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Vnesheconombank history
1917, October, Socialist Revolution in Russia
1917, November, New Soviet Government committed itself to abolishing pre-revolutionary credit system
1917, December 14, Private commercial banks were nationalized
Assets and liabilities of nationalized commercial banks were handed over to the RSFSR People's Bank (the former State Bank of the Russian Empire).
1918, Crisis of Russia's credit system worsened
Mutual loan societies, city, public and private land banks were abolished. Securities were withdrawn from circulation in Russia. Russia's internal and external national debt was repudiated.
1919, Russia's credit system and clearing settlements collapsed
The RSFSR People's Bank was virtually abolished. Inflation edged up. Non-availability of government credits left industrial enterprises without working assets and set the international financial community against the new government. The first attempt was made to establish a bank with foreign (Italian) participation in the Russian Federation. But Italy's financiers fell short of going into business in the country where the Civil War was raging on.
1921, October, RSFSR State Bank established
The RSFSR State Bank started to regulate money supply in the country.
1922, Russia's credit system was re-established
Joint stock and cooperative banks, as well as mutual loan societies emerged.
1922, The 1922 -1924 Monetary Reform started
The 1922 ruble issued - the Sovznak. First attempts made to float Soviet loans.
1922, February, Raising of foreign capital
The issue of establishing banks with the foreign capital participation was considered at the sessions of the Special Commission of the All-Russian Council of the RSFSR National Economy, this Special Commission was responsible for preparing documents for the Genoa Conference.
1922, August 18, Russian Commercial Bank was founded
The Russian Commercial Bank was founded by Olof Ashbert, the Swedish financier obtained from the Soviet Government a concession to establish a joint stock bank of short-term financing. Roskombank was given the right to conduct all transactions similar to those conducted by Gosbank, except for issuing transactions. The founders had to insure their capital against inflationary pressures and to this end they had to conduct their transactions in some stable foreign currency or in terms of gold. The Gosbank Board was granted the right to delegate its representatives to the Roskombank Board (with the right to decisive vote) in order to exercise control over Roskombank's business on a regular basis.
1922, October 11, Decree of the Council of People's Commissars "On Granting Gosbank the Right to Issue Banknotes"
1922, October 19, Charter of Russian Commercial Bank approved by resolution of the Council of Labour and Defense
Roskombank's authorized capital was set at 10 million rubles in gold. The capital was supposed to be raised by issuing 100 thousand shares at a par value of 100 rubles each. A portion of shares paid up by the founders (10%) was passed into ownership of the RSFSR State Bank, furthermore, once the charter was approved the founders were to transfer 5% of the authorized capital to the Russian Federation Government.
1922, November 27, Soviet Gold Chervonets
The Soviet Gold Chervonets is a banknote that was in circulation in parallel with the Sovznak. The new monetary unit was gold-backed. The Chervonets was equated with 10 pre-revolutionary rubles and formally contained 7.74234 grams of pure gold. Each issued Chervonets was backed by highly tradable goods, by at least 25% of gold, by other precious metals and a stable foreign currency. The rest of the Chervonets was backed by commodity bills of exchange and other short-term liabilities. As soon as the Chervonets came into being, its stock-exchange quotation rose. Gradually, the Chervonets replaced not only the Sovznak but other gold pre-revolutionary rubles and foreign currencies which were initially regarded as its equivalent. As a consequence, the Chervonets ousted Sovznaks from circulation becoming the only currency.
1922, Main Concession Committee was established - Glavkontsesskom
The Glavkontsesskom was established under the Sovnarkom and dealt with all matters relating to concessions. From 1922 to November 1, 1927, the Glavkontsesskom receioved 2211 concession bids. As for the number of projects, Germany was in first place accounting for 35.3% of all offers, then followed England (10.2%), the U.S. (9.4%), France (7.9%) and others. USSR citizens (5%) were among concession bidders. The largest proportion of concession bids from German businessmen was for the most part attributable to the fact that Germany lost its commodity markets since the Treaty of Versailles deprived it of its colonies. As Germany was denied access to developed countries markets, the Soviet Union was the only country where Germany could sell its industrial products.
1923, October 1, Roskombank's performance for its first year
Roskombank's total turnover amounted to 645.2 million gold rubles, its net profit was 1.4 million gold rubles (13.95%). Its total export-import turnover was 26.4 million gold rubles.
1923, December, License to open Export Bank of Narkomvneshtorg
The People's Foreign Trade Commissariat obtained a license to open an export bank and suggested that Roskombank be turned into a special Bank for Foreign Trade.
1924, February 05, Treasury notes in denominations of 1, 3 and 5 rubles went into circulation
1924, February 14, Issue of Sovznaks terminated
1924, February 22, Decree on minting fractional silver and copper coins. Mandatory exchange of Sovznaks for new money
1924, March, Narkomat for Foreign Trade bought Roskombank's block of shares owned by RSFSR State Bank
1924, March 8, Exchange of Sovznaks for new rubles
The Decree regulating the exchange rate set the following proportion: one 1924 ruble is to be equivalent to 50 thousand rubles of the 1923 Sobznaks or 50 billion rubles prior to the 1923 denomination.
1924, April 07, Russian Commercial Bank transformed into the Bank for Foreign Trade of the USSR (the USSR Vneshtorgbank)
Vneshtorgbank became a lending institution under Narkomvneshtorg. It was entrusted with servicing export-import transactions. V.K.Taratuta was elected first chairman of Vneshtorgbank Board. The Council of Labour and Defense introduced amendments to Roskombank's Charter to change the composition of shareholders. The new Charter incorporated more details, but the basic provisions of the 1922 Charter remained unchanged.
