Are gas distribution companies left unprotected when courts refuse to enforce the recovery of loans?

In his new article, Evgenii Kozhevin provides a step-by-step guide on how to make the Unified Gasification Operator:

• perform an agreement and issue a loan
• compensate for losses by paying interest under agreements with other lenders

Who will find this article useful?

• CEOs of gas distribution companies and their lawyers
• Investors in the gas industry
• Law firms

Read the full article here (in Russian).

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On May 21, 2025, a draft law was published for its second reading. It outlines special considerations that would apply to foreign investors wishing to exercise their right to acquire (buy back) the shares (interests) previously held in Russian companies (the “Draft Law”) [1].

The Draft Law stipulates that a special procedure will apply when a foreign investor[2] retains the right to buy back shares (interests) in a Russian company and the purchaser in the transaction is a Russian citizen, a Russian company or a foreign company from a so-called “friendly country” [3] that is controlled by a Russian citizen.

Purchaser’s right to refuse a compulsory sale

The Draft Law provides that the purchaser may unilaterally waive the obligation to sell shares (interests) back to a foreign investor, if the following conditions are simultaneously met:

1. A foreign investor is a person associated with so-called “unfriendly countries” (g., by citizenship, registration, place of business or profit-making), or is under the control of such persons.
2. The shares (interests) were sold between February 24, 2022 and March 1, 2025.
3. The shares (interests) were sold with an option to buy them back within three years or more, and the sale price was significantly lower than the market price;
4. It has been at least two years since the sale of shares (interests) took place; and
5. The company, in which the shares (interests) were acquired, (the “Target Company”) has been properly fulfilling its obligations to its employees (former employees) and creditors.

If the purchaser exercises the right to refuse a compulsory sale, the foreign investor’s right to buy back will be terminated. In other words, buying back such shares (interests) will no longer be possible.

Prohibition on a buyback

According to the Draft Law, the federal executive body that supervises the Target Company’s activities will have the right to prohibit a foreign investor from buying back shares (interests) in it, even if the purchaser has not exercised his right to refuse a compulsory sale. This prohibition may be imposed if the Target Company—and/or the group, of which it is a member—has a significant impact on Russia’s socio-economic development or if there are other circumstances as determined by the federal executive body.

The Draft Law fails to shed any light on what exactly will be considered a “significant impact” on Russia’s socio-economic development. Relevant executive bodies may at their sole discretion prohibit buybacks on any other grounds. It gives the federal executive bodies wide discretion, which creates additional uncertainty and the need for foreign investors to assess their risk of being refused a buyback in advance.

Foreign investor’s right to compensation

Within one year from the date on which the purchaser exercises the right to refuse a compulsory sale, or from the date on which the federal executive body prohibits a buyback, the foreign investor will have the right to demand compensation from the purchaser for the termination of his right to buy back.

If the transfer of shares (interests) was due to the foreign investor refusing or evading the exercise of the rights of shareholder (member) rights, hindering company management, or creating risks for the Target Company, including suspension, liquidation or bankruptcy, the purchaser will have the right to demand a reduction in compensation or refuse to pay it altogether.

Since the procedure for calculating compensation and the grounds for reducing it or refusing to pay it have not yet been determined, and it is still unclear who will determine whether there is a risk to the Target Company and how they will do so, all of this can lead to disputes between purchasers and foreign investors.

The Draft Law has not yet been finalized. It still has to go through several readings in the Russian State Duma when changes and additions may be made.

Still have questions or want to discuss something? Send an email to Julia Talagaeva or Artem Eretenko.

 

Sincerely,

Forte Tax & Law Team

[1] https://sozd.duma.gov.ru/bill/1059849-7#bh_histras

[2] The term “foreign investor” is defined by Federal Law No. 160-FZ dated July 9, 1999 On Foreign Investments in the Russian Federation

[3] The countries that have not been included on the list of so-called “unfriendly countries”, as approved by Directive No. 430-р of the Russian Government dated March 5, 2022

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Pravo.ru publishes the results of an international survey on Russian law firms’ projects abroad

For this survey, Forte Tax & Law submitted 18 projects completed in seven jurisdictions. Three of these projects were among the top 10 most popular jurisdictions by the number of projects in the Pravo.ru survey.

As part of these projects, Forte Tax & Law lawyers handled cases involving foreign trade/customs law and currency regulation, tax law, corporate law/mergers and acquisitions (M&A), regulatory law, and family and inheritance law. Four of these practices ranked among the top 10 most popular practices by the number of projects carried out in foreign jurisdictions.

The Forte Tax & Law team made it to Group 3 of the regional survey according to the overall standings.

If you have any questions about operating in foreign jurisdictions, please direct them to Anton Kabakov.

