The Ministry of Economic Development proposes to allow the Federal Antimonopoly Service (FAS) not to publish information on the applications of companies for the implementation of transactions, follows from the draft law of the Ministry of Economic Development, posted on the portal of regulatory legal acts. These amendments were included in the expanded version of the document, originally submitted by the Ministry of Economic Development in late April.
The new version of the bill significantly expands the list of corporate information that companies can not publish by the government's decision. The bill is designed to support the backbone enterprises, the explanatory note says. It should help such companies to solve the problem with costs due to "the introduction of restrictive measures" (ie sanctions), follows from the materials of the Ministry of Economic Development.
The list of strategic enterprises (.pdf) includes 199 companies - both public and private. Among them - AvtoVAZ, ALROSA, Rosneft, NOVATEK, Miratorg, Rusagro, OAO Rusal, Severstal, Surgutneftegaz, AFK Sistema, retailers Auchan, O'Key "And" Thunder "(operates under the brand" Magnet "), developers PIK and LSR, as well as other enterprises. Some of them are under American / European sanctions.
The Ministry of Economic Development proposes to give the government "the right to determine the cases in which business associations may not implement disclosure or provision of information." In addition, the bill gives the government the opportunity to determine the circle of persons whose information may not be disclosed in full. In the text of the document, it does not specify that it is only about the backbone companies (it is available only in the explanatory note). However, from the subject of its regulation it follows that the document concerns only enterprises from the list of system-forming ones, RBC was told by the press service of the FAS.
Do not report transactions
In December 2017, the government received the right to restrict the disclosure of "certain types of information", access to which by general rules should be granted to an unlimited number of persons (for public borrowers, joint-stock companies, etc.). The proposed amendments significantly expand the list of these types of information.
In particular, Part 9 of Art. 32 of the Law "On Protection of Competition" is proposed to be supplemented with a paragraph containing a rule that the FAS has the right not to post on the official website information about the received "request for consent to the transaction, other action" in cases determined by the government. "Currently, according to the order on the information policy of the FAS Russia, all decisions are published, except for cases stipulated by special laws, for example, on state secrets," the press service of the agency told RBC. RBC sent a request to the Ministry of Economic Development, but received no response on Friday.
The bill is a reaction to external influence, it will have a neutral impact on the domestic market, the chairman of the Committee on Antimonopoly Regulation of "Business Russia" Sergey Kolesnikov believes. "I think that the restrictions for the most part will affect the defense sector and financial institutions. The liquid market will be affected to a lesser degree, "Kolesnikov said. The dividend policy of companies and the quality of corporate governance are more important for minority shareholders and the market, and in any case, it will become known about insider trading from insiders, believes Kolesnikov.
FAS to the question of the consequences of the bill for the level of competition replied that "restrictions on the publication of decisions can take place when it concerns the need to protect public interests." In addition to competition, they are the interests of the defense and security of the state, the department stressed.
Do not disclose the liquidation of banks
The draft law of the Ministry of Economic Development also proposes to give the government the right to determine cases in which the Central Bank may not publish information on the liquidation or reorganization of banks and banking organizations on the Internet. In cases of mergers, acquisitions and conversion of banks, the government may allow organizations not to disclose (or disclose not completely) information on the form of reorganization, the procedure and duration of its conduct.
The Bank of Russia in March reported that it is working to restrict access to information that could potentially be used to identify relationships between banks and individuals and legal entities that have been sanctioned, and then possibly imposing sanctions against the banks themselves. The Central Bank prepared documents that stipulate that when disclosing information on the websites of the Central Bank and financial organizations, information on beneficiaries appearing in foreign sanctions lists is not subject to disclosure. Now banks are required to disclose controlling owners (up to a public joint stock company or an individual) no later than ten days after they learned of the relevant changes.
Less public information
The bill of the Ministry of Economic Development also introduces changes in Art. 92.2 of the Law "On Joint Stock Companies" and Art. 50.1 of the Law "On Limited Liability Companies", which were enacted in December 2017. In the current version, these articles already give the government the right to authorize AO and LLC not to disclose information relating to major transactions. The draft law proposes to expand the effect of these norms and, upon the government's decision, "to determine the conditions under which a company has the right to disclose and provide information in a limited amount". In addition, according to the changes, the government will be able to determine the circle of persons whose information may not be disclosed to the full extent.
If the bill is introduced and adopted, the government will also be able to determine when the central depository will not be able to disclose or publish the information in full (the National Settlement Depository publishes data on corporate actions of enterprises), clearing organizations, tender organizers. The non-disclosure standard is also proposed to be extended to federal laws "On Microfinance Activity and Microfinance Organizations", "On the Securities Market" and "On Countering the Illegal Use of Insider Information and Market Manipulation" (that is, systemically important enterprises will not be able to publish data on these issues) .
To circumvent the sanctions
The proposed measures are of a protective nature, says Alexander Lemchik, partner of the law firm Lemchik, Krupsky and Partners. Restrictions on the disclosure of information will close the possibility of collecting information about the corporate structure, financial indicators and beneficiaries of Russian backbone enterprises, says Lemchik. "The amendments will help those who are already under sanctions, since they will create new companies in which it will be impossible to draw an unambiguous conclusion about the structure of their share capital. This also applies to joint ventures with foreign partners, "the lawyer said.
With the help of these norms, the government hopes to circumvent the sanctions against individuals under the CAATSA law (on the expansion of anti-Russian sanctions), as well as sectoral sanctions against the most important sectors of the economy, Rustam Kurmaev, the managing partner of Rustam Kurmaev and partners, supposes. "If it is impossible to establish shareholders and owners, then to include the enterprise, say, in the list of SDN (Specially Designated Nationals List, the sanctions list introducing strict restrictions on its participants - RBC) along with them will be difficult. But this is in theory, and in practice it is unlikely that this will have a positive effect, since the next step can be imposed sanctions against companies whose information is classified, "Kurmaev argues.
To the detriment of investments and minority shareholders
Restrictions on the disclosure of information may adversely affect the companies themselves, suggests senior lawyer Coleman Legal Services Elena Zhukova. "These companies will become less attractive to investors due to the fact that the investor will lose the guarantee of obtaining comprehensive and complete information. Counterparties, in turn, may face problems when verifying such companies. These factors will undoubtedly affect the economic performance, "Zhukova said.
The introduction of these amendments may lead to the emergence of a "hybrid" legal and organizational form of legal entities with restricted access to certain information, believes Alexander Lemchik, and this will lead to a rethinking of the global institution of organizational and legal forms of legal entities.
It is unclear whether minority shareholders will be able to obtain the information that the government decides to limit for publication, Rustam Kurmaev points out. "If it's just classified, it basically raises the question of the possibility of resolving any corporate conflict," says the lawyer.
Not only system
The list of backbone enterprises is not the only register, the authorities of which protect against sanctions by closing information. Since August 1, the Federal Tax Service will start publishing data on tax and accounting statements of Russian companies. However, according to RBC sources, they will not contain information on strategic enterprises - defense companies and state-owned companies, information on them may not appear before 2020. The list of strategic enterprises and joint-stock companies (it exists separately from the "system-forming" list) includes about 70 companies, including Rosneftegaz, RusHydro, RZD, Rosneft, Gazprom, Aeroflot, VTB Bank and others.