The Committee for Construction and Land ownership has recommended for a second parliamentary hearing a draft law regulating foreign investment in ‘business entities, strategic for Russia’s national security’. The list of ‘strategic’ fields includes 43 types of activities such as geological exploration and mining. The list has been updated with TV and radio stations, communications industry, i.e. internet services, publishing business and printed media.
The draft law proposes that any foreign company (or a Russian one controlled by foreigners0 would have to ask for permission of an ‘authorized body’ in order to purchase more than 50 % stock in a company working in a strategic field. After applying for such approval, the would-be investor would have to wait up to six months for a final permission, given by a special commission headed by Russia’ Prime Minister. In case the investor list a foreign state among its shareholders, it will have to apple for an approval even if it plans to buy a 25 % share, after submitting a total of nine various documents listed in the draft law.
The law, if passed, will not have retroactive force, and investors who already own stock in Russian businesses will only have to ‘notify’ the government and not ask for authorization.
The Committee voted unanimously for the draft law, although there was fierce debate during its discussion. Aleksandr Maslov, Deputy Information and Communication minister, said including Internet and communications services was too much. The official thinks this can bring the developing industry to stagnation. The undersecretary cited statistics showing that Russian companies where dominating in ownership of communication businesses, with no restraints on foreign investment. Maslov also said that already existing laws regulating Internet and communications services where quite enough to ensure national security.
Many existing market players in Russia already have large shares owned by foreign investors. Vympelkom, a leading mobile phone operator also providing Internet services, is owned more that half by international business (the Norwegian Telenor and others). Vympelkom was lucky to buy Golden Telecom Internet provider before the law is passed, but many further planned purchases may now be questioned.
“We assume that implementing the suggested scheme will hinder investment and cause stagnation”, said Maslov.
But the lawmakers did not listen. Duma never doubts orders coming from the government, and the draft law was originally suggested by the Cabinet. “This document was discussed in Presidential administration, and we shall never contradict people who are solving the issues of national security on behalf of the President”, said Martin Shakkum, head of Duma committee.
Yekaterina Shokhina
Photo: Comstock complete / Fotolink
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