#15 - JRL 7258
gateway2russia.com
New Opportunities in a "Bull Market" in Russia
Stephan Wasylko, Minister Counselor for Commercial Affairs of Embassy of the United States of America, U.S. & Foreign Commercial Service

- What were your first impressions of Russia when you started your work here?

- I had very optimistic impressions. I worked in this region some time ago and was coming back in 2000 at the verge of the new era with a new President in Russia. Soon after my arrival the Presidents of the United States and Russia had their first meeting in Ljubljana in 2001, and our prospects for increasing economic cooperation, trade and investment between our two country's has been improving ever since then. In my position as the Senior Commercial Officer at the U.S. Embassy in Russia, my primary goal is to help American companies do more business in Russia and I remain very optimistic about the current prospects for U.S. companies in Russia.

- How can you characterize the changes carried out in economy, political system and political life since that time?

- There has certainly been significant progress made in the area of Russia's economic reforms, such as tax reform, labor law reform, land reform and a long list of the import measures taken by the Duma and reinforced by the President that really add greater transparency and stability to the economic environment. Plus the general economic recovery in Russia with four years of strong economic growth has registered quite loudly and clearly among American business circles, particularly when the global economy at large has not been performing quite as well. So U.S. companies that lived through the crash in 1998 have now basically recovered ground in the last couple of years and have started to register very impressive growth again. Many who left this market in 1998 now are coming back to Russia to re-establish themselves, and the positive news about the Russian economy is creating interest among other U.S. companies who are coming here for the very first time. Certainly major events such as BP-TNK merger resonate very loudly around the world and as a consequence more and more U.S. companies are contacting us for market information about Russia. The U.S. Embassy's commercial section is talking to more and more investors from the United States who are seeking to explore new business opportunities in what is clearly a "bull market" in Russia.

- What are the main obstacles on the way towards tighter cooperation between Russia and America nowadays?

- I think, there are several areas that really continue to need improvement and the attention of the Russian Government and the Duma to make Russia a much more attractive investment target for the U.S. medium-sized and smaller companies and also to benefit Russian companies. This includes the a need for greater banking reform, also significant reform of the legal system is still required. Implementation of the Russian laws is still an issue. We continue to have a number of longstanding dispute cases that have not been resolved and they continue to be deterrent for potential investors and an impediment to rapid expansion of our commercial relationship. We spend a considerable amount of time trying to resolve these cases, with limited results. For example, we have a case in Murmansk involving a U.S. investor, Kola Salmon that has been actually adjudicated by an international arbitration court, by the supreme court of Russia, and a number of different courts, all ruling in favor of the U.S. investors, however, all these court rulings have not been enforced. In this particular case we have witnessed endless stalling, endless unjustified appeals and no enforcement of court rulings. It is cases like these that continue to get into the news and cause serious concern about the Rule of Law and the enforcement of contracts in Russia, which continues to be major concerns. Also issues of corruption, red tape, bureaucracy still exist. But net/net, the general trend has been very positive. We continue to encourage more and more U.S. companies to come to Russia to help push the process of modernization and reform. And as the environment continues to improve we are confident that the economic relationship discussed by Presidents Putin and Bush and that they want to help build between the two countries is eventually going to be realized.

Interviewed by Sergey Chinyaev