Putin Criticizes American Law On Investments, May Make Russian Laws Harsher
Regulations on foreign companies’ access to the Russian market may become stricter. Vladimir Putin sharply commented on the law passed in US in the end of July regulating access of foreign investors into American economy, saying that Russia must “take steps for protecting its interests.” Experts believe that deputies will have to reconsider provisions of the draft proposed by Ministry of Industry and Energy on foreign investors’ access to strategic mineral deposits in light of this. President Putin stated that Russia is “concerned” with a possible introduction of limitations and activation of US security services in approving investments. Russia has “for a long time held back passing of such legislation,” Putin continued. However, it seems Russia’s hands are now loosened.
Russia has developed a law similar to that developed by the US, but the bill has not been passed by Duma. According to the draft, purchases by foreign investors of 25% or more of the shares of strategic enterprises must be first authorized by a government committee. Security forces will also have a voice in the final decision on such purchases. Acquisition of a company holding rights on working with classified information (which includes almost all strategic enterprises) must be first approved by the FSB. Now regulations of the draft will be, most likely, edited in the process of its revision by the State Duma. Also, the law is set up to allow deputes to establish additional limitations. For example, regulations based on size of mineral deposits may be established for oil and gas industry, and a ban on purchases of controlling interest of companies within the defense industry.
The Duma assures that tightening of access for American investors in Russia is possible if the USA limits access only for Russian investors. At the same time legislators are confident that, in spite of any regulations passed, “American investors are interested in purchasing Russian companies and securities and will conduct the transactions through offshore companies.”
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