Practices
Industries

Russian Courts Began to Invalidate Transactions Made Without the Permission of the Government Commission

23 October 2023

On 14 August 2023 the Tenth Arbitration Court of Appeal invalidated a real estate purchase and sale deal completed without the permission of the Government Commission for Monitoring the Implementation of Foreign Investments in the Russian Federation (hereinafter referred to as the “Government Commission”). On 16 October 2023 the Arbitration Court of the Moscow District upheld the decision of the Court of Appeal, confirming the illegality of such transactions bypassing the procedure provided for by current legislation.

The Ministry of Finance Has Softened the Conditions for Paying Dividends to “Unfriendly” Non-Residents

24 August 2023
On 23 August 2023, the Ministry of Finance of the Russian Federation has published on its website an extract from the minutes of the meeting of the Subcommittee of the Government Commission for the Control of Foreign Investment in the Russian Federation No. 182/5 dated 9 August 2023 (“Extract”). This Extract allows residents to pay dividends to foreign “unfriendly” creditors without complying with the conditions specified in paragraph 2 of the minutes of the meeting of the Subcommittee No. 171/5 dated 14 June 2023(«Conditions»). 

The Government Commission Has Unified the Requirements for Transactions on Sale of Shares in Russian Companies and Payment of Dividends, Which Carried Out with Shareholders from Unfriendly States

17 July 2023

The Ministry of Finance of the Russian Federation published the Extract from the Decision of the Subcommission of the Government Commission for Control over Foreign Investments in the Russian Federation (the “Subcommission”) No. 171/5 dated 7 July 2023, which unifies and clarifies the requirements for deals on sale and purchase of stocks (shares) in Russian companies by persons from unfriendly states and payment of dividends to such persons. At the same time, the previously published Extracts from the Minutes of the Subcommission meetings No. 118/1 dated 22 December 2022 and No. 143/4 dated 02 March 2023 are no longer in force.

The table with the main criteria used by the Subcommission when considering the issue of approving transactions is set out in this update


OFAC Has Restricted Payments of Mandatory Contributions to the Budget of the Russian Federation for American Companies and Individuals

05 April 2023

On 27.03.2023 the Subcommission of the Government Commission for the Control of Foreign Investments published an Extract from the minutes of its meeting dated 02.03.2023. This document provides for a new requirement which has to be fulfilled in order to obtain Subcomission’s permission with regard to sale of shares of Russian companies. Foreigners from unfriendly states are now obliged to transfer funds to state budget in the amount of 5%-10% of the target’s valuation.