On February 26, 2024 amendments were made to the Decree of the President of the Russian Federation of 05.08.2022 № 520 “On the application of special economic measures in the financial and fuel and energy spheres in connection with unfriendly actions of certain foreign states and international organizations”.
Decree No. 520 establishes a general ban on transactions (operations) entailing the establishment, change, termination or encumbrance of rights to own, use and dispose of securities, shares (contributions) in the authorized capitals of Russian companies, as well as rights and obligations under production sharing agreements, joint activity agreements or other agreements on the basis of which investment projects are implemented in the territory of the Russian Federation. These transactions may be made only on the basis of a special decision of the Russian President.
This prohibition applies to transactions with shares, stakes in authorized capitals of strategic enterprises, companies of the fuel and energy complex, credit organizations, rights and obligations belonging to participants in Production Sharing Agreements for the Sakhalin-1 project and oil production at the Kharyaga field, as well as a number of other enterprises owned by foreign persons from unfriendly states.
According to the introduced amendments, the Government Commission for Control over Foreign Investments will consider the expediency of the above transactions and prepare a motivated recommendation on the (in)expediency of such transactions. If the transactions concern financial organizations, prior consent of the Central Bank of the Russian Federation will be necessary for the preparation of the recommendation.
It is emphasized that a special decision of the President of the Russian Federation may be adopted without taking into account the recommendation of the Government Commission.
Decree No. 520 establishes a general ban on transactions (operations) entailing the establishment, change, termination or encumbrance of rights to own, use and dispose of securities, shares (contributions) in the authorized capitals of Russian companies, as well as rights and obligations under production sharing agreements, joint activity agreements or other agreements on the basis of which investment projects are implemented in the territory of the Russian Federation. These transactions may be made only on the basis of a special decision of the Russian President.
This prohibition applies to transactions with shares, stakes in authorized capitals of strategic enterprises, companies of the fuel and energy complex, credit organizations, rights and obligations belonging to participants in Production Sharing Agreements for the Sakhalin-1 project and oil production at the Kharyaga field, as well as a number of other enterprises owned by foreign persons from unfriendly states.
According to the introduced amendments, the Government Commission for Control over Foreign Investments will consider the expediency of the above transactions and prepare a motivated recommendation on the (in)expediency of such transactions. If the transactions concern financial organizations, prior consent of the Central Bank of the Russian Federation will be necessary for the preparation of the recommendation.
It is emphasized that a special decision of the President of the Russian Federation may be adopted without taking into account the recommendation of the Government Commission.