Proposed Increase in Voluntary Contribution Payable Upon Sale of Shares/Interests in Companies

There has been an intense discussion lately about increasing the amount of a voluntary contribution payable upon the sale of shares/interests in companies up to 40% of their market value.

As you may remember, where shares/interests in companies are sold involving entities/individuals from so-called ‘unfriendly’ countries, a voluntary contribution must be paid to the Russian budget, the amount of which is now at least 15% of the market value of the relevant assets as specified in a report on an independent appraisal of those assets. In other words, an authorization for the sale/purchase by such entities/individuals of shares/interests in companies is granted subject to payment to the Russian budget of 15% of the market value of the company, the shares/interests in which are being sold.

There have been more and more proposals put forward to increase the amount of a voluntary contribution to 40% of the appraised market value of shares/interests. We do not know whether this proposal will be realised in practice, but it is likely that the amount of a voluntary contribution may indeed be increased in the near future.

For this reason, we recommend that you should not delay submitting documents to the Russian Government Commission so that you may be able to obtain an authorization for the transaction before the amount of the voluntary contribution is increased.

We would be pleased to advise you on how to obtain authorizations from the Russian Government Commission in more detail.

If you would like to discuss this matter further or have any questions, please write to Anton Kabakov or Alexandra Yudina.