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. Last Updated: 07/27/2016

Strategic Sectors Bill Advances

The State Duma on Friday approved in the first of three readings a bill limiting foreign investment in strategic sectors of the economy.

Deputies approved the legislation after confirming President Vladimir Putin's nominee for prime minister, Viktor Zubkov. The bill, passed 330-1 and subject to revision, governs deals that would give a foreign company a majority stake or control of a venture in 39 industries, including aerospace and defense.

Putin last week criticized U.S. legislation limiting some foreign investment and said Russia may "have to take steps to protect its interests."

Foreign direct investment in Russia more than doubled to $15.8 billion in the first half of the year, according to the Federal Statistics Service. The economy expanded 7.9 percent in the first half, compared with 6 percent in the year-earlier period.

Putin first ordered the bill to be drafted in 2005, but it has since gone through delays and revisions before the Industry and Energy Ministry and the Economic Development and Trade Ministry reached a consensus on its provisions in March.

The bill essentially formalized what many believed is already in practice in the country and has been hailed in business quarters as outlining rules of the game for foreign investors. However, a clause in the bill said its provisions would not affect ventures already regulated by Russia's international commitments or agreements.

Bloomberg, MT