CONTROL INSTEAD OF BAN

FAS is improving the law on control of foreign investments

The President of the Russian Federation signed No.122-FZ Federal Law “On amendments to some legislative acts in the part of clarifying the “foreign investment” concept” of 31.05.2018.

A very important novelty is excluding the prohibition for establishing control over strategic companies for foreign investors that disclose information about their beneficiaries, beneficial owners and controlling persons, simultaneously issuing such prohibition for foreign investors that do not disclose information about their ownership structure.

Head of FAS Igor Artemiev commented the adopted amendments: “During the enforcement period of No. 57-FZ Federal Law, a trend has been formed towards liberalization of control over foreign investments. It is symbolic that the decade of the Law enforcement is marked with adopting the next package of amendments, eliminating excessive regulation for foreign investors while maintaining the level of regulation and control necessary for national defence and state security. The automatic ban for attracting foreign investments to strategic sectors due to a “wrong” jurisdiction is replaced with a more flexible treatment, in our opinion – the ban applies only to those foreign investors that do not wish to disclose who stand behind them. Bona fide investors have nothing to hide, while giving the most sensitive sectors of the economy to unknown hands is, at least, strange. We are confident that the amendments will help improve the investment climate in Russia”.

Under the new law, FAS is assigned the powers to give explanations on applying No. 57-FZ Federal Law.