1924, May 10, Decree on Issuing Paper Money
Sovznaks withdrawn from circulation. Sovznaks exchanged for the 1924 rubles.
1924, June, Unified monetary system was established in Soviet Russia
The Cash Department personnel of the People's Commissariat for Finance were taken over by the State Bank. Gosbank was entrusted with regulating money circulation in the country. The hard convertible monetary unit checked the inflationary process, thus bringing credit system back to life.
1924, November, Vneshtorgbank participated in negotiations with foreign financiers on extending credits to the USSR
Vneshtorgbank Board Chairman V.S. Korobkov was sent to the U.S. He held talks with representatives of Guarantee Trust, Equitable Trust, Chaise National, International Banking C° during November-December 1924.
1924, December 16, The Council of People's Commissars of the USSR approved the First Charter of the Bank for Foreign Trade of the USSR
1924, December, Branch network expanded
The All-Ukrainian Banking Office was opened in Kharkov. It was responsible for unifying all transactions to finance Ukraine's foreign trade. New branches in Odessa, Tiflis, Baku and Kiev and the agency in Novorossiisk were established. Thus the number of Vneshtorgbank's branches was brought to seven.
1925, March, Vneshtorgbank's new branches
The first branch outside the USSR was opened in Constantinople (Istanbul) and the North-Caucasus regional division - in Rostov-on-Don.
1926, February, Regulations of currency transactions
The government commission in charge of supervising export-import transactions adopted "The Rules for Regulating Currency Transactions by the State Bank of the USSR", which were binding on all banks involved in transactions in foreign currency. The rules regulated currency transactions of all specialized banks, namely, the Bank for Foreign Trade, the Trade and Industrial Bank, the All-Russian Cooperative Bank and the Moscow City Bank, as well Soviet foreign banks. The said banks were obliged to transfer to their current accounts with Gosbank all their foreign currency free balance except for the currency required to repay, within a period of three days, liabilities provided for by a currency schedule and except for the currency needed to secure credits extended by foreign banks. They were also obliged to deliver "for Gosbank's collection free drafts to use its foreign credits, as well as goods and trade documents which were not pledged in foreign banks". If specialized banks and Soviet foreign banks had free credits abroad and if they had no projects to use such credits, Gosbank was responsible for identifying projects to invest borrowed funds. Furthermore, the banks were obliged to submit financial statements to Gosbank on a regular basis.
1926, March, Vneshtorgbank's IV-th issue of shares worth more than 9 million rubles
1926, March, Agreement on Unified Currency Exchange Rate approved
In accordance with The Agreement on Unified Currency Exchange Rate under Foreign Currency Transactions Applicable to USSR Banks, all lending institutions which signed the agreement were required to conduct transactions to sell and purchase foreign currency exclusively at the exchange rate set by the Moscow Commodity Exchange Stock Market Department "without exempting, directly or indirectly, any of their clients from the said requirement", furthermore, lending institutions were not entitled to receive foreign currency from state-run and cooperative organizations to make transfers abroad. Only Gosbank was entitled to make such transfers.
1926, December, Branch network shrank
The branches in Rostov-on-Don, Voronehz, Kiev, Odessa, Novosibirsk and the agency in Novorossiisk were closed. The division in Tiflis was left intact temporarily. Of the ten branches, which operated on the USSR territory in early 1925, only three branches were fully operational, namely, in Kharkov, Leningrad and Baku.
1927, January, Financing export and import transactions
In Vienna, Vneshtorgbank Board Chairman K.Kh. Danishevsky and American citizen, banker and businessman Victor Freeman signed a memorandum of understanding. Under Vneshtorgbank's instructions V. Freeman undertook "to purchase and supply various goods to be imported to the USSR, as well as to sell goods to be exported from the USSR, and the total cost of imported and exported goods was scheduled to amount to about 2 million US dollars a month within the first year. He also undertook to finance these commodity transactions". The total amount of financing was scheduled to reach 50 million dollars.
1927, April, Vneshtorgbank's IV-th issue of shares completed
The Bank's capital assets rose to 42.7 million rubles within one year. Vneshtorgbank's total assets increased to 162 million rubles. The V-th issue of shares was scheduled.
1927, May, Negotiations with Berliner Handelsgesellschaft
Deputy Vneshtorgbank Chairman M. Antikol and Berliner Handelsgesellschaft President Yarokhovsky held talks for extending credit to the USSR through Vneshtorgbank. The German financier refused to participate in all projects offered to him and said that "other favorable prospects could open up only if Vneshtorgbank placed a considerable amount of money to its account with the German bank".
1927, May 17, Extending credits to finance foreign trade transactions
In order to pursue a coherent lending and currency policy on the foreign market the resolution of Sovnarkom authorized Gosbank of the USSR to be responsible for the general management of Vneshtorgbank's operations. Gosbank of the USSR was granted the right to exercise control over and keep records of Vneshtorgbank's transactions, to this end Gosbank of the USSR could delegate its representatives to Vneshtorgbank's Board, Auditing Commission and Management Council and receive from Vneshtorgbank all data relating to its transactions.
1929, November, Correspondent Agreement between Gosbank and Vneshtorgbank
Under this Agreement Vneshtorgbank was to open a correspondent account in rubles to be used to conduct all ruble transactions. Vneshtorgbank became increasingly dependent on Gosbank of the USSR.
1930, February 22, Extending credits to mixed companies
Vneshtorgbank Commission in charge of implementing the credit reform made the following decision: "in order to determine the current financial standing of mixed companies and to assess the amount of foreign and soviet capital invested in them the Bank should do its utmost to move to a system of direct lending". This decision made by the Commission of Vneshtorgbank was in line with the policy designed to roll back the New Economic Policy and it restricted mixed companies' business dramatically, with most of them becoming defunct with the end of the New Economic Policy.
