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By Sergei Gorbylev, Lawyer, Law Firm “Yukov, Khrenov & Partners”- Yukov, Khrenov & Partners
Legal Developments and updates from the leading lawyers in each jurisdiction. To contribute, send an email request to
Elena Sokolovskaya, Head of Antimonopoly Regulation; Sergey Spasennov, Partner, Head of St. Petersburg office; Egor Lysenko, Head of Krasnoyarsk office, Pepeliaev Group The State Duma is preparing to consider in the second reading a draft law that will significantly amend Federal Law No. 57-FZ ‘On the procedure for making foreign investments in business entities of strategic importance to ensure national defence and state security'. The draft law was passed in the first reading in May 2013 and is scheduled to be considered further in April 2014. The goal of new amendments is to simplify even more the control mechanism, eliminate extra administrative barriers for foreign investors and to create favourabe investment climate. For the second reading of the draft law, the Russian Federal Antimonopoly Service (the ‘FAS') prepared a number of amendments that have not been approved yet by the Russian Government (these amendments are posted on the FAS's official web site ). Below are the main provisions of the draft law and amendments to it.
Andrey Tereschenko, Partner (Tax); Alexey Konevsky, Partner (Real Estate and Construction); Egor Lysenko, Head of Siberian office in Krasnoyarsk; Sergey Spasennov, Partner and Head of Saint Petersburg office Preparations have started for staging the World Winter Universiade 2019 in Krasnoyarsk. There are several issues that companies face when major international sport events are staged in Russia. On 14 January 2014, the Russian President signed Decree No. 16 ‘On preparing for the XXIX World Winter Universiade 2019 to be staged in Krasnoyarsk' (‘Universiade 2019'). This decree is a framework document addressed, first of all, to the Russian Government, which is charged with carrying out a set of organisational actions to prepare for Universiade 2019, as well as to executive authorities of constituent entities of the Russian Federation, which are recommended to participate in carrying them out. In particular, the Russian Government needs to: establish an organising committee; develop and carry out, in cooperation with the government of the Krasnoyarsk Region, measures aimed at preparing and staging Universiade 2019; determine the list of capital construction facilities belonging to the Russian state, which are required to prepare and stage Universiade 2019 with financial support from the federal budget; assist with covering in the state mass media how Universiade 2019 is being prepared and staged.
Alexey Konevsky, Partner, Pepeliaev Group The Russian government has set for itself improvement of the investment and business climate in the country as its primary goal. A fairly wide range of measures and efforts are being taken with this in mind, not least in cooperating with investors and the business community. Regrettably, they are not always consistent when they put this into action. One example is the draft bill on transactions with real estate (the "Bill"), which Russia's Ministry of Economic Development published in November 2013 . The Bill restricts real estate transactions by foreign individuals and legal entities as well as stateless persons. Russian legal entities will face similar restrictions if they are more than 50% foreign owned. The Bill envisages that there will be a permission procedure for such persons to be able to enter into transactions with immovable property in Russia. They will have to obtain permission from a specially authorized government body if they wish to pursue a transaction aimed at gaining ownership title to or the right to use immovable property.
Arslan Dyakiev, Associate, Pepeliaev Group In 2013 the Russian Civil Code was significantly amended in all kinds of areas touching on the country's corporate life, including: transactions (state registration, notarization, approval and invalidity), civil law rights, powers of attorney, securities, state registration of legal entities, and limitation periods. The Russian Parliament is now considering a fairly extensive list of further amendments to the Civil Code. This article focuses on the area of "resolutions at shareholders' meetings", which has, in fact, become regulated for the first time by civil legislation. Chapter 9.1 of Part I of the Civil Code sets out the general terms and conditions covering any meetings of a so called "civil-law community". Though there is no specific legal definition of "civil-law community", this term applies to, among other things, meetings of creditors in the event of bankruptcy, meetings of a legal entity's members, and meetings of co-owners (e.g. owners of individual flats in a block of flats). Ostensibly, the main aim is to protect both members of the "civil-law community" who did not participate in the meeting and the interests of third parties; all of this seems positive. However, what effect it will actually have, how it will be interpreted, understood and enforced remains to be seen. This will be clearer when the provisions have been tested in courts.
Alexander Kosov, Head of Practice "Customs and Foreign Trade Regulation", Pepeliaev Group Alexander Strizhov, Senior Associate, Pepeliaev Group Important clarifications on setting the customs value of imported goods are contained in the Resolution adopted on 25 December 2013 by the Plenum of the Russian Supreme Commercial (‘Arbitration') Court (the "SCC") to replace the Plenum's Resolution No. 29 dated 26 July 2005. 1. Presumption that information supplied by a declarant is accurate 2. What is a sale? 3. Conditions which influence on the sale or the price of goods it is not possible to determine in terms of quantity 4. Providing additional evidence
1. Quotas for hiring foreign employees in 2014
On 14 January 2014, the Presidium of the Russian Supreme Commercial Court (hereinafter - SCC) published the Informational letter dated 10 December 2013 No. 162 on Review of case law on implementation of articles 178 and 179 of the Civil Code by commercial courts.
NEW CENTRAL BANK APPROVAL PROCEDURE FOR THE MANAGEMENT, DIRECTORS AND SHAREHOLDERS OF CREDIT ORGANIZATIONS
Andrey Tereshchenko, Partner; Sergey Sosnovsky, Head of Practice (St Petersburg) "Tax law and tax disputes" and Egor Lysenko, Head of Siberian office in Krasnoyarsk For the attention of: managers of companies in Eastern Siberia and companies of the federal and interregional levels operating in Eastern Siberia. Pepeliaev Group advises of the progress of measures being implemented to develop Eastern Siberia as communicated by the President of Russia in his Address to the Federal Assembly. On 12 December 2013, Russian President Vladimir Putin gave his annual address to the Federal Assembly, announcing a number of initiatives to develop Eastern Siberia, including Krasnoyarsk Krai and the Republic of Khakassia. These initiatives aim to: - set up a preferential tax regime for new investment projects; and - create a network of special areas of advanced economic growth with special conditions for setting up non-resource enterprises.
Foreign investors often arrive in Russia through companies incorporated in places like the Netherlands, Luxembourg, Cyprus and Switzerland, which are high up the list of the most popular jurisdictions in Russia. These companies are often created with a view to investing or are designed to finance other group companies. Though the above countries, of course, fall outside the definition of ‘offshore' jurisdictions, such structures could also be affected by measures for the ‘deoffshorization' of the Russian economy. Therefore, it is advisable for companies that are part of international holding structures to undertake a ‘stock take' in 2014 to check whether they face any risks and to take the steps that are needed so that the holding structure and its Russian subdivisions can work in peace in the future.