Sector-specific agencies had previously suggested that applicants’ LLC membership interest or share transactions and dividend payments could be approved in two cases: if the transaction does not result in a business closure or funds leaving the country, and if the company continues to operate effectively on the Russian market.
On 12 December the Sub-Commission of the Government Commission for Overseeing the Making of Foreign Investments in Russia (the ‘Sub-Commission’) held a meeting. At that meeting it disclosed for the first time the criteria for issuing permissions for transactions with shares, membership interests and investments (the ‘Assets’) involving foreign parties connected with states taking hostile actions against the Russian Federation .
Permission for the sale of Assets priced over $100,000,000 may be granted under the following conditions:
- An independent appraisal of the Asset has been submitted;
- The Asset is being sold at a price not greater than 50% of its market value;
- Key performance indicators have been set for the new shareholders (owners);
- Payment will be made in instalments over one or two years, or a contribution will be paid to the federal budget of no less than 10% of the transaction’s value.
These conditions may also apply to transactions with Assets under $100,000,000, if the Sub-Commission so decides as requested by the sector-specific ministry.
For payment of profit (dividends), the Sub-Commission has adopted the approaches already used by Russia’s Finance Ministry and the Bank of Russia:
- The amount to be distributed does not exceed 50% of the net profit for the previous year;
- The payment should comply with the previous dividend policy;
- Foreign owners are prepared to continue doing business in Russia;
- The authorities have set a quarterly KPI;
- The sector-specific agencies’ and Bank of Russia’s opinions on a company’s significance are factored in;
- Dividends may also be paid quarterly when the KPI has been met.
The Finance Ministry and Bank of Russia have been authorised since May 2022 to issue permissions to pay dividends to persons from hostile states where no type ‘C’ account must be opened. However, the criteria for issuing a favourable decision were not disclosed at that time.
 Minutes No. 116/1 of the meeting of the Sub-Commission of the Government Commission for Overseeing the Making of Foreign Investments in Russia dated 12 December 2022.
 Presidential Decree No. 254 On the temporary procedure for fulfilling financial obligations in the field of corporate relations to certain foreign creditors dated 4 May 2022.