1931, May, Participation in fulfilling special tasks of the Government
Vneshtorgbank assisted Mongolbank in making 60 thousand bonds issued under the loan named "The Mongolian People's Republic Five-Year Plan". The Gosznak 3 factory made bonds worth 1.5 million tugrics.
1931, October, Transactions with Torgsin
The Directive issued by the Foreign Transactions Directorate of Gosbank "On Transactions with Torgsin" was designed to regulate Vneshtorgbank's business specifying money transfer process ranging from receiving the money transfers from abroad to sending the customers' receipts to Vneshtorgbank's address.
1932, Vneshtorgbank started to make settlements for foreign trade transactions with a number of countries
Gosbank of the USSR took over the management of other lending institutions and specifically it started to service foreign trade transactions thus cutting down the scope of Vneshtorgbank's business. Vneshtorgbank of the USSR was authorized to make settlements for foreign trade transactions with some Eastern USSR neighbors, such as the Mongolian People's Republic, Tuvin People's Republic, China, Afghanistan and others.
1933, Opening current accounts in foreign currency
The People's Commissariat for Finance of the USSR authorized Gosbank of the USSR and the Bank for Foreign Trade of the USSR to open current accounts in foreign currency. Accounts in foreign currency fell into two categories: "free" accounts (type "A") and "partially limited" accounts (type "B"). Current foreign currency account (type "A") were opened in favor of foreign natural and legal persons residing both abroad and within the USSR on a temporary basis, as well as for Soviet citizens during their stay abroad. When Soviet citizens came back to the USSR those accounts moved into the category of "B"-type current accounts. As of January 1, 1941 608 current "A"-type accounts totaling 21.67 million rubles were opened with Vneshtorgbank.
1930, Export and import transactions
Since the early 1930s settlement terms of Soviet foreign trade export-import transactions improved. Specifically, most settlements for foreign trade of the USSR were made in the Soviet Union and particularly settlements for Soviet exports. Export goods were paid through letters of credit opened with Vneshtorgbank of the USSR or with a foreign bank, but in this case L/Cs were to be paid in Vneshtorgbank of the USSR. Prior to the Second World War a number of supply agreements stipulating payment procedures were signed with several European countries such as Germany, Sweden and the Great Britain.
1935, July, Vneshtorgbank made a decision to consolidate shares and contributions of affiliated foreign banks
Vneshtorgbank bought out 1000 Dalbank shares from the Moscow Narodny Bank (London) and 1000 Dalbank shares from Airobank (Paris).
1936, Vneshtorgbank took control over all transactions in securities held by Erevan Agricultural Bank (Armenia)
Deputy Gosbank Board Chairman A.S.Svanidze instructed Vneshtorgbank to take control over all transactions in securities held by Erevan Agricultural Bank (Armenia). The par value of one share issued in 1926 was 25 rubles, the annual yield on securities was 8%. The loan was issued in the total amount of 400 thousand rubles. The bonds worth 72 thousand rubles, of which 56 thousand were bearer bonds and the remaining amount accounted for registered bonds, were floated among various charities abroad.
1937, January 07, Vneshtorgbank was granted exclusive right to conduct transactions in precious metals, foreign exchange and foreign stock exchange securities
Under the Sovnarkom resolution dated January 7, 1937, Gosbank of the USSR and Vneshtorgbank were granted an exclusive right to conduct transactions in gold, silver, platinum and platinum-group metals in the form of coins, bullions and in the unprocessed form, as well as transactions in foreign exchange, in foreign exchange payment documents and in foreign stock exchange securities. Due to the state monopoly on currency, foreign currency was barred from circulation within the USSR. Foreign currency payments on the USSR territory were limited to foreign trade transactions conducted under applicable legislation and were handled only by Vneshtorgbank.
1941, June 22, Great Patriotic War
During the first months of the war, many Vneshtorgbank employees were drafted into the Red Army, some of them joined the people's voluntary corps. In the course of the German army's offensive on Moscow the employees who were still working in the bank tended to participate in building protecting obstacles and spent nights in military hospitals taking care of wounded Red Army soldiers.
1941, 28 June, Special accounts of countries occupied by fascist Germany
On Gosbank's instructions, a special Narkomfin account was opened with the Foreign Transactions Department. This special account incorporated banks' loro accounts as well as current accounts (types "A" and "B") belonging to companies, institutions and individuals from Germany, Italy, Romania, Finland, Holland, Belgium, Yugoslavia, Greece, Czechoslovakia, Norway, Hungary, Luxemburg and the occupied part of France. Unused L/C balances, the funds received to pay collection orders and all other remaining sums transferred to Gosbank or Vneshtorgbank in favour of companies and individuals from the countries listed above were transferred to the same account..
1941, October, Vneshtorgbank's office opened in Kuibyshev
Employees from Vneshtorgbank and Gosbank's Foreign Transactions Department were sent to Kuibyshev to serve foreign missions and representative offices there.
1943, November, Duplication of accounting associated with moving the office to Kuibyshev
During the evacuation the Bank's experts had to duplicate accounting. In Kuibyshev, entries on personal accounts were made on a daily basis. There were almost no delays in the duplicating process, all required actions were taken as appropriate documentation arrived from Moscow. Deputy Vneshtorgbank Board Chairman S.A. Elfimov was in charge of this line of activity.
