich wykonalność w sądzie. Chociaż nadal istnieją kwestie dotyczące wdrażania, stanowi to ważny krok w kierunku dalszego rozwoju alternatywnych metod rozstrzygania sporów w Rosji. Zgodnie z ustawą federalną z grudnia 2017 r. Wyspecjalizowany sąd ds. Sporów dotyczących własności intelektualnej (IP) zaczął funkcjonować w 2017 r. Sąd ten, osadzony w systemie sądów arbitrażowych (handlowych), będzie rozpatrywał sprawy dotyczące praw własności intelektualnej (IPR), włączając w to kwestionowanie ustawowych instrumentów IP, w pierwszej kolejności i kasację. We wrześniu 2017 r. Rada Wyższych Kwalifikacji Sędziów (organ w rosyjskim korpusie sądowym odpowiedzialny za nominowanie sędziów, które zostaną jeszcze mianowane przez Prezydenta) powołał 20 sędziów do utworzenia nowego Sądu ds. Prawa Własności Intelektualnej, a Sędziego Głównego Sądu Praw Prezydent w grudniu 2017 r. Likwidacja Wyższego Sądu Arbitrażowego budzi teraz wątpliwości co do tego, w jaki sposób zostaną podjęte decyzje sądu ds. własności intelektualnej. Sądowi IP podobno orzeczono około 360 spraw jako sądowi procesowemu, a ponad 200 spraw jako sąd trzeciej instancji (drugi poziom apelacji) z ponad 900 pozwów dopuszczonych do sądu od jego rozpoczęcia w lipcu 2017 r. Kilka eksperci i praktycy sądowi odwołują się do dobrej jakości rozwiązywania sporów, wysokich kwalifikacji sędziów i dobrej dbałości o szczegóły w sądzie. 5. Wymogi dotyczące wydajności i zachęty Wymogi dotyczące wydajności nie są na ogół nakładane przez prawo rosyjskie i nie są szeroko uwzględniane w ramach kontraktów prywatnych w Rosji. Pojawiły się jednak w umowach dużych wielonarodowych firm inwestujących w zasoby naturalne i w prawodawstwo dotyczące podziału produkcji. Nie ma formalnych wymogów dotyczących offsetu w inwestycjach zagranicznych. Ponieważ zatwierdzenie inwestycji w Rosji często zależy od relacji z urzędnikami państwowymi i od wykazania przez firmy ich zaangażowania na rynku rosyjskim, może to spowodować przesunięcia w praktyce. The Central Bank of Russia has imposed caps on foreign employees in foreign banks. The ratio of Russian employees in a subsidiary of a foreign bank is set at no less than 75 percent if the executive of the subsidiary is a non-resident, at least 50 percent of the bankrsquos managing body should be Russian citizens. In early 2017, the Russian government drafted a directive requiring all state-controlled assets including SOEsto come up with a series of key performance indicators (KPIs) to guide their development strategy going forward. In rolling out the initiative, the government made it clear that if KPIs were not met, personnel changes would be made. This measure is meant to push state corporations toward a more efficient operating strategy. The Russian government also declined to increase the size of the government budgetary subsidies to each state corporation, with a view to forcing these companies to run more efficiently. 6. Right to Private Ownership and Establishment Both foreign and domestic legal entities may establish, purchase, and dispose of businesses in Russia, except in certain sectors that are regarded as affecting national security. There is a blanket ban on purchases of property in border areas for national security reasons. Some Russian Duma deputies called for a ban on foreigners purchasing land without the permission of the Federal Management Service, but no legislative action has been taken in this regard yet. The Russian government limits foreign investment in sectors deemed to have strategic significance for national defense and state security via the Strategic Sectors Law of 2008 (Law No. 57-FZ). The law has been amended on four occasions, most recently in February 2017. The law currently specifies 45 strategic activities that require government approval for foreign investment. Foreign investors wishing to increase or gain ownership above certain thresholds in any of the sectors listed need to seek prior approval from a government commission headed by Russiarsquos Prime Minister. In 2017 (most recent information published), the Russian government considered 44 petitions from foreign investors of which 22 were pre-approved, 18 were returned to the petitioner for additional information, and four were withdrawn. The government denied in April 2017 a petition from the U. S. company Abbott Laboratories to purchase Russiarsquos Petrovax in a deal that was strongly supported by Petrovax. Russia also established via Executive Order No. 1009 of August 4, 2004 a separate list of strategic companies which includes the largest and most profitable Russian companies. Companies identified on this list have some level of government ownership the Executive Order sets forth the requirements to privatize these firms. The 2017 addition of Russian privately-held internet company Yandex to the strategic companies list highlights the broad interpretation of what is required to protect state security and national defense. The Constitution and a 1993 presidential decree give Russian citizens rights to own, inherit, lease, mortgage, and sell real property. Foreigners enjoy similar rights with certain restrictions, notably with respect to the ownership of farmland and areas located near federal borders. Mortgage legislation enacted in 2004 facilitates the process for lenders to evict homeowners who do not stay current in their mortgage payments. Thus far, this law has been successfully implemented and is generally effective. Mortgage lending is in its initial stages, and after a sharp contraction in 2008-09, the total value of mortgages in Russia is around three percent of GDP. In 2017, mortgage lending grew by 31 percent compared to 2017, with new issuances amounting to 42.5 billion in 2017. 7. Protection of Property Rights In Russia, the protection of intellectual property rights (IPR) is enforced on the basis of civil, administrative, criminal or customs legislation. The Civil Code sets up the statutory damages for IPR infringement andor incurred damages for copyright, trademarks and geographical indications. The Code of Administrative Offenses concerns IPR infractions that violate public or private interest or rights, but do not meet the criteria of the Criminal Code. An administrative investigation may be initiated at the request of an IPR owner or by law enforcement authorities (police or customs) suspecting possible IPR infringement. Administrative cases are dealt with by general jurisdiction courts or state arbitration (commercial) courts that have jurisdiction over economic disputes. The IPR provisions of the Criminal Code apply to large-scale infringements of copyright, patent and trademark rights that cause gross damages, as defined by the Criminal Code. The United States Government has expressed concerns that IPR enforcement continued to decrease overall in 2017, following a dramatic decline in 2017, and remained plagued by a lack of transparency and effectiveness. Stakeholders express concern about the manufacture, transshipment, and retail availability of counterfeit goods, including counterfeits of agricultural chemicals, electronics, information technology, auto parts, consumer goods, machinery and other products. Enforcement actions combatting end user piracy have sharply declined, including a decrease in raids, initiations of criminal cases and issuances of court verdicts. Copyright violations (audiovisual and sound recordings, computer software) remain a serious problem, particularly in the online environment. Although dwarfed in volume by pirated products online, legitimate DVD sales are on the rise, thanks in part to cheaper legitimate products, a growing consumer preference for high quality goods, and law enforcement action against physical piracy. Russian police on occasion carry out end-user raids against businesses using pirated products, namely software. However, at times, police have used IPR enforcement as a tactic to elicit bribes or harass NGOs. For additional information about treaty obligations and points of contact at local IP offices, please see WIPOrsquos country profiles at wipo. intdirectoryen . Embassy point of contact: William Muntean moscow. office. boxmail. doc. gov Local lawyers list: moscow. usembassy. govrootpdfslist---attorneys. pdf Russia has had a law providing for bankruptcy of enterprises since the early 1990s. Law enforcement officials, however, tend to view bankruptcy with suspicion and reported 500 cases of financial crimes involving bankruptcy in 2017. In November 2017, the State Duma passed in its first reading (three readings are required for passage) a personal bankruptcy bill, but the bill has not been adopted. The bill states that a citizen who finds himself in financial difficulty can submit a bankruptcy statement to the court. The court may then grant the individual the right to pay the debt in installments for a term of up to five years. An individual with debts exceeding 50,000 rubles (1,389) and whose arrears amount to three months can be declared bankrupt. In this case, the individual cannot apply for a bank loan without citing his bankruptcy for the five years after his bankruptcy status was declared. The individual is then given six months to come up with a debt restructuring plan subject to the approval of both the creditors and the court. Once the plan is approved, all late payment fees and penalties will be waived and assets unfrozen. Only in the case of a person who has no assets and no income may the debt be completely written off. The bill also stipulates a ban on declaring oneself bankrupt more than once in five years. The Duma is expected to consider the bill in the first half of 2017. 8. Transparency of the Regulatory System Russiarsquos legal system remains in a state of flux, with various parts of the government continuing to implement new regulations and decrees on a broad array of topics, including the tax code and requirements related to regulatory and inspection bodies. Negotiations and contracts for commercial transactions, as well as due diligence processes, are complex and protracted. Investors must do careful research to ensure that each contract fully conforms to Russian law. In some cases, Russian law has contradictory provisions. Contracts must likewise seek to protect the foreign partner against contingencies that often arise. Keeping up with legislative changes, presidential decrees, and government resolutions is a challenging task. Uneven implementation of laws creates further complications various officials, branches of government, and jurisdictions interpret and apply regulations inconsistently and the decisions of one may be overruled or contested by another. As a result, reaching final agreement with local political and economic authorities can be a long and burdensome process. Companies should be prepared to allocate sufficient funds to engage local legal counsel to set up their commercial operations in Russia. Russiarsquos tax system has recently undergone major changes. The Russian government has brought its tax legislation into line with OECD requirements, which has simplified the system and prevents double taxation on transfer prices. However, businesses continue to raise concerns regarding audits. Multiple audits, repeated requests for documentation, and technical weaknesses of some claims have been identified as serious impediments to the conduct of business. Russiarsquos Law on Transfer Pricing entered into force on January 1, 2017, and fully phased in all provisions by the start of 2017. Some experts caution the new provisions could result in additional disputes with the tax authorities. All draft laws that go through the Russian Duma are published on the Duma39s website. Sometimes, but not consistently, ministries and other Russian government bodies also publish proposed legislation (including draft laws, government decrees and regulations) on their websites. The scope of Russiarsquos Open Government initiative was severely reduced after the Russian government announced in May 2017 that it would no longer be a part of the international Open Government Partnership due to unspecified differences regarding the terms of the partnership. In a statement announcing the decision, Kremlin spokesperson Dmitry Peskov said that Russia remained committed to providing more transparency in government and might reconsider joining the partnership at a later date. Russian Ministries have become more active in seeking input from industry experts and business groups, including the Foreign Investment Advisory Council, when developing business-related laws and regulations. Statements made by key Russian officials in November 2017 suggest the government will take additional action to roll back administrative barriers to foreign investment in Russian strategic companies. The Federal Antimonopoly Service (FAS) has prepared various amendments, still awaiting approval by the State Duma, intended to simplify the procedures for state supervision of foreign investment in Russian strategic companies and to eliminate ambiguities in the interpretation and application of existing legislative provisions. The proposed amendments include the following: (1) removal of food and beverage production from the list of strategic activities involving the use of infectious agents (e. g. cultured bacteria in yogurt production). FAS is considering similar revisions to exempt certain entities involving selected activities (e. g. foreign banks vis-a-vis distribution and servicing of encryption devices required for their operations) (2) eliminating the need for prior approval by the Government Commission for certain share increases or transactions in cases where the foreign investors hold 75 percent or more of a Russian strategic companyrsquos shares (3) eliminating the need for prior approval for intra-group transactions by foreign investors controlled by the same entity (4) allowance of automatic permit extensions for foreign investors already holding a permit (typically with a 2-year term) to invest in a strategic enterprise (5) elimination of the need for government approval for acquisitions by Russian-controlled purchasers from foreign-controlled sellers (currently, only Russian-to-Russian transactions are exempt, but not acquisitions by Russian-controlled purchasers from foreign-controlled sellers) (6) clear er rules on state supervision and approval of transactions involving the placement of securities of Russian strategic companies (including depositary receipts) on stock exchanges, including foreign stock exchanges. However, it is unclear if and when such proposals would be advanced in the current economic and political climate. 