Newsletter: "Сriteria for obtaining the permission of the government commission"

On July 12th, the Excerpt from the Resolution of the Sub-Commission of the Governmental Commission on Control over Foreign Investments in the Russian Federation No. 171/5 dated July 7th, 2023 was published on the website of the Ministry of Finance. This Resolution provides for new edition of the criteria for obtaining permissions from the government commission, thus the previous Resolutions are nullified.


Moreover, the Excerpt introduces a number of new criteria for obtaining permissions for transactions related to shares and stocks in Russian companies (including sale, liquidation, contributions to share capital) with persons from so-called “unfriendly” states, while at the same time confirming / specifying the previously applicable criteria. The criteria for granting permissions for dividend payments are also included in the new Excerpt, but their content remains virtually unchanged.


The following requirements have been specified:

  • Expert evaluation: In addition to the appraisal report regarding the market value of the respective assets, an expert evaluation of the self-regulatory organization (SRO) of the appraisers shall be provided. Both, the appraiser and the SRO, should be from the list of recommendation by the Governmental Commission.
  • Exit Tax: the so-called “voluntary” payment should be made within 3 months from the date of the transaction at the latest.
  • KPI: the possible types of KPIs have been specified, including preservation of technological potential or main activity, preservation of staff number and performance of contractual obligations. KPIs are to be agreed upon with the relevant ministry. According to the Excerpt the KPIs shall be determined for the buyers and/or target companies with the relevant ministry performing control functions. Consequences of non-fulfillment of KPIs are not established in the Excerpt, whereby, linking transaction payments to KPIs might not be excluded. This would be bad news for the sellers because, for example, after the share transfer, they would not have control over the target companies to ensure the fulfillment of KPI.


The following requirements are introduced:

  • Payment procedures: the Excerpt offers three options for payments:
  • to a Type-C account (de facto, further disposal of funds is practically impossible within this option);
  • to an account at a Russian bank in case of RUB settlements within Russia;
  • installment payments to foreign accounts in case of transactions with persons from foreign countries (single payments would therefore no longer be possible, the period of installment payments is currently unclear).


This new requirement may significantly complicate the payment procedure, since it is evident that the payments can only be made with some delay, and the fulfillment of KPI may be considered as an additional payment requirement.


  • Transactions with shares: in case of transactions with shares of Russian public joint stock companies (PAOs), 20% of the shares of the relevant PAO should be offered for purchase in organized trading (e.g., on the stock exchange);
  • Option agreements: a time limit for buy-back option agreements is set at a maximum of 2 years from the date of the initial transaction. The buy-back price shall furthermore be equal to the market value of the (equity) shares at the time the option is exercised and shall be economically favorable for the Russian seller;
  • Other permissions: approvals and permissions related to the relevant transaction should be obtained from other authorities in advance (e.g., permits from the Federal Antimonopoly Service).