On March 12, 2013 the State Duma of Russia approved in the first reading the draft law canceling notification control of the FAS of Russia (Federal Antitrust Service) with respect to a range of transactions involving economic concentration.

In particular, amendments to the Federal Law “On protection of competition” cancel notification control for transactions related to creation of a commercial entity as a result of a merger among commercial entities and consolidating with a commercial entity one or several other commercial entities, provided the overall asset value or the overall sales revenue of the entities for the calendar year preceding the consolidation year exceeds 400 million rubles according to the latest balance sheets.

The draft law ends control over transactions related to creation of a financial entity or consolidation with a financial entity, provided the overall asset value according to the latest balance sheets of financial entities involved in the transaction does not exceed the value established by the Government of Russia.

Notification control is canceled with respect to transactions on purchase of shares, rights or property, provided the overall asset value according to the latest balance sheet or overall sales revenue of the entity (or group of entities) buying them and the entity (or group of entities) selling them exceeds 400 million rubles, while the overall asset value according to the latest balance sheet of such entities exceeds 60 million rubles.

Also, control over transactions on purchase of shares (or participation interest), rights and/or assets of a financial entity is also canceled, if its asset value according to the latest balance sheet exceeds the value established by the Government of Russia. Control over transactions on consolidation of a commercial entity and financial entity is eliminated, if the asset value of the financial entity according to the latest balance sheet exceeds the value established by the Government of Russia.

The permit of the FAS of Russia is now required only with respect to transactions of companies with overall asset value exceeding 7 billion rubles and annual revenue exceeding 10 billion rubles.

Therefore, the FAS of Russia has lifted an administrative barrier for business related to approval of transactions which have no significant impact on competition.

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Irina Akimova, Moscow Office of Capital Legal Services.

This Information letter keeps the clients of the Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this Information letter shall not be deemed as legal opinions.