Russian Finance Minister Siluanov confirms conditions for foreigners to exit Russian assets tightened

MOSCOW. Oct 17 (Interfax) - The Russian government's foreign investment commission has changed the conditions for approving transactions with residents of "unfriendly" countries for the sale of their Russian assets, increasing the amount payable to the budget to 35% of a deal's value and the mandatory discount to an independent market valuation to 60%, Russian Finance Minister Anton Siluanov told journalists.

"[The one-off payment is going up] as much as from 15% to 25%, plus 5% one year and 5% in the next, so 35% in total. And the discount for foreigners is increasing from 50% to 60%," he said.

In March 2022, presidential decree No. 81 introduced a special procedure for conducting transactions with residents of "unfriendly" countries, according to which the government foreign investment commission issues permits for such transactions. A sub-commission was set up to review and make decisions. The decree is valid until December 31, 2025.

The decree applies to strategic enterprises, energy companies, banks with foreign ownership interests, servicing and manufacturing equipment in the fuel and energy sector, and developers of subsurface resources including under production sharing agreements, including gold, nickel, diamonds, platinum group metals and others.

A number of terms and conditions were imposed when approving "exit" deals. One of the fundamental requirements is paying a specific amount to the federal budget, which had previously been at least 10% of the transaction amount or of the market value of the asset if sold at a large discount. The commission in October last year reset the payment requirement to the federal budget at 15% of the market value of the assets.

Deputy Finance Minister Alexei Moiseyev said in January this year that the terms and conditions for such deals would not change for the time being. "There are no plans to change anything. This is a lot as it is: 15% of a company's value is by and large already a significant amount," Moiseyev said at the time.

RBC said last week, quoting sources, that a decision had, after all, been reached to tighten the conditions.