Andrey Goltsblat for The Washington Times: “What is Skolkovo and who can be there?“

22.03.2011

In Russia, “Skolkovo” symbolises innovation. If everything goes as planned, it will be a breakthrough and we will really have something to be proud of here in Russia. But, as a lawyer, my attitude towards the project is neither constant nor definitive. Sometimes I believe in it profoundly and hope for its rapid implementation; at other times, I am overcome by skepticism and doubt. Will it work this time or will the result be the same as usual? On the other hand, I have a professional interest in the project, in which context I naturally hope everything goes off well.

Which of the legal provisions of the law on the Skolkovo innovation centre do I consider the most significant, still constituting the focus of discussion?

An important place in creating the conditions for working at the innovation centre belongs to the management company - the “boss” of Skolkovo. This company is granted very broad powers indeed. So, its crucial that the Management company has a clear rules and act profeccionally.

Also important are the conditions for including a legal entity on the register of the project’s participants. There are four of these, which are set out in detail in clause 10. Namely they are:

1) the legal entity is incorporated under Russian law;
2) the standing executive body of the legal entity and other bodies or persons entitled to act on its behalf without power of attorney are permanently located at the Centre;
3) the legal entity’s constituent documents stipulate exclusively research activities in accordance with this Federal Law;
4) the legal entity assumes the obligation to carry out research in accordance with this Federal Law and to abide by the project’s rules.

Yet the law also allows the management company to set additional binding conditions other than those stipulated in this article. Equally important are the conditions for early exclusion of legal entities from the participants’ register. There are three of these and they, too, are specified quite clearly (breach of the project rules or the law and withdrawal from the project). In my opinion, however, the question of appealing against early exclusion is a significant one.

Besides, the law gives no indication as to how such decisions should be taken. The relevant procedure is left to the discretion of the management company.

In general, is there any way of appealing against decisions taken by the management company? Probably, but it would possibly be a good idea to mention this.

One more major issue – reimbursement of project participants’ customs costs. The law provides for a relevant mechanism and its details have undergone extended discussion. Article 11 envisages that the management company will assume the functions of customs broker and customs duties will be reimbursed as subsidies from the budget. According to the law, these funds will be remitted by the management company.

But will this mechanism work? Only time will tell.

The law’s restrictions on the powers of the central and regional authorities at Skolkovo appear, of course, quite justified. The territory of Skolkovo will, indeed, be a separate one where officials’ powers relating to land and transport relations, construction supervision and education, etc. do not apply. Everyone apparently understands that this is an essential condition for the experiment to work - yet doubts remain: the enclave will have to undergo a serious test of survival in an aggressive environment.

As a professional lawyer, I am taking an active part in the discussions and working groups and I am constantly striving to get a grasp of the legal forms the innovation centre idea is taking and the rules in which these are being manifested. Yes, it is great that Microsoft recently announced its wish to invest in at least 100 so-called start-ups, that it has signed a co-operation agreement - which, by the way, Cisco did even before the Skolkovo law came into effect. Microsoft and Cisco can visualise the opportunities opening up and state support for their business in Russia in general, and the possibility of setting up R&D centres in Skolkovo in particular. If Skolkovo can help in fulfilling these tasks, then law must also be geared to doing so.

Let us recall that Silicone Valley’s initial development was based on state defence orders and venture investors. Even though we have not yet managed implement capital gains tax benefits throughout the country, maybe they should at least be introduced for Skolkovo projects? This would be a greater incentive to venture investors. Maybe we should take a serious look at the idea of distinguishing between the concepts of non-designated and ineffective use? State funds would then be used effectively and not just spent so as to avoid, at all costs, being accused of non-designated use.

By the way, Rosnano has for a long time been very actively investing and developing nano-projects and technologies without Skolkovo, since the financing is there, as is confidence in protection of the investments. So far, the company is state-owned but it is soon to become a joint-stock company, with a public sale not far in the distance. This means we are again talking about investments, their protection and the judicial system. I believe the Skolkovo project might do much to promote the further development of these fundamental institutions of a civilised society. But this is in theory.

Are their any interim results? Apparently there are. So far, 26 certificates of project participant have been issued and 87 promising applications are under consideration. The Development Fund has signed a memorandum of intent with Nokia Siemens, with EADS and Alstom, and a number of other companies and educational institutions. A model has been determined for the planning and development of the Innovation Centre: the international tender was won by the project proposed by the French company AREP. All these are positive signs.

And I hope that the experiment is a success and that Skolkovo, as an area of serious aspirations, might become our own Silicon Field - after all, that part of the Moscow area is mainly flat!

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