1943, Last drawing of the Second Five-Year Plan bonded loan
The last drawing of 7% bonds under the Second Five-Year Plan bonded loan issued in 1933 ???? with a 10-year maturity was made. About 80% of bonds of this loan were floated in the U.S., 10% - in Great Britain and the remaining portion - in France, Switzerland, Holland, Belgium and other countries.
1945, Vneshtorgbank's Action Program for the post-war period
As Vneshtorgbank was, for the most part, engaged in making transfers from the Soviet Union to foreign countries and carried out foreign banks' instructions to pay transfers from aboard to the USSR, there was a need to establish good and strong relationship with foreign banks. The Board decided to reform the network of its agency banks by minimizing their role in the Bank's transactions. Vneshtorgbank maintained nostro and loro accounts which were predominantly used in the following foreign banks: the US - Chase National Bank, American Express, Guarantee Trust Company, Amalgabank, Bank of America, United States Trust Company and some others; the Great Britain - Lloyd Bank, Midland Bank, Westminsterbank, Barcklice Bank and National-Proventional Bank; Switzerland - Schweizerische Bankverein, Schweizerische gezelschaft, Bank Popular Suisse, Bank Federal; Sweden - Enshildabank, Scandinavisca Bank. Besides, the Bank maintained correspondent relations with the banks of Canada, Uruguay, Argentine, Brazil, Syria, Iran, Turkey, China and Mongolia.
1945, March, Vneshtorgbank reconsidered relations with its subsidiaries
Vneshtorgbank reconsidered its relations with those foreign companies where it acted as their shareholder, namely, Dalnevostochny Bank, Moscow Narodny Bank (London), Russo-Iran Bank, American Joint Stock Company "Amtorg" (New York). Vneshtorgbank's participation in these companies' business was postponed till the end of the war.
1946, October, Credit relations with capital countries reestablished
Sweden entered into the intergovernmental agreement on extending credit to the Soviet Union. Although the credit was not used to the full extent, the Soviet trade companies purchased a large quantity of products to be used in the national economy.
1947, December, Participation in the 1947 monetary reform in the USSR
After the Great Patriotic War in order to withdraw excess money from circulation and to boost purchasing power of the ruble the exchange of money in the ratio 10:1 was affected. From December 16 to 22, 1947, Vneshtorgbank re-estimated current accounts and exchanged cash for foreign diplomatic representative offices in the USSR.
1948, October 25, State currency monopoly in Russia
The resolution of the USSR Council of Ministers banned the exportation, transfers, as well as importation and transfers from aboard of Soviet currency, bonds and bond coupons paid in the Soviet currency. Thus, the Soviet currency in cash was withdrawn from circulation outside the USSR. All the resources (material and financial) used in foreign economic business were owned by the state and were at the state's disposal. All foreign economic transactions were conducted through special state-run bodies subject to the central state control.
1952, Vneshtorgbank closed its last foreign branch - in Istanbul
1954, June 12, Vneshtorgbank organizational chart changed
Of 7 subdivisions only 4 remained: the Board, Operations Department, General Accounting Office and secretariat. The Bank had a staff of 58.
1956, The USSR on the world's credit market
The Soviet Union was active in using short-tem and mid-tem company credits, as well as acceptance credits, and in its turn extended similar credits to capitalist companies and banks.
1958, Convertibility of Western European countries' currencies
The USSR was provided with the opportunity to carry on foreign trade and make settlements with foreign countries on a multilateral basis. The USSR entered into intergovernmental agreements with Austria, Belgium, Denmark, Holland, Italy, Norway, France and Sweden. These agreements regulated payments, which were made either in freely convertible currency or in other currencies, which could be converted in any other currencies under current transactions.
1960, November, Vneshtorgbank was authorized to service foreign economic transactions
In the context of improved foreign economic ties and new forms of economic cooperation with foreign countries, the Council of Ministers of the USSR adopted a resolution on concentrating all payment and credit transactions with foreign banks in a specialized banking institution - the Bank for Foreign Trade of the USSR The order issued by Gosbank of the USSR specified that " in view of the fact that payment and credit transactions in export and import of goods with foreign banks, effecting of non-commercial payments as well as extension of credits to Soviet foreign trade institutions are to be transferred to Vneshtorgbank of the USSR, Gosbank Foreign Operations Department is to be transformed into the Currency Economic Department under Gosbank Board. The said transactions are to be transferred from Gosbank to Vneshtorgbank as of January 1, 1961 and from this point on these transactions are to be conducted by Vneshtorgbank…"
1961, January, State currency monopoly
Since January 1961, Vneshtorgbank was the only bank authorized to conduct all monetary and currency transactions with foreign countries sticking on the one hand to the principles of the Soviet economic management and planning and on the other hand - to laws, customs and rules of international banking practice.
1962, August, Vneshtorgbank's new charter was approved
The new Vneshtorgbank charter set out new functions to enable the Bank to secure the state currency monopoly. Once the new charter was approved and the Bank was authorized to perform new functions, Vneshtorbank's operations expanded rapidly and the Bank succeeded in improving its working practice. The Bank started to play a more prominent role in its relations with foreign partners and strengthened its relations with foreign banks, companies and other institutions. Vneshtorgbank stepped up its efforts to address the most important economic national challenges associated with international cooperation and with strengthening its monetary and credit-financial relations with foreign countries. The Charter authorized Vneshtorbank to open its branches, agencies and representative offices both on the USSR territory and abroad.
1963, Vneshtorgbank offered gratuitous assistance to developing countries
On the USSR Government's instructions, Vneshtorgbank rendered gratuitous assistance to developing countries. For example, in May 1963, a credit line worth 1.6 million rubles was opened under the Agreement on Rendering Gratuitous Assistance to the Government of Mali to Establish an Agricultural Training Center, Higher Administrative School and Medical School.
