Events

 
 
 

Meeting of the Government Commission on Monitoring Foreign Investment

 
 
 

Dmitry Medvedev’s opening remarks:

Good afternoon. Our commission is expanding, soon this room will no longer hold all of us. But if this corresponds to the volume of investment, that's probably okay.

Today we are holding the first meeting of the Commission on Monitoring Foreign Investment of the year. The agenda is in accordance with the commission’s statute, which considers foreign investors’ applications for bargains with strategic assets.

There are a number of bargains in the pharmaceutical industry, minerals, and several other deals that we will consider with you.

And a few words on last year’s results. The period was not easy for us, but the general volume of foreign investment into the Russian economy totaled over $50 billion, which is nearly the same as in 2011. As compared to the global dynamics, this is not a bad result. We are among the top five or six world leaders in receiving foreign investment, with foreign direct investment globally reduced by nearly 20%. I recently gave a report in the State Duma and presented these numbers.

Regarding the activities of the commission, the volume of bargains upon which the decisions were made totals nearly $3 billion, and investment  as part of the business projects that were approved totals nearly five billion roubles. 

Here’s another interesting point – last year we received applications from investors from Kazakhstan (four) and Azerbaijan. This shows that investment cooperation is being stepped up in the CIS as well. This is a good thing.  

The Government is taking steps toward improving legislation on monitoring foreign investment in strategic spheres. In several cases it will be made more liberal. As a result, the number of appeals on these issues has decreased by almost twice in 2012 as compared with 2011.

Of course, we should take a balanced approach to this and encourage long-term investment projects in the manufacturing of high-tech competitive products.

All procedures should be sensible and understandable for bona fide investors. At the same time we must by all means protect our strategic interests – as regards both security and the fulfillment of social commitments to employees and citizens that use the services of the companies monitored by the commission.

The Federal Anti-Monopoly Service has made proposals on improving legislation. We’ll discuss them and make decisions on specific deals.

I’d like to say a few words about such a high-profile issue as the use of the bio resources of our seas. We have addressed this issue several times and we must finally put things in order here. In principle, we have done the work, and both today and for the future, we proceed from a simple premise – Russian companies should catch bio resources in our seas. Incidentally, we haven’t invented anything new here, and it’s not because our approach is so tough. No, this is the worldwide practice and other countries act in the same way. These are our bio resources and this is the only reason why we must control them better. That said we welcome the contribution of foreign investors to the stock of such companies, especially in the processing industry. 

We’ve discussed this issue more than once. I’ve instructed profile ministries and departments to conduct practical work with our foreign partners and our fishering companies. Mr Artemyev (Igor Artemyev, Head of the Federal Anti-Monopoly Service) will report to us on what has been done and whether there are still some problems.

Let’s start discussing the agenda.

<...>

* * *

Head of the Federal Anti-Monopoly Service Igor Artemyev speaks to journalists after the meeting

Igor Artemyev: Good afternoon, ladies and gentlemen. Today we’ve held a regular meeting of the government commission on foreign investment in Russia chaired by the Prime Minister. Dmitry Medvedev acted as moderator of the meeting.

We’ve reviewed several important issues. One of the issues we discussed is passage of the Government-endorsed amendments to Federal Law No. 57, which underlies the commission’s work. We’ve been discussing different issues that must be reviewed in the Government and the State Duma, and we’ve been preparing for the first and second readings to amend the law as soon as possible, thereby facilitating access of foreign investors to strategic sectors of the Russian economy.  We’ve spent some time on these issues.

We’ve presented to the government commission an overview of our activities on behalf of FAS, reflecting the commission’s work for almost three years. It is clear that investors are primarily interested in projects linked with natural resources and the infrastructure of natural monopolies. Investors have made the greatest number of inquiries about these spheres. They have also made most of their investments there.

In addition, the commission heard a report on the implementation of the Prime Minister’s instructions and the Government’s decisions pertaining to the performance of foreign companies in the Far East. You know the Pacific Andes story. The commission’s previous decisions made it clear that the catching of aquatic bioresources in Russia’s waters should be left to our companies. This is the practice all over the world. We are merely stating that these decisions are being fulfilled. Pacific Andes has sold part of its business in Russia and is still involved in this process. We know that one Korean company has also sold its business to Russian companies.

The commission’s decisions were as follows: first, no matter what a county’s company of origin is, it cannot own more than 50% of shares; second, it should not try to acquire control over the Russian fishing fleet, ships and companies on the basis of secret agreements (let me emphasise this again). 

The Ministry of Agriculture, the Federal Agency for Fisheries, security agencies and FAS have received new instructions. We’ll continue enforcing law and order in the Far East.

In addition, we don’t forget that Russia has other seas and oceans where things were not so bad as in the Far East, but where foreign companies also operate. They signed all sorts of illegal agreements to gain control over our bioresources and domestic quotas for catching them. This is a big issue and we’ll deal with it on a permanent basis.

We’ve reviewed several important deals. Perhaps the precedent has been set by one of them, notably the American company Abbott Laboratories. It wanted to buy Petrovax Pharm, a very successful Russian company that develops vaccines and other bio-immunological preparations. As a result of a very long discussion of this issue, the commission barred the US company from buying Petrovax Pharm. This is one of the very rare cases where the commission ruled against a deal. The decision was based on national security considerations and international experience, which shows that all states want vaccines to be produced by domestic companies because masses of people, including children and elders are inoculated against dangerous diseases.

Such biomaterials are under control. Financially, this transaction is attractive, but the commission didn’t give it the green light for reasons of national security and based on general practices adopted by other countries.

Moreover, it was decided to discuss issues of immunisation and vaccination in Russia during preparation of the amendments in the second reading and eliminate the loophole in the law to make sure that the production of vaccines is made an area of strategic importance, which we discussed today. We will have to wait and see what decision will be taken, but there were concerns expressed about it. The decision about Abbott (Abbott Laboratories - American Chemical Pharmaceutical Corporation) is not a decision against the company, even less so against the United States. This is a strategic decision, and the Government says that the production of vaccines is a strategic area, because it affects almost all Russian citizens at the biological and immunological level. Therefore, it doesn’t matter where the company is based – the United States, Greece, China or Japan. Of course, we welcome such proposals from the point of view of investment. Any company would be rejected, not just Abbott, since it has to do with this sphere.

Of course, there were some good and positive decisions. In particular, we accepted the application filed by Polish company Asseco Poland SA with regard to R-Style Softlab, the Russian developer of automated banking systems. In fact, this company makes encrypted products for the banking industry, and the Polish company gets full control over it and its proprietary technology. In addition, there’s a very large transaction in which the Republic of Kazakhstan is buying 25% in a major process plant – the Urals Electrochemical Plant. This has to do with the peaceful use of nuclear energy, and, accordingly, Rosatom and our companies are involved. So, the companies from the Republic of Kazakhstan are buying 25% in it to jointly cope with new objectives.

We have approved the acquisition by Polymetal (as you are aware, there are foreign shareholders; in particular, Czech shareholders hold large stakes) of the Ural-Metal and the platinum group. We are talking about fairly large platinum deposits, which we allowed them to buy for investment purposes.

We had a fairly large number of items on our agenda today with lots of legislative initiatives. We adopted specific precedent-based solutions. The decision in the area of immunobiology and vaccine production is, of course, the most important, and it took up most of our time today.

Адрес страницы в сети интернет: http://archive.government.ru/eng/docs/23970/