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7 Mar, 2022 13:36

Moscow explains how it’ll do business with firms from ‘unfriendly states’

The Ministry of Finance has set up a special subcommittee to control foreign investment
Moscow explains how it’ll do business with firms from ‘unfriendly states’

Russian companies wishing to work with firms from countries which oppose Moscow’s military operation in Ukraine will have to receive government permission for the deals, the press service of Russia’s Ministry of Finance said on Monday. Permission will be granted by the Government Commission for the Control of Foreign Investments. It includes representatives from Russia’s Central Bank (Bank of Russia) and the presidential administration.

According to the resolution establishing the procedure, which was signed by Prime Minister Mikhail Mishustin, a Russian resident company or foreign company from an “unfriendly state” must apply for permission for any business deal.

[The application] should contain comprehensive information about the applicant, including information on the beneficial owners of the company. Based on the analysis of the documents received and the nature of the future agreement, a decision will be made to approve or refuse to implement it,” the press service said, stressing that “the main goal of this work is to ensure the country’s financial stability in the face of external sanctions pressure.

The government on Monday also unveiled an updated list of countries which have been deemed “unfriendly states” for their positions on the Ukraine conflict. It includes the United States and Canada, the countries of the EU bloc, the UK (including Jersey, Anguilla, the British Virgin Islands, and Gibraltar), Ukraine, Montenegro, Switzerland, Albania, Andorra, Iceland, Liechtenstein, Monaco, Norway, San Marino, North Macedonia, and also Japan, South Korea, Australia, Micronesia, New Zealand, Singapore, and China’s self-ruled territory of Taiwan.

The countries and territories were added to the list after they imposed or joined the sanctions against Russia in connection with the ongoing military operation of the Russian Armed Forces in Ukraine.

According to the government decree, Russian citizens and companies, the state itself and its regions and municipalities will now also have to pay for obligations to foreign creditors from countries on the list in rubles. The new temporary procedure applies to payments exceeding 10 million rubles per month, or a corresponding amount in foreign currency.

The measures have been introduced by Moscow to support the Russian economy after Western states placed Russia under heavy sanctions over the past 10 days. A number of Russia’s largest banks have been cut off from SWIFT and had their foreign assets frozen, restrictions were placed on certain Russian imports, and a growing number of companies from all sectors have been shutting down operations in the country.

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