ANDREY TSYGANOV: A FOREIGN INVESTOR MAY BUY A RUSSIAN DEFENCE PLANT OBSERVING THE RULES SET BY THE LAW
31-07-2019 | 11:37
Representatives of FAS, the legal community and consulting discussed applying the law on foreign investments and its interpreting by the antimonopoly body at an event at Higher School of Economics
On 4 July 2019, Deputy Head of FAS Andrey Tsyganov took part in the Round Table on the “Key development trends and problems of enforcement of he law on foreign investments in strategic companies” organized by the Antimonopoly Experts Association.
“We have met today to discuss the future of the law on foreign investments, controversial issues emerging in enforcement of thelaw on strategic companies, approaches used by FAS to consider problematic situations and cases that, in view of both the regulator and the legal community, need changes to the law on foreign investments or explanations on its enforcement practice”, started his speech Deputy Head of FAS.
Andrey Tsyganov reported that since the law on foreign investments was passed it proved to be successful and it enables foreign investors to invest in the assets of interest.
He said that “Russian law on foreign investments is not a prohibitive law: it is possible to purchase a defence plant, an oil field, it is possible to buy a company that launch satellites to the space, observing the rules set by the law”.
The speaker gave FAS statistics on considering foreign petitions, which shows that the antimonopoly body works in a “foreigners-friendly manner”.
Deputy Head of FAS described “package” changes to the law on foreign investments and on amendments drafted by FAS upon its own initiative.
“The main objective of all changes is to set clear, understandable and transparent rules and avoid the stories when the law is interpreted differently by the law, foreign investors and the antimonopoly body and other federal executive bodies, with whom we jointly draft documents for the Government Commission on control over foreign investments, and legal companies that support these transactions”, emphasized Andrey Tsyganov.
He added: “It is for this purpose those specialists of the Antimonopoly Experts Associationdrafted explanations and comments to the Law on foreign investments. And we meet at Round Tables and similar events to deeply and comprehensively work out controversial issues and reach common positions so we do not keep making the same mistakes many times, teetering on the brink of violating No.57-FZ Federal Law”.
Commenting on interpretation of the concept of “strategic company” by the antimonopoly body, Andrey Tsyganov pointed out that FAS does not apply the law on foreign investments broadly.
“The Law on foreign investmentsspecifies a list of operations of strategic importance for national defence and state security. The economy, however, is more complex that the norms of the law. Our enforcement practice shows that there are types of goods, works, services, inseparable from strategic operations. At the same time, in some cases деятельности we put in the law the competitive types of activities are not strategic, for instance, cryptography for banks, infectious diseases agents in the food industry and some others. These are the cases when FAS in collaboration with other market players and federal executive bodies have drafted amendments to the law, which decreased ambiguous interpretation of enforcement of No.57-FZ Federal Law. At the same time, there are other stories in our practice, related first of all to such essential strategic sector as mineral resources management. In every case and a company has doubts, we recommend to enjoy one’s right under No.57-FZ Federal Lawand approach the Federal Antimonopoly Service for consultations. FAS as the authorized body will give it opinion”, concluded the speaker.
Head of FAS Department fro Control over Foreign Investments, Olesya Milchakova added: “We embark on a course of analogy of lawand applying the principles ofNo.57-FZ Federal Law: the priority of national defence and state security in relation to foreign investments. When the norms of the law are not clearly worded, when can be interpreted ambivalently, we as the authorized body follow a more formal path. And it cannot be called a broad interpretation. Moreover, each time we consider the norms of the law in their totality and in accord with a particular situation”.
Deputy Head of FAS also mentioned investment compliance, implementing which, according to the regulator, helps companies to minimize the risks of violating the law.
The participants also discussed various aspects of defining control, ascertaining indirect acquisitions, exceptions and their applications to transactions, requirements to disclose information about beneficiaries, beneficial owners and controllers, and considered enforcement practice of No. 160-FZ Federal Law “On foreign investments in the Russian Federation”.
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August 5, 2019 at 09:45AM