Deals with parties from non-friendly states: for what operations the authorization of the Government Commission is required and how to obtain it

Jul, 03 2024

Since 2022, it has been established that it is necessary to obtain a permit for transactions with a resident of an “unfriendly” country. The types of transactions that need to be authorized before they are made are specified in special presidential decrees.

Which operations are subject to restrictions
Several transactions related to property, stocks and assets, foreign currency and ruble loans, transactions, more specifically:
• transactions of purchase and sale of securities, stocks of companies with participation of persons from non-friendly states, increase or decrease of authorized capital, option agreements and corporate contracts;
• crediting of funds in other currencies by residents of the Russian Federation to their accounts located outside the Russian Federation;
• transfer of funds for intellectual property to right holders from unfriendly states;
• transactions for the alienation of immovable property;
• granting loans and credits to residents of unfriendly states;
• subsequent transactions arising from those for which a permit was previously issued by the Government Commission.

What is required to obtain permit and how to submit documents
A transaction for the above-mentioned operations, its conclusion and its identification as valid is possible only in the presence of a permit issued by the Government Commission.
The authorization is obtained by submitting the relevant package of documents:
• the form of an application for authorization of a transaction established by the Ministry of Finance of the Russian Federation;
• an application with a detailed description of the conditions and identification of the purpose of the transaction for which authorization is required;
• a document confirming the state registration of the company – for a legal entity or an individual entrepreneur, an identification document – for an individual entity;
• founding documents for the applicant – legal entity;
• a document confirming the right of a person to submit documents on behalf of the applicant.
Transaction without authorization will lead to invalidity of the transaction, blocking and may result in negative consequences for both parties.
Non-residents/residents of unfriendly countries may submit a set of documents either in person or electronically using an electronic signature.
In case of paper submission, the documents must be properly executed: stitched and stamped by the applicant, if any. If the applicant is a physical person: must be signed by the applicant and notarized. An inventory must be attached to the document package in both cases.

Timeframe for obtaining a permit
An important aspect of the process of obtaining a permit from the subcommission is the determination of the time frame within which the decision should be received. The procedure for submitting an application, as well as a complete list of required documents are specified in the RF Government Decree No. 295 of 06.03.2022.
However, the official document does not specify the timeframe within which the application is considered. At present, the time period for obtaining an authorization by the subcommission usually takes at least 2-3 months.
In case of a favorable outcome of the application, the sub-commission issues a permit for the requested action.
In case of a negative decision, the applicant is informed of the refusal – in such a case, the application must be resubmitted for a new review.

Author of the article
Deals with parties from non-friendly states: for what operations the authorization of the Government Commission is required and how to obtain it
Valentina Khlavich
Managing Partner
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