1964, Financing imports from developed countries
Vneshtorgbank made strenuous efforts to obtain foreign banks' credits to finance imports from developed counties. Vneshtorgbank entered into a number of agreements on obtaining long-term 10-15 year credits totaling 480 million rubles (at the dollar exchange rate of 0.9 ruble) with the banks of England, France and Italy. In the same year, a group of English banks extended a 15-year credit worth 250 million rubles to Vneshtorgbank. The credit was to be used to purchase equipment from the Great Britain.
1964, International Bank for Economic Cooperation (IBEC) started its business
The IBEC was established to make multilateral international settlements and to extend credits in order to promote the economic integration of Communist countries. International settlements between Communist countries were made in transferable rubles. The transferable ruble was Communist countries' collective currency; it was used in economic, scientific and technological and cultural cooperation between COMECON member countries. It was the transferable ruble that was used by Communist countries to make multilateral settlements, set contractual prices in their mutual trade and to extend government credits to each other. The gold backing of the transferable ruble was 0.987412 gram of pure gold but it was never used as available currency and remained to be a sort of credit money.
1965, Credit from Instituto Mobiliare Italiano
The Italian State Financial Company, Instituto Mobiliare Italiano extended a 60-million ruble 10-year credit to Vneshtorgbank for it to place orders in Italy. Then the amount of the credit was increased to 100 million rubles. In the following year the new agreement on extending a 232 million-ruble credit was signed between the Instituto Mobiliare Italiano and Vneshtorgbank with an eight-year deferment of payment and interest rate of 5.6 % per annum.
1966, 7 Credit Agreements were signed with European financial institutions
Seven credit agreements worth 449.1 million rubles were signed with European banks, with Italian banks accounting for 376.2 million, French banks- for 45.5 million, English banks - for 27.4 million. Among these agreements of particular importance is the credit worth 333 million rubles received from Italian banks to pay for supplies and services from the Fiat company involved in the Volga automobile project construction, as well as the French credit to pay for the deliveries of equipment, technological know-how and technical documentation from the Renault company intended for manufacturing automobile components and assemblies in the Soviet automobile factories. In negotiating these financial agreements Vneshtorgbank succeeded in securing more favorable credit terms compared with the previous agreements. For example, the credit to pay for Fiat deliveries covered the cost of 90% of deliveries with a 8.5-year credit repayment period and 5.6 % interest rate per annum, whereas the previous Italian banks' credits covered 85% with a 7-year credit repayment period and interest rate of 5.9% per annum. The credit to pay for Renault deliveries covered the cost of 90% of the total equipment and services volume with a 8.5-year credit repayment period and interest rate of 5.5% per annum, whereas the previous French banks' credits covered 85% with a 7-year credit repayment period and interest rate of 5.95% per annum.
1967, Credits in foreign currency
Vneshtorgbank started to extend foreign currency credits to the Soviet republics' Councils of Ministers, ministries, departments and certain enterprises to purchase western equipment, machinery, materials, licenses and samples of new products, which were not manufactured in the Soviet Union.
1967, January, Credits for Volga Automobile Factory (VAZ)
Vneshtorgbank signed 12 new credit agreements worth 254.7 million rubles and in particular with Italian banks for the amount of 26.9 million rubles to pay for the deliveries of equipment to the Volga Automobile Factory from the US and Switzerland.
1968, Credits for VAZ and gas pipeline construction projects
Vneshtorgbank signed a 99-million ruble credit agreement with an Austrian bank. The credit was designed to pay for the deliveries of large-diameter pipes and equipment for gas pipeline construction projects. The credit was to be repaid by proceeds from the sales of Soviet gas in Austria. New credits were extended for the Volga automobile project construction. Vneshtorgbank received a 5.4 million-ruble credit from the Belgium bank, Societe General, to supply equipment from Belgium to the Soviet Union for VAZ.
1969, Agreement on gas deliveries from the USSR to Italy
The agreement on supplying 100 billion cubic meters of natural gas to Italy from the USSR was made with the ENI company. The 300- million-dollar agreement also provided for supplying large-diameter pipes and equipment for the gas pipeline from Italy to the USSR.
1969, Agreements with English banks
Vneshtorgbank signed three new agreements worth 28.7 million rubles with English banks: 28.7 million rubles were earmarked for the deliveries of equipment to develop the Pravdinsky oil field in western Siberia, 17.8 million rubles - for tin-plating equipment, 4.1 million rubles - for making high-alkali machine oil additives. The larger credit worth74million rubles was obtained from Algemene Bank (Holland) to pay for the exportation of machinery and equipment from Holland to the Soviet Union.
1970, February, Agreement with FRG
The agreement on supplying 55 billion cubic meters of natural gas to FRG from the USSR and on purchasing 1.2 million tons of large-diameter pipes was signed by Vneshtorgbank, VTO "Soyzneftexport", VTO "Promsyryeimport"and the consortium of West German banks headed by Deutsche Bank.
1971, Freely convertible travelers' checks
Due to the increased number of foreign tourists in the USSR, banking transactions in buying and selling travelers' checks were on the rise. Vneshtorgbank issued freely convertible travelers checks in rubles.
1971, January, New agreements with Italian and German banks
The total amount of long-term credits received from foreign banks was 2.7 billion rubles. A number of agreements were signed with such Italian banks as Instituto Mobiliare Italiano and Mediobanca on extending a 172.8 million-ruble credit to pay for the deliveries of pipes, equipment, cables and other materials to develop new gas fields in he Soviet Union. The 297.5 million-ruble credit agreement was signed with Deutsche Bank to pay for the deliveries of similar equipment and materials from FRG to the USSR.
