Russia-Luxembourg relations

In the middle of the nineteenth century Russia was at the origins of the State of Luxembourg, as one of the guarantors of the borders of the Grand Duchy and its neutrality. Diplomatic relations between Russia and Luxembourg were established in 1891 (the Duchy gained its independence in 1867); relations between Luxembourg and the Soviet Union commenced in 1935 (interrupted by the Second World War and resumed in 1946).

The Luxembourg Presidency of the EU, in the first half of 2005, helped in the intensification of bilateral political contacts, when, with the active support of the Duchy, the four «Road Maps» for the building of common areas of cooperation were approved at the Russia-EU summit in Moscow on May 10, 2005.
The most important event in bilateral relations was the first official visit by the Russian president to Luxembourg. On the 24th of May, 2007 Russian President V. V. Putin visited the Grand Duchy, had a conversation with the Grand Duke Henri and held talks with the Prime Minister of Luxembourg, Jean-Claude Juncker.

In May 2005 the Grand Duke Henri of Luxembourg and his wife Grand Duchess Maria Teresa paid a private visit to the Russian Federation to participate in the celebrations of the «golden wedding anniversary» of M. L. Rostropovich and G.P.Vishnevskaya.

Luxembourg Prime Minister Jean-Claude Juncker has visited Russia on official visits several times; including 1998, 2002, in 2003 to celebrate the 300th anniversary of St. Petersburg; to participate in the EU-Russia summit held in St. Petersburg (he was actually the initiator of the summit) in 2004; and on the 9th of May 9, 2005 to participate in the celebrations of the 60th anniversary of the Victory and in connection with work of the EU-Russia summit. During a visit on the 24th of April, 2008, held at the initiative of the Luxembourg side, Jean-Claude Juncker was received by President V. V. Putin, in addition to the newly elected President of the Russian Federation D. A. Medvedev.

On the 24th of August, 2010 during the visit of Jean-Claude Juncker to Russia for talks with D. A. Medvedev in Sochi, a number of aspects were progressed: the friendly nature of Russian-Luxembourg relations was confirmed; the sides exchanged their views on a wide range of political, financial and economic and humanitarian issues; both sides stressed the need to expand bilateral relations in a number of priority areas and sectors of the economy in order to support efforts to modernize the Russian Federation.

The mutual intention to improve the legal framework of bilateral Russian-Luxembourg relations announced during the Sochi summit in 2010 has already led to a number of results:

- On the 28th of March, 2011, a Memorandum of Understanding between the Central Bank of Russia and the Commission for Financial Sector Supervision of the Luxembourg (Commission de Surveillance du Secteur Financier, Luxembourg) was signed.

- On the 6th of April, 2011 the Memorandum of Understanding and the Exchange of Information between the Federal Financial Markets Service (FFMS) of Russia and the Commission for Financial Sector Supervision of Luxembourg (Commission de Surveillance du Secteur Financier, Luxembourg) was signed.

- On the 16th of May, 2011 an agreement was signed on cooperation between the Prosecutor General’s Office of Russia and the Ministry of Justice of Luxembourg.
- On the 15th of July, 2011 the Board of Directors of the Central Bank of Russia approved the normative act, excluding Luxembourg from the list of states and territories offering a preferential tax regime and/or not requiring the disclosure and provision of information on offshore financial operations (so-called «black list»).

- On the 13th of September, 2011 the Executive protocol between the Government of the Russian Federation and the Government of the Grand Duchy of Luxembourg on the order of implementation of the EU-Russia agreement on re-admission of May 25, 2006 was signed in Luxembourg.

- On the 21st of November, 2011 a Protocol on the Updating of the Bilateral Agreement on avoidance of double taxation was signed.
Contact between Sergey Lavrov and the Minister of Foreign Affairs of Luxembourg Jean Asselborn has become regular. On the 26th of October, 2011 Jean Asselborn undertook a regular working visit to Russia. S.V. Lavrov visited Luxembourg several times to meet with the leaders of the EU Three and participate in work of the EU-Russia Permanent Partnership Council (PPC). His last visit occurred on the 27-28th of April 2009, when the Minister had a meeting with the Grand Duke Henri and the Prime Minister J.C. Juncker.

In June 2011, in Moscow Russian Luxembourg political consultations were held (Deputy Russian Foreign Minister A. V. Grushko and the political director of the Foreign Ministry of Luxembourg G. Frieden).

In October 2010, the 75th anniversary of diplomatic relations between Russia and Luxembourg was celebrated in the Grand Duchy of Luxembourg. In the conference dedicated to this date, as well as in a number of events, the Russian delegation was led by Russian Minister of Culture A. A. Avdeyev, while from the Luxembourg side the entire political elite was involved. During his stay A. A. Avdeyev met with the Grand Duke Henri and the Minister of Culture O.Modert. Her return visit to Moscow was on the 12-14th of March, 2012. At the meeting with A. A. Avdeyev such issues as the exchange of experience in the ministries, the possibility of mutual organization of cross «Culture Week» and the development of libraries and archives were discussed.

Russian Luxembourg parliamentary relations have also been developing. In 2009, a delegation of the Committee on CIS Affairs of the Federation Council of the Federal Assembly of the Russian Federation visited Luxembourg. During the visit, a number of meetings, such as meetings in the State Council, with the Chamber of Deputies and with some ministers were held. In February 2010 a delegation led by the President of the Chamber of Deputies of Luxembourg, L.Mozarom, visited Moscow and held negotiations and meetings with the State Duma and the Russian Foreign Ministry.

