OREANDA-NEWS. May 12, 2014. The Head of the Department of the Federal Antimonopoly Service (FAS Russia) for Control over Foreign Investments, Armen Khanayn, announced this information at an international conference on “Health Care Modernization in Russia - Opportunities and Prospects for German – Russian Cooperation”.

For the first time the Conference was organized in 2013. This year the venue took place on 29th April 2014 at the Embassy of the Russian Federation in Berlin. FAS was also represented by the Head of FAS Department for Control over Social Sphere and Trade, Timiphei Nizhegorodtsev.

He discussed the problems of unfair competition in procurement of medicines and medical equipment, and the novelties to the Russian healthcare legislation aimed at eliminating them: restrictions for coordination of work between medical doctors and pharmaceutical companies, requirements to prescribing and purchasing medicines under international non-proprietary names, and the procedures for compiling various lists of medicines are under preparation.

According to Armen Khanayn, Russian pharmaceutical industry was always of interest to foreign investors. It is necessary to take into account, however, that production of vaccines and medicines is a strategic activity since it concerns life safety of Russian citizens. Therefore, transactions with regard to Russian pharmaceutical companies require ex-ante approval under No.57-FZ Federal Law “On the Procedures of Foreign Investments in the Economic Entities of Strategic Importance for the National Defence and State Security”.

Armen Khanayn informed representatives of large German pharmaceutical companies in detail about the procedures for filing petitions to FAS and the consideration periods.

“The existing procedure of considering petitions outlines clearly what must be done to undergo the approval procedure. You file a petition to FAS – you receive a decision also from FAS”, pointed out the Head of the Department for Control over Foreign Investments.

Statistical data confirm easiness and transparency of the approval procedure. In 6 years of enforcement of No.57-FZ on foreign investments, no more than half of 331 petitions filed to FAS required approvals, and only 9 petitions were refused. None of the decisions of the Government Commission for Control over Foreign Investments in the Russian Federation were appealed at Court, although Article 11 of No.57-FZ Fedeal Law allows it.

Since the law is designed to protect national defence and state security, the financial side of transactions becomes less significant. Statistics shows, however, that in 6 years the total sum of transactions of foreign investors with Russian strategic companies was nearly 1 trillion RUB, and the volume of planned investments - around 900 billion RUB. According to Armen Khanayn, however, the figures are approximate because the price of a transaction is not always specified in documents (being a commercial secret) and is not directly important for a transaction in question.