1971, International Investment Bank formed
The International Investment Bank (IIB) extended mid- and long-term credits to promote international division of labour, to strengthen industrial specialization and cooperation, to expand raw materials and fuel base in the interests of all bank-member countries. Vneshtorgbank was authorized by the Soviet Union to conduct transactions with the International Bank for Economic Cooperation and the International Investment Bank. The Soviet Union made all its settlements with COMECON countries in foreign trade and non-trade transactions. Vneshtorgbank also conducted currency, deposit and credit transactions effectively.
1972, U.S. commercial banks' credits to finance large scale national economic projects
Vneshtorgbank entered into a number of agreements with the U.S. Eximbank and other American commercial banks. The agreements provided for extending credits to finance large scale procurements for the Kama automobile factory, the mineral fertilizes integrated production facility, the International Trading Center in Moscow and other facilities.
1974, Financing purchases of equipment for major national economic projects
French, English, Italian and Canadian banks extended a number of large credits to Vneshtorgbank to finance the purchases of equipment for major national economic projects. These agreements provided for supplying equipment to the Kama automobile factory, the Ust-Ilimsk integrated pulp-and-paper mill and other production facilities in oil, gas, chemical and engendering industries. For the first time Japanese banks extended credits to finance the development of timberlands in Siberia and the Far East as well as the development of coal fields in Yakutia.
1976, OECD member countries "Gentlemen's Agreement"
Organization for Economic Cooperation and Development (OECD) member countries approved the uniform terms of extending export credits. The terms set, above all, minimum interest rates for export credits. This created a lot of difficulties for Vneshtorgbank in obtaining mid- and long-term credits in western countries.
1980, The 1980-Summer Olympics increased the range of services
Prior to and during the Moscow Summer Olympics the range of services expanded and the exchange office network was built up. Exchange offices were equipped with state -of the- art computers. Direct payments by Vneshtorgbank traveler's checks, Eurocards, credit cards and other payment documents were introduced.
1981, January, Olympic coinage program
Vneshtorgbank of the USSR implemented the Soviet Olympic coinage program. 56 banks and 23 capitalist countries' companies were involved in delivering Soviet Olympic coins. The total sales of Soviet coins amounted to 125.5 million rubles as of January 1, 1981. Foreign exchange profit from selling coins exceeded the estimated foreign exchange profit almost by 50%.
1980, Obtaining financial credits
In the 1980s, Vneshtorgbank tended to obtain financial (untied) credits on terms favourable to our country, which had the high credit rating at that time. These credits were of great importance to the USSR as its balance of payments was on the decline.
1987, Market-oriented reforms in the USSR
The Soviet Government committed itself to implementing market-oriented reforms in the economy including reforms in the trade and economic sector. The changes in the banking system were aimed at strengthening foreign economic ties for the Soviet Union to integrate fully into the world's economic system.
1988, Joint Stock Bank "Vneshtorgbank of the USSR" renamed the Bank for Foreign Economic Affairs of the USSR (Vnesheconombank of the USSR)
Vnesheconombank's functions to service the entire trade economic and financial business of the USSR with foreign countries were expanded. Vnesheconombank of the USSR acted as the agent for new Soviet joint stock ventures raising export credits for them. Vnesheconombank of the USSR was authorized to extend foreign currency credits directly to companies and institutions in the amount of up to 5 million rubles, it was also entitled to raise companies' temporarily free foreign currency funds to be used as credits on mutually beneficial terms.
1988, Obtaining financial credits
In 1988 - 1990, credits were obtained under intergovernmental agreements with such countries as France, Italy, Spain, Austria and others. These credits provided for financing purchases of machinery and equipment as well as non-investment goods including foodstuffs and other products which were of primary importance for stabilizing the USSR national economy. Some credits were used to repay Soviet FTO debt.
1990, Credit agreement with France and consortium of German banks
Under the intergovernmental understanding a number of credit agreements were signed with France for the amount of 5.0 billion francs and with the consortium of German banks headed by Deutsche Bank for the amount of 1.2 billion FRG marks.
1991, October 28, 10 republics of the former USSR signed the Memorandum of Understanding confirming their joint and several responsibility for repaying Soviet debt
1991, Republics of the former USSR signed the agreement to distribute debts and assets of the former Soviet Union between each other
1991, December 17, Customers' funds in Vnesheconombank's accounts frozen
Financial untied credits were exclusively used to repay foreign debt. As there were not enough funds to import essential goods, the USSR Government decided to use funds in Vnesheconombank's accounts. By the time when the Soviet Union broke up the funds in the said accounts were all but used up.
1991, December, Consultations with the London Club on foreign debt to world's commercial banks started
1992, January 04, Agreement on deferring payments on Soviet-era debt
On the basis of the memorandum of understanding signed by creditor countries and successor states to the USSR, the agreement on deferring principal payments on the foreign debt maturing in 1992 was signed. The agreement was doomed to failure - its signatories, apart from Russia, lacked political will. In autumn 1992, CIS states authorized Russia to hold talks with western creditors. Vnesheconombank took active part in the talks.
1992, January 13, Servicing Soviet-era foreign debt
The Resolution by the Presidium of the Supreme Soviet of the USSR authorized Vnesheconombank to participate in servicing Soviet-era debt.
1993, April 02, First agreement on restructuring Soviet-era debt with Paris Club Countries Russia assumed full responsibility for repaying
Soviet-era debt and fulfilling any obligations which might arise in connection with it. The agreement provided for restructuring all debt payments coming due in late 1991 and up to 1993 inclusive.
