THE GOVERNMENT OF THE RUSSIAN FEDERATION APPROVED TWO DRAFT LAWS OF THE FAS RUSSIA ON FOREIGN INVESTMENTS IN RUSSIAN COMPANIES

The initiatives of the Authority are aimed at improving the existing procedure for directing foreign investment, including in strategic sectors of the economy

The first draft law of the Authority provides an algorithm for investors. It determines in respect of which non-strategic economic entities a transaction can be submitted for consideration by the Government Commission on Control over Foreign Investments in the Russian Federation. A potential investor, having a list of such criteria, can immediately determine the instance to which it is necessary to send the application. The adoption of the draft law will reduce the terms for consideration of applications for foreign investors, as well as make decisions more understandable and transparent.

In accordance with the second draft law of the Federal Antimonopoly Service, a company that decides to engage in one of the strategic activities will have to agree with the Government Commission the obtaining a license, certificate or other authorization document to carry out such activities if this company is controlled by a foreign investor. Among other things, the document defines measures to suspend the validity of such a license (permit document) in case of violation of this procedure.

The draft law was previously agreed with all the interested authorities and finalized taking into account the comments of the business. The initiative is aimed at preventing risks arising from foreign investments in companies engaged in strategic activities. The amendments will apply only to newly emerging relationships.

The Federal Antimonopoly Service notes that this draft law will not affect 95% of investments made in open sectors of the Russian economy. They affect only the spheres of activity that are of strategic importance for the defense and security of the state (defense industry enterprises, subsoil, ports, extraction (catch) of aquatic biological resources and others).

Reference:

[1] draft Federal Law "On Amendments to the Article 6 of the Federal Law "On Foreign Investments in the Russian Federation" and the Federal Law "On Protection of Competition"

[2] draft Federal Law "On Amendments to the Federal Law "On the Procedure for Foreign Investments in Economic Entities of Strategic Importance to ensure the defense of the country and the security of the state" and certain legislative acts of the Russian Federation"

[3] In accordance with the Article 6 of the Federal Law of April 29, 2008
No. 57-FZ "On the Procedure for Foreign Investments in Economic Entities of Strategic Importance for Ensuring the Country's Defense and State Security" (with amendments and additions)