9. Efficient Capital Markets and Portfolio Investment Banks continue to make up a disproportionate share of Russiarsquos financial system. Although Russia has roughly 900 banks, the sector is dominated by state-owned banks, particularly Sberbank and VTB. The six largest banks (in terms of assets) in Russia are state-controlled, and the top five held 53.7 percent of all bank assets in Russia as of March 1, 2017. The growing role of the state in the banking sector continues to distort the competitive environment, impeding Russiarsquos financial sector development. The successful implementation of the Deposit Insurance System in 2004 has proved a critical psychological boon to the banking sector, reflected in the overall growth of deposits. This has significantly enhanced the stability of the banking sectorrsquos deposit base. At the beginning of 2017, aggregate assets of the banking sector amounted to 86.0 percent of GDP and aggregate capital was 10.6 percent of GDP. Russia39s banking sector has recovered from the global economic crisis, with corporate loan growth reaching 17.0 percent and retail loan growth 27.4 percent in the 12 months running up to March 1, 2017. The share within Russia39s banking sector of non-performing and troubled loans (categories III-V), which during the 2008-2009 financial crisis increased substantially, stabilized in 2017 at around 20 and began to slowly decline in the second half of 2017, so that as of March 1, 2017, it was equal to 14.0 percent. These positive trends notwithstanding, Russian banks reportedly still operate on short time horizons, limiting capital available for long-term investments. On September 1, 2017, the Central Bank of Russia became the consolidated financial markets regulator (replacing the Federal Financial Markets Service) for Russiarsquos capital markets and financial institutions. Whereas the Central Bank previously had primary responsibility for banks, the new Financial Markets Service of the Bank of Russia, the so-called mega-regulator, has responsibility for other non-bank financial institutions including pension funds, insurance companies, and asset management companies, as well as the securities markets. Consolidated supervision is expected to improve overall regulation and oversight of the capital markets. Along these lines, the Central Bank has closed down a growing number of banks in recent months as part of a crackdown on the banking sector, as the Central Bank attempts to tighten oversight of banks and rein in shadow banking activity. The Central Bank revoked licenses for 54 banks from June 2017 through March 2017, with many banks cited for violating anti-money laundering or countering the financing of terrorism (AMLCFT) laws. This effort is succeeding in not only much needed banking sector consolidation, but also in weeding out bad banks that have been complicit in money laundering and facilitating the so-called ldquogrey transactionsrdquo that have been part of capital outflows from Russia. To fill the gap in capital available for long-term investments, authorities have also sought to improve the regulatory environment for non-bank institutional investors. This has had some success, though non-bank financials remain small relative to the size of the financial sector. Pension funds are viewed as the most promising source of long-term capital. Pension funds have had strong inflows, in recent years, though they have shown little risk appetite, primarily investing in sovereign debt, corporate debt, and bank deposits, thus limiting their utility as a source of long-term capital. A recent decision by the government to freeze inflows to funded pensions has increased uncertainty, undermining confidence in the industry. The government plans to allow inflows to resume to private pension funds once they have been audited and restructured. This could bolster confidence in the industry over the long term. Russiarsquos two main stock exchanges ndash the Russian Trading System (RTS) and the Moscow Interbank Currency Exchange (MICEX) ndash merged in December 2017. The MICEX-RTS bourse conducted an initial public offering on February 15, 2017, auctioning an 11.82 share. Russian authorities and shareholders of MICEX and RTS believe the merged entity, now branded the Moscow Exchange, has the potential to become a global player. While most large Russian companies currently choose to list their stocks in London and elsewhere abroad, the Russian government has begun a campaign to encourage state-owned companies to use the Moscow Exchange as a vehicle for privatization. The Law on the Securities Market includes definitions of corporate bonds, mutual funds, options, futures, and forwards. Companies offering public shares are required to disclose specific information during the placement process, as well as on a quarterly basis. In addition, the law defines the responsibilities of financial consultants who assist companies with stock offerings and holds them liable for the accuracy of the data presented to shareholders. Russian financial authorities are attempting to deepen the ruble-denominated domestic debt market to make it more attractive to foreign investors. In December 2017, the Central Bank issued a resolution allowing, effective January 1, 2017, government bonds (OFZ) to be traded outside Russian exchanges (over the counter). In February 2017, Euroclear and Clearstream, two international securities depositories, began settling transactions of OFZ bonds, Russiarsquos primary sovereign debt security. Euroclear and Clearstream have since also begun settling transactions of Russian corporate and municipal debt, and may soon be able to settle equity transactions as well, possibly by early 2018. This has increased access to Russian securities markets for foreign investors by negating the need to have onshore brokerage and custody accounts. 10. Competition from State-Owned Enterprises State-owned enterprises (SOEs) accounted for roughly half of Russiarsquos GDP in 2017 and the Russian governmentrsquos policy is for the most part focused on maintaining the status quo, rather than supporting competition. In June 2017, the Russian government unveiled their 2017-2018 Privatization Plan, the most recent update of Russiarsquos original privatization plan that was published in 2017 and amended in 2017. The new plan rolled back previous commitments to fully privatize oil giant Rosneft, VTB bank, energy company Zarubezhneft and hydroelectric company Rushydro. Instead of selling all stakes in those companies by 2018 the Russian government will continue to own a 50.1 percent of each company, a ldquogolden share. rdquo Plans for Russian Railways, the Russian Agricultural Bank and Rosagroleasing were also scaled back. However, a decision was made to fully privatize Rostelecom and a total of 431 enterprises were added to the block for privatization by 2018. Most of the sales involve selling off minority share positions, privatization through dilution of shares rather than divestment and retaining golden shares to maintain government veto power. To date, treatment of foreign investment in new privatizations has been inconsistent at times, foreign participation has often been confined to limited positions. Subsequently, many have faced problems with inadequate protection for minority shareholders and corporate governance. Potential foreign investors are advised to work directly and closely with appropriate local, regional, and federal agencies that exercise ownership or authority over SOEs whose shares they may want to acquire. Due to the significance of SOEs within Russiarsquos economy, corporate governance within those companies is a significant factor in Russiarsquos economic growth. A specific variant of SOE, state corporations, are 100 owned by the Russian government and operate under special legislation. The Russian economy also features thousands of other companies owned in part or whole by the Russian government that operate under different legal arrangements, such as unitary enterprises and joint stock companies. In early 2017, the Russian government drafted a directive requiring all state corporations to come up with a series of key performance indicators (KPIs) to guide their development strategy going forward. In rolling out the initiative, the government made it clear that if KPIs were not met personnel changes would be made. This measure is aimed at pushing state corporations toward more efficient operating strategies. The Russian government also declined to increase the size of the government subsidy supporting each state corporation, also with the aim of forcing these companies to run more efficiently. Private enterprises are theoretically allowed to compete with SOEs on the same terms and conditions, and in some sectors, including where state ownership is minimal, competition is robust. But in other areas the playing field can be tilted. Issues that hamper efficient operations and fair competition with SOEs include a lack of transparency, lack of independence and unclear responsibilities of boards of directors, misalignment of managers39 incentives and company performance, inadequate control mechanisms on managers39 total remuneration or their use of assets transferred by the government to the SOE, and minimal disclosure requirements. There are two sovereign wealth funds in Russia: the Reserve Fund (87.46 billion, or 4.3 of GDP as of April 1, 2017, up from 3.9 of GDP as of April 1, 2017) and the National Wealth Fund (87.5 billion, or 4.3 of GDP as of April 1, 2017, up from 4.1 of GDP as of April 1, 2017). The Ministry of Finance manages both funds39 assets in accordance with established procedures the Central Bank of Russia acts as operational manager. Both funds are audited by Russia39s Chamber of Accounts and the results are reported to the Federal Assembly. The Reserve Fund, at 4.3 of GDP, remains below the target of 7 of GDP and is, under currently loosening fiscal policy policies, expected to fall. In February 2017, the Finance Ministry announced plans to spend RUB 212.2 billion on FX purchases for the Reserve Fund. Since the beginning of the year, 38 billion rubles (1.1 billion) have been spent on currency purchases. The Ministry said that currency purchases for the country39s Reserve Fund were tied to the position of the ruble within the currency39s euro-dollar trading corridor. Due to the high volatility of the markets, triggered by the tensions around the situation in Ukraine and Crimea, the Ministry suspended such purchases March 4. 11. Corporate Social Responsibility While not standard practice, Russian companies are beginning to show an increased level of interest in their reputation as good corporate citizens. When seeking to acquire companies in Western countries or raise capital on international financial markets, Russian companies face international competition and scrutiny, including on corporate social responsibility (CSR) standards. Consequently, most large Russian companies currently have a CSR policy in place, or are developing one, despite the lack of pressure from Russian consumers and shareholders. CSR policies of Russian firms are usually published on corporate websites and detailed in annual reports. However, these CSR policies and strategies --shyare still in an early stage relative to those of Western counterparts. Most companies choose to create their own NGO or advocacy group rather than contribute to an already existing organization. The Russian government is a powerful stakeholder in the development of certain companiesrsquo CSR agendas, predictably, some companies choose to support local health, educational and social welfare organizations favored by the government. The Federal Service for Financial Markets established a corporate governance code in 2002 and has endorsed an OECD White Paper on ways to improve practices in Russia. International business associations such as the American Chamber of Commerce in Russia, the U. S.-Russia Business Council, the Association of European Businesses in Russia, the International Business Leaders Forum, and Russian business associations, all stress corporate governance as an important priority for their members and for Russian businesses overall. One association, the Russian Union of Industrialists and Entrepreneurs, developed a Social Charter of Russian Business in 2004 in which over 200 Russian companies and organizations have since joined. 12. Political Violence Political freedom has been significantly curtailed during the past year, including rising hostility toward almost all opposition media outlets and increasing harassment of non-governmental organizations. In the aftermath of Ukrainersquos EuroMaidan protest which led to the ouster of Kremlin-friendly Ukrainian President Viktor Yanukovich, the Russian government and Russian society as a whole has been gripped by nationalist rhetoric. Soviet-era phrases such as ldquonational traitorsrdquo and the ldquofifth column, rdquo which for the Government refers to persons and groups within Russia which they regard as fomenting revolution on behalf of outside forces but in reality may include those opposed to government policy, have reappeared. It remains difficult to predict the next actions of the Russian government, ruled with increasing authoritarianism by President Putin. Political risk is arguably the biggest drag on the Russian economy through the end of 2017. On the media front, in December 2017, RIA Novosti, the only remaining semi-independent Russian wire service, was abruptly dissolved and reorganized into a new organization to be called ldquoRossiya Segodnya. rdquo The new organization will take marching orders directly from the Kremlin and is charged with producing a specifically Russian view on world events. In early 2017, popular opposition-minded cable channel Dozhd was cut from every major cable and satellite network due to an internet poll that was deemed to be ldquounpatriotic. rdquo The channel continues to produce online content but retains only 20 percent of its original audience, and little advertising revenue without access to cable networks. In a call-in show in April, President Putin indicated a reprieve for the embattled channel but it is still unclear how much longer Dozhd will be able to continue to operate in its limited state. Public protests continue to occur sporadically in Moscow though they are often disrupted by spur of the moment construction work at the protest site and heavy police presence. The most recent large-scale protest was in February 2017 when 30,000 persons took to the street to protest the illegal Russian annexation of Crimea. There have been smaller protests regarding media freedom and eCommerce issues in 2017 that drew a few thousand participants as well as protests in support of opposition politician Alexey Navalny, who has faced a variety of legal charges due to his activism. The Russian government has also been more inclined to use government-sponsored counter-protests to gain support for their actions. Counter protests in support of Russiarsquos illegal annexation of Crimea drew less than 5,000, although the Russian media erroneously reported the participation figure as much higher. Some individuals who took part in Moscowrsquos Bolotnaya Ploshchad protest in May 2017 are currently serving jail sentences of up to 4 years for offensives including violence against police officers and participating in an unsanctioned rally. Opposition leaders insist that the individuals were arrested at random and their prosecution was meant to intimidate Russians and prevent future protest actions. Aleksey Navalny, anticorruption whistleblower and member of the opposition Coordination Council, was convicted in October 2017 of stealing 500,000 worth of state-owned timber in a trial that