Government Resolution No. 687 of the Russian Federation, dated April 30, 2021, “On State Support for Organizations to Compensate for a Portion of Costs Associated with the Certification of Products, Including Products of the Pharmaceutical and Medical Industries, in Foreign Markets” (hereinafter referred to as Resolution No. 687) establishes the objectives, conditions, and procedures for granting federal budget subsidies. These subsidies compensate organizations for a portion of the costs incurred during product certification in foreign markets, specifically targeting the Life Sciences sector (pharmaceutical and medical industries), under the "Industrial Export" federal project of the "International Cooperation and Export" national project.

The Ministry of Industry and Trade of the Russian Federation (Minpromtorg) shall allocate subsidies within its distributed budgetary commitments for the following designated purposes:

• General Product Certification: Reimbursing a portion of actual costs incurred by the organization no earlier than 12 months preceding the competition announcement date and for a maximum duration of 12 months following the announcement date;
• Pharmaceutical Certification: Reimbursing a portion of actual costs incurred by the organization no earlier than 12 months preceding the competition announcement date and for a maximum duration of 36 months following the announcement date.

To secure subsidies for foreign pharmaceutical certification, organizations must achieve the following key performance indicators (KPIs):

• Obtaining documentation that confirms the successful completion of clinical trial phases required for foreign drug registration (at least one document per clinical trial phase) and/or confirms successful WHO prequalification of the pharmaceutical product (at least one document);
• Executing export supplies of the subsidized pharmaceutical product to foreign markets, yielding a total export value that exceeds the received subsidy amount by at least ten times within five calendar years from the date of trial completion, drug registration, and/or WHO prequalification (provided that the export volume in the year following registration or prequalification equals at least 60% of the received subsidy).

In the event of unexpended subsidy funds, Minpromtorg shall reallocate the remaining balance, granting secondary priority to the pharmaceutical manufacturing sector (immediately following the mechanical engineering industry). Resolution No. 687 outlines the exact formulas for calculating these subsidy amounts.

Organizations seeking subsidies must satisfy the following regulatory compliance requirements as of a date not earlier than 30 calendar days prior to the application submission date:

• The applicant has not received federal budget funds for identical purposes within the 12 months preceding the competition announcement;
• The organization maintains no overdue liabilities regarding the return of federal subsidies or budget investments;
• The entity has no outstanding tax arrears, unpaid fees, insurance contributions, penalties, fines, or interest subject to mandatory payment;
• The corporation is not undergoing liquidation, bankruptcy proceedings, administrative suspension of activities, or reorganization (except for reorganization via merger);
• The applicant is neither a foreign corporate entity nor a Russian legal entity with more than a 50% aggregate share of offshore foreign ownership in its authorized (charter) capital;
• The regulatory registry of disqualified persons contains no records of the organization's executive management or founders;
• The organization operates as the developer and/or manufacturer of the pharmaceutical product and holds exclusive rights or valid usage rights granted via a licensing agreement or other lawful mechanisms.

JSC Russian Export Center (REC) administers the competitive selection process for granting these subsidies. REC performs the functions of a Government agent in subsidy distribution pursuant to a tripartite agency agreement executed between the Ministry of Industry and Trade, the Ministry of Economic Development, and REC.