ANDREY TSYGANOV: STATISTICS SHOWS THAT WE HAVE A FRIENDLY ATTITUDE TOWARDS FOREIGN INVESTORS
Deputy Head of FAS discussed regulation of foreign investments in Russian strategic companies at an event in Moscow
On 10 February 2020, the France-Russia Chamber of Commerce and Industry held a conference - “Economic situation in Russia: trends and forecasts”. Deputy Head of FAS Andrey Tsyganov presented a regulator’s opinion about foreign investments in economic entities of strategic importance.
He drew attention of the audience to the powers of Russian antimonopoly body that controls tendering, foreign investments, public procurement and public defence procurement, as well as tariff and antimonopoly regulation, which makes FAS a macro-regulator.
“We are a multi-sided body, and we are involved not only in antimonopoly enforcement; one of our main functions is control over foreign investments in Russian economic entities”, started his speech Andrey Tsyganov.
He outlined the legal foundation for exercising FAS functions and detailed the mechanisms of control over foreign investments in strategic economic entities.
“Our work is based on the Law on foreign investments1, adopting which was aimed at unifying control over operations of foreign investors; prior to this the norms were fragmented and were contained in multiple regulatory acts of different levels. The Law application is rather successful, it is constantly developing. During the period of its existence, 4 packages of amendments have been passed, the main meaning of which is liberalizing the law and adjusting concepts in order to avoid ambiguous interpretation of legal norms”, said the speaker.
Deputy Head of FAS informed that the Law on foreign investments specifies some restrictions for foreign investors, the consequences and sanctions for non-compliance, and described the decision-making procedure in detail.
“A foreign company, wishing to acquire a “strategic entity” in the Russian Federation, must observe particular rules in line with the Russian law. There is only one ban: a foreign state or a state-run foreign company cannot establish control over a Russian strategic company; those investors who do not disclose their beneficiaries and owners also cannot complete transactions. At the same time, private foreign investors can acquire strategic assets upon consent of the RF Government Commission”, stated Andrey Tsyganov.
The speaker drew attention of the audience to the procedure of the work ofthe Government Commission for Control over Foreign Investments in the Russian Federation.
“Decisions on approving transactions are made by the Government Commission. And it is frequently a discussion where a pre-drafted decision differs from a decision that can be finally issued. Currently a new Government Commission is being formed in view of the changes that have taken place recently in the Cabinet. Hopefully, the Commission members will be determined by the end of February and the Chairman of the Government Commission will be able to fix the date of the next meeting”, pointed out Deputy Head of FAS.
He also presented the FAS procedure for considering petitions and reported about the results of considering petitions received by FAS from 2008 till present.
For instance, in 11 years FAS received 621 petitions in accord with № 57-FZ Federal Law 282 petitions were considered by the Government Commission; 265 petitions were returned to the petitioners as not requiring preapprovals; 63 petitions were withdrawn by the petitioners due to abandoning intentions to complete the expected transactions, and 11 petitions are at the stage of consideration.
“I’d like to draw your attention that only in 23 cases investors were not allowed to complete transactions since those transactions threatened national defence and state security in Russia. The statistics shows that we have a friendly attitude towards foreign investors, the character of our work is not prohibitive”, confirmed Andrey Tsyganov.
Deputy Head of FAS highlighted a wide range of spheres that are of interests to foreign investors and mentioned that “a single meeting of the Government Commission should bring nearly 1 trillion RUB of foreign investments in the Russian economy”.
He underlined that during the period of application of № 57-FZ Federal Law, FAS has considered around 20 petitions of foreign investors from the French Republic with regard to Russian economic entities of strategic importance, and petitions of French investors were not refused.
1 № 57-FZ Federal Law “On the procedure of foreign investments in economic entities that are of strategic importance for national defence and state security”.