20/7 Tass 253
NOVO-OGAREVO, July 20 (Itar-Tass) —— Russia’s Federal Antimonopoly Service (FAS) hopes that amendments to the law on strategic investments will be adopted in September.
The State Duma is examining the amendments. “They will do a lot [of improvement] for business,” FAS Deputy Head Andrei Tsarikovsky told Itar-Tass on Wednesday, July 20.
“I think this draft law will be passed in September and will remove half of transactions from under the commission’ s [on foreign investors] jurisdiction,” the official added.
The Russian government earlier approved a set of measures aimed at facilitating access to strategic sectors of the economy for foreign investors.
There are 43 sectors to which access restrictions apply, FAS chief Igor Artemyev said earlier.
“The idea is to reduce this list,” he said, but did not specify which sectors will be opened to foreign investors.
To this end, the amendments suggest amending the list to exclude activities related to the use of Risk Group IV pathogens, as well as to the operation of class 4 sources of radiation.
This means pathogens used by milk and cheese factories, and Roentgen units used by hospitals and clinics, including dental ones, defect detectors, and X-ray machines for examining luggage.
The amendments will also apply to banking activities, specifically cryptography.
Yet another amendment will allow foreign investors to avoid the need for seeking approval for the acquisition of shares in strategic enterprises that use federal subsoil resources, if such acquisition does not increase the share of the foreign investor in the authorised capital of the company.
Last year, the FAS proposed amendments, according to which deals aimed at acquiring shares, which make up the authorised capital of a strategic company, by way of an additional issue will be made without a preliminary approval, if the investors’ rights regarding the disposal of such shares do not increase.
Another key amendment was designed to increase the period of time during which a foreign investor can make an agreement on the acquisition of assets in Russia from 20 to 30 days after the approval of a deal by the government commission for foreign investments.
The change was prompted by numerous complaints from companies that cannot compete this work within three weeks.
Before sending amendments to the law on foreign investments in strategic industries to the government, FAS said it would discuss them with investors. “We will have a series of joint discussions with foreign and Russian investors. It is important for us to hear their opinions and suggestions regarding the amendments and ways to eliminate possible uncertainties in understanding and applying come of its provisions,” Artemyev said back then.
Artemyev said that the amendments would not make things worse for foreign investors.
“The government will consider the draft law, and before it goes to the State Duma all investors will have a chance to study it,” he said.
He said the new law would not enlarge the list of industries that are off limits to foreigners.
“There is no new industry that falls under control, nothing will get worse for investors, and no thresholds will be lowered to worsen the situation,” he said.
“What is done is that we are specifying the details mentioned by investors,” Artemyev said.
In 2009, Prime Minister Vladimir Putin said the Russian government would make adjustments in the procedure for exercising control over foreign investments in strategic industries.
He said the government commission on control over foreign investments had received applications from foreign investors for the purchase of shares in strategic Russian companies.
Putin believes it necessary to eliminate loopholes in legislation. “We must eliminate the problems that allow some participants in economic activities to bypass the law and avoid the approval of transactions with strategic assets,” he said.
At the same time, he stressed the need to simplify the decision-making process and made it less burdensome for bans fide investors.
He said this work should be done publicly and promptly in constructive dialogue with the business community.
The Federal Antimonopoly Service also submitted a draft government resolution aimed at bringing its powers in line with the federal laws “On Foreign Investments in Business Entities of Strategic Importance in Order to Ensure National Defence and Security”, “On the Protection of Competition”, “On the Placement of Orders for the Supply of Goods, the Performance of Works and the Provision of Services for Governmental and Municipal Need” and “On the Power Industry”.
The draft resolution gives FAS additional powers to oversee foreign investments in companies of strategic importance for national defence and security.
FAS will have the sole authority of adopting the following regulatory acts in the appropriate fields: the form of a business plan of a strategic company; a tentative form of an agreement with a foreign investor or a legal entity or an individual from the group of persons that includes a foreign investor if they intend to carry out a transaction or establish control over a business entity of strategic importance, that will require them to perform certain obligations.