Financial Journal Vol.13 No.3 2021
Victor L. Dostov, Pavel M. Shust, Pavel V. Pimenov
Prospects for the Development of Payment Institutions in Russia, p. 8-26
The current structure of the Russian payment market is almost ten years old—in the summer of 2011, the Federal Law “On the National Payment System” was adopted. This was the start of a “Russian noncash miracle,” a fantastic increase of non-cash payments in retail turnover. Having solved numerous problems, the new market structure today also needs to be updated. During this decade, the range of challenges faced by the industry and the regulator has changed significantly: those are unbalanced competition, the presence of types of companies with similar functionality on the market, complex licensing procedures, and so on. This article aims to consider a new perspective of market transformation based on the introduction of payment institution into the Russian system. The article analyzes the current and future types of payments; examines in detail the structure of the Russian payment market, its advantages and disadvantages; and describes the payment institution, identifying the risks and prospects of its introduction into Russian banking practice. The authors suggest the feasibility of introducing payment institutions as a more functional version of the payment agents operating in Russia to simplify the complex structure of payment service providers. Payment institutions should become conduits for new payment services (such as PISP and AISP). In addition, payment institutions should be supervised by the regulator. At the same time, the introduction of a new type of companies should not put existing players at a disadvantage. Therefore, existing credit institutions and payment agents should have the ability to easily change their status and transform into payment institutions and back again.
Keywords: payment institutions, revised Payment Services Directive, the payment system of the Bank of Russia, payments as a commercial service, regulation of payment services
JEL: G21, G23
For citation: Dostov V.I., Shust P.M., Pimenov P.V. Prospects for the Development of Payment Institutions in Russia. Financial Journal, 2021, vol. 13, no. 3, pp. 8–26 (In Russ.). https://doi.org/10.31107/2075-1990-2021-3-8-26.
Alexey V. Maslov
Development of New Payment Systems in Russia Similar to a CLS Analogue, p. 27-37
This paper examines the need to create new infrastructural payment and financial institutions in Russia to ensure greater independence of the Russian financial market from any external factors as well as the efficiency of the market for ruble conversion transactions and cross-border payments. The issue of creating an analogue of Continuous Linked Settlement (CLS) in Moscow on the basis of the Interstate Bank, or establishing a new payment system, is highly relevant. Almost seven years ago, on September 22, 2014, the CLS international payment system postponed the inclusion of the Russian ruble in its list of currencies, scheduled for November of that year. The prospect of such inclusion in the coming years remains very weak. In March 2014, VISA and MasterCard payment systems stopped servicing cards of several Russian Banks in retail outlets and ATMs. Amendments to the Federal Law “On the National Payment System” were prepared and promptly adopted in order to provide infrastructure and information support for the processes of making money transfers within Russia. On July 23, 2014, the National Payment Cards System was launched, which was tasked with creating an operational and clearing center for processing domestic transactions with cards of the international payment systems and promoting the national payment card. This experience should be used to create new payment systems in order to secure the efficiency of cross-border payments and currency conversion operations. This step will extend the sphere of ruble convertibility, ensure an increase in the status of the ruble and its importance in international trade, and bring Russia closer to practical steps to create a regional international financial center. To expand settlements in rubles on the part of non-residents, it is necessary to strive to perform trade and financial transactions in rubles and keep ruble savings, which is impossible without a market for ruble conversion transactions. The author examines the prospects for creating a new payment system, in particular with participation of the CIS and BRICS countries.
Keywords: CLS, analogue of CLS in Russia, Interstate Bank, the sphere of ruble convertibility
JEL: G21, G23
For citation: Maslov A.V. Development of New Payment Systems in Russia Similar to a CLS Analogue. Financial Journal, 2021, vol. 13, no. 3, pp. 27–37 (In Russ.). https://doi.org/10.31107/2075-1990-2021-3-27-37.
