Amendments to the foreign investment law
New rules took effect from 9 January 2023 requiring transactions with foreign investors to be referred for review by the Government Commission.
Amendments to Federal Law No. 160-FZ introduced a requirement for the Federal Anti-Monopoly Service ("FAS") to assess transactions with foreign investors to decide whether they need advance approval from the Government Commission. That assessment is mandatory both for investments in strategic enterprises and for investments in certain Russian companies
as listed above.
As a result, a transaction with a foreign investor may be held up for over 60 days
given that the preliminary assessment process involves the preparation of reasoned recommendations by federal agencies (up to 30 days), the review of the transaction by the chairman of the Government Commission (up to 30 days), followed by notification of the chairman’s decision to the parties concerned.
It should be noted that federal agencies consider the following criteria in their reasoned recommendations:
- the consequences of the transactions for the sector
- applicable regulations and/or federal state control procedures
- whether or not there is a need for the Government Commission to impose the obligations provided for in Federal Law No. 57-FZ on the foreign investor
In view of the above, we recommend that companies factor in the new rules and assess in advance whether a transaction would need to be reviewed by the Government Commission in order to plan the timeframe for obtaining approval.