Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Official: Foreign Limit on Sensitive Firms to Be Raised

Plans are being drawn up that would allow foreign investors to buy up to 50 percent of security-sensitive firms as long as full control rests with the state, a senior Cabinet official said Wednesday.

But the Federal Security Service opposes this and insists that foreigners should be allowed to buy no more than 30 percent stakes, said Vladimir Taraskin, head of the legal department at the Industry and Energy Ministry.

A new, more liberal version of the bill on foreign investment in so-called strategic enterprises will be sent to the government for approval June 1.

He said 15 ministries had approved a draft that outlines 39 industries where foreign investment might be limited, including aerospace and aviation security. The rest of the list comprises defense and security-sensitive sectors such as cryptographic equipment manufacturing and research on infectious diseases.

Under the draft document, a foreign investor wanting to acquire a stake in a firm defined as strategic should send an application to the Federal Anti-Monopoly Service, which would pass it to a special commission.

The commission would include several ministers responsible for related industries as well as heads of the defense and security agencies. Taraskin said it would be logical for the commission to be headed by Economic Development and Trade Minister German Gref. He said conditions for purchase might include the appointment as CEO of a Russian citizen with approved access to classified information or an obligation to sell goods to the Defense Ministry at regulated prices.

Taraskin said the draft document contained eight reasons for turning down an application. These include work on a defense ministry contract, the export and import of military equipment and work requiring access to classified information.