 

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Effective May 30, 2025, key changes introduced by Federal Law No. 420-FZ[1] will affect the processing and protection of personal data. The law will tighten control over the processing of personal data, introducing new types of offenses and record-high fines of up to RUB 500 million, or up to 3% of a company’s annual revenue. As you may remember, criminal penalties[2] for violating Russian personal data protection laws were established effective from December 11, 2024[3]. Criminalized actions include unauthorized access to, destruction, blocking, or modification of data as computer systems. Examples include hacking a database, deleting a file containing personal data, blocking access to them.

The main changes in administrative liability[4] pertain to compliance with personal data processing requirements. These are:

• For repeated and gross violations relating to the processing of personal data, legal entities will be subject to fines of up to 3% of their annual revenue (or up to RUB 500 million). Currently, this article provides for a maximum fine of RUB 18 million.
• A three-tier scale of liability has been introduced, depending on the amount of unlawfully transmitted data.
• A separate liability has been established for the leakage of biometric personal data and special personal data categories (a fine of up to RUB 20 million).
• A specific liability has been introduced for failure to notify the Russian Federal Service for the Supervision of Communications, Information Technology, and Mass Media (Roskomnadzor) of the intention to process personal data and of a leak. Currently, such violations are covered by the general Article 19.7 of the Russian Code of Administrative Offenses (failure to provide information requested by a government agency) that provides for a minimum fine of up to RUB 5,000 for officials.

Furthermore, state commercial courts will consider cases initiated under Article 13.11 of the Russian Code of Administrative Offenses against companies, their officials, and sole proprietorships (currently, it is justices of the peace that consider administrative offenses relating to personal data).

The new fines are now clearly comparable with the European penalties for personal data protection violations (GDPR). The introduction of new fines is not just a blind regulatory tightening, but a well-thought-out system designed to force data operators to pay more attention to the protection of personal data.

The industries most at risk include IT operators, banks, telecom companies, marketplaces, and any companies that work with personal data.

We recommend conducting an internal audit of the processing of personal data (including biometric data), preparing notices to Roskomnadzor, and implementing technical and organizational protection measures before the changes take effect.

The Forte Tax & Law team stands ready to assist you with risk assessment, audits, and compliance preparations.

Do you have any questions or would like to discuss something? Please send an email to Julia Talagaeva or Ekaterina Belyaeva.

 

[1] Federal Law No. 420-FZ dated November 30, 2024 On the Introduction of Amendments to the Russian Code of Administrative Offenses.

[2] Federal Law No. 421-FZ dated November 30, 2024 On the Introduction of Amendments to the Russian Criminal Code.

[3] Article 272.1 of the Russian Criminal Code.

[4] Article 13.11 of the Russian Code of Administrative Offenses.

 

 

 

 

 

 

 

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Anton Kabakov, Partner at Forte Tax & Law, gave a presentation on “Instructions for Surviving in Cross-Border Payments. New Settlement Mechanisms in the Context of Tightened Foreign Exchange Controls”.

Since this is a very important issue for many companies in Russia, we have decided to address it at several events:

• The Industrialist Day 2025 Conference, hosted by the German-Russian Chamber of Commerce (AHK Russland) on April 22, 2025 as part of its traditional week in St. Petersburg, which featured discussions on the current situation in Russia’s industrial production, the impact of sanctions on imports and exports, payment difficulties, opportunities for expansion into new markets, project financing, and human resources.
• The 6th Annual Financial Directors Forum, hosted by Kommersant Publishing House on April 24, 2025, which focused on current trends, opportunities for transforming financial strategies for companies, liaison with regulatory agencies, and many other issues. 

If you are facing difficulties in cross-border payments, please send an email to Anton Kabakov.

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On April 18, 2025, a List of Presidential Instructions was published, which includes an instruction to develop a special procedure for the return of foreign companies[1] to Russia, and an instruction to maintain a list of foreign companies that have curtailed or discontinued operations in Russia after February 22, 2022[2].

It is anticipated that a special procedure will be established for the following transactions (operations) involving persons from so-called “unfriendly countries”:

1. Acquisition of real estate by persons from “unfriendly countries” for the purpose of owning, possessing, or using such real estate to conduct business activities in Russia;
2. Acquisition by persons from “unfriendly countries” of the rights to directly or indirectly dispose of shares (interests) in companies, or other rights that would enable them to determine the conditions of management of such companies and/or the conditions of their business activities.

What will happen to the previously granted buyback options?

Among other things, the Russian President has instructed to develop a special procedure for the sale of buyback options for Russian assets sold on non-market terms after February 22, 2022. The Russian government appears to be sending a message that the return of such assets will be scrutinized more closely by the Russian regulatory agencies and will probably require separate additional approval and compliance with some requirements that have yet to be developed.

However, it is a well-known fact that there is already a formal procedure for approving transactions (operations) involving real estate, shares (interests) in Russian companies with the participation of foreign “unfriendly” persons. Therefore, it is likely to be about the development of certain conditions for foreign companies to enter the Russian market.

