OREANDA-NEWS. December 17, 2013. The Federal Antimonopoly Service drafted an additional package of amendments for the second reading of the draft Law “On Making Changes to the Federal Law “On the Procedures of Foreign Investments to the Business Entities of Strategic Investments for the National Defence and State Security”. Information about this was given by Deputy Head of FAS Andrey Tsyganov at the Round Table organized by “Promoting Competition” Non-Commercial Partnership” for practicing lawyers.

Within five years of enforcement, the law of the Russian Federation on foreign investments was continuously developed. As pointed out Andrey Tsyganov, since No.57-FZ Federal Law coming into force, 16 normative legal acts were adopted aimed at creating a common and clear mechanism of control in the field in question. “No norm of the law must not have double interpretation”, said Andrey Tsyganov.

Deputy Head of FAS also reminded on the amendments adopted at the end of 2011 to narrow to a reasonable extent the area of enforcement of the Law and simplifying the control procedures. In particular, a list of strategic activities was narrowed, the threshold for control over users of subsurface resources is reduced from 10% to 25%, transactions of international financial organizations in which the Russian Federation participates, are excluded from transactions regulated by No.57-FZ.

During the entire period of validity of No.57-FZ Federal Law, FAS considered 324 petitions; 171 of which were presented for consideration by the Government Commission for Control over Foreign Investments in the Russian Federation. “Decisions to refuse were made only in 9 cases”, added Andrey Tsyganov. But in spite of the Russian law providing for a possibility to challenge the decisions of the Government Commission at Court, no investors took advantage of it”.

Also 112 petitions were returned to the applicants as not requiring approvals and 36 petitions were withdrawn by the applicants. 5 petitions are being considered.

“The number of petitions decreased. It is certainly related to liberalization of the law and narrowing the areas of control”, summed up Andrey Tsyganov.

Armen Khanyan, in his turn said that FAS is preparing to the second reading of the draft law introduced by the Government of the Russian Federation to the State Duma in April 2013 and passed in the first reading. He also informed participants of the Round Table that “at the moment, particularly, upon the instructions by the Government Commission, additional amendments are devised in line with the present-day realities. They include some principal issues and also clarify certain moments”. In particular, it is proposed to:

Submit information about end beneficiaries in a petition As a mandatory requirement,

Consider a strategic company to be under control of a foreign investor if its shareholders (participants) are foreign states, the share of which in their totality enable to control it

Add the list of obligations specified in No.57-FZ and imposed upon an investor, such as processing water biological resources in the Russian Federation

Make changes to the Federal Law “On Fishery and Preserving Water Biological Resources” in the part of prohibiting fishing by Russian persons controlled by foreign investors, except cases when control is established under No.57-FZ Federal Law

In view of coming termination of state regulation of the tariffs for the services of natural monopolies for providing mooring, loading, unloading and storage of goods in the ports of the Russian Federation, introduce amendments aimed at preserving state control over foreign investments to the economic entities rendering services in the ports of the Russian Federation.

It is expected that the amendments to 57-FZ at the beginning of 2014.

Summing up the meeting, Andrey Tsyganov and the Head of “Promoting Competition” Non-Commercial Partnership” Evegeny Voevodin agreed that representatives of the Non-Commercial Partnership would be able to submit their proposals to FAS to be used on the work on the amendments.