1995, Memorandum on Soviet-era debt restructuring principles
The RF Government and members of the Paris Club Banking Consultative Committee signed in Frankfort on the Main the memorandum on coordinated principles of restructuring Soviet-era debt worth 31 billion dollars (principle amount - 22 billion dollars and interest - 9.0 billion dollars). Agreements on restructuring debt payments on an annual basis were also made in 1994-1995.
1996, April, Agreement on restructuring debt to the Paris Club
The framework agreement on restructuring Soviet-era debt to the Paris Club on a multiyear basis was made. The agreement provided for rescheduling debt payments coming due from January 1, 1996, to March 31, 1999, under both original credit agreements and the previous agreements on Soviet-era debt restructuring. Russia entered into bilateral intergovernmental agreements with 17 Paris club-member countries as well as with the Great Britain.
1997, September, Reconciliation of the debt to the London Club
Russia's foreign debt reconciliation was completed and as a result the Russian Government issued its declaration 'On Assisting Vnesheconombank in its Efforts to Fulfill its Obligations to the London Club of creditors".
1997, October 06, Restructuring of the debt to the London Club
Vnesheconombank of the USSR and London Club creditors signed a package of documents on restructuring the debt to foreign commercial banks.
1997, December, Vnesheconombank and Ernst and Young, the auditing company, established a special office to consider and confirm creditors' claims to the Russian Federation
1998, August, Russia suspended payments on Soviet-era debt as a result of severe financial crisis
1998, November, New stage in relationship with the Paris and London Club
The RF Finance Ministry made a proposal to Paris Club member states to hold talks to further restructure the earlier rescheduled financial liabilities. At the same time the RF Finance Ministry and Vnesheconombank appealed to the London Club creditors on their own. As it was agreed upon with creditors at the initial Soviet-debt restructuring stage, indebtedness under credits and loans obtained after January 01, 19992, was to be further serviced in strict compliance with the current credit agreements.
1998, Servicing of credits to CIS member countries
In accordance with the Russian Federation Government's resolution, Vnesheconombank started to service credits extended by Russia to CIS countries. Vnesheconombank signed interbank agreements with Armenia, Byelorussia, Kirgizia and Tajikistan.
1998, Vnesheconombank's credit facilities expanded
Vnesheconombank and the U.S. Eximbank entered into the agreement on cooperation. Similar cooperation agreements were signed with the Finish Export Credit Insurance Agency "Finvera", with the British Export Credits Guarantee Department, the Italian Insurance Agency SACE and the Hungarian Export Import Bank.
1999, July, Vnesheconombank's Custody Department was opened
1999, August , 01, Multilateral agreement on restructuring the 1997-2000 payments was singed during talks with the Paris Club
2001, Vnesheconombank participated in implementing a number of socially-oriented projects
From 2001 to 2003 Vnesheconombank on the government's instructions was engaged in financing a number of social projects. The Bank was involved in implementing the presidential program "Russia's Children" and in raising funds to build and equip baby food factories across the country. The Bank also participated in building and renovating Russia's Central Stomatological Research Institute under the Russian Health Ministry in order to use it as a base for creating a stomatological center for disabled children, in purchasing equipment to re-equip the Russian Paediatric Clinical Hospital under the Health Ministry and the Scientific Paediatric Health Center under Russian Academy of Medical Sciences, as well as in renovating the Lomonosov State University etc. During that period Vnesheconombank made more then 60 separate credit agreements totaling about 900 million US dollars.
2002, Vnesheconombank was restructured and its role as a state-run financial institution strengthened
Under the government's resolution a number of measures were taken to restructure Vnesheconombank's business. The Bank stepped up its efforts in servicing government programs and reduced the scope of its commercial business. VEB gave high priority to supporting government structural reforms.
2002, April, Vnesheconombank as the agent for managing Pension Fund assets
The Government appointed Vnesheconombank as agent for investing temporarily free Pension Fund's assets in securities denominated in foreign currency.
2002, November, Soviet-era FTO Debt settlement
The RF MinFin announced the start to exchanging Soviet-era FTO Debt into Russian eurobonds. Vnesheconombank was appointed as a subagent for exchanging this category of debt. For the first time in the history of Russia's credit business, the Russian bank (VEB) participated in settling sovereign foreign debt as an agent on a par with foreign banks. VEB was engaged in working with creditors to reconcile Soviet-era debt, in maintaining the register of claims, as well as in making required payments.
2003, January, State Trust Management Company was appointed
According the Government's resolution VEB was appointed as State Trust Management Company responsible for investing pension funds. The special structural subdivision to handle pension funds was formed in the Bank.
2003, Vnesheconombank's participation in establishing a state-run system to promote exports
Vnesheconombank took an active part in drafting the Concept to Promote Industrial Exports on a Governmental Level. On the Government's instructions Vnesheconombank took measures to boost Roseximbank's business, which was provided with the key role in implementing the Concept.
2003, A number of agreements on promoting exports with export, lending and insurance agencies as well as with foreign specialized banks of industrial countries
Vnesheconombank and Roseximbank made agreements with U.S., British, German, French and Italian financial institutions. The agreements aimed to promote Russian companies' export and investment projects by extending credits and offering guarantees, the projects were carried out together with leading foreign companies in third countries. The banking infrastructure for working with G-8 nations on an equal footing was established, setting the stage for making Russian exporters more competitive.
2004, Vnesheconombank Expands International Ties
Vnesheconombank started to conduct transactions in trust managing of pension savings funds acting as a state trust management company. The Bank gave top priority to high technology industries manufacturing dual-purpose goods including aircraft construction, shipbuilding, motor industry, tool making, nuclear power engineering, telecommunications. Vnesheconombank jointly with Roseximbank made an agreement on supporting national exports with 5 leading financial institutions of the Group of Eight countries as well as Finland, Hungary, Turkey, China, India, Brazil and Mexico.
