ANDREY TSYGANOV: REGULATE TIME LIMITS FOR CONSIDERING PETITIONS THAT FALL UNDER THE LAW ON FOREIGN INVESTMENTS

“Russia is undertaking robust work to attract foreign investors”, said Deputy Head of FAS Andrey Tsyganov, speaking at the International Conference – “Antimonopoly Regulation in Russia” on October 28, 2019

The session raised an issue of defining more precise criteria of classifying transactions under No. 57-FZ Federal Law and clear and understandable deadlines for considering petitions by the Government Commission on Foreign Investments.

Deputy Head of FAS agreed that the law can specify the timeline for considering petitions that fall under No. 57-FZ Federal Law in more detail, particularly, for the so-called “other” transactions submitted for consideration to the Government Commission by decisions of the Commission Chairman.

Andrey Tsyganov pointed out that amendments have been drafted to the law on foreign investments in the strategic sectors, regulating the procedures on approving establishing control over a strategic company if after establishing such control a Russian investor gains a status of a foreign investor (for example, a citizen of the Russian Federation receives a citizenship of another state).

The amendments also detail cases when transactions must be approved under the procedures specified in No. 57-FZ Federal Law when a foreign investor gets property of state and municipal unitary enterprises in concession.

The amendments to the law regulated the procedure of FAS inspections to verify compliance with No. 57-FZ Federal Law. As liability for unfair investors, FAS shall give orders to transfer the income gained during the period of unlawful control over a strategic company to the federal budget.

The amendments also detail provisions of the Code on Administrative Violations that establish administrative liability for failure to observe bans set by No.57-FZ Federal Law.

FAS and the Antimonopoly Experts Association have drafted the first version of Article-by-Article comments on the law on foreign investors. Currently FAS is working on the second edition. “Practice is constantly improving, and we are preparing profound FAS explanations on No. 57-FZ Federal Law, that will focus on the most complex aspects of enforcement of the law on foreign investments to strategic sectors of Russian economy”, informed Andrey Tsyganov.

Head of Austria Competition Authority, Theodor Tanner; François-Charles Laprévoteand Antoine Winckler, Partners at Cleary Gottlieb Steen & Hamilton LLP; Nikolai Voznesensky, Partner at Bryan Cave Leighton Paisner (Russia) LLP; Irina Akinova, Head of antitrust division, BGP Litigation; Elena Sokolovskaya, Partner, Head of antimonopoly practice at “Peplyaev Group; Evgeny Yuriev, a counsel at Herbert Smith Freehills Law Firm; Andrey Rego, Director of “MTS” Department for Regulatory Risks Management, Chairman of the General Council of the Antimonopoly Experts Association and other experts attended the session.

Background:

In 11 years the Federal Antimonopoly Service received 606 petitions under No. 57-FZ Federal Law “On the procedure of foreign investments in the economic entities of strategic importance for national defence and state security”.

Including:

263 petitions were considered by the Government Commission, of which 245 were pre-approved (78 with particular obligations) and in 18 cases pre-approvals are not granted;

261 petitions are returned to petitions as they do not require approvals;

59 petitions are withdrawn by the petitioners due to changing their intention to execute the merger in question;

23 petitions are currently under consideration.