New Rules, New Risks: Russia’s Draft Law on Foreign Asset Buybacks
June 9, 2025
On May 21, the State Duma Committee for Property approved amendments on the regulation of buyback call options of Russian assets by foreign companies. The amendments allow unilateral refusal by a Russian party to execute call option agreements.
The possibility for Russian buyers of former foreign assets to unilaterally terminate call options was conceptually supported by President Putin during his meeting with Russian business community on May 26.
The bill may be considered and approved in mid-/late June by the parliament, although some amendments may still be anticipated as the Central Bank of Russia voiced its concerns over broad and vague criteria for unilateral termination of call option agreements.
In the current wording, the amendments assign both the Russian business owners and the regulators with extremely broad powers to initiate termination of call option agreements exceeding 2 years potentially with no compensation for foreign investors.
Why:
The bill aims to protect interests of local buyers of foreign businesses whose opinion will be considered when taking decision to allow a foreign investor to come back to Russia.
This reflects a restrictive approach to foreigners who have their call-option agreements signed on so-called "non-market terms". The company's image and reputation, political statements, etc., will be assessed too.
In a broad sense, this approach fits into a general trend of dividing into "good" and "bad" foreign investors, thus the behaviour of those who stayed, but reduced the scope of presence should also be monitored (and "corrected", if necessary).
What are the conditions:
1.Russian companies, private persons, as well as legal entities controlled by Russian nationals will be empowered to unilaterally refuse to execute call option agreement with foreign investors. Such a refusal will only be possible subject to a number of simultaneous conditions, namely:
3.The relevant industry regulator may also prohibit the buyback of assets if this affects the sustainability of socio-economic development or under other circumstances.
For tailored insights or strategic support, contact our team at marketing@kesarev.com
The possibility for Russian buyers of former foreign assets to unilaterally terminate call options was conceptually supported by President Putin during his meeting with Russian business community on May 26.
The bill may be considered and approved in mid-/late June by the parliament, although some amendments may still be anticipated as the Central Bank of Russia voiced its concerns over broad and vague criteria for unilateral termination of call option agreements.
In the current wording, the amendments assign both the Russian business owners and the regulators with extremely broad powers to initiate termination of call option agreements exceeding 2 years potentially with no compensation for foreign investors.
Why:
The bill aims to protect interests of local buyers of foreign businesses whose opinion will be considered when taking decision to allow a foreign investor to come back to Russia.
This reflects a restrictive approach to foreigners who have their call-option agreements signed on so-called "non-market terms". The company's image and reputation, political statements, etc., will be assessed too.
In a broad sense, this approach fits into a general trend of dividing into "good" and "bad" foreign investors, thus the behaviour of those who stayed, but reduced the scope of presence should also be monitored (and "corrected", if necessary).
What are the conditions:
1.Russian companies, private persons, as well as legal entities controlled by Russian nationals will be empowered to unilaterally refuse to execute call option agreement with foreign investors. Such a refusal will only be possible subject to a number of simultaneous conditions, namely:
- A foreign investor is associated with an “unfriendly” state.
- An asset sale transaction is concluded after February 24, 2022.
- More than 2 years passed since the call option agreement was concluded.
- A call option the call option exceeds 3 years and implies a significantly lower price relative to the market value of the asset,
- A Russian business fulfills its obligations to employees and creditors.
3.The relevant industry regulator may also prohibit the buyback of assets if this affects the sustainability of socio-economic development or under other circumstances.
For tailored insights or strategic support, contact our team at marketing@kesarev.com