was maligned by opposition leaders and international organizations as little more than a show trial. However, he was released and his five-year sentence was suspended so he could run in the Moscow mayoral elections. His conviction and release resulted in large rallies in Moscow. He has since spent ten days in jail for participation in an unsanctioned rally and is currently under house arrest on a new set of trumped up fraud charges. Although the use of strong-arm tactics is not unknown in Russian commercial disputes, the U. S. Embassy is not aware of cases where foreign investments have been attacked or damaged for purely political reasons. Russia continues to struggle with an ongoing insurgency in Chechnya, Ingushetiya and Dagestan. These republics and neighboring regions in the northern Caucasus have a high risk of violence and kidnapping. In yet another sign of the worsening civil rights situation in Russia, prominent economist and Rector of the New Economic School Sergei Guriev fled Russia in April 2017. He currently lives in exile in Paris. He has written extensively in the Western press regarding his decision, which was motivated primarily by increasing harassment by the Russian government for support of opposition politicians. He is only one of many examples of high-profile people who have fled Russia because they fear repercussions for holding opinions different from the governmentrsquos. The remaining two imprisoned members of the Russian punk rock group ldquoPussy Riotrdquo were released on December 12, 2017 as a part of a Presidential amnesty to celebrate the 20 th anniversary of the Russian constitution. Since their release they have been arrested and subsequently released for their participation in additional protest actions in Moscow and in Sochi, on the margins of the 2017 Winter Olympic Games. They have also been physically abused in public multiple times, with authorities refusing to press charges against their assailants despite video evidence of the crimes. Also released as a part of the amnesty was Russian oligarch Mikhail Khordorkovsky, who was convicted in 2005 of fraud in the controversial Yukos case and sentenced to nine years in prison. He was convicted on secondary charges in 2017 which extended his term to 2017 and a third case was in the process of being brought before the courts. Upon release, Khordorkovsky departed Russia for Germany and currently resides in Switzerland. The Russian government stepped up its campaign against corruption in 2017. In March 2017, then-Russian President Medvedev adopted the National Anti-Corruption Plan for 2017ndash2017. The plan contained guidance and recommendations for the government, federal executive bodies and other government agencies on counteracting corruption, including the establishment of a legal framework for lobbying and increasing the transparency of state officialsrsquo personal finances and acceptance of gifts. Additionally, in 2017, Russia adopted a law requiring individuals holding public office, state officials, municipal officials and employees of state organizations to submit information on the funds spent by them and members of their families (spouses and underage children) to acquire certain types of property, including real estate, securities, stock and vehicles. The law also required public servants to disclose the source of the funds for these purchases and to confirm the legality of the acquisitions. In addition, the State Duma adopted a law in 2017 that required state officials, deputies, senators and governors to disclose information on their foreign property holdings and to close foreign bank accounts. Speaking at the Russian General Prosecutorrsquos Office on the occasion of the 291 st anniversary of its establishment, Sergei Ivanov, Chief of the Presidential Administration, mentioned that in 2017, over 7,000 persons charged with corruption had received prison sentences and a greater number of corruption cases were initiated. One high level case led to the firing of Defense Minister Anatoly Serdyukov, who was reportedly at the center of multiple corrupt schemes on a very large scale. However, after a year of investigation, no charges have been filed. Various reports in the media speculated that Serdyukov had been given amnesty, or alternatively, that the investigation had been limited to suspicious of negligence rather than more serious crimes. Failure to hold high government officials accountable for corruption sends a strong signal throughout the system that certain persons are untouchable and protected by the highest authorities. This phenomenon undermines the rule of law in Russia. Indeed, a long-running dispute between the Russian Prosecutor General, Yuri Chaika, and the Chairman of the Investigative Committee, Alexander Bastrykin, flared up in the Spring 2017. Chaika publicly accused the Investigative Committee of being unwilling to handle serious corruption matters. However, even the General Procuracy has experienced public embarrassment on this issue, when Hewlett Packard Russia pleaded guilty in the United States in April 2017 to bribing Russian prosecutors ten years earlier in exchange for a computer systems procurement contract. Media reports suggested that Russia has not been very helpful in investigating cases under the U. S. Foreign Corrupt Practices Act (FCPA). Russia is a signatory to the UN Convention against Corruption, the Council of Europe39s Criminal Law Convention on Corruption, and, as of 2017, the OECD Anti-Bribery Convention. The OECD Convention calls for the implementation of national legislation to criminalize commercial bribery and to prohibit both offering bribes to foreign government officials and accepting such bribes. It provides no exceptions for ldquogrease payments, rdquo and includes foreign entities doing business in Russia, meaning these entities could be subject to liability under their own countryrsquos law, as well as Russiarsquos. The convention also calls for increasing the penalties that may be imposed upon an individual or entity found in violation. Fines and terms of incarceration contemplated by the Convention vary, depending upon the type of bribe and the official involved. During 2017-2017, Russia passed national legislation to bring itself into better compliance with its commitments under the OECD Convention and UNCAC. For instance, Article 13.1 of the Federal Law on Corruption allows removal of government officials for failure to take measures to combat corruption. Article 13.3, very broadly requires all legal entities in the Russian Federation implement an ethics and compliance program to combat corruption and conflict of interest. This law also applies to Russian government budgetary entities like schools. Some analysts have expressed concern that lack of depth in the compliance culture in Russia will render the law a formality that does not function in reality. The implementation and enforcement of the many measures required by these conventions have not yet been fully tested. In recent years, there appears to be a greater number of prosecutions and convictions of mid-level bureaucrats for corruption, but real numbers were difficult to obtain and high-ranking officials were rarely prosecuted. After the close of the 2017 Winter Olympic Games in Sochi, anti-corruption blogger and opposition political candidate Alexey Navalny released a detailed report alleging wide-spread corruption and graft from those government and private individuals involved in construction of the Olympic venues. According to reports, the Prosecutor Generalrsquos Office opened over 50 criminal cases related to the Olympic Games and has imposed administrative penalties on over 100 persons and companies. It is likely that many of these cases touch only lower level bureaucrats and not high-ranking government officials or prominent businessmen close to the Kremlin who won the lucrative construction contracts for the Olympics. It is important for U. S. companies, irrespective of size, to assess the business climate in the relevant market in which they will be operating or investing, and to have an effective compliance programs or measures to prevent and detect corruption, including foreign bribery. U. S. individuals and firms operating or investing in Russia should take the time to become familiar with the relevant anticorruption laws of both Russia and the United States in order to properly comply with them, and where appropriate, they should seek the advice of legal counsel. Additional country information related to corruption can be found in the U. S. State Department39s annual Human Rights Report available at state. govgdrlrlshrrpt . Assistance for U. S. Businesses The U. S. Department of Commerce offers several services to aid U. S. businesses seeking to address business-related corruption issues. For example, the U. S. Commercial Service can provide services that may assist U. S. companies in conducting their due diligence as part of a company39s overarching compliance program when choosing business partners or agents overseas. The U. S. Commercial Service can be reached directly through its offices in major U. S. and foreign cities, or through its Website at: trade. govcs . The Departments of Commerce and State provide worldwide support for qualified U. S. companies bidding on foreign government contracts through the Commerce Department39s Advocacy Center and Statersquos Office of Commercial and Business Affairs. Problems, including alleged corruption by foreign governments or competitors, encountered by U. S. companies in seeking such foreign business opportunities can be brought to the attention of appropriate U. S. government officials, including local embassy personnel and through the Department of Commerce Trade Compliance Center ldquoReport A Trade Barrierrdquo Website at: tcc. export. govReportaBarrierindex. asp . The U. S. Government seeks to level the global playing field for U. S. businesses by encouraging other countries to take steps to criminalize their own companies39 acts of corruption, including bribery of foreign public officials, by requiring them to uphold their obligations under relevant international conventions. A U. S. firm that believes a competitor is seeking to use bribery of a foreign public official to secure a contract should bring this to the attention of appropriate U. S. agencies, as noted below. U. S. Foreign Corrupt Practices Act (FCPA) In 1977, the United States enacted the FCPA, which makes it unlawful for a U. S. person, and certain foreign issuers of securities, to make a corrupt payment to foreign public officials for the purpose of obtaining or retaining business for or with, or directing business to, any person. The FCPA also applies to foreign firms and persons who take any act in furtherance of such a corrupt payment while in the United States. For more detailed information on the FCPA, see the FCPA Lay-Person39s Guide at: justice. govcriminalfraudfcpadocslay-persons-guide. pdf . The Department of Justice (DOJ) FCPA Opinion Procedure enables U. S. firms and individuals to request a statement of DOJrsquos present enforcement intentions under the anti-bribery provisions of the FCPA regarding any proposed business conduct. The details of the opinion procedure are available on DOJ39s Fraud Section Website at: justice. govcriminalfraudfcpa . Although the Department of Commerce has no enforcement role with respect to the FCPA, it supplies general guidance to U. S. exporters who have questions about the FCPA and about international developments concerning the FCPA. For further information, see the Office of the Chief Counsel for International Counsel39s website, at: ogc. doc. govtransantibribery. html . It is U. S. Government policy to promote good governance, including host country implementation and enforcement of anti-corruption laws and policies pursuant to their obligations under international agreements. Since enactment of the FCPA, the United States has been instrumental to the expansion of the international framework to fight corruption. Several significant components of this framework are the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Convention), the United Nations Convention against Corruption (UN Convention), the Inter-American Convention against Corruption (OAS Convention), the Council of Europe Criminal and Civil Law Conventions, and a growing list of U. S. free trade agreements. OECD Anti-Bribery Convention The OECD Anti-Bribery Convention entered into force in February 1999. There are 38 parties to the Convention including the United States (see oecd. orgdataoecd591340272933.pdf ). The Convention obligates the Parties to criminalize bribery of foreign public officials in the conduct of international business. The United States meets its international obligations under the OECD Anti-Bribery Convention through the FCPA. In 2017, Russia passed anti-corruption legislation that clearly criminalized foreign bribery and acceded to the Anti-Bribery Convention in 2017. U. S. firms should familiarize themselves with local anticorruption laws, and, where appropriate, seek legal counsel. While the U. S. Department of Commerce cannot provide legal advice on local laws, the Departmentrsquos U. S. Commercial Service can provide assistance with navigating the host country39s legal system and obtaining a list of local legal counsel. Transparency International (TI) publishes an annual Corruption Perceptions Index (CPI). The CPI measures the perceived level of public-sector corruption in 183 countries and territories around the world. The CPI is available at: cpi. transparency. orgcpi2017. TI also publishes an annual Global Corruption Report which provides a systematic evaluation of the state of corruption around the world. It includes an in-depth analysis of a focal theme, a series of country reports that document major corruption related events and developments from all continents and an overview of the latest research findings on anti-corruption diagnostics and tools. Seetransparency. orgpublicationsgcr. Transparency International-Russia also posts corruption-related research materials and findings on the following sites, all specific to Russia: transparency. org. ruINTERindex. asp and askjournal. ru . The World Bank Institute publishes Worldwide Governance Indicators (WGI). These indicators assess six dimensions of governance in 213 economies, including Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption. See info. worldbank. orggovernancewgisccountry. asp. World Bank Business Environment and Enterprise Performance Surveys may also be of interest. The World Economic Forum publishes the Global Enabling Trade Report, which presents the rankings of the Enabling Trade Index, and includes an assessment of the transparency of border administration (focused on bribe payments and corruption) and a separate segment on corruption and the regulatory environment. See weforum. orgreportsglobal-enabling-trade-report-2017 . Global Integrity, a nonprofit organization, publishes its annual Global Integrity Report, which provides indicators with respect to governance and anti-corruption. The report highlights the strengths and weaknesses of national level anti-corruption systems. The report is available at: globalintegrity. orgreport . 