Investment projects of FEZ residents must undergo expertise - KGC of Vitebsk region

Investment projects of residents of a free economic zone (FEZ) must undergo an examination. This opinion was expressed today to journalists by the Deputy Chairperson of the Vitebsk Regional Committee for State Control, Yulia Avkhukova, in response to a question from a correspondent of BELTA.

An expanded meeting of the collegium of the Regional Committee for State Control was held in Vitebsk today, which reviewed the effectiveness of the administration and residents of the "Vitebsk" free economic zone.

"The number of residents of the "Vitebsk" FEZ has decreased by 20% over the past two years, and not a single new resident has been registered in the first half of 2014. There are very few effective and interesting projects, and those that are declared are not being implemented within the established deadlines," stated Yulia Avkhukova, emphasizing that 80% of the current residents do not fulfill the agreements on the terms of activity in the FEZ. "At the same time, they enjoy benefits on customs duties, value added tax, profit, property, and land taxes," she said.

Employees of the Regional Committee for State Control have thoroughly studied the activities of 18 residents who have been failing to comply with the terms of their FEZ registration agreements for a long time. "It was established that 4 of them are not implementing an investment project at all, and the remaining 14 are not meeting the established indicators. At the same time, they have received Br100 billion in state support," emphasized the Deputy Chairperson of the Vitebsk Regional Committee for State Control.

According to Yulia Avkhukova, to avoid such facts, it is necessary to adhere to the initially established project implementation deadlines and not allow their extension, as is currently happening, and also to introduce mandatory examination for such projects. "Investment projects implemented at the expense of state funds undergo examination in the Ministry of Economy, while in FEZs, documents operate on a declarative principle. Hence the failure to meet indicators," she is convinced. It would be advisable to review the current agreements and organize work on mutually beneficial terms.

At the board meeting, it was emphasized that, in accordance with the legislation, free economic zones are created to promote the socio-economic development of the country, to attract investments in the creation and development of export-oriented and import-substituting industries based on new and high technologies.

A number of FEZ residents successfully use the benefits and preferences granted to them by the state, produce products in demand abroad, have a stable source of foreign exchange earnings, create new jobs, provide a decent wage level, and receive significant profits from which they make payments to the budget. These include enterprises such as OJSC "Vitebskiye Kovry", OJSC "Design Bureau "Display", IP "VIK - Animal Health", LLC "Allianceplast", UP "Polymerconstruction", IOOO "Prodexim".

At the same time, during the inspection, numerous systemic shortcomings and miscalculations were identified in the organization of work of the administration and FEZ residents. In particular, the administration failed to fulfill the socio-economic development indicators set by the Vitebsk Regional Executive Committee. The majority of residents do not fulfill the indicators stipulated by the agreements on the terms of activity in the FEZ. The indicator for attracting investment in fixed assets was achieved through budget funds, preferential loans, and funds from state investment funds. The investment projects of residents do not always provide for the creation of export-oriented and import-substituting industries based on new and high technologies.