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In his address, Evgeny noted that the confiscation of assets for the benefit of the state has become one of the defining trends of the past three years. These precedents are driven by various factors, ranging fr om anti-corruption efforts and the reassessment of the outcomes of privatisation to the implementation of counter-sanctions measures. He emphasised that the “pioneer” in this area was Law No. 57-FZ on Foreign Investments in Strategic Companies, under which claims for “nationalisation” began to be considered even prior to 2022.
When discussing the challenges arising from the application of Law No. 57-FZ, Evgeny highlighted several key issues:
• an expansive definition of a foreign investor, which also includes Russian nationals holding dual citizenship or a residence permit in a foreign state;
• the often broad interpretation of what constitutes strategic activity;
• a wider reliance on the concept of de facto control.
Reviewing current case-law, Evgeny pointed out that the courts take into account a wide range of evidence demonstrating de facto control over strategic companies: close business ties, family relationships, financing provided by a foreign investor, and the establishment of control through pledge-related and similar arrangements.
Given the increased risks for businesses, Evgeny suggested assessing these risks on the basis of a broad interpretation of the law, factoring in historical risks, taking steps wh ere possible to reduce the likelihood of a company being classified as strategic, and paying particular attention to these issues during the due diligence process when acquiring a business.