Social entrepreneurship bill out for consultation
Moscow, 10.08.2016
The Ministry of Economic Development has drafted a Bill to enshrine the concept of “social entrepreneurship” within federal legislation. It seeks to amend laws on the “Protection of competition” and on the “Development of Small and Medium Sized Enterprises (SMEs) in the Russian Federation”. The text has been published on the official federal draft laws and regulations portal: https//regulation.gov.ru.
The aim of the Federal Bill on “Amending separate Russian Federation legislative acts (in particular, strengthening the definition of “social entrepreneurship”)” is to implement the provisions of the Development Strategy for SMEs in the Federation up until 2030 as approved by the Russian Government, and to keep to the “road map” to support NGO access to the provision of social services to the public.
The Bill for developing the Strategy and “road map” highlights social entrepreneurship as a separate priority work area for SME entities, as well as identifying specific forms and types of social entrepreneurship support. In particular, it explains the use of criteria for classifying SME entities as entities of social entrepreneurship such as companies that specialise in the production of goods and in the provision of services to the disadvantaged or that create jobs for this group of people, according to the Bill’s Explanatory Note.
Decisions on specific cases for classifying SME entities as entities of social entrepreneurship will be taken by the Russian Government. It is envisaged that information on social entrepreneurship entities will be included on a single SME register maintained by the Federal Tax Service.
In addition, the Bill includes a separate article which defines common principles for providing support for social entrepreneurship entities. Such support will be given by State and local Government agencies through the creation and development of a specialised organisational support infrastructure for social entrepreneurship entities by providing premises at preferential rates, establishing bank franchises, implementing training and education measures, and organising social entrepreneurship entities’ access to the discharge the functions of social service provision to the public.
The Bill aims to amend the federal law on the “Protection of competition” so as to provide extra material support to social entrepreneurs. It is envisaged that social entrepreneurs will be able to enter into lease agreements for State or municipal property without having to go through a competitive tendering exercise.
“Strengthening the definition of “social entrepreneurship” will enable measures to be developed that support entities of social entrepreneurship through sectoral federal laws and legislation on the procurement of goods, works and services that meet the needs of the State sector”, according to the Bill’s Explanatory Note. The Bill is in line with the principles of the Eurasian Economic Union agreement, as well as complying with the provisions of other international protocols signed by Russia, says its authors.
52 regions are currently involved in implementing support measures for social entrepreneurship. In 2015, 32 Russian social entrepreneurship entities attracted money from the federal budget, this year 29. Total funding provided for social entrepreneurship measures since 2012 amounts to 1.5 billion roubles, according to the Ministry of Economic Development.
The public consultation on the social entrepreneurship Bill via the regulation.gov.ru website will end on 23 August. Special permission will be required to make changes to the Bill. Experts say that the basis of the draft is taken from a Bill presented to the Duma in 2015 by senators Galina Karelova, Lyudmila Bokova and Rafael Mardanshin, with the support of the Russian Union of Industrialists and Entrepreneurs and its President, Alexander Shokhin.
Author: Yulia Vyatkina
