Russian parliament to review law limiting foreign investment

March 21st, 2008 - 8:34 pm ICT by admin  

Moscow, March 21 (DPA) Russia’s parliament is set to review draft legislation that limits foreign investment in strategic sectors including oil and gas, publishing, telecommunication and fishing. Under the proposed bill, foreigners are forbidden from buying a significant stake in companies without government approval in industries defined as crucial to national security.

The law has drawn criticism at home and provoked concern among foreign investors who fear more state bureaucracy blocking business deals.

The Kremlin administration has approved amendments extending the list of sectors viewed as strategic and other fine points of the bill, said Martin Shakkum, head of the Construction and Land Policy Committee, which with the cabinet is sponsoring the law, Interfax news agency reported.

Shakkum judged Thursday that the bill, now in its second reading, would not be seriously revised before the third and final reading before being submitted to President Vladimir Putin for approval.

The law requires foreign investors to seek the approval of a government commission to acquire more than 50 percent of a company in one of the wide-ranging sectors defined as “strategic”.

Russian newspapers listed the nuclear, aerospace and arms industry, as well as oil and gas, fishing and mass media among the 40 or so strategic sectors.

Some Russian lawmakers have criticized the breadth of sectors seen as crucial to defence and security.

Minister of IT and Communications Leonid Reyman said last week that the bill could impede investment in the telecommunications market and cause a slowdown in the booming industry.

It could take anywhere up to six months for approval on business deals from a commission headed by the prime minister, according to Russian media estimates.

If passed into law, Putin, who has promised to become prime minister after May, would then be the first to head the new commission deciding on foreign requests to invest in strategic sectors.

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