Russian counter measures. Recent developments (29 september 2022 update)
Procedure for the Approval of Transactions with Shares in a Russian LLC Adopted
On 19 September 2022 Russian Government introduced amendments establishing a procedure for approval of transactions involving shares in Russian limited liability companies.
Such transactions are considered as controlled operations and are to be approved by the Governmental Commission for the Control of Foreign Investment in Russia.
►Application. application must include a number of documents, namely those on the beneficiaries of the foreign person (the list of documents to be provided partially repeats the list already provided for by the Russian law on strategic sectors).
►Authorized applicants. While the procedure does allow for both residents and non-residents to be the applicants, in practice authorities require residents to file the applications.
►Reviewing procedure. No deadline for examining applications is defined by the decree. The government commission can decide to approve the operation without reservation, approve it under certain conditions or reject it. The governmental commission can also define the period of validity of its authorization.
The procedure is the same as the procedure for adopting other controlled operations. For more information, please refer to our Legal Alert dated 10 March 2022.
The initial regime of control of transactions involving Russian LLCs was introduced by Decree of the President No. 618 dated 8 September 2022. According to said decree the transfer of shares in Russian LLCs between Russian residents and foreign persons from unfriendly states entailing direct or indirect establishment, change or termination of rights of possession, use and (or) disposal of shares in the charter capital of limited liability companies or other rights allowing to determine the conditions for managing such limited liability companies and (or) the conditions for their entrepreneurial activities is subject to governmental control. For more information on this decree please refer to our Legal Alert dated 13 September 2022.
We are actively following the developments related to those issues and are fully prepared to advise our clients.
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