Mitchell & Co EMDG Newsletter May 2022

EMDG Old – Year ended June 30th, 2021 – the last of the old program.

Most applications have now been processed. We are tracking at 85% now processed and paid. We expect the rest to be completed before the end of June. There will be second tranche for payments greater than $30,000. The amount is unknown at this stage. It will not happen until the 3rd week in June.

EMDG New – Year ended June 30th, 2022 – the first of the new program.

Grant Offers for Tiers 2 and 3 are now happening – with over 50% now issued, this is a big improvement from the 5-10% some weeks back. We now expect all offers to be out by the end of this month.

Russian Sanctions – President Putin and EMDG.

What does President Putin have to do with EMDG, you ask?

Sanctions have been imposed by the Australian Government against Russia in response to Russia’s invasion of Ukraine.

Australia will prohibit the supply, sale, or transfer of certain luxury goods directly or indirectly to, for use in, or for the benefit of Russia.

The sanctions, work both ways, not only imports from Russia to Australia, but also exports from Australia to Russia.

In Theory, for your EMDG application: –

1.    Per section 20 of the EMDG Act, any expenses in respect of products that the sale or export of would contravene Australian law are excluded under the Act.

For this reason any marketing or promotional expenses incurred on or after 7 April 2022 in relation to the export of goods covered in the Autonomous Sanctions (Export Sanctioned Goods—Russia) Amendment (No.1) Designation 2022 to Russia will no longer be eligible to be claimed under the EMDG scheme.

2.    In addition to the above, any expense incurred after 7 April 2022 relating to an otherwise eligible product being exported to Russia and/or Belarus will be deemed by Austrade to be detrimental to Australia’s trade reputation, and as such excluded as an eligible expense per rule 47 of the EMDG Rules. This means all goods and services are effectively excluded from EMDG support for applicable marketing costs incurred in relation to Russia and Belarus.

In Practice, for your EMDG application: –

·         If a business only markets to Russia and Belarus, Austrade will not enter (execute) into a Grant Agreement with you. You will be excluded from any EMDG support until further notice.

·         To access EMDG support, you will need to change your marketing efforts to different markets going forward.

·          Marketing expenditure up to April 7 incurred in relation to both Russia and Belarus is still claimable, it’s only costs after that date that are excluded for those markets.

·         If you already hold an executed EMDG Grant Agreement, expenditure for any promotional marketing activities related to Russia/Belarus incurred after 7 April 2022 will not be supported through the EMDG funding.

·         If you are exporting to other countries in addition to Russia and/or Belarus, grant funding for the eligible expenditure in those countries is still covered by EMDG.

If you have any questions, as always, feel free to contact us directly.

All the best,

Stuart and Team.

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