The State Duma adopted the law in its third reading
The State Duma adopted the law in its third reading, which will allow Russian buyers to reject buyback of shares and stakes from foreign investors who sold their assets in Russia after February 2022 via court proceedings. Disputes will be considered by the Arbitration Court of Moscow Region.
Consensus
- The State Duma passed a law in third reading allowing the termination of foreign investors' rights to repurchase businesses sold in Russia after February 22, 2022.
- The law applies only to transactions involving investors from unfriendly states and those conducted after February 22, 2022.
- Termination of the right to repurchase can be achieved through a court decision by the Arbitrazh Court of Moscow Oblast.
- Either one condition from two groups is sufficient for termination: behavior of the investor post-February 2022 or economic terms of the deal.
- The law allows foreign investors to claim compensation within one year after a court ruling, though the amount may be reduced or denied based on circumstances.
- The law will come into force upon official publication.
Points of divergence
- The law formally gives Russian buyers a legal tool to retain assets without returning them, even if the foreign investor did not publicly 'harm' Russia during exit — citing Putin's statement about welcoming companies that did not 'insult' Russia. — thebell
- The law was initially intended for relocation of companies to special administrative regions but was expanded in second reading to include restrictions on repurchase rights. — fontanka
- Ministry-initiated cases require approval from a government commission, and the right to sue can be exercised even if the foreign investor has not yet requested repurchase. — kommerant
Coverage (6 sources)
- Duma adopts law on refusal to repurchase Russian companies by foreigners — Коммерсантъ
- State Duma allowed to strip 'unfriendly' investors of rights to buy back sold businesses in Russia — The Bell
- State Duma adopted law depriving foreign investors of the right to return assets — Коммерсантъ
- The State Duma introduced a judicial mechanism to ban foreign companies from returning to Russia — Вести
- State Duma passes law: foreigners who left Russia may be denied return of their business — Фонтанка
- The State Duma introduced a judicial mechanism to ban the return of foreign business in Russia — Ведомости