Economically significant organizations (“ESO”) first appeared in Russian legislation in summer of 2023 after the adoption of federal law No. 470-FZ dated 04 August 2023 “On Peculiarities of Regulation of Corporate Relations in Business Companies that are Economically Significant Organizations” (“FZ No. 470”). Read more about the criteria for classifying a company as ESO and the specifics of the legal status of such organizations in our review.
On 20 October 2023, the draft law “On Amending Article 13 of the Federal Law 'On Peculiarities of Regulation of Corporate Relations in Business Companies that are Economically Significant Organizations'” (“Draft Law”) was submitted to the State Duma. The Draft Law amends Federal Law No. 470 and cancels some restrictions for transactions aimed at obtaining direct control over ESO by Russian citizens and residents indirectly owning stocks/shares of ESO owned by a foreign holding company.
Thus, such transactions will not be regulated by the rules on:
- obtaining the prior or subsequent consent of the Bank of Russia for the acquisition of stocks/shares of ESO that is a credit organization or a non-credit financial organization;
- obtaining the consent of the Government Commission for Control over Foreign Investments in the Russian Federation and the Federal Antimonopoly Service of Russia for the transaction;
- acquisition of 30% or more of ordinary stocks of ESO that is a joint-stock company;
- involvement of an authorized federal executive body to determine the price of placement of stocks of ESO;
- exercising the right of pre-emptive acquisition of stocks/shares of ESO;
- approval of a related-party transaction.
The Draft Law is designed to reduce the time and simplify the procedure for taking direct ownership of stocks/shares in ESO, as follows from the explanatory statement to it, what determines the expediency of canceling previously accepted restrictions.