2005, Development of Public Private Partnership
This was the year of the Bank’s substantial renewal. Vnesheconombank took a active part in developing public private partnership and stepped up its efforts to work with regional administrations. Vnesheconombank was the first in the post-Soviet history to raise a syndicated loan worth 500 million US dollars on the best terms for Russian banks as of the date of borrowing.
2006, Vnesheconombank Is Soon To Be Transformed Into Development Bank
Vnesheconombank was on the threshold of a new stage: a large financial development institution is to be established in Russia. On January 31, Russian President Vladimir Putin said that it was necessary to establish a National Development Bank with an authorized capital of 2.5 billion rubles. In December, the Russian Government approved a federal draft law “On Development Bank”.
Vnesheconombank expanded its cooperation with regions substantially. The fact that the Bank participated in implementing the Comprehensive Program of the Lower Angara Region Development shows clearly that the Bank started to operate as a development institution. The amount of investments under this program is expected to exceed 330 billion rubles. The year saw a very important event for the Bank: it obtained a three-year syndicated loan from foreign banks worth 0.8 billion US dollars on the best pricing terms compared to similar transactions conducted by Russian Banks. The Bank’s performance was rated positively by foreign leading rating agencies that upgraded its long-term rating for obligations in foreign currency to BBB+. The Russian financial system and VEB as an agent for the government in managing government foreign and currency-denominated domestic debt succeeded in repaying Soviet-era debt to the Paris Club in full and early.
2007, A State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’was established
State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ was established in the Russian Federation. Russian President Vladimir Putin signed a Federal Law “On Bank for Development” on May 17. The Bank for Development and Foreign Economic Affairs was registered with the State Registration Chamber under the Justice Ministry of the Russian Federation on June 8. Vnesheconombank is one of the key instruments of government investment policy. The Bank’s activity is aimed at overcoming infrastructure growth restrictions, upgrading and promoting non-raw materials economic sector, high-technology industries, encouraging innovations, exports of high-technology products, implementing projects in special economic zones, environment protection projects and supporting small and medium-sized enterprises. The Bank’s authorized capital is being formed by pooling assets of Vnesheconombank of the USSR to be transferred in the course of its reorganization, federally-owned shares of the Russian Development Bank and Roseximbank as well as assets to be transferred by the Russian Government. The Bank’s Supervisory Board was established and a Memorandum on the Bank’s Financial Policies was approved. The Bank takes an active part in carrying out major investment projects that help to boost infrastructure and high-technology industries of the Russian real sector of the economy.
2008, Vnesheconombank
Vnesheconombank continued operating as a Bank for Development. Over a year and a half since the Bank’s establishment, its Supervisory Board examined more than 70 investment projects worth about 750 billion rubles and approved the Bank’s participation in financing them, with the Bank’s participation share being in excess of 400 billion rubles. Most of the projects are investment ones designed to develop innovations and infrastructure (in excess of 80%) as well as projects to support exports.
Since October 2008, under the Russian Federal Law “On the Additional Measures for Supporting the Financial System of the Russian Federation” and the Russian Government’s Resolutions, Vnesheconombank had been performing additional functions which involved refinancing Russian companies’ and banks’ debts to foreign creditors, extending subordinated loans as well as providing support for the stock market. In order to help stabilize the Russian banking sector as agreed with the Bank of Russia, Vnesheconombank succeeded in reorganizing OJSC Svyaz-Bank and CJSC Globex Bank.
2009, Vnesheconombank
Vnesheconombank carried on undertaking its core activity as a Bank for Development and implemented crisis management measures of the Russian Government that involved extending credits as part of refinancing Russian companies’ debts, extending subordinated loans to Russian banks and providing support for the Russian stock market.
The amount of the Bank’s own funds was 340.1 billion rubles as of the year end. The Bank’s balance sheet profit for 2009 was 30.96 billion rubles exceeding the previous year’s balance sheet profit by 3.3 times. Vnesheconombank is among Russian leading banks in terms of profitability indicators.
The Russian Government’s Order introduced changes in the Memorandum on Vnesheconombank’s Financial Policies. The list of the Bank’s main lines of investment activities now includes the implementation of projects aimed at increasing energy efficiency. The list of industrial priorities was also expanded by way of including strategic computer technologies and software; information-communications systems; medical equipment and pharmaceutics. Vnesheconombank was charged with implementing projects (investment programs) in mono cities.
The Bank started to finance 24 new projects, credits worth 62 billion rubles were extended to implement the projects.
2009, February, A decision was made on Vnesheconombank’s participation as a major creditor in financing the construction of Olympic facilities in Sochi (transport and energy infrastructure, sports facilities).
Vnesheconombank succeeded in carrying out the state’s program of providing financial support for small and medium-sized enterprises through its subsidiary bank – the Russian Development Bank. The total amount of financial support provided by Vnesheconombank to carry out this program increased by 40 billion rubles and was 49 billion rubles as of the year end.
2009, May, Vnesheconombank issued domestic currency-denominated bonds for the first time.
2009, August, The Federal Law, which entitled the state pension savings management company, Vnesheconombank, to invest in corporate, sub-federal, mortgage-backed bonds, bonds of international financial institutions and deposits with credit institutions, came into effect.
2009, December, Vnesheconombank held an International Conference “Modernization of the Russian Economy: a Role of Development Institutions” timed to coincide with its 85th anniversary. Heads of federal authorities, foreign development institutions, representatives of scientific community, the largest Russian and foreign companies participated in the Conference.
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