14. Bilateral Investment Agreements While the United States and Russia signed a bilateral investment treaty (BIT) in 1992, it is not in force due to lack of ratification by the Russian Duma. In January 2017, Russia and the United States began talks on ways to improve the bilateral investment relationship. Those talks were suspended after Russiarsquos illegal invasion of Crimea in February 2017. Russia has BITs with 75 countries, 54 of which are currently in force. The United States and Russia have shared an income tax treaty since 1992, which is designed to address the issue of double taxation and fiscal evasion with respect to taxes on income and capital. Full text of the treaty: irs. govpubirs-trtyrussia. pdf. There is some concern that taxation requirements have sometimes been used in Russia as a way to ldquoraidrdquo or illegally take possession of foreign companies, particularly small and medium enterprises. 15. OPIC and Other Investment Insurance Programs Since 1992, the U. S. Overseas Private Investment Corporation (OPIC) has been authorized to provide loans, loan guarantees (financing), and investment insurance against political risks to U. S. companies investing in Russia. OPICrsquos political risk insurance and financing help U. S. companies of all sizes invest in Russia. OPIC insures against three political risks: expropriation political violence and currency inconvertibility. OPIC recently announced that political risk insurance now covers private equity fund investments. To meet the demands of larger projects in Russia and worldwide, OPIC can insure up to 250 million per project and up to 300 million for projects in the oil and gas sector with offshore, hard currency revenues. Projects in the oil and gas sector with offshore, hard currency revenues may be approved for an exposure limit up to 400 million if the project receives a credit evaluation (shadow rating) of investment grade or higher. The individual per project exposure limit for financing is 250 million. The maximum combined (insurance and financing) exposure limit to OPIC on a single project is 400 million. OPIC has no minimum investment size requirements. OPIC also makes equity capital available for investments in Russia by guaranteeing long-term loans to private equity investment funds. Detailed information about OPICrsquos programs can be accessed at opic. gov. Russia is also a member of the World Bankrsquos Multilateral Investment Guarantee Agency. The Russian labor market remains fragmented, characterized by limited labor mobility across regions and consequent wage and employment differentials. Earnings inequalities are substantial, enforcement of labor standards is relatively weak, and collective bargaining is underdeveloped. Employers regularly complain about shortages of qualified skilled labor. This is due in part to weak linkages between the education system and the labor market. In addition, the economy suffers from a general shortage of highly skilled labor. Businesses face increasing labor costs as competition over a limited pool of workers intensifies. On the other hand, private business must compete with SOEs, where Russians have indicated in recent surveys they would prefer to work due to salaries and benefits. The public sector, which maintains inefficient and unproductive positions, accounts for about 25 percent the workforce. The 2002 Labor Code governs labor standards in Russia. The enforcement of worker safety rules continues to be a major issue, as enterprises are often unable or unwilling to invest in safer equipment or to enforce safety standards. The rate of actual unemployment (calculated according to ILO methodology) in 2017 was low at 5.5 percent. Average unemployment in urban districts (4.7 percent as of December) was much lower than in rural districts (8.3 percent). In 2017, two regions in the North Caucasus had the highest unemployment rates in the country: Ingushetia (43.7 percent) and Chechnya (26.9 percent). In stark contrast, the unemployment rate was 1.5 percent in St. Petersburg and 1.7 percent in Moscow. 17. Foreign Trade ZonesFree Ports Russia has 26 Special Economic Zones (SEZs), which fall in one of four categories: industrial and production zones technology and innovation zones tourist and recreation zones and port zones. Enterprises operating within SEZs enjoy a range of benefits that the Ministry of Economic Development (MED) ndash which manages the SEZ program ndash estimates can save investors up to 30 of the cost of doing business. Specifically, investors enjoy streamlined administrative requirements and procedures, a more favorable customs regime (including the waiver of import duties and refunds of the value-added-tax), and reduced tax rates on income, property, land, and transport. SEZ investors also receive discounts on infrastructure expenses, including facilities and utilities costs. Such benefits are extended for an agreed introductory period, often lasting five years. Progress in attracting foreign investors to SEZs is uneven. The majority of SEZ investments are still listed as ldquoplanned, rdquo meaning investors are still able to back out of commitments. The lack of interest from foreign investors in addition to environmental concerns led to the closure of the proposed Kaliningrad tourist and recreational zone SEZ in late 2017. The Russian government has been hesitant to go forward with major SEZ infrastructure projects. Detailed information about the benefits and results of Russia39s SEZs can be found at the MEDrsquos SEZ website: economy. gov. ruminecactivitysectionssezmain . Independent of the SEZs, in 2017 then-President Medvedev launched an initiative to establish the Skolkovo Innovation Center in the Moscow suburbs to promote investment in high-technology startup businesses, research, and commercialization of technological innovation. Inspired by the model of Silicon Valley, Skolkovo ldquoresident companiesrdquo can receive a broad range of benefits, including exemption from profit tax, value-added tax, property taxes, and import duties, and partial exemption from social fund payments. Applicants for residency are evaluated and selected by an international admission board company performance is monitored to ensure continued qualification for benefits. According to the Skolkovo Foundation, over 1,000 startups have been selected as residents thus far, although very few are physical present at Skolkovo now. The infrastructure for Skolkovo is still being built. 18. Foreign Direct Investment and Foreign Portfolio Investment Statistics Table 1 shows flows of foreign investment into Russia by country for the first nine months of 2017, compared to the same period in 2017. Total foreign investment increased by 15 year-on-year. According to Russian statistical practice, total foreign investment numbers include direct investment (FDI), portfolio investment, and other investment (largely trade credits). FDI flows into Russia also increased in 2017, rising by 52 the largest share came from Cyprus according to available data. FDI from the Netherlands and Cyprus is consistently high, reflecting the fact that most FDI coming from these countries is likely either returning or reinvested Russian capital through subsidiaries or off-shore ldquoshellrdquo vehicles. The data in the table below is from the Central Bank of Russia. While official statistics for 2017 are not yet available, anecdotal evidence suggests that uncertainty spawned by the crisis in Ukraine as well as market fluctuations in Russia will drive FDI numbers down for this year. Table 1: Top Investors - By Year (in million) The numbers in Table 2 represent the accumulated stock of total foreign investment in Russia by originating country, including FDI, portfolio, and quototherquot investment as of September 30, 2017, compared to the amount accumulated a year prior. Source: Central Bank of Russia. Table 2: Top Investors - Accumulated Basis (in million) As of Sep 30, 2017 As of Sep 30, 2017 As of Sep 30, 2017 Table 3 shows total foreign investment by region over the first nine months of 2017, compared to the same period in 2017. Moscow continues to attract the lionrsquos share of investments, mainly due to the concentration of companiesrsquo headquarters and consumers with high purchasing power. Source: Central Bank of Russia, including direct, portfolio and ldquootherrdquo investments. Table 3 ndash Foreign Investment ndash Top Regions (in million) Table 4 shows investment by sector over the first nine months of 2017, compared to the same period in 2017. Total investment increased in six of the ten top sectors. Data for investment into the financial sector was not available. Source: Central Bank of Russia Table 4: Foreign Investment: Top Sectors (in million) Extraction of Fuel Wholesale and Retail Trade Production of coke and oil products Transport and Communications Real Estate and Related Services Production of vehicles Table 5 shows stocks of Russian FDI abroad as of September 30, 2017 and September 30, 2017, as well as flows of Russian FDI abroad for the first nine months of 2017, compared to the same period in 2017. Russian FDI stocks decreased in the Netherlands and the United States but increased in Cyprus, the United Kingdom and Luxembourg (data from 2017 was unavailable for Luxembourg and the United Kingdom). Source: Central Bank of Russia. Table 5: Top Destinations of Russian FDI - By Year (in million) as of Sep 30, 2017 as of Sep 30, 2017 as of Sep 30, 2017 19. Contact Point at Post for Public Inquiries William Muntean Senior Trade Officer Bolshoy Deviatinsky Pereulok No. 8, Moscow 121099, Russian Federation 7 (495) 728-5000 moscow. office. boxmail. doc. gov In This Section: Highlights Learn More The Office of Website Management, Bureau of Public Affairs, manages this site as a portal for information from the U. S. State Department. External links to other Internet sites should not be construed as an endorsement of the views or privacy policies contained therein. Note: documents in Portable Document Format (PDF) require Adobe Acrobat Reader 5.0 or higher to view, download Adobe Acrobat Reader. Javascript is disabled in your browser. For the best experience on this web site, please enable Javascript. U.S. Department of State Philippine law generally treats foreign investors the same as their domestic counterparts, with important exceptions outlined in the Foreign Investment Act (detailed below). Corporations or partnerships must register with the Securities and Exchange Commission (SEC) and sole proprietorships must be registered with the Bureau of Trade Regulation and Consumer Protection in the Department of Trade and Industry (DTI). Investors generally report that the Philippine bureaucracy is nondiscriminatory but slow to process these requirements. The Foreign Investment Negative List is actually two lists, which outline sectors that are restricted or limited in terms of foreign investment under the 1991 Foreign Investment Act. The Foreign Investment Act also requires the Philippine government to publish an updated negative list every two years to reflect changes in law the eighth negative list was promulgated in February 2017. This relatively long list of foreign investment limitations contribute to the poor Philippine record in attracting foreign investment. List A enumerates investment sectors and activities for which foreign equity participation is restricted by mandate of the Constitution and specific laws. List B enumerates areas where foreign ownership is restricted or limited (generally at 40 percent) for reasons of national security, defense, public health, safety, and morals. The restrictions stem from a constitutional provision permitting Congress to reserve to Philippine citizens certain areas of investment and limit foreign participation in public utilities or their operation. No mechanism exists for a waiver under the negative lists. Only Philippine citizens can practice licensed professions such as engineering, medicine and allied professions, accountancy, architecture, interior design, chemistry, environmental planning, social work, teaching, and law. Top positions and elective officers of majority foreign-owned enterprises (i. e. president, general manager, and treasurer or their equivalents) are exempt from these restrictions. Companies that register with the Board of Investments (BOI) may employ foreign nationals in supervisory, technical, or advisory positions for five years from registration, extendable for limited periods at the discretion of the BOI. The 1987 Constitution prohibits foreign nationals from owning land in the Philippines. The Investors39 Lease Act of 1994 allows foreign investors to lease a contiguous land parcel of up to 1000 hectares for 50 years, renewable once for 25 years. In mid-2003, the Dual-Citizenship Act allowed natural-born Filipinos who became naturalized citizens of a foreign country to re-acquire Philippine citizenship. Philippine dual citizens now have full rights of possession of land and property. Ownership deeds continue to be difficult to establish, are poorly reported and regulated, and the court system is slow to resolve cases. Other investment areas reserved for Filipinos include: mass media (except recording) small-scale mining private security utilization of marine resources, including small-scale utilization of natural resources in rivers, lakes, and lagoons and the manufacture of firecrackers and pyrotechnic devices. The retail trade industry is highly restricted to foreign investment. Retail trade enterprises with paid-up capital of less than 2.5 million, or less than 250,000 for retailers of luxury goods, are reserved for Filipinos. Foreign ownership of retail trade enterprises with paid-up capital between 2.5 to 7 million is now allowed, with initial capitalization requirements. Enterprises engaged in financing and securities underwriting that are regulated by the SEC are limited to 60 percent foreign ownership. Although a relaxation of previous policy, the number of new foreign banks that could open full-service branches in the Philippines was capped at a total of ten in 1994 by the banking liberalization law, and all licenses have been issued. These foreign banks are limited to six branch offices each. In addition, four foreign banks that were operating in the Philippines prior to 1948 were allowed to open up to six branches each. Foreign banks that qualify under the law -- publicly-listed and with national or global rankings -- may own up to 60 percent in a locally-incorporated subsidiary. Foreign investors that do not meet these requirements are limited to a 40 percent stake. Since 1999, the Bangko Sentral ng Pilipinas (Central Bank) has imposed a moratorium on the issuance of new bank licenses, limiting investments to existing banks, although micro-finance institutions are exempt. Philippine law also requires that majority Filipino-owned banks must, at all times, control at least 70 percent of total banking system resources in the country. The insurance industry is open to 100 percent foreign ownership, with a sliding scale of minimum capital requirements depending on the degree