Russia: Sets new controls on foreigners seeking to trade in Russian assets

Russia has set strict rules for foreigners seeking permission to sell and buy Russian stocks and real estate, according to a Citigroup note to its customers, as details of new state investment controls become known in response to Western sanctions. .

Russia has temporarily banned foreigners from selling Russian assets this month, saying it wants to ensure decisions are made carefully and not under political pressure, as sanctions intensify following Moscow’s invasion of Ukraine.

The Russian authorities issued Decree 81 this month stipulating that any transaction between Russian and foreign partners must be authorized by the Russian Government Commission for the Control of Foreign Investment.

In essence, this means that foreign investors, who have acquired Russian stocks and bonds without restrictions, are forced to hold on to these assets as the economy transforms from an attractive investment destination to a financial outlet.

Russia has now set out the details of the application process for foreigners wishing to trade in assets, and the possibility of trading is limited to those with licenses, according to the Citigroup note.

The process requires foreign investors who want to buy and sell Russian assets to provide detailed information in advance in order to be given the relevant trading license.

“The Russian authorities have announced the procedure for obtaining licenses for activities specified in Decree 81. An authorized body has been set up with the power to make licensing decisions,” the note said. According to this, the application and the relevant documents must be submitted to the Russian Ministry of Finance, in Russian, which will include “information on the purpose, subject, content and basic conditions of the transaction.”