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Vegas Lex Supports Special Investment Contract Between Russian Government and CLAAS Group

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Vegas Lex has prepared Russia’s first “federal special investment contract” for the Russian Federation and the Russian subsidiary of Germany's CLAAS group of companies.

CLAAS is a German engineering group and manufacturer of agricultural machinery, headquartered in Harsewinkel (Nordrhein-Westfalen). The company, which employs more than 11,000 people, reported a turnover of EUR 3.8 billion in 2013. Vegas Lex reports that the company's Krasnodar plant, which modernized at the end of 2015, "is the most up-to-date agricultural engineering facility in Europe."

On June 17, 2016, CLAAS and the Russian Federation (represented by the country’s Ministry of Industry and Trade) entered into the country's first federal special investment contract (SIC) at the St. Petersburg International Economic Forum. According to a Vegas Lex press release, the law firm "prepared the required documents, and [was] directly involved in the negotiations for the conclusion and subsequent implementation of the SIC in the interests of CLAAS."

As the result, CLAAS received the official status of Russian supplier of agricultural machinery, which means that the purchase of its products is entitled to financial support from the state. CLAAS, in turn, committed itself to moving more of its technological operations to local industrial facilities and to invest an additional RUB 750 million in its Russian assets.

“All we want is to work on an equal footing with other leading farm equipment manufacturers,” said Ralf Bendisch, General Director of CLAAS and German Honorary Consul in Krasnodar. “We have gone a long way to ensure that the CLAAS plant in Krasnodar is recognized by a Russian manufacturer, and we believe we have earned this recognition. Of the 45 suppliers we use, only seven are outside the Russian Federation. We pay taxes to the Russian budget and have actually remitted over RUB 2 billion to budgets of different levels, raising the profitability of Russian agricultural businesses. Higher production volumes and lower prices will only increase the benefits for the Russian economy."

According to Vegas Lex, Russia's Ministry of Industry and Trade has recently used the CLAAS project and SIC consultations with other foreign manufacturers (including Mazda Motor, DMG Mori, KOVOSVIT, Hyundai Motor CIS, among others) to draft the necessary amendments to relevant Government Resolutions to clarify the rules for concluding, modifying, and terminating a SIC, as well as the SIC template to be used.

The Vegas Lex team was led by Partner and Head of Special Projects Maxim Grigoryev.

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