The law that regulates foreign investments in strategic industries was amended and the new law will take effect on 21 December 2011. After the amendment private investments in private banks will no longer be subject to government approval. Further, manufacturing of X-ray equipment was removed from the list of strategic industries.
Earlier, President Medvedev ordered that corporate acquisitions where the final beneficiary is a Russian private person or organisation be excluded from the list. This order has been implemented in the new law , with the prerequisite that the person or organisation in question pay taxes to the Russian state. The government commission that oversees transactions falling under the scope of application of the Act on strategic industries has so far processed several acquisitions by, for example, Luxembourgian or Cypriot companies under Russian ownership. Under the proposal of the Ministry for Economic Development, the commission's approval would no longer be required for such transactions, provided that the beneficiary is a Russian tax resident. The Ministry hopes that the amendment will lighten the commission's workload and bring additional tax income into the federal treasury.
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