We will be monitoring the situation closely and keep you informed as soon as there are any changes to the legislation.

Still have questions or want to discuss something? Send an email to Julia Talagaeva or Artem Eretenko.

 

[1] The term “foreign companies” means companies from so-called “unfriendly countries”, a list of which was approved by Directive No. 430-р of the Russian Government dated March 5, 2022

[2] http://www.kremlin.ru/acts/assignments/orders/76722 (in Russian)

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On April 22, 2025, in St. Petersburg, Delovoy Peterburg newspaper announced the results of the contest “Legal Top: Team Score 2025”.Law firms based in St. Petersburg participate in the competition and submit their cases to be judged by a panel of experts.

The Forte Tax & Law team was awarded with a winner’s diploma in the category “Non-Petersburg Cases of Petersburg Lawyers” and took second place in the category “Legal Practices – Corporate Law”.

Congratulations to the winners and participants of the contest!

To read the full article, click here (in Russian).

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A joint will is a raw format, an inheritance fund is overly complicated, and a personal fund is the preferred choice of government officials. RBC Pro has interviewed lawyers to gain insight into how new instruments of inheritance law really work in Russia.

Such legal constructs as joint wills, inheritance funds, personal funds, and inheritance contracts, came into existence in Russian legislation in 2022 when wealthy Russian testators began experiencing problems using similar instruments in the West. The initial test run revealed that some of them proved extremely popular, while others were strongly advised against.

“We recently provided legal support to a client for the structuring of the purchase of a high-budget residential property in France. We focused not only on purchasing the property, but also on building an effective ownership model. This model was designed to reduce tax costs, simplify the inheritance process, and minimize the administrative burden of enjoying the property,” commented Anton Kabakov, Partner, Forte Tax & Law. “We proposed setting up a special non-profit entity in France as a basis for the structure, in whose name the property was registered. The key element of the solution was dismemberment of ownership (démembrement de propriété). It essentially means the separation of economic interest from legal title: bare ownership (nue-propriété) passes to future heirs while the current owner retains the right to use and enjoy the property (usufruit). This mechanism, which is rooted in Roman law, makes it possible to effectively plan the transfer of property without changing the title owner, to minimize the tax base for property wealth tax (impôt sur la fortune immobilière), and in some cases, to completely avoid inheritance tax, which can be as high as 45% in France. The currency restrictions and sanctions were particularly challenging: it was necessary to circumvent the prohibitions on foreign currency loans between residents and non-residents, restrictions on participation in foreign entities, and to comply with applicable Russian currency regulation laws.”

Read the full article here on the RBC Pro website (in Russian).

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What’s happened?

 On April 1, 2025, provisions came into force requiring mandatory contributions for the distribution of online advertising. The corresponding amendments were introduced to the Federal Law No. 38-FZ of March 13, 2006 “On Advertising” (hereinafter referred to as «the Advertising Law») by Federal Law No. 479-FZ of December 26, 2024.

Who is required to pay the contributions?

The following parties are liable for the contributions:

1. Advertising distributors and advertising system operators that place advertisements on the Internet aimed at attracting the attention of consumers located in Russia (hereinafter referred to as “advertising distributors”) [1];
2. Any persons, whether natural or legal that (а) carry out activities to distribute online advertising on behalf and at the expense of an advertiser/advertising distributor, or (b) provide services for distributing online advertising in their interests (hereinafter referred to as “advertising agents”) [2].

Interestingly, there is no direct indication of the need for advertising agents to target their advertising at Russian consumers, nor are there any restrictions based on the place of registration or tax residence of such payers. That is, formally, any person that carries out these activities may fall under the obligation to make the contributions. At the same time, we believe that the absence of such a provision is merely the result of a legislative drafting inaccuracy.

Generally, advertising distributors and advertising agents pay the contributions on their own.

However, if a Russian advertiser—whether an individual, a sole proprietorship, or a legal entity—enters into a contract with a foreign individual or legal entity or a stateless person for the distribution of online advertising aimed at Russian consumers, the Russian advertiser is obligated to calculate and withhold the contributions from the funds paid[3].

[1] Article 18.2(1) of the Advertising Law

[2] Article 18.2(10) of the Advertising Law

[3] Article 18.2(5) of the Advertising Law

What is the contribution rate?

The contribution rate is set at 3%[1].

The received funds are to be credited to the federal budget and are expected to be used for supporting rights holders of Russian software and the development of certain information resources[2].

How is the base for calculating contributions determined?

The base for calculating contributions is the income received from the relevant activity during the quarter[3].

