Since August 17, the State Duma has been considering a draft law on amending the Federal Law “On Foreign Investments in the Russian Federation” and the Federal Law “On Protection of Competition”. The main purpose of the draft law is to strengthen control over foreign investment.

In particular, this draft law proposes to define a list of business entities in respect of which the procedure for informing the Chairman of the Government Commission about a foreign investor’s transaction is mandatory. This list includes:

  • participants of national projects;
  • city-forming organizations;
  • enterprises occupying a dominant position in the commodity market;
  • guaranteeing suppliers of electric energy, cold water supply and (or) sanitation, unified heat supply organizations, regional operators for municipal solid waste management;
  • sole producers or suppliers of products (works, services) on the territory of the Russian Federation;
  • organizations providing satellite communication services;
  • enterprises of strategic importance for ensuring the defense of the country and the security of the state;
  • subsoil users;
  • organizations carrying out work on the creation and (or) reconstruction of the seaport and (or) river port.

Please note that from September 08, 2022, in accordance with Decree No. 618 of the President of the Russian Federation, the permission of the Government Commission will also be required for any transactions to establish, change or terminate the rights to shares in the authorized capital of Russian companies, if one of the parties is a foreign entity related with unfriendly foreign states.

The legislator also intends to expand the list of documents and information to be provided when applying for a preliminary approval of the transaction. When adopting the draft law, it will additionally be required to provide a list of licenses held by the company, as well as information about each of the beneficiaries, beneficial owners, controlling persons of the applicant.

In addition, it is planned to expand the powers of the Federal Antimonopoly Service of Russia with the right to make decisions on extending the time for consideration of applications for obtaining a preliminary approval of the transaction.