Russia’s foreign trade with Luxembourg
in 2011 totalled 138.7 million Euros, a 19.8% increase compared to 2010. Russian exports to Luxembourg amounted to 12.9 million Euros, while imports reached a value of 125.8 million Euros. Thus, a negative trade balance for Russia with Luxembourg totalled 112.9 million Euros. The main export commodities (the proportion of supplies which exceeded 96%) in 2011 were: polymeric materials, plastics, natural rubber, synthetic rubber and articles thereof (71.8%), machinery, equipment, their spare parts and accessories (16.3%), basic metals and articles thereof (8.2%). Russian imports from Luxembourg consisted of the following product groups (approximately 90% of total supplies): machinery, equipment, their spare parts and accessories (33.9%), basic metals and products (18.4%), pulp of wood, pulp and paper products (18.3%), polymers, plastics, natural and synthetic rubbers and products made of these (14.1%), prepared foods, alcoholic and non-alcoholic beverages and tobacco (6.5%).

During the first five months of 2012 the trade turnover between Russia and Luxembourg totalled 50.5 million Euros, of which Russian imports from Luxembourg were 48.3 million Euros, while exports amounted to 2.2 million. Russian exports have seen a sharp decline (to 0.045%) in the share of goods belonging to the category «Plastics, rubbers and articles thereof».

Luxembourg is one of the biggest foreign investors in Russia (after Cyprus and the Netherlands). At the end of the first half of
2012 accumulated investment from Luxembourg to Russia amounted to 36.7 billion U.S. dollars (including direct investment of $ 1.1 billion). The volume of Russian investments in Luxembourg on July 12012 was $ 6.2 billion (of which direct investment was $ 2.4 billion).

The proven mechanism which facilitates the development of bilateral economic relations is the Joint Commission on Economic Cooperation between the Russian Federation and the Belgium-Luxembourg Economic Union (JCEC Russia — BLEU). Its latest VIII session was held in November 2011 in Moscow. The establishment of the Russian-Luxembourg subcommittee within the JCEC Russia — BLEU was approved there.

E.Schneider, who replaced J. Krecké as Minister of the Economy of Luxembourg, visited the Russian Federation on March 31 to April 4, 2012 and during his working visit he held talks with E. S. Nabiullina.

As acknowledged by both parties, the results of the economic mission of Luxembourg, led by the Crown Prince Guillaume, in Moscow and St. Petersburg (April 2010) were positive. The meetings and talks with Russian Foreign agencies, the authorities in Moscow and St. Petersburg, as well as activities involving heads of industry, finance and commerce, confirmed that «the Russian market opened significant business opportunities for the businessmen of Luxembourg». Much attention was paid to the prospects of cooperation in the financial sector, inter-bank contacts, cooperation in the field of energy and renewable energy sources.

On the 22-24th of April, 2012 in Luxembourg, the conference called «Global Meeting with Russian business» was held under the patronage of the Prime Minister of Luxembourg J. C.  Juncker. In the framework of the forum there was a series of thematic round table discussions and specialized sections devoted to investment into Luxembourg; the methods for post-crisis development of the world economy and their associated risks; the role of Russia in this process, its economic and trade relations with foreign partners and their involvement in the development and modernization of the Russian economy.

Regions of the Russian Federation have been showing growing interest in establishing links with Luxembourg. Cooperation at the regional level has developed through economic and cultural relations, relations of veterans’ organizations, as well as in scientific and medical fields as a part of student exchange programs. The most important events for the further development of relations with Luxembourg were the «Days of Russian Regions» held in 2009 and 2010 (presentations and meetings with representatives of Moscow and St. Petersburg, Vladimir, Kaluga, Moscow, Murmansk, Novgorod and Tver regions).

On the 9-10th of April, 2012, a delegation of the Republic of Tatarstan headed by President R. N. Minnikhanov visited the Grand Duchy, who had a meeting with J.C. Juncker. They discussed the issues of provision of space for television channels, provision of public access to the Internet, the introduction of «electronic government», production of automotive components, creation of technology parks in Tatarstan and free economic zones and upgrading of petrochemical companies.

Cultural and scientific cooperation is based on regularly renewed three-year intergovernmental cooperation programs in the fields of science, education, culture, youth and sports exchanges. In October 2010, the Protocol of the meeting of the Russian-Luxembourg Joint Commission on Cultural Cooperation was signed which contains the program of cooperation for 2011-2014.

In October 2011, the Conference and Exhibition «Russian Technologies» was held in Luxembourg with the participation of the Russian Ministry of Education, Sciences, the leading Russian universities and companies working in the development and implementation of advanced technologies.

On the 10th of November, 2011, the official opening ceremony of the Russian Centre of Science and Culture (RCSC) in Luxembourg was held. Opening of RCSC provides a structural basis for further steps in the development of Russian-Luxembourg scientific, educational and cultural exchanges.

The institute of honorary consuls of Luxembourg in Russia has been rapidly developing. Since September 2006, a Russian businessman A. A. Mordashov has been honorary consul for Cherepovets («Severstal»). On the 16th of September, 2009 the ceremony appointing honorary consuls of Luxembourg in Russia, V. A. Gergiev (for St. Petersburg and Novgorod) and V. P. Evtushenkov (for the Yekaterinburg, Sverdlovsk Oblast and Khabarovsk region) took place in Luxembourg. On the 14th of December, 2011 in Luxembourg, the Chairman of the Board of Directors of JSC «Magnitogorsk Metallurgical Plant» V. F. Rashnikov was appointed the honorary consul of Luxembourg for the Magnitogorsk and Chelyabinsk Region.