On 13 December 2024, amendments were made to the Rules* governing the issuance of permits by the Government Commission for Control over Foreign Investment in the Russian Federation, as outlined in the counter-sanctions Decrees of the President of the Russian Federation.

The amendments establish the procedure for filing applications by residents (excluding financial institutions) seeking permits for dividend payments (profit distributions) and loan repayments without adhering to the special procedure set out in Presidential Decree No. 95* of 5 March 2022 (i.e. in the amount exceeding RUB 10m per month and without using special “C” type account).

It is worth noting that, in September 2024, the Government Commission was designated as the competent authority responsible for issuing relevant permits to residents that are not financial institutions. The procedural aspects of residents' applications for such permits are now formally codified in the Rules.

Under the Rules, the application process, which had already been in practical use, is now formalised. Residents (applicants) must submit their application, along with supporting documents, to the Government Commission via the relevant line ministry. The ministry reviews the application on its merits, forming a position on whether to support the application. If the application is supported, the relevant line ministry forwards it to the Ministry of Finance of the Russian Federation for subsequent consideration at a Government Commission meeting, where a final decision is made.

The Rules also specify the documentation and information required as part of the application, such as details of dividend payments over the past five years and key performance indicators. These requirements should be carefully observed when preparing the necessary documents for submission to the competent authority.

With the approval of this procedure, it is anticipated that the process for reviewing applications for dividend payment authorisations by the Government Commission (and other involved authorities) will resume in 2025. This process had been effectively suspended in 2024 while the authorisation procedure was under review.

For completeness, the conditions for obtaining permission to pay dividends to “unfriendly” foreign shareholders, as stipulated in Government Commission Decisions No. 171/5 of 12 July 2023 and No. 182/5 of 9 August 2023, remain in effect and unchanged.

We would also remind you that, under the current regulations (Decrees Nos. 95* and 254*), payment of dividends to an “unfriendly” foreign shareholder (participant) or repayment of loans to an “unfriendly” foreign creditor of up to RUB 10m per month (in aggregate with other restricted payments to “unfriendly” foreign creditors), or payments into a special “C” type account may be made without obtaining permit. These rules and regulations remain in force and have not been modified.

We will continue monitoring further developments in the legal and regulatory framework and will provide updates as they become necessary.

* In Russian

Publication is also available in Russian and Japanese languages.

Authors:

Maxim Boulba, Partner, Head of Antitrust & Regulatory

Elena Andrianova, Senior Associate, Antitrust & Regulatory