Who will be affected by the changes?

Starting from 30 March 2023, a provision that a person exercising control over a company of strategic importance must submit an application for approval of the establishment of control over the company if he/she has acquired another citizenship, residence permit or other valid document confirming the right to permanent residence in a foreign country or if the decision to accept Russian citizenship or the procedure for a person to renounce Russian citizenship is revoked.

The application shall be submitted to the Governmental Commission for Control over Foreign Investment in the Russian Federation within 3 months from the date of the relevant reason.

It is assumed that the innovation applies only to the grounds arising after the regulation came into force, but no clarification from the agency has been published.

The list of persons recognised as a foreign investor who are subject to the particularities of the transactions is also extended to foreign agents.

Notification to the competent authority when acquiring a foreign residence permit

Persons who own 5% or more in organisations of strategic importance and do not exercise control and who have acquired another citizenship, residence permit or other similar document, or persons who have exited from Russian citizenship, are required to provide information on such changes to the FAS within 45 days.

Changes to the procedure for obtaining a licence

If an organisation under the control of a foreign investor plans to obtain a licence to operate in a strategic industry (if a licence is required), it requires the approval of the Government Commission to obtain a licence.

In the application for a licence, the organisation indicates that it is controlled by a foreign investor and encloses the decision from the Government Commission approving the control.

Review by an authorized body

If the FAS determines that obtaining a licence or establishing control over a company has occurred without approval (if required), it issues an opinion and forwards it to the Government Commission for review. The Government Commission has the right to suspend the company's activities by withdrawing its licence or accreditation. However, the investor has the right to challenge the supervisory body's decision in court.

Which sectors are considered strategic?

According to Article 6 of No. 57-FZ "On the Procedure for Foreign Investment in Business Entities of Strategic Importance for National Defence and State Security", strategic industries include 52 types of activities, including:

• activities related to nuclear facilities and radioactive substances;

• development and production of encryption (cryptographic) means and information systems and telecommunications systems protected using encryption (cryptographic) means

• development and production of weapons and military equipment;

• space activities;

• fishing;

• television and radio broadcasting;

• extraction of minerals, etc.
  
  Accordingly, whether the activities of the organisation of interest fall within a type of activity of strategic importance should be checked in accordance with the said Article 6.