For advertising distributors, the base is the income earned from placing advertisements. For advertising agents, it is the amount of agency remuneration or income earned from the provision of advertising distribution services in the interests of such an advertiser and/or advertising distributor. It is assumed that if contributions on the income from providing advertising distribution services are paid by the advertising agent, the advertising distributors will not have to pay contributions on that advertisement[4]. It is expected that this will help avoid the “doubling” of contributions.

In general, the Russian Federal Service for the Supervision of Communications, Information Technology, and Mass Media (“Roskomnadzor”) independently calculates the amount of contributions based on the information provided to it[5]. In fact, the information will be sourced from the already functioning information system, «the Unified Online Advertising Register». The submission of information to this system is mandatory for advertisers (with the exception of owners of exclusive rights to goods or sellers of goods), advertising distributors, operators of advertising systems, and individuals who provide access to informational resources on the internet for more than 200,000 users[6].

Roskomnadzor will also monitor the completeness and timeliness of payment of the contributions[7].

[1] Article 18.2(4) of the Advertising Law

[2] Article 18.2(1) of the Advertising Law

[3] Article 18.2(3) of the Advertising Law

[4] Para. 5 of the Draft Resolution of the Russian Government On the Approval of Special Considerations Related to the Calculation and Payment of the Levy Provided for in Article 18.2(1) of the Federal Law ‘On Advertising’ and the Procedure for Monitoring the Completeness and Timeliness of Payment of Such Levy

[5] Article 18.2(6) of the Advertising Law

[6] Article 18.1(3) of the Advertising Law

[7] Article 18.2(7) of the Advertising Law

Which advertising revenues are exempt from contributions?

The law provides exceptions to the obligation to pay contributions. Specifically, contributions are not required for advertising placed:

1. on the websites owned by:
   • TV and radio broadcasters;
   • news agencies;
2. on the websites that are registered as online publications whose editorial offices and/or founders are:
   • government or municipal authorities, or in whose charter capital there is a share owned by the Russian Federation, a constituent entity of the Russian Federation, or a municipal entity;
   • receive budget allocations during the year;
   • carry out the activities of an editorial office, publisher, or founder of a periodical, provided that their total circulation meets the criteria set by the Advertising Law;
3. on all-Russian mandatory public access TV channels and TV channels that carry out digital broadcasting in multiplexes throughout Russia.

Payment deadline and further details

Other details regarding the payment procedure for contributions should be established by the Russian Government[1]. The Russian Government will also determine the criteria for classifying information disseminated on the Internet as advertising[2].

The Russian Government has not yet been adopted such a regulation. However, a draft resolution prepared by the Ministry of Digital Development exists[3].

According to the draft, Roskomnadzor will calculate the amount of contributions no later than the 15th day of the second month of the quarter following the reporting quarter in the payer’s online account[4].

The payment of mandatory contributions must be made no later than the 5th of the third month of the quarter following the reporting period[5].

[1] Article 18.2(8) of the Advertising Law

[2] Article 18.2(2) of the Advertising Law

[3] Draft Resolution of the Russian Government On the Approval of Special Considerations Related to the Calculation and Payment of the Levy Provided for in Article 18.2(1) of the Federal Law ‘On Advertising’ and the Procedure for Monitoring the Completeness and Timeliness of Payment of Such Levy (Draft ID 02/07/03-25/00155826) (the “Draft Resolution”)

[4] Para. 10 of the Draft Resolution

[5] Para. 9 of the Draft Resolution

Do you have any questions or would like to discuss something? Please send an email to Nadezhda Danilenko

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New rules on the use of SIM cards by foreign citizens start to apply in Russia from January 1, 2025. Foreign citizens are now required to undergo additional identification to keep their access to mobile communications and banking services. Those who will not confirm their mobile numbers by June 30, 2025 risk losing their communications, because mobile operators will stop servicing unregistered SIM cards.

Who are the new rules for?

The requirements apply to all foreign citizens using Russian SIM cards. This includes those who live in Russia and those who visit Russia from time to time. This innovation is especially important for those foreign citizens who use Russian SIM cards for their mobile banking applications, online banking systems, and other services that require SMS verification codes.

What do you need to do?

 To keep your mobile number, you must take the following steps **by June 30, 2025**:

1. Obtain a SNILS (Individual Insurance Account Number).
2. Create and confirm an account on the Russian Public Services Portal (Gosuslugi).
3. Register in the Unified Biometric System by submitting your biometric data (photo and voice).
4. Confirm your SIM card either at your mobile operator’s outlet or through the Gosuslugi

The same rules apply to new SIM cards purchased after January 1, 2025.

What happens if you don’t do it?

 If you do not complete this procedure on time, your mobile operator will suspend the service of your mobile number. As a result, you may lose access to your banking and other online services.

We will be pleased to advise you on the confirmation of your SIM card and on any migration matters that you may have.

Do you have any questions or would like to discuss something? Please send an email to Julia Talagaeva or Alexandra Yudina.

Sincerely,

Forte Tax & Law Team

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