Russia may raise foreign share in strategic firms

Moscow, May 17 | Updated: May 18 2006, 05:30am hrs
Russia is preparing plans on allowing foreign investors to buy up to 50% of security-sensitive firms as long as full control rests with the state, a senior cabinet official said on Wednesday.

But the powerful Federal Security Agency opposes this, and insists that foreigners should be allowed to buy no more than 30% stakes, said Vladimir Taraskin, head of the legal department at the industry ministry.

A new, more liberal version of the bill on foreign investment in so-called strategic enterprises would be sent to the government for approval on June 1. Earlier we had (allowed) a 25% stake. Now we have moved it to 50%, Taraskin told Reuters. He said 15 ministries a majority had approved the draft which outlines 39 industries where foreign investment might be limited, including aerospace and aviation security.

The rest of the list comprises defence and security sensitive sectors such as cryptographic equipment manufacturing and research on infectious diseases. Officials earlier said Russia had no plans to limit investment in natural resources, except for six strategic deposits to be defined in a separate law on subsoil use.

According to the draft document, a foreign investor wanting to acquire a stake in a firm defined as strategic should send an application to the anti-monopoly watchdog, which would pass it to a special commission.

The commission would include several ministers responsible for related industries as well as heads of the defence and security agencies. Taraskin said it would be logical for the commission to be headed by economy minister German Gref.

Reuters