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News > Russia

State Duma Ruled Bill on Administration for Foreign Companies

  • State Duma passes a bill on external administration for foreign companies leaving Russia. May. 24, 2022.

    State Duma passes a bill on external administration for foreign companies leaving Russia. May. 24, 2022. | Photo: Twitter/@StevenN08311469

Published 24 May 2022 (22 hours 6 minutes ago)
Opinion

On Tuesday, the State Duma introduced a bill "on external administration on governing an organization" for foreign companies leaving Russia.

A bill was introduced on Tuesday "on external administration on governing an organization" by the State Duma, the lower house of the Russian parliament.

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This bill is only effective for foreign companies leaving the country; the document provided the introduction of external administration for such companies which announce their withdrawal from the Russian market.

The bill has been designed for targeting those companies which decided to leave the country without any obvious economic reasons, "based on anti-Russian sentiment in Europe and the United States, while their activities significantly affected the stability of the economy (for example, if they were the only suppliers of critical industries, produced essential goods or were city-forming)".

According to the bill, it is required a court decision to transfer management from foreign owners to external management. The interdepartmental commission under the Economic Development Ministry will be the one in charge of such companies, followed by the proposals of other ministries and heads of regions. An opportunity will be granted to those foreign owners who wish to resume work in Russia or sell their stakes.

The explanatory note on the bill said that "the state development corporation VEB.RF or another organization proposed by the interdepartmental commission and agreed with the head of the constituent entity of the Russian Federation in which the organization is registered or operates can be appointed by the court as an external administration."

The organization designated could be changed, should the interdepartmental commission sends an application to the court to replace it, in case the Russian government has grounds for it. The bill says that the expenses incurred by the external administration and its remuneration are reimbursed at the expense of the organization, which limits are dictated by the Cabinet.

The bill proposes a term of 18 months for the external administration, which could be terminated if requested by shareholders owning more than 50% of shares.

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