By Tian Wenjing  Gao Zhenkun  Xu Yue  Ma Ke King & Wood Mallesons’ Corporate & Securities Group

tian_wen-jingThere’s been intense media coverage both at home and abroad about the 400 billion ruble (roughly 40 billion yuan) loan China has agreed to provide Russia for the Moscow-Kazan high speed railway project without requiring the sovereign guarantee of Russia. If It is agreed that no sovereign guarantee is required from Russian side, for such a high-profile project, we suppose there have to be other alternative measures to protect the rights and interests of Chinese borrowers and investors. This case illustrates to some extent increasing attention to the sovereign guarantee. This article, however, focuses mainly on the newly amended Russian Budget Code [1], and presents an overview of the Russian sovereign guarantee system to give a reference point for Chinese enterprises looking to invest or do financing in Russia.

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