Ministry of Economic Development Refines Rules for Asset Buyback by Foreign Investors

Russia’s Ministry of Economic Development has proposed amendments establishing criteria allowing Russian owners to deny foreign investors the right to sell back their shares in Russian assets, even if such an option was originally included in sales agreements.

Grounds for Denial (Key Criteria):

1. Public statements by the foreign investor about exiting Russia for political reasons.
2. Actions aimed at terminating business operations in Russia (e.g., failure to fulfill shareholder duties).
3. The bill outlines eight cumulative criteria that must all be met to justify denial.
4. The President of Russia may introduce additional conditions via executive orders.

Consequences of Denial:
• The compensation amount (if applicable) will depend on the severity of the foreign investor’s actions.

Procedure:

1. Refusals must be formalized through a court claim.
2. The Arbitration Court of Moscow Region will handle disputes, overriding any prior agreements stipulating foreign jurisdiction.
3. Claims may be filed by Russian asset owners or relevant government agencies.
4. Foreign investors must seek compensation (if eligible) within one year of the court ruling.

Objective: The amendments empower Russian owners and the state to block foreign investors from exiting Russian assets via buyback options if their departure is linked to political motives or actions harming business operations in Russia, with final authority granted to Russian courts.