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Updated criteria for the approval of transactions under countersanction decrees of the Russian president

legal updates
14 / 07 / 2023
The website of the Ministry of Finance of the Russian Federation published an extract from Decision No. 171/5 of the Sub-Commission of the Government Commission dated 7 July 2023, which clarifies the conditions for the performance of transactions in accordance with countersanction Decrees of the President of the Russian Federation.

In particular, such conditions now include:

  1. the availability of a report on the market value of assets prepared by an appraiser included in the list of appraisers recommended by the Sub-Commission for such appraisal;
  2. the availability of an opinion of a self-regulatory organisation included in the list of recommended SROs;
  3. the sale of assets at a discount of at least 50% of the market value;
  4. a contribution to the budget in the amount of at least 10% of half of the market value, and if the discount on the transaction exceeds 90% – at least 10% of the full market value of the relevant assets, and the contribution itself must be sent within three months from the date of the transaction;
  5. the establishment of key performance indicators for the purchaser and/or the target, which should provide for:
    • the preservation of jobs, technological potential and the main economic activity of the target;
    • the performance of obligations under current agreements;
  6. settlements under the transaction:
    • using a C-type account; or
    • in roubles within the Russian banking system; or
    • by transferring funds to the seller’s account in a foreign bank, but subject to payment in instalments;
  7. the necessity of taking into account of the following circumstances in case of an option:
    • the repurchase of the asset must be carried out at the market value on the date of exercising the option;
    • the existence of an economic benefit in the option for the resident owner of the asset;
    • limitation of the period of the validity of permission for the repurchase (as a rule, no more than two years from the date of the initial transaction);
  8. the placement of up to 20% of the acquired shares in a public company on organised trading;
  9. the applicant obtaining other permissions provided for by the laws of the Russian Federation necessary for the transaction (eg consent of the Federal Antimonopoly Service of Russia). We assume that the abovementioned permissions should not be considered as a condition for the issuance of the permission by the Sub-Commission of the Government Commission and may be obtained in parallel with the procedure for the approval of transactions under countersanction Decrees of the President of the Russian Federation.
It appears that by the adopted protocol, the Sub-Commission of the Government Commission has once again generalised the approaches to the consideration of transactions that have been developed to date for the purposes of ensuring the effectiveness of the procedure for the consideration of applications.