More About Obtaining a Consent by the Government Commission for Certain Transactions With Foreign Counterparties

Presidential Decrees No. 79 of February 28, 2022 and No. 81 of March 1, 2022 (Decrees) introduced new rules for conducting transactions with foreign persons associated with States engaged in unfriendly actions.

Currently, the following operations (transactions) can be performed only with the consent of the Government Commission:

• transactions on the provision of loans and credits (in rubles) to foreign persons of unfriendly states¹;
• transactions resulting in ownership of securities² and real estate³;
• transactions resulting in of ownership rights to securities and real estate carried out (executed) with foreign persons who are not persons of foreign states committing unfriendly acts, if the subject of the transaction was acquired after February 22, 2022 by these foreign persons from persons of foreign states committing unfriendly acts⁴;
• operations on the provision of foreign currency loans by residents to non-residents⁵;
• operations for transferring foreign currency by residents to their foreign accounts⁶;
• money transfer operations without opening an account with electronic wallets provided by foreign payment services⁷.

To obtain a consent for any of above operations, a resident or a foreign person from an unfriendly state submits an application to the Ministry of Finance. The recommended application form was approved by the meeting minutes of the subcommission of the Government Commission for the Control of Foreign Investment in the Russian Federation No. 9 dated March 14, 2022 and posted on the website.

In addition to the application, you should also submit a set of documents. The full list of such documents is specified in Government Decree No. 295 dated 06.03.2022 (Resolution)⁸:

• a document confirming the state registration of the applicant or the identity of the individual;
• a document confirming the fact of the establishment of the applicant - a foreign organization that is not a legal entity;
• constituent documents of the applicant;
• a document including information about the beneficiaries, beneficial owners, about the person taking control over the person of a foreign state who is a transaction party;
• the resident's balance sheet as of the last reporting date before the date of submission of the application;
• information on the carrying value of the resident's assets as of the last reporting date before the date of submission of the application.

The necessary documents can be submitted:

• by email to: podcom@minfin.gov.ru;
• by mail: 109097, Moscow, Ilyinka str., 9;
• personally: Moscow, Ilyinka str., 9, 5 entrance, room. 121 (entrance from Bolshoy Cherkassky Lane).

There is no information about the state duty and about the timing of consideration of the application. At the same time, based on the first cases the Government Commission gives such consents faster than the standard 30 days. For example, "Norilsk Nickel" and "Rosneft" have already received such permits for three months⁹.

Additionally, the Government Commission have the right to give a consent for transactions, including to an indefinite circle of persons (paragraph 16 of the Resolution). On the date of publication of this material, such permits have been issued of the following transactions¹⁰:

• transactions for the purchase and sale of real estate or participation in shared construction between residents and non-residents from unfriendly countries¹¹;
• operations on foreign currency financing of branches and representative offices of residents outside the Russian Federation not exceeding the amount of the corresponding financing for the previous year¹²;
• operations for paying wages, rents, coupons, dividends and other payments in foreign currency to a resident from a non-resident¹³;
• currency transfer and conversion operations carried out by resident individuals in banks and financial organizations with accounts opened before 01.03.2022¹⁴;
• lending to residents of the Russian Federation controlled by organizations from unfriendly states, provided that the incoming funds will be used to support the resident's activities on the territory of the Russian Federation¹⁵.