On 23 August, the Russian Ministry of Finance partially lifted a ban for the payment of dividends to foreign shareholders in case such shareholders have invested in the Russian economy.

On 8 August, the Russian President suspended certain provisions of double tax treaties. Suspended provisions include tax regime for dividends, real estate, business profit, etc This suspension will mostly target non residents who have income in Russia.

On 4 August 2023 Russian President signed a new federal law establishing a framework for the exercise of corporate rights in certain Russian entities owned by Russian residents through foreign structures.
According to the lawmakers, the idea behind the law was to launch the mechanism that allows Russian persons to restore control over domestic companies in cases where such control has been exercised through foreign legal entities. However, there are certain concerns that this law could also be used more generally with regards to Russian subsidiaries of foreign companies without the Russian residency link.

Russian courts have started considering cases on reclaiming property owned by companies with foreign ownership The cases are initiated by the Russian prosecutor’s office and are developed in several state economic courts.

Additionally, on 23 August Russian Ministry of Finance confirmed the el aboration of a legal mechanism that would allow exchange of frozen assets between Russian and foreign investors. According to the Russian Central Bank representative, the mechanism would first target small retail investors. Foreign investors will be given the opportunity to purchase the relevant “ foreign securities from Russian investors at the expense of funds held in type C accounts. Participation of investors (both Russian and foreign) in this process will be voluntary.

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For more information on sanctions and Russian counter measures, please refer to our previous “Legal Alerts“.