of foreign ownership. As a general rule, only the state-owned Government Service Insurance System (GSIS) may provide coverage for government-funded projects. Build-Operate-Transfer (BOT) projects and privatized government corporations must secure insurance and bonding from GSIS, at least proportional to GPH interests. Other specific limits on foreign investment include: private radio communications networks (20 percent) employee recruitment and locally-funded public works construction and repair (25 percent) advertising agencies (30 percent) natural resource exploration, development, and utilization (40 percent, with exceptions) education institutions (40 percent) operation and management of public utilities (40 percent) operation of commercial deep-sea fishing vessels (40 percent) Philippine government procurement contracts (40 percent) adjustment companiesinsurance sector (40 percent) operations of BOT projects in public utilities (40 percent) ownership of private lands (40 percent) rice and corn processing (40 percent, with some exceptions). The Philippines also limits foreign ownership for reasons of national security, defense, public health, safety, and morals, including explosives, firearms, military hardware, and massage clinics, which are all generally limited to 40 percent foreign equity. Foreign ownership in small - and medium-sized enterprises is also limited to 40 percent in non-export firms. In addition to the restrictions detailed in the Foreign Investment Negative List, firms with more than 40 percent foreign equity that qualify for BOI incentives must divest to the 40 percent level within 30 years from registration date or within a longer period determined by the BOI. Foreign-controlled companies that export 100 percent of production are exempt from this requirement. The Build-Operate-Transfer (BOT) Law provides the legal framework for large infrastructure projects and other types of government contracts. Franchises in railways or urban rail mass transit systems, electricity distribution, water distribution, and telephone systems may only be awarded to enterprises with at least 60 percent Philippine ownership. U. S. firms have won contracts under the law and similar arrangements, mostly in the power generation sector. However, more active foreign participation under BOT and similar arrangements can be frustrated by legal administration problems, including: weaknesses in planning, tendering, and executing private sector infrastructure projects regulatory and legal challenges to collecting andor increasing tolls and fees and lingering ambiguities about the level of guarantees and other support provided by the government. The Philippine Mining Act of 1995 allows a foreign entity full ownership of a company involved in large-scale exploration, development, and utilization of mineral resources, as arranged through Financial and Technical Assistance Agreements with the Philippine government. Addressing limitations on foreign investment will be critical to the Aquino administrationrsquos stated goal of aggressively promoting Public-Private Partnerships (PPPs) as a means to supplement insufficient public sector resources for vital infrastructure. A November 2017 conference launching PPPs under the new government was well received by the business sector. Government officials vowed to protect investors from regulatory risk, though they have not provided specifics, and announced a relaxation in single borrower limits for Philippine banks that finance PPP arrangements, subject to risk management requirements. The government has also established a PPP Center to promote transparency and oversee project development and approval, and has allotted resources in the 2017 budget for right-of-way, land acquisition, and other preparatory facilities to attract private participation in infrastructure. Conversion and Transfer Policies The Central Bank has worked over the past five years to relax and streamline the Philippine foreign exchange (forex) regulatory framework and help stem the rapid appreciation of the peso. There are no restrictions on the full and immediate transfer of funds associated with foreign investments, foreign debt servicing, or payment of royalties, lease payments, and similar fees. Central Bank regulations spell out specific requirements for foreign exchange purchases. There is no mandatory foreign exchange surrender requirement imposed on export earners and other foreign exchange earners such as overseas workers. The Central Bank follows a market-determined exchange rate policy, with scope for intervention targeted mainly at smoothing excessive foreign exchange volatility. Expropriation and Compensation Philippine law allows for expropriation of private property for public use or in the interest of national welfare or defense. In such cases, the GPH offers compensation for the affected property. Most expropriation cases involve acquisition for major public sector infrastructure projects. In the event of expropriation, foreign investors have the right under Philippine law to remit sums received as compensation in the currency in which the investment was originally made and at the exchange rate at the time of remittance. However, agreeing on a mutually-acceptable price can be a protracted process. There are no recent cases of expropriation involving U. S. companies in the Philippines. However, BOT contractors in the energy sector, including U. S. firms, have reported disputes on real property tax assessments with local government units (LGUs). In at least one of these cases, the LGUs have initiated auction andor confiscation proceedings on the contractorsrsquo assets, which the companies are challenging in the courts. Philippine law mandates divestment to 40 percent foreign equity in some sectors. The Omnibus Investment Code specifies a 30-year divestment period for non-pioneer foreign-owned companies that accept investment incentives. Pioneer enterprises and companies that export 100 percent of production are exemption from this provision. Certain non-luxury retail establishments must offer at least 30 percent of their equity to the public within eight years from the start of operations. Investment disputes can take years for parties to reach final settlement. A number of GPH actions in recent years have raised questions over the sanctity of contracts in the Philippines and have clouded the investment climate. Recent high-profile cases include the GPH-initiated review and renegotiation of contracts with independent power producers, court decisions voiding allegedly tainted and disadvantageous BOT agreements, and challenges to the extent of foreign participation in large-scale natural resource exploration activities, such as mining. Many foreign investors describe the inefficiency and uncertainty of the judicial system as a significant disincentive for investment. The judiciary is constitutionally independent of the executive and legislative branches and faces many problems, including understaffing and corruption. The GPH is pursuing judicial reform with support from foreign donors, including the U. S. Government, the Asian Development Bank, and the World Bank. The Philippines is a member of the International Center for the Settlement of Investment Disputes and of the Convention on the Recognition and Enforcement of Foreign Arbitrage Awards. However, Philippine courts have, in several cases involving U. S. and other foreign firms, shown a reluctance to abide by the arbitral process or its resulting decisions. Enforcing an arbitral award in the Philippines can take years. A long-awaited insolvency law designed to recognize creditor rights and respect the priority of claims replaced the century-old Insolvency Act in July 2017. Subject to certain conditions, rehabilitation may be initiated by debtors or creditors under court-supervised, pre-negotiated, or out-of-court proceedings. The law also sets the conditions for voluntary (debtor-initiated) and involuntary (creditor-initiated) liquidation. The acts recognizes cross-border insolvency proceedings and the United Nations Center for International Trade and Developmentrsquos Model Law on Cross-Border Insolvency, allowing the courts to provide relief arising from insolvency or rehabilitation proceedings in a foreign jurisdiction involving a foreign entity with assets in the Philippines. Regional trial courts designated by the Supreme Court as commercial courts have jurisdiction over insolvency and bankruptcy cases. Although enforcement remains key, the new law seeks to provide a clear, transparent, and predictable legal framework for the rehabilitation and liquidation of distressed enterprises, which used to be governed by outmoded legislation and a cacophony of sometimes ambiguous and inconsistent rulings, procedures, and other jurisprudence subject to challenges and protracted delays. Performance Requirements and Incentives Performance requirements are usually based on an approved project proposal, established by the BOI for those investors who are granted incentives. In general, the BOI and the investor agree on yearly production schedules and export performance targets, with a requirement that registered projects maintain at least 25 percent of total project cost in the form of equity and comply with a 20 percent local value-added sourcing requirement. In practice, the BOI has been flexible in enforcing this requirement as long as actual performance does not deviate significantly from the industry standard. Certain industries have been subject to more specific local sourcing requirements. However, provisions requiring foreign retailers to source locally lapsed in March 2017, after ten years. The Philippines is not a signatory to the WTO Agreement on Government Procurement. The Government Procurement Reform Act of 2003 requires the public sector to procure goods, supplies, and consulting services from enterprises that are at least 60 percent Filipino-owned and infrastructure services from enterprises with at least 75 percent Filipino interest. Although Philippine law outlines objective criteria for selection of a single portal electronic procurement system, U. S. and other foreign companies continue to raise concerns about irregularities in government procurement and inconsistent implementation. Philippine law also gives preference to local products andor Filipino-controlled enterprises in the bid evaluation process for public sector purchases of goods and supplies. When the lowest bid is from a supplier of imported goods andor from a foreign-owned enterprise, the lowest domestic bidder can claim preference and match the offer, provided its original bid was no more than 15 percent higher than that of the foreign bidder or foreign entity. Filipino consultants enjoy preferential treatment in government projects. If Filipino consultants work for foreigners on such projects due to technical need, the law requires that they are the lead consultants. Where foreign funding is indispensable, foreign consultants must enter into joint ventures with Filipinos. Multilateral donor agencies report that their implementing partners have thus far been able to comply with both donors39 internal procurement guidelines and Philippine law. Foreign bidders may participate in foreign-funded development assistance projects, provided the foreign assistance agreement expressly provides for use of the foreign government or international financing institutionrsquos procurement procedures and guidelines. The Official Development Assistance Act further authorizes the President to waive statutory preferences for local suppliers for foreign-funded projects. The Government Procurement Reform Act does not cover projects under the BOT Law, which allows investors in qualifying projects to engage the services of Philippine andor foreign firms for the construction of infrastructure projects. Procurement by government agencies and government-owned or controlled corporations is subject to a countertrade requirement entailing the payment of at least 1 million in foreign currency. Implementing regulations set the level of countertrade obligations at a minimum of 50 percent of the import price and set penalties for nonperformance of countertrade obligations. Over 140 laws address general and sector-targeting investment incentives in the Philippines. Echoing past administrations, President Benigno Aquino III has publicly stated support for fiscal incentives rationalization and a number of bills have been filed in the Philippine Congress. However, the scope and detail of reform remain contentious. Proposals by key cabinet secretaries to phase out income tax holidays have been especially controversial. Every year, the Investment Priorities Plan (IPP) outlines the list of investment areas entitled to incentives. The 2017 IPP continues many of the same priority investment areas as the previous one, including: agricultureagribusiness and fisheries (encompassing biotechnological products and services) infrastructure engineered products business process outsourcing research and development and, creative industries. Also covered are ldquostrategic activities, rdquo projects with a minimum investment of US 300 million that create at least 1,000 jobs or use advanced technology. New to the 2017 Plan is the inclusion of quotgreen projects, quot which promotes the efficient use of energy, natural resources and raw materials, and projects that minimize pollution and greenhouse gas emissions. Screening for the legitimacy and regulatory compliance of companies seeking investment incentives appears to be nondiscriminatory, but the application process can be complicated since incentives granted by the BOI often depend on action by other agencies, such as the Department of Finance (DOF), including its Bureau of Customs (BOC). Among the significant incentives offered to BOI-registered companies include: 4-6 year income tax holiday additional years of tax holidays for expansion and modernization projects tax deductions for necessary and major infrastructure works for companies located in areas with deficient infrastructure, public utilities, and other facilities duty exemptions for breeding stocks and required supplies or spare parts exemption from wharf dues and any export tax, duty, impost, or fees on non-traditional export products for ten years the ability to employ foreign nationals in supervisory, technical, or advisory positions for five years under simplified visa requirements (the positions of president, general manager, and treasurer are not subject to this limitation) and, the simplification of customs procedures. To encourage the regional dispersal of industries, BOI-registered enterprises that locate in less - developed areas and the thirty poorest provinces are automatically entitled to quotpioneerquot incentives. Such enterprises can deduct 100 percent of infrastructure outlays from taxable income. A company may also deduct 100 percent of incremental labor expenses for five years, which is double the rate allowed for BOI-registered projects not located in less-developed areas. In addition to the general incentives available to BOI-registered companies, a number of incentives apply specifically to