Sergey V. Shkodinsky, Mihail N. Dudin, Daler I. Usmanov
Analysis and Assessment of Cyberthreats to the National Financial System of Russia in the Digital Economy, p. 38-53
The relevance of the topic of this scientific article lies in the need for a theoretical and practical study of the problem of escalating numbers and quality of cyber threats and attacks committed against institutions of the Russian financial system, implying their safe and sustainable development being ensured in Industry 4.0. The purpose of the article is a comprehensive analysis of cyberthreats facing the national financial system of the Russian Federation in the context of economy digitalization. The subject of scientific research is the processes of ensuring national security of the Russian Federation’s financial system in the digital economy. In the process of research, the authors relied on general scientific methods (observation, comparison, measurement, analysis and synthesis, as well as logical reasoning), specific scientific methods (static analysis, expert assessments, and graphical method), and the foresight method. The validity and reliability of the results of scientific research are ensured by the correctness and rigor of the logic and research scheme construction. Scientific and practical research of Russian and foreign scientists in the field of cybersecurity, digital economy and public administration was used as a methodological and fundamental basis of the study. Various approaches to key categories—digital sovereignty and cyberwar—have been systematized, and it has been established that the most pressing financial challenges and threats to the digital economy of the Russian Federation are as follows: hacker attacks, financial sabotage in the financial market, design and launch of social engineering trojans, infrastructure attacks on IoT (Internet of Things) networks, and sale of hacker tools with open source. The authors have analyzed the number and quality of cyberattacks on domestic financial institutions in 2016–2020; summarized the losses caused by cyberattacks to financial institutions; and identified the main scenarios for the development of cyberthreats and cyberattacks for the national financial system. As the main conclusion, the authors determine that further elaboration of the issues of ensuring financial institution cybersecurity in the digital economy requires justification and implementation of specific programs and activities carried out both by commercial banks within the framework of individual strategies for ensuring digital security, and by authorities and management with positions of ensuring the digital sovereignty of the state.
Keywords: cyberterrorism, financial institutions, digital economy, security of financial transactions
JEL: G21, G28
Funding: The article was prepared within a state assignment of the Market Economy Institute of the Russian Academy of Sciences; the topic of research is “Institutional transformation of economic security in the solution of socioeconomic sustainable development problems of the national economy of Russia.”
For citation: Shkodinsky S.V., Dudin M.N., Usmanov D.I. Analysis and Assessment of Cyberthreats to the National Financial System of Russia in the Digital Economy. Financial Journal, 2021, vol. 13, no. 3, pp. 38–53 (In Russ.). https://doi.org/10.31107/2075-1990-2021-3-38-53.
Victor Ya. Pishchik, Peter V. Alekseev
Cybercrime as a Key Operational Risk of the Payment and Settlement Infrastructure of the Global Financial System
and Approaches to Its Regulation in the Eurasian Economic Union, p. 54-66
One of the key areas in the formation of a single financial market within the Eurasian Economic Union (hereinafter, EAEU or Union) is the development of a single payment space (SPS) of the Union. In the context of growth and transformation of the risks of the payment and settlement infrastructure (PSI) of the global financial system (GFS) (sanctions, systemic, operational and other risks), the problem of effectively neutralizing their impact on the PSI of the EAEU countries is highly topical. The article clarifies the conceptual apparatus associated with the transformation of risks for the PSI of the GFS, and carries out their systematization. Sources of operational risk of the GFS’s PSI, including the threat of an increase in cybercrime, are analyzed. The authors assert that the main type of operational risk for the PSI of the GFS in the future will evidently be cyberattacks using trojans, ransomware viruses and phishing, as well as blocking user access to Internet sites using DDoS attacks. Nowadays, the number of DDoS attacks in Russia has been growing for several years in a row, and this growth may intensify in 2021 due to a number of factors set out in the article. It is indicated that, in Russia and other EAEU countries, growth in cybercrime is one of the main threats to the stable functioning of the national PSI as well as credit and financial systems in general. In this regard, the article substantiates the need to develop regional cooperation on cybersecurity issues within the EAEU using the experience of the European Union, where this issue is paid very serious attention. Besides, it is advisable to build up international cooperation between the countries of the world within the UN in order to enhance the cybersecurity of the GFS’s PSI and ensure the successful development of the SPS in the EAEU.
