State Duma to rework bill denying options for foreign companies' return
Lawmakers in the State Duma intend to amend the bill allowing certain investors who left Russia after the military operation began in February 2022 to be blocked from buying back Russian assets under existing options. As Sergey Gavrilov, chairman of the Duma committee on ownership, land and property relations (the committee responsible for studying the initiative), told Vedomosti newspaper, the authors of the bill will rework it "more systemically" so as to submit it for parliamentary review in June.
The second reading of the document, at which the option amendments were to have been approved, had been planned for 28 May but was postponed until June.
According to Vedomosti's two sources, comments had been made on the amendments by the Bank of Russia: the regulator was against making the denial of buyback options broadly available.
The Finance Ministry followed by saying it "conceptually" supports amendments aimed at limiting the possibility for foreign companies in certain cases to exercise a buyback option.
According to the amendments published in the database of State Duma bills on 23 May, Russian business owners will gain the right to unilaterally deny buyback options provided five conditions simultaneously apply:
A sector-specific government agency will also be able to deny foreign companies the right to exercise a buyback option if it considers their return to Russia could negatively affect socioeconomic stability (and if the above five conditions simultaneously apply).
A foreign investor denied the right to exercise an option by a Russian business owner or sector-specific government agency would have one year in which to demand compensation (although the bill does not specify how the amount would be determined). However, if the foreign company is proved to have acted in bad faith, the compensation may be reduced or totally denied, the lawmakers' amendments state.