On 13 September 2012, an order of the President of the Russian Federation came into force on measures to protect the interests of the country when Russian legal entities are engaged in external economic activity (the “Order”).
Specifically, the Order requires that open joint-stock companies (“OJSCs”) included in the list (approved by Order of the President on 4 August 2004) of strategically important enterprises and joint-stock companies, as well as their subsidiaries (the “List”), receive preliminary approval from the federal authorities authorised by the Government of the Russian Federation (the “Government”) in order to present information (except for information already published or divulged) if requested to do so by (i) foreign state bodies; (ii) international organisations; as well as (iii) joint unions of foreign states and their bodies. Without such preliminary approval from the federal authorities, OJSCs and their subsidiaries included in the List are not permitted to:
- amend agreements entered into by OJSCs and their subsidiaries with foreign counterparties, as well as amend other documents in terms of commercial (pricing) policy with foreign states; and/or
- dispose of (i) a participatory interest in foreign organisations; (ii) the right to engage in entrepreneurial activities in foreign states; and/or (iii) immovable property located abroad.
The Order stipulates that the authorised federal authorities must refuse to approve the above actions if they could cause harm or damage to the economic interests of the Russian Federation. The Order also stipulates that the Government is given a period of one month to appoint the federal authorities granted the authority to approve the actions of business entities to engage in the above actions.
Consequently, the OJSCs and their subsidiaries in the List will need to take into account the implications of the Order in terms of the additional time and finances required to seek the approval/denial of the authorised federal authorities, as well as potential fines and penalties resulting from breaching the Order.
[Order No. 1285 of the President of the Russian Federation “On Measures to Protect the Interests of the Russian Federation when Russian Legal Entities Engage in Foreign Economic Activities”, dated 11 September 2012]