THE PRESIDENT OF RUSSIA HAS SIGNED A LAW TO PROTECT FISHING INDUSTRY FROM CONTROL OF THE UNSCRUPULOUS FOREIGN INVESTORS

Amendments are being made to the Law on Fisheries and Conservation of Aquatic Biological Resources (No. 166-FZ) and the Law on Foreign Investment (No. 57-FZ)

The law has been prepared by the FAS Russia as part of the implementation of the Order of the President of Russia on strengthening identification of transactions allowing for managing domestic fishing companies and gaining control over them by foreign citizens and foreign legal entities.

Under the Law on Foreign Investment, the fishing of aquatic biological resources is an activity of strategic nature. Transactions resulting in the control by foreign investors over enterprises engaged in such activities are subject to prior agreement with the Government Commission for Control over Foreign Investments in the Russian Federation.

The adopted law provides for a decline in the stake of a foreign investor, in which a fishing company is considered to be under the control of a foreign investor, from more than 50% to 25%. This will avoid the risks of full material, technical and financial dependence of Russian fishing companies on foreign companies while keeping the industry's investment attractiveness for bona fide foreign investors.

Within 365 days from the date of entry into force of the law, foreign investors holding more than 25 and up to 50 percent of stakes in the authorized capital of fishing companies are required to submit a petition for approval of control activities in accordance with the procedure provided for by the Law on Foreign Investment or reduce their stakes in the authorized capital. Otherwise, the foreign investor will be deprived of the right to vote at the general meeting of stakeholders in court.