THE AMENDMENTS TO THE LAW ON FOREIGN INVESTMENTS PROPOSED BY FAS AIM AT ELIMINATING LEGAL UNCERTAINTY
The amendments proposed by the Authority relate only to cases of violation of law when unfair foreign investors illegally acquire the property of a strategic company or a share in it. The possibility of applying the mechanism of transfer of shares/persentage/corporate rights/property in favor of the state already exists in the Law on Foreign Investments*. With this draft law** FAS details legislation in accordance with the law enforcement practice of the Authority.
Thus, according to the current Law on Foreign Investments, if the transaction is void, the court applies the consequences of its invalidity in accordance with the Civil Code of the Russian Federation.*** The court may recover to the State's income everything obtained during such deal by the parties, which acted intentionally.
FAS has identified cases of the impossibility of applying such a provision. The first case of the impossibility of returning shares (property) are situations when sellers (foreign investors) have ceased their activities under the transaction. The second case is considered to be the return of shares (property) to the seller (investor) that does not meet the interests of national and economic security.
Amendments to the Law on Foreign Investments will not concern 95% of investments made in open sectors of the Russian economy. They affect only societies of strategic importance for the defense and security of the state (defense industry enterprises, subsoil, ports, extraction (catch) of aquatic biological resources and others).
Attracting foreign investment, as well as any investment, continues to be a key task of the state, and the most favorable conditions are created for fair investors.
For reference:
* Federal Law No. 57-FZ of 29.04.2008 "On the Procedure for Foreign Investments in Business Entities of Strategic Importance for Ensuring the Country's Defense and State Security".
** The draft law is posted on the Federal Portal of Regulatory Legal Acts