Initially, the ban on transactions with securities, shares and participatory interests of unfriendly foreigners was established by Presidential Decree No. 520 of 05.08.2022 "On the application of special economic measures in the financial and fuel and energy sectors in connection with unfriendly actions of certain foreign states and international organisations" ("Decree No. 520").
Decree No. 520 provides for a ban on the following categories of transactions:
transactions (operations) involving, directly or indirectly, the establishment, alteration, termination or encumbrance of rights of ownership, use and/or disposal of securities of Russian legal entities, shares (contributions) constituting charter (share) capital of Russian legal entities, participation interests;
transactions (operations) entailing directly and (or) indirectly the establishment, change or termination of the rights to own, use and (or) dispose of rights and obligations belonging to participants of production sharing agreements, joint activity agreements or other agreements under which investment projects are implemented in Russia, provided that these securities, shares (contributions), rights and obligations belong to foreign persons from unfriendly countries.
At the same time, such transactions for companies with foreign participation were prohibited for companies on the list of strategic enterprises, lending institutions, parties to the Sakhalin-1 Production Sharing Agreement and the Kharyaga Oil Field Development and Production Sharing Agreement, fuel and energy companies and service companies, as well as companies owning subsurface sites.
These transactions can be carried out (executed) on the basis of a special permit from the President of the Russian Federation.
Presidential Decree No. 876 of 05.12.2022 extended this prohibition until 31 December 2023.
Nadmitov, Ivanov & Partners law firm actively advises clients on corporate law and M&A transactions, including those involving foreign participation in LLCs.
Tel: +7 (495) 649-87-12