export-oriented firms. An enterprise with more than 40 percent foreign equity that exports at least 70 percent of its production may still be entitled to incentives even if the activity is not listed in the IPP. These include: tax credit for taxes and duties paid on imported raw materials used in the processing of export products exemption from taxes and duties on imported spare parts (applies to firms exporting at least 70 percent) and, access to customs bonded manufacturing warehouses. The BOI is flexible with the enforcement of individual export targets, provided that exports as a percentage of total production do not fall below the minimum requirement (50 percent for local firms and 70 percent for foreign firms). BOI-registered foreign controlled firms that qualify for export incentives are subject to a 30-year divestment period, at the end of which at least 60 percent of equity must be Filipino-controlled. Foreign firms that export 100 percent of production are exempt from this divestment requirement. Export-oriented firms with at least 50 percent of their revenues derived from exports may register for additional incentives under the Export Development Act of 1994. Registered exporters may be eligible for both these and BOI incentives, provided the exporters are registered according to BOI rules and regulations and the exporter does not take advantage of the same or similar incentives twice. Specific export incentives include a tax credit ranging from 2.5 to 10 percent of annual incremental export revenue. Philippine law also provides incentives for multinational enterprises to establish regional or area headquarters and regional operating headquarters in the Philippines (Omnibus Investment Code of 1987, as amended). Philippine law considers regional headquarters to be branches of multinational companies headquartered outside the Philippines that do not earn or derive income in the Philippines, but that act as supervisory, communications, or coordinating centers. Incentives for regional headquarters include: exemption from income tax exemption from branch profits remittance tax exemption from value-added tax sale or lease of goods and property and rendition of services to the regional headquarters subject to zero percent value-added tax exemption from all taxes, fees, or charges imposed by a local government unit (except real property taxes) value-added tax and duty-free importation of training and conference materials and equipment solely used for the headquarters functions. Regional operating headquarters enjoy many of the same incentives as regional headquarters but, being income generating, are subject to the standard 12 percent value-added tax, applicable branch profits remittance tax, and a preferential ten percent corporate income tax. Privileges extended to foreign executives working at these operations include tax and duty-free importation of personal and household effects, and immigration benefits for executives. Eligible multinationals establishing regional operating headquarters must spend at least 200,000 yearly to cover operations. Multinationals establishing regional warehouses for the supply of spare parts, manufactured components, or raw materials for their foreign markets also enjoy incentives on imports that are re-exported. Re-exported imports are exempt from customs duties, internal revenue taxes, and local taxes. Imported merchandise intended for the Philippine market is subject to applicable duties and taxes. Right to Private Ownership and Establishment Philippine law recognizes the private right to acquire and dispose of property or business interests, subject to foreign nationality caps specified in the Philippine Constitution and other laws. The 1987 Constitution grants the government authority to regulate competition and prohibit monopoly, although there is no implementing law. A few sectors are closed to private enterprise, generally on grounds of security, health, or quotpublic morals. quot For example, the Philippine government controls and operates the country39s casinos through the Philippine Amusement and Gaming Corporation and runs lottery operations through the Philippine Charity Sweepstakes Office. Only the state-owned GSIS may insure government-funded projects. BOT projects and partially privatized government corporations must meet insurance and bonding requirements from the government insurance system, in proportion to GPH interests. In addition, government funds should, as a general rule, be deposited in the Philippine Central Bank and government-owned banks. Protection of Property Rights Delays and uncertainty associated with a cumbersome court system continue to concern investors, even though the Philippines has established procedures and systems for registering claims on property. Questions regarding the general sanctity of contracts, and the property rights they support, have also clouded the investment climate. Of particular concern in the Philippines is the challenge of intellectual property rights protection, for which the Philippines is listed on United States Trade Representative (USTR) Special 301 Watch List. U. S. distributors continue to report high levels of pirated optical discs of cinematographic, musical works, computer games, and business software, as well as widespread unauthorized transmissions of motion pictures and other programming on cable television systems. Trademark infringement of a variety of product lines is also widespread, with counterfeit merchandise openly available in all major cities. The Intellectual Property (IP) Code provides the legal framework for intellectual property rights protection in the Philippines, especially in the key areas of patents, trademarks, and copyright. The Electronic Commerce Act extends the legal framework established by the IP Code to the Internet. Investor concerns include deficiencies in the IP Code and other IP laws that have unclear provisions relating to the rights of copyright owners over broadcast, rebroadcast, cable retransmission, or satellite retransmission of their works, and burdensome restrictions affecting contracts to license software and other technology. The Philippines has generally strong patent and trademark laws. Its first-to-file patent system grants patents valid for 20 years from the date of filing the holder of a patent is guaranteed an additional right of exclusive importation of his invention. However, the Cheaper Medicines Act of 2008 limits patent protection for pharmaceuticals, and significantly liberalizes the grounds for the compulsory licensing of pharmaceuticals, although this provision has not been implemented to date. Trademark law protects well-known marks, which do not need to be in actual use or registered to be protected under the law, and prior use of a trademark in the Philippines is not required to file a trademark application. In the area of copyright law, the Philippines has not enacted necessary amendments to its IP Code that would fully implement the World Intellectual Property Organization (WIPO) Copyright or Performances and Phonograms treaties, despite being a WIPO member and having acceded to the treaties. However, Philippine law does protect computer software as a literary work, and exclusive rental rights may be offered in several categories of works and sound recordings. Terms of protection for sound recordings, audiovisual works, and newspapers and periodicals are compatible with the Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS). The Philippines has been a significant source country for illegal camcording of new release international films, a trend that prompted the enactment of stringent penalties for such activities through the Anti-Camcording Act of 2017. Early reports suggest that the incidence of illegal camcording fell in 2017, although the long-term effect of the law remains uncertain. The IP Code also recognizes industrial designs, performers39 rights, and trade secrets. The registration of a qualifying industrial design is for a period of five years and may be renewed for two consecutive five-year periods. While Philippine law recognizes performers39 rights for 50 years after death, the exercise of exclusive rights for copyright owners over broadcast and retransmission is ambiguous. While there are no codified rules on the protection of trade secrets, Philippine officials assert that existing civil and criminal statutes protect trade secrets and confidential information. Other important laws defining intellectual property rights are the Plant Variety Protection Act, which provides plant breeders intellectual property rights consistent with the 1991 Union for the Protection of New Varieties of Plants Convention, and the Integrated Circuit Act, providing WTO-consistent protection for the layout designs of integrated circuits. Generally, the Philippine government enforcement agencies are most responsive to those copyright owners who actively work with them to target infringement. Agencies will not proactively target infringement unless the copyright owner brings it to their attention and works with them on surveillance and enforcement actions. The Intellectual Property Office (IPO) has jurisdiction to resolve certain disputes concerning alleged infringement and licensing. Although intellectual property owners have sometimes used the IPO39s administrative complaint system as an alternative to the judicial court system, the process can be slow-moving due to limited resources. Joint efforts between the private sector and the National Bureau of Investigation, the Philippine National Police and the Optical Media Board have resulted in some successful enforcement actions. Enforcement actions are not often followed by successful prosecutions. Intellectual property infringement is not considered a major crime within the Philippine judicial system and takes a lower precedence in court proceedings. The Philippine government has tried several different judicial approaches to handling intellectual property cases, but none have worked well due to lack of resources and heavy non-IP workloads. Because of the prospect of lengthy court action, many cases are settled out of court. Since 2001, there have been sixty-four convictions for IP violations, with no convictions in 2009 or 2017. Convicted intellectual property violators rarely spend time in jail, since the six year penalty enables them to apply for probation immediately under Philippine law. Transparency of the Regulatory System Philippine national agencies are required by law to develop regulations via a public consultation process, often involving public hearings. In most cases, this ensures some minimal level of transparency in the rulemaking process. New regulations must be published in national newspapers of general circulation or in the GPH39s official gazette before taking effect. On the enforcement side, however, regulatory action is often weak, inconsistent, and unpredictable. Regulatory agencies in the Philippines are generally not statutorily independent, but are attached to cabinet departments or the Office of the President and, therefore, subject to political pressure. Many U. S. investors describe business registration, customs, immigration, and visa procedures burdensome as a source of frustration. To counter this, some agencies, such as the SEC, BOI, and the Department of Foreign Affairs (DFA), have established express lanes or quotone-stop shopsquot to reduce bureaucratic delays, with varying degrees of success. Efficient Capital Markets and Portfolio Investment The Philippines is generally open to foreign portfolio capital investment. Non-residents may purchase domestically-issued securities and invest in money market instruments, as well as peso-denominated time deposits, though foreign exchange purchases face some restrictions. Although growing, the securities market remains relatively small and underdeveloped, with a limited range of choices. Except for a few large firms, long-term bonds and commercial paper are not yet major sources of capital. Philippine Stock Exchange Membership in the Philippine Stock Exchange (PSE) is open to foreign-controlled stock brokerages incorporated under Philippine law. Offshore companies not incorporated in the Philippines may underwrite Philippine issues for foreign markets, but not for the domestic market. The Lending Company Regulation Act of 2007 requires majority Philippine ownership for such enterprises, to establish a regulatory framework for credit enterprises that do not clearly fall under the scope of existing laws. Current law also restricts membership on boards of directors for mutual fund companies to Philippine citizens. Investments in any publicly-listed firm on the PSE are governed by foreign ownership ceilings stipulated in the Constitution and other laws. In 2017, the ten most actively-traded companies accounted for about 44 percent of trading value and 44 percent of domestic market capitalization. To encourage publicly-listed companies to widen their investor base, the PSE introduced reforms in 2006 to include trading activity and free float criteria in the selection of companies comprising the stock exchange index. The 30 companies included in the benchmark index are subject to review every six months. Hostile takeovers are not common because most company shares are not publicly listed and controlling interest tends to remain with a small group of parties. Cross-ownership and interlocking directorates among listed companies also lessen the likelihood of hostile takeovers. The Securities Regulation Code of 2000 strengthened investor protection by requiring full disclosure in the regulation of public offerings, and implementing stricter rules on insider trading, mandatory tender offer requirements, and the segregation of broker-dealer functions. The Code also significantly increased sanctions for securities violations, and mandated steps to improve the internal management of the stock exchange and future securities exchanges. Moreover, the Code expressly prohibits any one industry group (including brokers) from controlling more than 20 percent of the stock exchangersquos voting rights, though the PSE has yet to fully comply. The enforcement of these strengthened laws is mixed. While there has been some progress from the creation of special commercial courts, the prosecution of stock market irregularities can be subject to delays and uncertainties of the Philippine legal system. As of September 2017, the five largest commercial banks in the Philippines represented more than 47 percent of total commercial banking system resources, with estimated total assets the equivalent of about US68 billion. The Central Bank has worked to strengthen banks39 capital bases, reporting requirements, corporate governance, and risk management systems. Central Bank-mandated phased increases in minimum capitalization requirements and regulatory incentives for mergers have prompted several banks to seek partners. Commercial banks39 published average capital adequacy ratio was 16.2 percent on a consolidated basis as of March 2017, above the ten percent statutory limit and the eight percent internationally accepted benchmark. Philippine banks had limited direct