Putin instructs the government to consider support measures for Russia’s jewelry industry

Russian President Vladimir Putin instructed the government to consider the inclusion of the jewelry industry on the list of economic sectors most affected by the spread of coronavirus, the Finmarket news agency reported. This order, as it follows from the materials at the disposal of Interfax, was given after Sergey Sitnikov, the governor of the Kostroma Province appealed to the president.
It is said that in pursuance of the president’s order Andrei Belousov, First Deputy Prime Minister asked the Ministry of Finance, the Ministry of Economic Development and the Ministry of Industry and Trade to prepare their proposals on this issue by June 20. According to the Kostroma Province governor, if federal support measures will be provided to the jewelry industry this will allow Russian jewelers to protect their labor force, fulfill export contracts and retain overseas sales markets.
“He also notes the need to abolish excessive state control over the circulation of silver jewelry. Now silver products, despite their cheapness, are sold only at jewelry stores, which severely limits their sales,” Finmarket said.
The City of Kostroma positions itself as the jewelry capital of Russia: the Kostroma Province is home to more than 1,500 enterprises engaged in the jewelry business, which employ more than 8,500 people and produce 50% of gold and 60% of silver jewelry in Russia. According to the Assay Chamber, the Kostroma jewelry firms decreased their daily output in April this year 11 times as much compared with their March output.
Earlier, the Ministry of Finance initiated another measure to support domestic jewelers proposing to simplify the sale of jewelry. The ministry considers it necessary to increase the amount of retail purchases of jewelry using bank cards. Currently, buyers are requested to identify themselves in case a transaction is 100,000 rubles or more, while the Ministry of Finance wants to raise the threshold to 600,000 rubles. Raising the identification threshold is a logical step to stimulate online jewelry sales, the ministry said.
The softening of legislative requirements regarding the identification of jewelry online buyers will seriously support the jewelry market, said Sergey Barsukov, Deputy CEO at ALAROSA (MOEX: ALRS), whose statement was conveyed by the company’s spokesperson. The low identification threshold “slows down the development of online sales in Russia, which are the main driver of jewelry retail in the world,” he said. “Given that digital payments are already controlled by banks that have the necessary information about the cardholders, the requirement to identify jewelry buyers seems redundant in this case. The Finance Ministry recently proposed to raise the identification threshold to 600,000 rubles, which was enthusiastically supported by jewelers,” said Barsukov.