Russia prepares new rules for the localization of shipbuilding

Moscow, Russia (Ports Europe) June 1, 2020 - The Ministry of Industry and Trade has prepared a revised Resolution 719 (import substitution) to include aspects of shipbuilding. The resolution covers certain products and technologies which should be sourced from within the Russian Federation and not imported from other countries. It is designed to promote local manufacturing industries and limit imports of foreign goods, including by state and municipal procurement. The revised resolution now includes a list of operations and equipment relevant to shipbuilding, a move which will benefit Russian ports. The various aspects of ship and ship equipment are allocated points in a system. If they have a certain number of points, companies will have access to subsidised interest rates on loans and recycling grants, a form of state support for locally produced items. The highest number of points is assigned to the floating unit ballast system (700 points), the main power plant (450 points), hold caps (375 points), fire extinguishing equipment (350 points), floating pontoon counterweight (300 points), and sanitary equipment and equipment for wardrooms, towing winches (250 points each), helical-steering columns (245 points), hold refrigeration and freezing machines (230 points), propeller motors and a propeller shaft (200 points each). Additional points can be obtained for cutting metal, manufacturing and sections, as well as the use of Russian raw materials and paints. In order for vessels to be recognized as Russian, the shipyard, as before, must have technical documentation, and the laying of the vessel, the formation of the hull, launching, mooring and sea trials and the delivery of the vessel must take place in the Russian Federation. As a result, since July 2021, at least 1,500 points must be scored for objects of marine and river technology, at least 2,000 points for sea vessels, for mixed vessels (river-sea) and inland navigation, as well as fishing vessels - 2,500 points. Every two years (until 2025), the required level will increase by 500 points. In the future, the Ministry of Industry and Trade is going to increase state support for vessels gaining a large number of points by introducing increasing coefficients for subsidizing interest rates on loans and a recycling grant. The document will be submitted for discussion by the Interdepartmental Working Group, created by the Ministry of Industry and Trade, to prepare proposals for improving legal regulation in the shipbuilding industry. The estimated time of entry into force of the new edition is the end of 2020. JSC United Shipbuilding Corporation (USC) said that it welcomes all the changes aimed at simplifying the procedures for calculating the level of localization in each concrete project for the construction of a vessel for customers, design bureaus and construction plants. USC is an open joint stock company in Russia operating in shipbuilding, repair and maintenance subsidiaries in western and northern Russia, in the country's Far East, to streamline civilian shipbuilding using military facilities. The Russian Fisheries Company (RRPK) also supported the state’s localization strategy, but wants the “requirements for the depth of localization to be formulated taking into account the current and future capabilities of Russian producers – to be are feasible.” Experts claim that the transition to Russian equipment in shipbuilding may threaten the manufacturing standards, which will negatively affect the business. The case is similar to the problems that are faced by all Russian industries, including the key oil and gas business where the use of locally produced equipment to replace Western technologies creates serious issues. Copyright (C) Ports Europe. All Rights Reserved. 2020.

Russia prepares new rules for the localization of shipbuilding

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Russia prepares new rules for the localization of shipbuilding

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All news

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