OREANDA-NEWS. May 22, 2013. The State Duma of the Russian Federation approved in the first reading a draft law on introducing amendments to the Federal Law “On the Procedures for Foreign Investments in the Business Entities of Strategic Importance for the 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 for Foreign Investments in the Russian Federation and of the Government of the Russian Federation.

Approving the amendments in the first reading is some kind of a present for the anniversary of No.57-FZ Federal Law that was adopted five years ago – on 29th April 2008 but officially came into force on 7th May, establishing unified procedures for preliminary approval of transactions for foreign investors, as well as the requirements and the rules regulating participation of foreign investors in the statutory capital of strategic business entities.

For five years No.5-Federal Law has been expanding and developing. Several packages of amendments were adopted, the purpose of which was to eliminate excessive administrative barriers for foreign investors.

The draft law is also designed to further eliminate administrative barriers and simplify the procedures for considering petitions from foreign investors, logically continuing economic liberalization.

The main amendments proposed by FAS are:

Exclude ambiguity in interpreting the current version of the law and the need for a preliminary approval of transactions with regard to subsoil users if the Russian Federation loses control over them

Exclude the need for preliminary approval of transactions if the buyer is a company controlled by the Russian Federation, a constituent territory of the Russian Federation, as well as citizens of the Russian Federation that do not have dual citizenship and are tax residents

Clarify the concept of an “agreement”, which shall mean any arrangements and actions by foreign investors for joint voting at the governing bodies of strategic companies

Exclude the need for preliminary approval of transactions by foreign investors with regard to subsoil users that already possess 75% and more shares and intra-group transactions with regard to such strategic companies

Exclude from the list of strategic activities use of infectious agents by the companies mainly involved in production of food products

Grant a possibility to prolong an earlier issued decision about preliminary transaction approval

“In the course of the first reading of the draft law the State Duma actively discussed the proposed amendments, which once again confirms their significance and fastens an idea in our mind that we are on the right track”, commented Deputy Head of FAS Andrey Tsyganov.