Keywords: Eurasian Economic Union, single payment space, payment and settlement infrastructure, global financial system, risk transformation, cybercrime, cybersecurity
JEL: F36, G15
Acknowledgments: The article was prepared based on the results of research carried out at the expense of budget funds within a state contract of the Financial University.
For citation: Pishchik V.Ya., Alekseev P.V. Cybercrime as a Key Operational Risk of the Payment and Settlement Infrastructure of the Global Financial System and Approaches to Its Regulation in the Eurasian Economic Union. Financial Journal, 2021, vol. 13, no. 3, pp. 54–66 (In Russ.). https://doi.org/10.31107/2075-1990-2021-3-54-66.
Andrey I. Lukashov
Some Directions of Increasing the Efficiency of Public Administration in the Context of Digitalization, p. 67-75
Building upon the practices of the Treasury of Russia as well as other federal executive agencies, this article presents a new approach aimed at improving the efficiency of public administration through the centralization of general management functions within a given body. The set of general functions across public authorities is largely generic, suggesting that the stage involving the optimization of said functions can be regarded as a preliminary one preceding a full-fledged digital transformation of public administration. Functions associated with budget accounting and budget report formation, material and technical support, and personnel, legal and administrative activities dominate in the structure of both federal and local authorities’ general management functions. At the same time, individual government bodies at both the federal and regional levels are all, to some extent, engaged in the optimization of general functions implementation costs through assigning appropriate powers to subordinate agencies. Exemplified by the Treasury of Russia and other public administration bodies, the article systemizes and analyzes the existing approaches within the subject matter. As a result of the analysis, it is deemed advisable to synchronize the activities of public authorities, in particular through coordinating the process at the level of the Government of the Russian Federation.
Keywords: public administration, general management functions, digitalization, centralization of general functions, efficient use of budget funds, treasury, integration, unified information platform
For citation: Lukashov A.I. Some Directions of Increasing the Efficiency of Public Administration in the Context of Digitalization. Financial Journal, 2021, vol. 13, no. 3, pp. 67–75 (In Russ.). https://doi.org/10.31107/2075-1990-2021-3-67-75.
Makar I. Kudelich
Problems of Innovative Science and Technology Center Financing From Budgetary Funds, p. 76-87
This article attempts to identify and analyze the problems of financial support for the creation and functioning of innovative science and technology centers (ISTCs) at the expense of the budgetary system of the Russian Federation which require their solution, in particular through improving legislation. The article provides an overview of the legal problems associated with the creation of ISTCs, the determination of the effectiveness of the Russian Federation’s tax expenditures on activities of the ISTCs, and the assessment of the volume and permissible directions of budget financing of the ISTCs. Conclusions are made about the absence of any formal criteria for support, or refusal to support, proposals to create an ISTC presented by the project initiator, including those related to the financial and economic justification of the requested amount of funds from the budgets of the budgetary system of the Russian Federation, as well as about the biased nature of budgetary efficiency calculation for Russia’s tax expenditures on activities of the ISTCs. The paper also contains proposals on possible mechanisms for determining and assessing the validity of financial support for ISTCs from the federal budget declared by project initiators.
Keywords: innovative science and technology center, financial support for creation and operation, tax expenses, budget
For citation: Kudelich M.I. Problems of Innovative Science and Technology Center Financing From Budgetary Funds. Financial Journal, 2021, vol. 13, no. 3, pp. 76–87 (In Russ.). https://doi.org/10.31107/2075-1990-2021-3-76-87.
