Strategic Investments

 

On 17 November 2011 the President signed Federal Law No. 322-FZ amending the Foreign Investments Law and the Strategic Investments Law.

The amendments aim to improve the investment climate in Russia and remove excessive administrative barriers affecting foreign investors. The amendments introduce, in particular, the following changes:

  • international financial institutions (their list will be established by the Government) are released from the obligation to obtain an approval from the Government Commission for Control over Making Foreign Investments in the Russian Federation for the acquisition of both strategic and non-strategic Russian companies;
  • the Strategic Investment Law shall no longer apply to transactions between entities controlled by the Russian Federation or Russian citizens (provided that such citizens do not have double citizenship and are Russian tax residents);
  • the control threshold in respect of strategic subsoil users (i.e., companies holding licenses for subsoil plots of federal significance) has been raised from 10% to 25% (number of votes allocated to voting shares or participatory interest in a company’s equity capital and/or the number of directors on its board);
  • the following activities are excluded from the list of strategically important activities:

    (a) activities involving distribution and maintenance of cryptographic means and rendering services involving information encoding performed by banks if the Russian Federation does not hold any equity stake in the bank, and (b) activities related to operations with radiation sources in the civilian sector of the economy if such activities do not constitute the company’s main business.

The amendments will enter into force on 18 December 2011.

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For further information please contact Igor Ostapets or Irina Dmitrieva in the Moscow office of White & Case, tel + 7 495 787 3000 .

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