On 8 September 2022, the Decree of the President of the Russian Federation No. 618 "On the special procedure for the implementation (execution) of certain types of contracts (operations) between certain persons" established a special procedure for transactions with shares of the charter capital of limited liability companies. The relevant Presidential Decree is posted on the official portal of the publication of legal acts.
From now on the transactions with shares of limited liability companies with the participation of "unfriendly"¹ non-residents will be possible only after the approval of the Governmental Commission for the control of foreign investments.
The approval of transactions with shares of Russian LLC shall be required in the following cases:
- One of the parties to the transaction is a foreign entity associated with an "unfriendly" state or one controlled by such an entity, and the other is a Russian resident;
- the parties to the transaction are persons from "unfriendly" countries;
- the parties to the transaction are a person from an "unfriendly" country and a resident of a "friendly" country.
The procedure for obtaining approval of the Governmental Commission is not provided yet and will be established within 10 days from the date of publication of the present Decree. The Ministry of Finance has the power to give official explanations on its application.
In addition, the Decree allows the sanctioned banks to fulfill obligations in foreign currency under bank account (deposit) agreements to their clients (legal entities which are residents of the Russian Federation) in roubles in an amount equivalent to the value of obligations in foreign currency at the exchange rate of the Central Bank of the Russian Federation established on the day of fulfillment of obligations.
The Decree also allows limited liability companies with the charter capital directly or indirectly belonging to Russian subsoil users from the list of strategic enterprises not to report on their activities to their co-owners if these are entities from "unfriendly" countries.
Marillion legal team will be following the news on this issue and publishing up-to-date information. We are ready to provide assistance and support to clients when applying for approval of the Governmental Commission.
¹ The list of unfriendly foreign countries and territories was approved by Government order of the Russian Federation dated 05.03.2022 № 430-р