Russia

HIGH RISK for enterprise

Economic risk
Business environment risk
Political risk
Commercial risk
Financing risk

Economic risk
Business environment risk
Political risk
Commercial risk
Financing risk

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GDP

USD1483.5bn (World ranking 10, World Bank 2020)

Population

144.1mn (World ranking 9, World Bank 2020)

Form of state

Federation

Head of government

Vladimir Vladimirovich PUTIN (President)

Next elections

2024, Presidential

Abundant natural resources, in particular oil and gas
More than 20 years of continued current account surpluses (including the crisis years 2009, 2015-2016 and 2020)
Low public debt
Comfortable foreign exchange reserves

Far-reaching structural reforms still outstanding
High vulnerability to global oil price shocks
Prone to capital flight
Exchange rate remains vulnerable to volatility and sudden depreciation
Poor rule of law and high level of perceived corruption
Geopolitical risks: Conflict with Ukraine and serious dispute with the West over that conflict (including sanctions and counter-sanctions). Also involved in Syria crisis

Trade structure by destination/origin

(% of total, annual 2020)

Exports	Rank	Imports
China 14.3%	1	23.2% China
Netherlands 7.3%	2	11.0% Germany
United Kingdom 6.7%	3	5.6% Belarus
Germany 5.4%	4	4.0% Italy
Belarus 4.6%	5	4.0% United States

Trade structure by product

(% of total, annual 2020)

Exports	Rank	Imports
Petroleum, petroleum products and related materials 42.1%	1	9.2% Road vehicles
Iron and steel 7.6%	2	7.9% Other industrial machinery and parts
Non-ferrous metals 6.1%	3	7.0% Electrical machinery, apparatus and appliances, n.e.s.
Coal, coke and briquettes 4.4%	4	4.9% Specialised machinery
Cereals and cereal preparations 3.3%	5	4.9% Telecommunication and sound recording apparatus

The payment behavior of domestic firms is often poor and the businesses themselves have complex legal structures. Payment terms are not fully regulated and Russian counterparties try to renegotiate conditions, requesting postponement of payments or ignoring contractual obligations.

Low
Medium
Sensitive
High

Payments
Court proceedings
Insolvency proceedings

Payments
Court proceedings
Insolvency proceedings

Courts can be fairly efficient when a debt is certain and undisputed, but legal proceedings may otherwise be complex (no default judgments, no fast track proceedings above EUR 4,000 even if the debt is certain and undisputed) and cannot be avoided through Alternative Dispute Resolution methods(which is not relied upon) or through foreign courts (since Russian courts apply extremely strict jurisdictional exclusivity rules).

Insolvency proceedings ought to be avoided. A debt renegotiation mechanism isindeed available, although it is unused in practice. Liquidation is therefore the default procedure, but unsecured creditors would have very limited chances of recovering their debt.