A government mechanism for handling investments has introduced a voluntary contribution requirement as part of the process to unwind ownership of Russian assets held by non-residents marked as hostile. This stance is described in an excerpt from the minutes of a subcommittee meeting within the government commission that oversees foreign investment, as reported by Interfax.
The subcommittee outlined the contribution as no less than 10% of the asset’s market value, with a discount exceeding 90% applied to the value. It retains the authority to permit certain deals with hostile non-residents and to approve terms set forth in related agreements. These restrictions were initially established by Russian authorities in the spring of 2022 in response to international sanctions against Russia. The framework allows for specific transactions that would otherwise be prohibited, under careful presidential oversight and conditional approvals. This balancing act aims to manage external pressure while preserving essential economic activity. This point was clarified in December 2022, noting that the decision rests with the appropriate institutional authority and that the determined discount is fixed in the market value for assets held by hostile non-residents.
The overall capital control regime, shaped by sanctions, enables transactions with hostile non-residents through the government commission’s foreign investment subcommittee. The subcommittee has the discretionary power to approve certain operations that are otherwise restricted by a sequence of presidential decrees. The work of the subcommittee is led by the Finance Minister, Anton Siluanov, and its composition includes representatives from the Central Bank, the Ministry of Economic Development, and the office of the President. This structure reflects a strategic approach to asset management under sanctions, combining policy direction with financial and regulatory oversight to navigate external risks while aiming to protect national interests. (Interfax)