exposure to investment products issued by troubled financial institutions overseas. Fiscal and regulatory incentives to encourage the sale of non-performing assets to private asset management companies have promoted a resilient banking sector in the Philippines. By September 2017, non-performing loans and non-performing asset ratios of commercial banks were estimated at 3.1 percent and 3.7 percent. The General Banking Law of 2000 paved the way for the Philippine banking system to phase in these internationally accepted, risk-based capital adequacy standards. In 2007, the Philippines adopted the Basel 2 capital adequacy framework, expanding coverage from credit and market risks to include operational risks and enhancing the risk-weighting framework. The Central Bank has announced that the Philippines will adopt Basel 3 capital adequacy rules on a staggered basis starting in 2017. Other important provisions of the General Banking Law strengthened transparency, bank supervision, and bank management. However, some impediments remain to more effective bank supervision and prompt corrective action, including: stringent bank deposit secrecy laws the need to secure the affirmative vote of at least five Monetary Board members before a bank can be examined within a period of less than 12 months from last examination and, inadequate liability protection for Central Bank officials and bank examiners. Credit is generally granted on market terms and foreign firms are able to obtain credit from the domestic market. However, some laws require financial institutions to set aside loans for certain preferred sectors, which may translate into increased costs andor credit risks. According to the Agri-Agra Law, banks must set aside 25 percent of loanable funds for agricultural credit, with at least ten percent earmarked for programs such as improving the productivity of farmers to whom land has been distributed under agrarian reform programs. In early 2017, a new law tightened alternative modes of compliance -- which used to include low-cost housing, educational and medical developmental loans -- to those directly targeting the agricultural sectors. Recent investor experience in alternative modes of compliance raise questions about implied guarantees by the Philippine government and investors are cautioned to exercise due diligence. Banks are also required to set aside ten percent of their loans for micro-, small - and medium-sized borrowers, 80 percent of which should be earmarked for micro and small enterprises. While most domestic banks are able to comply with these mandatory lending requirements, operating restrictions make it more difficult for foreign banks to comply. Direct lending by non-financial government agencies is limited to the Department of Social Welfare and Development, focusing on the poorest areas not being served by micro-finance institutions. Anti-Money Laundering and Information Exchange The Paris-based Financial Action Task Force (FATF) continues to monitor implementation of the Philippine Anti-Money Laundering Act through the Anti-Money Laundering Council. Covered institutions include foreign exchange dealers and remittance agents, which are required to register with the Central Bank and must comply with various Central Bank regulations and requirements related to the implementation of the Philippines39 anti-money laundering law. The Philippines is a member of the Egmont Group, the international network of financial intelligence units and the Asia Pacific Group on Money Laundering. The Asia Pacific Group on Money Laundering conducted a comprehensive peer review of the Philippines in September 2008. In October 2017, FATF included the Philippines in a list of jurisdictions with ldquostrategic deficienciesrdquo that posed potential risks to the international financial system. FATF and the Philippine government have agreed on an action plan to address these deficiencies by December 2017, and legislation is pending before the Philippine Congress. Following the signing into law of the Exchange of Information on Tax Matters Act in March 2017 and the issuance of implementing rules and regulations in September 2017, the Organization for Economic Cooperation and Development (OECD) upgraded the Philippines from its tax standards ldquoblacklistrdquo to the list of jurisdictions that ldquohave substantially implemented the internationally agreed tax standardrdquo for the exchange of information. All Central Bank-supervised entities are required to adopt Philippine Financial Reporting Standards and Philippine Accounting Standards, patterned after International Financial Reporting and Accounting Standards issued by the International Accounting Standards Board (IASB). The SEC requires an entityrsquos Chairman of the Board, Chief Executive Officer, and Chief Financial Officer to assume management responsibility and accountability for financial statements. The SEC reviews and revises guidelines, as necessary, on the accreditation of auditing firms and external auditors to promote quality control and discipline in the financial reporting environment. The SEC requires listed companies to disclose to the SEC any material external audit findings within five days of receipt. Material findings include fraud or error, losses or potential losses aggregating 10 percent or more of company assets, indications of company insolvency, and internal control weaknesses that could result in financial reporting problems. Effective January 1, 2017 the Philippines adopted the International Financial Reporting Standards for Small - and Medium-Sized Entities. Except for limited circumstances, the standards apply to enterprises which do not have public accountability and with total assets from 3 million to 350 million pesos or liabilities from 3 million to 250 million pesos. A number of local accountancy firms are affiliated with international accounting firms, including KPMG, PricewaterhouseCoopers, Ernst amp Young, Deloitte, BDO, and Grant Thornton. Outward capital investments from the Philippines do not require prior approval from the Central Bank if: the outward investments are funded by withdrawals from foreign currency deposit accounts the funds to be invested are not purchased from the banking system or foreign exchange corporations that are subsidiaries of banks or, the funds to be invested do not exceed 60 million per investor or per fund per year (if sourced from the banking system or bank-affiliated foreign exchange corporations). Outward investments exceeding 60 million that are funded with foreign exchange purchases are subject to prior Central Bank approval. Qualified investors, such as mutual funds, pension or retirement funds, insurance companies, may apply for a higher annual outward investment limit. All outward investments of banks in subsidiaries and affiliates abroad require prior Central Bank approval. Foreign exchange proceeds from profits and capital divestments from such outward investments should be inwardly remitted and sold for Philippine pesos within 30 banking days from receipt of the funds abroad. Regulations do not require inward remittance of these proceeds if intended for reinvestment overseas, provided the funds are reinvested abroad within 30 banking days from receipt. Competition from State-Owned Enterprises Private and state-owned enterprises (SOEs) generally compete equally, with some clear exceptions. The governmental National Food Authority has, at times, been the sole legal importer of rice, though in 2008 the GPH ceded about half of all rice importation to the private sector. In the insurance sector, only the state-owned GSIS may provide coverage for government-funded projects, although the industry was opened up to 100 percent foreign ownership in 1994. All BOT projects and privatized government corporations must fulfill all insurance and bonding requirements from the GSIS, at least in proportion to GPH holdings. Besides confronting direct competition from SOEs in some limited areas, the GPH has intervened to directly cap or control pricing in some additional private markets. In the wake of the 2009 typhoons, the Philippine government imposed temporary price controls on gasoline and a basket of basic goods and services. Under Philippine law, the President may freeze prices on basic goods and services for a period of 90 days under a state of emergency. The Philippine government39s privatization program is managed by the Privatization Management Office under the Department of Finance. Apart from restrictions under the Foreign Investment Negative List, there are no regulations that discriminate against foreign buyers. The bidding process appears to be transparent, though the Supreme Court has twice overturned high profile privatization transactions to foreign buyers. The Power Sector Assets and Liabilities Management Corporation is mandated to sell 70 percent of the government-owned National Power Corporationrsquos (NPC) generating assets and transfer 70 percent of NPC-Independent Power Producer contracts to private companies. The Philippine government has opened access and retail competition through several measures, including: the unbundling of rates removal of cross-subsidies establishment of the Wholesale Electricity Spot Market and, privatization of 92 percent of NPCrsquos generation assets (as of mid-2017). Corporate Social Responsibility Although no law requires corporate social responsibility (CSR) programs, they constitute a basic and fundamental feature of most significant business operations in the Philippines. U. S. companies report strong and favorable response to CSR programs among employees and within local communities. Many CSR programs focus on poverty alleviation efforts, promotion of the environment, health initiatives, and education. In some cases, the GPH has compelled its own entities to engage in CSR. For example, the Philippine Bases Conversion and Development Authority is mandated to declare portions of its property in Fort Bonifacio and surrounding areas as low-cost housing sites. Terrorist groups and criminal gangs operate in some regions of the country. The Department of State publishes a consular information sheet at (travel. state. gov) and advises all Americans living in or visiting the Philippines to review this information periodically. The Department of State has issued a travel warning to U. S. citizens contemplating travel to the Philippines at ( travel. state. govtravelcispatwtwtw2190.html ). The Department strongly encourages visiting and resident Americans in the Philippines to register with the Consular Section of the U. S. Embassy in Manila through the State Department39s travel registration website, ( travelregistration. state. gov ). Arbitrary, unlawful, and extrajudicial killings by elements of the security services and political killings, including killings of journalists, by a variety of actors continued to be major problems. On May 10, 2017, approximately 75 percent of registered citizens voted in elections for president, both houses of congress, and provincial and local governments. The election was generally free and fair, but was marked by some violence and allegations of vote buying and electoral fraud. Peace talks between the government and the Mindanao-based insurgent group Moro Islamic Liberation Front (MILF) are ongoing. The peace process had stalled in August 2008 after the Supreme Court placed a temporary restraining order on the signing of a preliminary peace accord and some MILF members attacked villages in central Mindanao and killed dozens of civilians in response. The ensuing fighting between government and insurgent forces caused both combat and civilian deaths and the displacement of hundreds of thousands of people. In July 2009, both sides instituted ceasefires, ending nearly one year of intense fighting and enabling the parties to discuss a return to the negotiating table. The New People39s Army (NPA), the military arm of the Communist Party of the Philippines, is responsible for general civil disturbance through assassinations of public officials, bombings, and other tactics. It frequently demands quotrevolutionary taxesquot from local and, at times, foreign businesses and business people. To enforce its demands, the NPA sometimes attacks infrastructure such as power facilities, telecommunications towers, and bridges, mostly in Mindanao. The National Democratic Front, an umbrella organization which includes the Communist Party and its allies, has engaged in intermittent peace talks with the Philippine government. It has not targeted foreigners in recent years, but could threaten U. S. citizens engaged in business or property management activities. Terrorist groups, including the Abu Sayaaf Group and Jemarsquoah Islamiyah, periodically attack civilian targets in Mindanao, kidnap civilians for ransom, and engage in armed skirmishes with the security forces. Corruption is a pervasive and longstanding problem in the Philippines. President Aquino, who assumed the presidency in July 2017 on a good governance platform, has vowed to combat corruption as critical to inclusive growth and poverty reduction. Early efforts to reign in corruption by the administration have improved public perception, but are frequently overshadowed by high-profile cases reported in the Philippine media. The Philippines is not a signatory of the Organization for Economic Cooperation and Development Convention on Combating Bribery. It has ratified the UN Convention against Corruption in 2003. The Philippine Revised Penal Code, Anti-Graft and Corrupt Practices Act, and Code of Ethical Conduct for Public Officials aim to combat corruption and related anti-competitive business practices. The Office of the Ombudsman investigates and prosecutes cases of alleged graft and corruption involving public officials, with the quotSandiganbayan, quot or anti-graft court, prosecuting and adjudicating those cases. The Presidential Anti-Graft Commission assists the President in coordinating, monitoring, and enhancing the governmentrsquos anti-corruption efforts. The Commission also investigates and hears administrative cases involving presidential appointees in the executive branch and government-owned and controlled corporations. Solicitingaccepting and offeringgiving a bribe are criminal offenses, punishable by imprisonment (6-15 years), a fine, andor disqualification from public office or business dealings with the government. Bilateral Investment Agreements As of November 2017, the Philippines had signed bilateral investment agreements with Argentina, Australia, Austria, Bahrain, Bangladesh, Belgium, Luxembourg, Burma, Canada, Cambodia, Chile, China, the Czech Republic, Denmark, Equatorial Guinea, Finland, France, Germany, India, Indonesia, Iran, Italy, Japan, Republic of Korea, Kuwait, Laos, Mongolia, Netherlands, Pakistan, Portugal, Romania, Russian Federation, Saudi Arabia, Spain, Sweden, Switzerland, Syria, Taiwan, Thailand, Turkey, United Kingdom, Venezuela, and Vietnam. The Philippines does not have a bilateral investment agreement with the United States. Bilateral Tax Treaty The Philippines has a tax treaty with the United States for the purpose of avoiding double taxation, providing