The Russian Ministry of Economic Development has proposed significant changes to the legal framework governing the forced refusal of foreign businesses seeking to return to Russia via options. Under the draft legislation, a court may block a buyback of assets only if all eight criteria are met simultaneously. The Ministry has submitted amendments to the Federal Law “On Joint Stock Companies” and other legislative acts of the Russian Federation. The proposal was reviewed by the State Duma on July 14.

Previously, lawmakers introduced the concept of challenging options granted to foreign sellers. The current proposal aims to revise the scope and conditions for such challenges.

Alexey Chichirenkov, Senior Associate of the Corporate Practice at BBNP, shared his comments with RBC:

“Under the current draft, only companies engaged in the circulation of food products, materials, and goods, or in the provision of public catering services, fall within the scope of the mechanism. In our view, if this version is adopted, companies such as Inditex and IKEA will likely remain outside its reach — unlike McDonald's.”

The proposed criteria for challenging an option include:

• Date of the option agreement — the transaction must have been concluded in 2022
• Absence of special authorization — the transfer of shares must not have required prior approval by the Government Commission
• Company’s business profile — the Russian entity must operate in a sector subject to federal sanitary and epidemiological oversight (e.g., pharmaceuticals or food production)

Judicial procedure for contesting options:

• Exclusive jurisdiction — cases are to be heard exclusively by the Arbitrazh Court of the Moscow Region
• Investor rights priority — the court must verify compliance with all eight criteria before rendering a decision to refuse the return

All criteria must be satisfied cumulatively. Even if two or three conditions are met, the option cannot be challenged unless the remaining criteria are also fulfilled.

While the list of conditions is exhaustive, the President of the Russian Federation is empowered to expand it by decree depending on the economic situation. The Ministry’s current draft reflects a highly restrictive approach to blocking returns. This suggests that the government does not intend to systematically prevent the return of foreign companies under previously issued options. The scope for “non-return” scenarios is therefore narrowing.

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