On August 25, 2015, on the official web site of draft regulatory acts, the Federal Antitrust Service (the FAS) published a draft Resolution of the Russian Government introducing amendments to the Regulations on the government committee for supervision over foreign investments. 

In particular, the antitrust authority proposes to improve the procedure for adopting decisions on the results of examining motions for preliminary approval of transactions or establishing control of a foreign investor over companies of strategic importance. 

Pursuant to the effective Regulations,[1] the decision is to be adopted by a simple majority of members of the Committee. That provided, the period for examining a motion by the antitrust authority and the Committee is 3 months and can be extended by another 3 months. Taking into account that the country’s top executives are among the members of the Committee, and that it is headed by the Chairman of the Russian Government, the Committee meets only if several motions requiring approval are on the agenda. In practice, a motion which is ready for approval can be put on hold at the FAS for 6 months until the time when a sufficient number of motions for initiating a meeting of the Committee has accumulated. There is no doubt that this affects the timeframes for approving the motions and adds ambiguity for investors who do not have an opportunity to determine when their transaction will be approved. 

To resolve the issue, the FAS of Russia proposes to grant the Committee the right to adopt decisions by absentee voting. The chairman or deputy chairman of the Committee would adopt the decision on holding the absentee voting. That provided, the Committee members will be notified thereof and will be able to provide in writing their opinion on the issues put to vote. 

However, the draft prepared by the FAS of Russia does not contain provisions which would establish the criteria based on which the decision on holding the absentee voting is to be adopted. 

Despite that, in the event the initiative of the FAS is approved, the opportunity of the absentee voting will allow to considerably shorten the time needed for approving transactions with foreign investors and to avoid situations when an investor does not understand why a decision on his motion has not been adopted for a long time.

Irina Akimova  Of Counsel  Head of Antitrust Practice                               Moscow    iakimova@cls.ru  Tel.: +7 (495) 970 1090

Dmitry Gavrilenko   Associate                Moscow       Tel.: +7 (495) 970 1090

Additional notes

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

This Information letter keeps the clients of 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 and do not cancel the need to obtain legal advice or legal opinion on separate issues.