1.Which transactions are concerned by the Decree?
The scope of the new Decree seems to be somewhat broader than the similar approval requirement for transactions with shares in joint stock companies. In particular, the Decree covers not only transfers of shares in Russian OOOs, but also mentions transactions and operations with respect to “use” of shares, shareholding rights and “indirect” transactions with shares and shareholding rights. The Decree applies to
a. Transactions between:
- CFUS and Russian residents
- CFUS and CFUS
- CFUS and other foreign residents
b. Transactions (operations) resulting, directly or indirectly, in
- creation, change/amendment or termination of
- rights of ownership/possession, use and/or disposal over
- (i) shares in the registered share capital of Russian limited liability companies (“OOOs”) or (ii) other rights of control (rights allowing to determine the conditions of management and/or business conduct by OOOs).
2.Procedural aspects with respect to the expected filing procedure
The Decree states that the transactions mentioned above can be conducted only on the basis of an approval to be issued by the government commission for control over foreign investments in the Russian Federation (the “Commission”). The Commission may also impose conditions for the implementation of the transactions. The Government of the Russian Federation shall issue a procedure for the issuance of such approvals by the Commission until 19 September 2022. The Ministry of Finance is authorized to provide clarifications on questions regarding the application of the Decree.
This approach is similar to the regulation concerning transfers of shares to Russian residents in joint stock companies which also require approval by the Commission and issuance of procedural rules by the Russian Government. Decisions on approvals for such transfers are taken by a sub-committee of the Commission, as the Commission itself consists of very high-ranking officials (including the Russian Prime Minister) and does not convene very often.
It may well be that, similarly to filings regarding joint stock companies, there will be no predictable timeline for obtaining an approval. Additional documents and (commercial) information will be required, and the Commission will be able to affect the commercial terms of the transaction.