OLESYA MILCHAKOVA: LEGAL UNCERTAINTY INFLUENCES FAVOURABLE INVESTMENT CLIMATE IN RUSSIA
Ministry of Justice registered FAS Administrative Regulations on considering notifications from foreign investors regarding Russian strategic companies
No. 57-FZ Federal Law1 obligates foreign investors or group of persons with participation of foreign investors to notify FAS about acquiring five and more percentage of shares (stock) constituting the authorized capital of the companies of strategic importance of national defence and state security.
Head of FAS Department for Control over Foreign Investments, Olesya Milchakova, commented: “In this case the question is, first of all, about transactions that do not establish control of foreign investors over Russian strategic companies as well as completed transactions on acquiring control over strategic companies, decisions on preliminary approval of which was made by the Government Commission to control foreign investments in the Russian Federation”.
The Administrative Regulations2 establish the procedure for the officers of the antimonopoly body for acting upon receiving notifications from foreign investors and the deadlines for providing the state services on considering notifications. The Regulations also specify an exhaustive list of documents that must accompany notifications.
FAS provides the state service without any duty or other payment. The period of considering the notification is 30 days under the condition of providing the full package of the required documents.
Olesya Milchakova stated: “No. 57-FZ Federal Law provides for rather serious consequences for violating the procedure of notifying FAS about acquiring stock of shares of a Russian strategic company by a foreign investor – suspending the right to vote at a general shareholders meeting. In this context, an important task for us is detailed and comprehensive description of the rules for submitting notifications, because legal certainty for foreign investors directly influences favorable investment climate in Russia”.
1 No. 57-FZ Federal Law "On the procedures of foreign investors in economic entities of strategic importance for the national defence and state security" of 29.04.2008.
2 No.382/19 Order of the Federal Antimonopoly Service "On approving the Administrative Regulations of the Federal Antimonopoly Service for providing the state service for considering notifications on acquiring 5% or more of stock (shares) constituting the authorized capital of the economic entities of strategic importance for national defence and state security by foreign investors of a group of persons, comprising foreign investors, as well as completing transactions, other actions subject to preapproval" of 27.03.2019 (No.54532 Order registered on 26.04.2019)