procedures for resolving interpretative disputes, and enforcing taxes of both countries. The treaty also encourages bilateral trade and investments by allowing the exchange of capital, goods and services under clearly defined tax rules and, in some cases, preferential tax rates or tax exemptions. Pursuant to the most favored nation clause of the Philippine-United States tax treaty, U. S. recipients of royalty income qualify for the preferential rate provided in the Philippine-China tax treaty. Accordingly, a ten percent tax rate applies with respect to most royalties. A 15 percent tax applies on the remittance of profits by Philippine branches of U. S. companies to their head office and dividends remitted by Philippine subsidiaries of U. S. companies to their parent companies. A foreign company without a branch office that renders services to Philippine clients is considered a permanent establishment, and is liable to pay Philippine taxes if its personnel stay in the country for more than 183 days for the same or a connected project in a twelve-month period. However, BIR rulings on the taxation of permanent establishments have been inconsistent on whether to treat them as resident or non-resident foreign corporations. Philippine courts reportedly have denied a number of claims for refund of tax payments in excess of rates prescribed under applicable tax treaties for failure to secure tax treaty relief rulings. An entity must obtain a tax treaty relief ruling from the BIR in order to qualify for preferential tax treaty rates and treatment. However, according to several tax lawyers, the volume of tax treaty relief applications has resulted in processing delays, with most applications reportedly pending for over a year. Recently, the BIR appears to be altering its position on taxing gains through liquidation. Previously, it had consistently applied Philippine-United States Tax Treaty provisions exempting foreign companies from capital gains and corporate income tax on profit from the redemption and sale of shares by Philippine affiliatessubsidiaries being liquidated. However, a 2009 ruling involving a foreign company held that such gains were subject to corporate income tax, but not to capital gains tax in another case, the BIR ruled that the gains were subject to tax on dividends. The companies and other interested parties have filed position papers with the Department of Finance to contest these rulings. Although the BIR has yet to finalize long-pending draft regulations on transfer pricing, it has declared that, as a matter of policy, it subscribes to the OECD39s transfer pricing guidelines. Currently, the Tax Code authorizes the BIR to allocate income or deductions among related organizations or businesses, whether or not organized in the Philippines, if such allocation is necessary to prevent tax evasion. Domestic and foreign resident companies subject to regular income tax may claim an optional standard deduction of up to 40 percent of gross income, in lieu of itemized deductions. Companies may opt for either the optional standard deduction or itemized deductions in filing their quarterly income tax returns. However, in the final consolidated return for the taxable year, companies must make a final choice between standard or itemized deductions for the purpose of determining final taxable income for the year. The BIR has issued recent rulings involving non-U. S. investors asserting that the stock transfer tax is an ad valorem, transactional tax -- different from the capital gains tax -- and therefore applies on the sale of publicly-listed shares in the stock exchange. These rulings contradicted previous exemptions from the stock transfer tax by virtue of bilateral tax treaty provisions exempting foreign nationals from tax on capital gains. This interpretation could serve as a precedent for the BIR in resolving similar tax treaty relief applications by U. S. and other foreign investors. BIR rules and regulations for tax accounting have not been fully harmonized with the Philippine Financial Reporting Standards, which are patterned after standards issued by the International Accounting Standards Board. The disparities between reports for financial accounting and tax accounting purposes can be an irritant between taxpayers and tax collectors. The BIR requires taxpayers to maintain records reconciling figures presented in financial statements and income tax returns. OPIC and Other Investment Insurance Programs The Philippine government currently does not provide guarantees against losses due to inconvertibility of currency or damage caused by war. The Overseas Private Investment Corporation can provide U. S. investors with political risk insurance for expropriation, inconvertibility and transfer, and political violence, based on its agreement with the Philippines. The Philippines is a member of the Multilateral Investment Guaranty Agency. Managers of U. S.-based companies widely report that Philippine labor is relatively low cost, motivated, and possesses strong English language skills. As of October 2017, the Philippine labor force was estimated at 36.5 million, with an unemployment rate at 7.1 percent. This figure includes employment in the informal sector and does not capture the substantial underemployment in the country. Multinational managers report that total compensation packages tend to be comparable with those in neighboring countries. In the call center industry, the average labor cost is between 1.60 and 1.90 per hour. Regional Wage and Productivity Boards meet periodically in each of the country39s 16 administrative regions to determine minimum wages, with the National Capital Board setting the national trend. As of January 2017, the non-agricultural daily minimum wage in the National Capital Region is 404 pesos (approximately 9), although some private sector workers receive less. Cost of living allowances are given across the board. Most other regions set their minimum wage significantly lower than Manila. The lowest minimum wage rates were in the Southern Tagalog Region, where daily agricultural wages were 190 pesos (4.21). Regional Boards may grant various exceptions to the minimum wage, depending on the type of industry and number of employees at a given firm. Literacy in both English and Filipino is relatively high, although there have been concerns in the business and education communities that English proficiency was on the decline. The Department of Education, under its National English Proficiency Program, continues its efforts to strengthen English language training, including school-based mentoring programs for public elementary and secondary school teachers aimed at improving their English language skills. Violation of minimum wage standards is common, especially non-payment of social security contributions, bonuses, and overtime. In 2009, President Arroyo signed a law offering relief for companies that had not been paying social security taxes for their employees, as an incentive to resume their social security remittances. Philippine law also provides for a comprehensive set of occupational safety and health standards, although workers do not have a legally-protected right to remove themselves from dangerous work situations without risking loss of employment. The Department of Labor and Employment (DOLE) has responsibility for safety inspection, but a severe shortage of inspectors makes enforcement extremely difficult. The Philippine Constitution enshrines the right of workers to form and join trade unions. The mainstream trade union movement recognizes that its members39 welfare is tied to the productivity of the economy and competitiveness of firms frequent plant closures have made many unions even more willing to accept productivity-based employment packages. The trend among firms of using temporary contract labor continues to grow. In 2017, DOLE reported eight strikes involving 3,034 workers. The DOLE Secretary has the authority to end strikes and mandate a settlement between the parties in cases involving the national interest, which can include cases where companies face strong economic or competitive pressures in their industries. In 2017, there were 135 registered labor federations and 16,132 private sector unions. The 1.7 million union members represented approximately 4.7 percent of the total workforce of 36.5 million. Mainstream union federations typically enjoy good working relationships with employers. Special Economic Zones (ecozones) often offer on-site labor centers to assist investors with recruitment. These centers coordinate with the Department of Labor and Employment (DOLE) and Social Security Agency, and can offers services such as mediating labor disputes. Although labor laws apply equally to ecozones, unions have noted some difficulty organizing inside them. There have been some reports of forced labor in connection with human trafficking in the commercial sex, domestic service, agriculture, and fishing industries. The Philippines is a signatory to all International Labor Organization (ILO) conventions on worker rights, but has faced challenges enforcing them. Unions allege that companies or local officials use illegal tactics to prevent them from organizing workers. The quasi-judicial National Labor Relations Commission reviews allegations of intimidation and discrimination in connection with union activities. In September 2009 the government cooperated with a high-level ILO mission to investigate labor rights violations in the country. The ILO mission noted issues relating to violence, intimidation, threat, and harassment of trade unionists and the absence of convictions in relation to those crimes. It also observed obstacles to the effective exercise in practice of trade union rights. In response to ILO mission recommendations, the government constituted the Tripartite Industrial Peace Council (TIPC) to monitor the application of international labor standards and has proposed several legislative measures to address weaknesses in the Labor Code. Foreign Trade ZonesFree Ports Enterprises enjoy preferential tax treatment when located in export processing zones, free trade zones, and certain industrial estates, collectively known as economic zones, or quotecozones. quot Enterprises located in ecozones are considered to be outside the customs territory and are allowed to import capital equipment and raw material free from customs duties, taxes, and other import restrictions. Goods imported into free trade zones may be stored, repacked, mixed, or otherwise manipulated without being subject to import duties and are exempt from the GPH39s Selective Pre-shipment Advance Classification Scheme. While some ecozones have been designated as both export processing zones and free trade zones, individual businesses within them are only permitted to receive incentives under a single category. Among the most compelling incentives for firms in export processing and free trade zones are: income tax holiday for a maximum of eight years exemption from real estate taxes for certain machinery for the first three years of operation of such machinery a five percent flat tax rate on gross income in lieu of all national and local income taxes, after expiration of the income tax holiday tax - and duty-free importation of capital equipment, raw materials, spare parts, supplies, breeding stocks, and genetic materials simplified import and export procedures remittance of earnings without prior approval from the Central Bank domestic sales allowance equivalent to 30 percent of total export sales permanent resident status for foreign investors and immediate family members exemption from local business taxes and, simplified import and export procedures. Philippine Economic Zone Authority The Philippine Economic Zone Authority (PEZA) manages three government-owned export-processing zones (Mactan, Baguio, and Cavite) and administers incentives to firms in about 230 privately-owned and operated zones, technology parks and buildings. Any person, partnership, corporation, or business organization, regardless of nationality, control andor ownership, may register as an export processing zone enterprise with PEZA. PEZA administrators have earned a reputation for maintaining a clear and predictable investment environment within the zones of their authority. PEZA reported an increase of 32 percent in investments in 2017, compared to the previous year. Information technology parks located in the National Capital Region may serve only as locations for service-type activities, with no manufacturing operations. PEZA defines information technology as a collective term for various technologies involved in processing and transmitting information, which include computing, multimedia, telecommunications, and microelectronics. Bases Conversion Development Authority The ecozones located inside former U. S. military bases are independent of PEZA and subject to the Bases Conversion Development Authority. The principal converted bases are the Subic Bay Freeport Zone (Subic Bay, Zambales) and the Clark Special Economic Zone (Angeles City, Pampanga). Other converted properties include John Hay Special Economic Zone Poro Point Special Economic and Freeport Zone and, Morong Special Economic Zone (Bataan). These ecozones offer incentives comparable to those offered by PEZA. Additionally, both Clark and Subic have their own international airports, power plants, telecommunications networks, housing complexes, and tourist facilities. The Phividec Industrial Estate (Misamis Oriental, Mindanao) is governed by the Phividec Industrial Authority, a government-owned and controlled corporation. Incentives available to investors are comparable to those offered by PEZA, and also include special low rates for electrical power and land lease. Two lesser-known ecozones are the Zamboanga City Economic Zone and Freeport (Zamboanga City, Mindanao) and the Cagayan Special Economic Zone and Freeport (Santa Ana, Cagayan Province). The incentives available to investors in these zones are very similar to PEZA incentives but administered independently. In addition to offering export incentives, the Cagayan Economic Zone Authority is also authorized by law to grant gaming licenses. Foreign Direct Investment Statistics The Philippine SEC, BOI, National Economic and Development Authority (NEDA), and the Central Bank each generate direct investment statistics. The Central Bank records actual investments based on the balance of payments methodology, readily available in U. S. dollar terms. Central Bank data are widely used as a reasonably reliable indicator of foreign investment stock and foreign investment flows. The figures in Table 1 below refers to foreign direct investment (FDI) stock reported by the Central Bank, based on the Philippine international investment position using the balance of payments methodology. Disaggregation of net FDI flows by country and by industry is presented in Tables 2 and 3, respectively. Table 4 provides a list of top foreign investors in the Philippines, using the latest available published information from the SEC. Table 1: Foreign Direct Investment Stock (US Millions)

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