OREANDA-NEWS. May 07, 2013. The Committees of the State Duma and the Council of the Federation approved the draft Federal Law “On the Procedures of Foreign Investments in the Business Entities of Strategic Importance for National Defence and State Security” (No.57-FZ) devised by the Federal Antimonopoly Service (FAS Russia) to execute the instructions of the Government Commission for control over foreign investments in the Russian Federation and the Government of the Russian Federation.

The draft Law on introducing amendments to No.57-FZ is a logical continuation of economic liberalization and is aimed at further eliminating administrative barriers and simplifying the procedures for processing petitions of foreign investors.

The main amendments proposed by FAS are:

Excluding ambiguous interpretation of the current version of the Law and preliminary approval of transactions with regard to subsoil users when the Russian Federation loses control over them;

Excluding preliminary approvals of transactions, when buyers are organizations controlled by the Russian Federation, the constituent territories of the Russian Federation, and citizens of the Russian Federation who do not have dual citizenship and are tax residents;

Clarifying the concept of “agreement” (any arrangements and actions of foreign investors towards joint voting in the governing bodies of strategic companies);

Excluding activity for using infectious agents by economic entities, mainly involved in food production, from the list of strategic activities;

Excluding preliminary approvals of transactions with regard to subsoil users if foreign investors already possess 75% and more shares, as well as intra-group transactions with regard to such strategic companies;

Allowing to prolong validity of an earlier issued decision on a preliminary transaction approval.

After the draft law was discussed by the State Duma Committee on Land Relations, it was proposed to include it for consideration in the first reading in May.

“MPs and senators took a positive view of the proposed amendments which is confirmed by the approval of the draft law at this stage without criticism”, commented the Head of FAS Department for Control over Foreign Investments, Armen Khanyan. “I think, we are going in the right direction and the amendments will give a positive impulse for investors”.