FAS reviews the most typical violations in the field of control over foreign investments
The list of the most frequent violations includes: failure to notify transactions establishing control over strategic companies, failure to notify transactions with strategic companies, and submitting incorrect or incomplete data upon official FAS requests
According to the data given by FAS Department for Control over Foreign Investments, the most frequent violation is failure to submit pre- and post-merger notifications, information under the Law on Foreign Investments.
Foreign investors conclude transactions and establish control over strategic entities without prior approvals by the Government Commission on Foreign Investments in the Russian Federation.
Such violations are punishable by administrative fines upon legal entities from 500,000 RUB to 1 million RUB. Transactions concluded in breach of No. 57-FZ Federal Law are void.
Sometimes foreign investors fail to submit information about acquiring 5% and more stock / shares of a strategic company. It incurs administrative liability in the form of an administrative fine upon legal entities for up to 500,000 RUB.
In some cases foreign investors submit incorrect or incomplete data upon official FAS requests.
Considering pre- and post-merger notifications and other petitions in the field of control over foreign investments, the regulator can request information necessary to perform its functions.
For refusals to submit such data or submitting incorrect or incomplete data upon official FAS requests violators are held administratively liable and pay up to 1 million RUB fines.
To avoid violating the law on foreign investments before concluding transactions that establish control by foreign investors over strategic companies, FAS recommends foreign investors to thoroughly familiarize themselves with No. 57-FZ Federal Law, especially the criteria of establishing control over strategic companies, and in case of any doubts whether a particular transaction requires approval, approach FAS for explanations.