Russia targets 45 "strategic activities" that trigger a national review

In 2015, FAS received 44 applications from foreign investors, and in 2016 this number continues to increase.

The Government Commission on Control Over Foreign Investments in the Russian Federation (the Government Commission), which was established by the Russian Government in 2010, is responsible for reviews. The Government Commission is headed by the Chairman of the Russian Government and composed of the heads of certain ministries and other government bodies.

Although the final decision on the application is made by the Government Commission, all the preparatory work (i.e., reviewing an application's completeness, liaising with relevant government bodies) is done by the Federal Antimonopoly Service (FAS). FAS, among other things, performs a preliminary review of the application and prepares materials for a further assessment by the Government Commission.


An acquirer must file if the proposed acquisition would result in the acquirer's control over an entity exercising activities of "strategic importance" to Russian national defense and security (a Strategic Entity). The acquirer is required to obtain consent of the Government Commission prior to the acquisition of control over a Strategic Entity; otherwise, the respective transaction is void.

To apply for the consent, the acquirer must submit an application to the FAS with attachments, which include, among other things, corporate charter documents of the acquirer and the target, information on their groups' structures (including the whole chain of control over both the acquirer and the target), transaction documents and a business plan for the development of the target post-closing.


The Government Commission reviews transactions that result in acquisition of control over Strategic Entities. Currently, there are 45 activities of "strategic importance" that, if engaged in by the target, cause the target to be considered a Strategic Entity.

The 45 activities encompass, among others, areas related to natural resources, defense, media and monopolies.

The activities include not only those directly related to the state defense and security (e.g., operations with nuclear materials, production of weapons and military machines), but also certain other indirectly related activities (e.g., TV and radio broadcasting over certain territory, extraction of water bioresources and publishing activities). The criteria for determining control are rather wide and are different for a target that is involved in the exploration of "subsoil blocks of federal importance" (e.g., oil fields with certain size of reserves, uranium mines, and subsoil blocks subject to exploration within a defense and security zone). Foreign public investors (i.e., foreign investors controlled by foreign states or international organizations) are not permitted to obtain control over Strategic Entities.

In addition, foreign investors also must obtain the Government Commission's consent for certain transactions involving acquisition of a Strategic Entity's property.

Certain transactions in respect of Strategic Entities or their property are exempt from the necessity to obtain the Government Commission's approval (e.g., transactions in which the acquirer is ultimately controlled by the Russian Federation, constituent entities of the Russian Federation or a Russian citizen who is a Russian tax resident and does not have dual citizenship, as well as certain "intra-group" transactions).


Generally, a review assesses the transaction's impact on state defense and security.

FAS initially requests opinions of the Ministry of Defense and the Federal Security Service as to whether the transaction poses any threat to the Russian defense and security. Additionally, if the target has a license for dealing with information constituting state secrecy, FAS requests information from the Interagency. Committee for the State Secrecy Protection on the existence of an international treaty allowing a foreign investor to access information constituting state secrecy.

Russian law does not provide for more details on the review's scope or the criteria on which the transaction is assessed.


  • Most transactions submitted to the Government Commission for review are approved. Such approval contains the term within which the respective acquisition needs to be completed.
  • The Government Commission can approve the transaction subject to certain obligations imposed on the foreign investor. The list of such obligations is exhaustive and established by law (although there is a legislative proposal to open the list). Those obligations may include the obligation to process bioresources or natural resources extracted by the Strategic Entity on Russian territory.
  • The Government Commission can reject the application for approval of the acquisition.


In 2015, FAS received 44 applications from foreign investors, and in 2016 this number continues to increase. Most foreign investors are from Cyprus, China, United Arab Emirates, Switzerland, the US, France, Italy and India.


At the early stage of a transaction, a foreign investor should analyze whether the target company qualifies as a Strategic Entity and whether the planned transaction triggers the necessity of the Government Commission's consent. This will allow the investor to start filing preparations and then file its application as early as possible, thereby reducing the filing's impact on the timing of the transaction.


The statutory period for reviewing the application is three months from the date of its acceptance for review. The Government Commission can extend the review period for an additional three months.

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