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Simplifying control over foreign investments in Russian strategic enterprises

The Federal Law on amendments to the article 6 of the Federal Law “On Foreign Investments in Russian Federation” and the Federal Law “On the Procedure of Foreign Investments in Companies Having Strategic Significance for the Preservation of National Defense and State Security” (hereinafter – the “Law”) was passed in the second reading by the State Duma on 1 November 2011. The Law simplifies the control procedure over foreign investments into the Russian strategic enterprises.

Introduced amendments change several criteria, used for identification of either foreign investor’s or group of persons’ control over company, having strategic significance. Thus the minimum interest of foreign investor in such Russian companies, defined as an interest granting corporate control, was increased from 10 to 25 percent. The minimum interest of foreign investor in oil-and-gas and mining companies (which transactions are subject to preliminary consent) was increased equally as well.

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