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The establishment of new rules for foreign investment in key areas of the Russian economy will have a positive effect on Russia's investment climate
The establishment of new rules for foreign investment in key areas of the Russian economy will have a positive effect on Russia's investment climate, the economic development and trade minister said Friday. German Gref, speaking at a news conference in Stockholm, said: "In my view, this will help to improve the investment climate. Investors will be able to understand the rules governing the market. This is always positive." The minister announced at a government session Thursday that the government would restrict foreign companies' access to 39 strategic economic sectors, including weapons production, the nuclear industry and mineral deposits. "We will identify a set of industries," Gref said. "For the moment, the list contains 39 types of activities where foreign companies will need [government] authorization to acquire controlling stakes." Gref also told journalists in Stockholm he was confident that the government's purchase of a controlling stake in energy giant Gazprom had also given a boost to the investment climate. "The previous situation was entirely opaque. The state owned 38% of shares, and banned share trading. The state has now bought 50 percent plus one share, and has permitted free share trading." Gazprom was previously prevented from joining other Russian companies on the main exchanges by a "ring fence" around its ordinary shares that limited foreign ownership of the company. The government lifted those restrictions after the state took a majority stake in the company in late 2005. "The market capitalization of Gazprom climbed from $60 billion to $200 billion. This says it all," Gref said. According to the bill on foreign investment drawn up by the Economic Development and Trade Ministry, non-residents will have to receive government approval on specific deals in the sectors listed. The ministry said in a news release that that bill proposed a similar procedure to those in the United States, Spain, France, Finland, and other countries. Gref told the government that the measures were "far more liberal than in other countries, for example, Finland and the United States," and added that the restrictions would concern sectors that account for 2-3% of national GDP. According to the minister, a "gray mechanism" is currently applied when foreign companies consult the government before buying assets in Russia. He called for clear and open regulations of foreigners' access to the country's strategic assets. Gref said a special interagency commission would be set up to authorize such deals. The bill will be considered at a government session on March 9.
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