Olga A. Sinenko, Timofey P. Mitrofanov
Identification of Signs of “Business Fragmentation” in Russian Far Eastern Territories with Special Economic Status, p. 88-103
The issue of “business fragmentation” has been relevant in Russia for over ten years. Business striving to ensure competitiveness makes it necessary to look for mechanisms to reduce the tax burden, applying special tax regimes or preferential tax conditions for residents of territories with special economic status. In this paper, the authors analyze the theoretical prerequisites for substantiating the signs of “business fragmentation,” and study the scope of application of “business fragmentation” schemes within the framework of preferential tax conditions for territories with special economic status in the Far East. The basic research methods were content analysis, comparative analysis and synthesis. As a result of the content analysis of judicial practice, the criteria for business fragmentation, confirming the formal division of a business, were substantiated. The authors carried out a comparative analysis of resident companies and identified, based on open data, 159 residents of priority social and economic development areas (PSEDAs) and 625 residents of the Free Port of Vladivostok (FPV) with signs of “business fragmentation.” Those amounted to 28.49 % and 29.48 % in the total number of active residents, respectively. Vladivostok is the leader in terms of the number of residents with signs of “business fragmentation,” with 443 residents of the FPV. The most common signs of “business fragmentation” among resident companies in territories with a special economic status of the Far East are substantiated: common persons managing companies, common or identical type of activity, and common address of location. Common types of activity among resident companies with signs of “business fragmentation” within territories with special economic status of the Far East are warehousing and auxiliary transport (15 % of PSEDA; 12.3 % of the FPV); construction of buildings (16.5 % of the FPV); and operations with real estate (14 % of the FPV).
Keywords: business fragmentation, Free Port of Vladivostok, priority socio-economic development areas, Far East, tax risks, tax incentives
JEL: E62, F38
For citation: Sinenko O.A., Mitrofanov T.P. Identification of Signs of “Business Fragmentation” in Russian Far Eastern Territories with Special Economic Status. Financial Journal, 2021, vol. 13, no. 3, pp. 88–103 (In Russ.). https://doi.org/10.31107/2075-1990-2021-3-88-103.
Alexey A. Artemiev
The Flow of Dividends to the Seller: Customs Valuation Methodology, p. 104-115
The article is devoted to customs valuation methodology for foreign trade transactions run between related parties. It is proven that, in the conditions of a wide range of transfer pricing transactions, the actual sense of all costs and expenses of the buyer is vital. The study shows that, in determining the customs value, analysis of the business model in total, of the relationship between the parties, and of the real economic sense of various expenses is a must. Proposals for methodological approaches to customs valuation are developed and offered.
Keywords: customs value, customs valuation methodology, Eurasian Economic Union, price actually paid or payable for imported goods, flow of dividends
JEL: H20, H25, M31
For citation: Artemiev A.A. The Flow of Dividends to the Seller: Customs Valuation Methodology. Financial Journal, 2021, vol. 13, no. 3, pp. 104–115 (In Russ.). https://doi.org/10.31107/2075-1990-2021-3-104-115.
Vyacheslav Yu. Dodonov
Devaluation’s Impact on the Formation of Kazakhstan Government Budget: The Factor of the National Fund Investment Income, p. 116-131
Depreciation of the national currency — economies with predominantly raw material exports included — is reflected not only in the indicators of the external sector, but also in the sphere of public finance, in particular the formation of budget revenues. In Kazakhstan, the impact of devaluation on the formation of the state budget is specific, associated with the presence of a special source of its income in the form of transfers from the sovereign wealth fund (National Fund). During the period of low oil prices, revenues to the National Fund from the oil sector decreased, and its accelerated spending began, which brought to the forefront investment income as one of the main source of its receipts. The high investment income in the Kazakh currency secures relative stability of the fund’s volume and transfers to the budget, but this income is largely formed due to the exchange rate factor. The weakening of the Kazakhstani tenge against hard currencies placed as the main part of the fund’s assets ensures an increase in the tenge investment income through their revaluation. The growth of investment income, in turn, produces increased volumes of transfers to the budget. Thus, the devaluation of the tenge has become a factor of stability in the formation of state budget revenues.
Keywords: devaluation, foreign exchange rate effect, government budget, Kazakhstan National Fund, investment income
JEL: H61, H62, E58
For citation: Dodonov V.Yu. Devaluation’s Impact on the Formation of Kazakhstan Government Budget: The Factor of the National Fund Investment Income. Financial Journal, 2021, vol. 13, no. 3, pp. 116–131 (In Russ.). https://doi.org/10.31107/2075-1990-2021-3-116-131.