FOREING INVESTOR IN THE FISHERY INDUSTRY IS UNDER FAS CONTROL

Experts discussed enforcement practice on exposing incidents of unlawful control of offering investors over Russian fisheries at a meeting at the State Duma

On 18 February 2019, Deputy Head of the Legal Unit, FAS Department for Control over Foreign Investments, Vsevolod Savin took pat in a session of the Working Group on improving the law on aquatic culture (fish husbandry) of the State Duma Committee on Natural Resources, Property and Land Relations.

Under the Law on foreign investments in strategic companies* operations for harvesting (catching) aquatic biological resources is of strategic importance for national defence and state security. FAS exercises control over transactions by foreign investors for acquiring shares (stock) of fishing companies.

‘Different authorities and mass media repeatedly stated that foreign investors effectively control considerable portions of catch of Russian fish products, most part of which is exported to foreign countries – Korea, Japan, China, etc. Such export often takes place at reduced prices to a sole foreign buyer – the minority shareholder of a Russian fishing company – and is “returned” to the Russian market at overrated prices for Russian population”, said Vsevolod Savin.

According to Head of FAS Department for Control over Foreign Investments, Olesya Milchakova, “at the moment there not that many cases when control by foreign investors is obvious through direct participation of foreigners in the registered capital with more than 50% ownership. FAS exposes increasingly more situations when foreign companies put Russian companies in a position of economic dependence, paralyzing their independent conduct in business operations and excluding competition”.

For instance, at the end of 2018 the antimonopoly body issued two opinions: in the first case, a fishing company was under indirect control of a Danish firm, which was a member of a big foreign holding; in the second case a Russian entity was effectively under control of a Spanish company.

“To more efficiently counter illegal control of foreign companies over Russian fisheries the law on fishing should be improved to better protect the interests of Russian citizens in general and ensure healthy competition in the fishing sector of Russia”, commented Olesya Milchakova.

* No. 57-FZ Federal Law “On the Procedure for foreign investments in economic entities of strategic importance for national defence and state security” of 29.04.2008