Russian lawmakers have proposed a draft bill which if adopted could result in severe repercussions for almost all economic activity by foreign companies in Russia.
On Friday, 13 April 2018 the leaders of all the parties represented in the Russian Parliament introduced Draft Bill No. 441399-7 “On Measures (Countermeasures) in Response to Unfriendly Actions of the USA and (or) other Foreign States” (the “Draft”).
The Draft provides for the following measures:
- Prohibition or restriction on the import into Russia of agricultural products, raw materials and food products, originating from the US and/or other foreign states;
- Prohibition or restriction on the import into Russia of alcohol and tobacco products originating from the US and/or other foreign states;
- Visa ban for persons to be listed by the Ministry of Foreign Affairs of Russia;
- Termination or suspension of international cooperation between Russia and Russian legal entities and US and/or other foreign states, including entities that are more than 25% directly or indirectly owned by entities under the jurisdiction of the US and/or other foreign states, relating to the sectors of atomic power, rocket engines, and aircraft production;
- Prohibition or restriction on access to public procurement for technological equipment and software originating from the US and/or other foreign states;
- Prohibition or restriction on the provision of consulting, audit and legal services by entities under the jurisdiction of the US and/or other foreign states (including entities that are more than 25% owned by entities under the jurisdiction of the US and/or other foreign states) for state and municipal needs, as well as with respect to certain types of entities (as yet undefined);
- Prohibition or restriction on participation in privatizations for US persons and persons of other foreign states, including entities that are more than 25% owned by entities under the jurisdiction of the US and/or other foreign countries;
- Prohibition or restriction on the provision of services related to the sale of public property owned by Russia by entities under the jurisdiction of the US and/or other foreign states (including entities that are more than 25% owned by entities under the jurisdiction of the US and/or other foreign states);
- Exhaustion of IP rights to trademarks owned by US and/or other foreign countries (including entities that are more than 25% owned by entities under the jurisdiction of the US and/or other foreign states). The Russian Government will draw up the list of goods covered by this measure;
- Increase of the fees for air navigation services for aircraft of the US and/or other foreign states for the transportation of goods while using Russian airspace;
- Prohibition or restriction on the export from the Russian Federation of goods made from rare earth metals by citizens of the US and/or other foreign states and/or entities that are more than 25% directly or indirectly owned by entities under the jurisdiction of the US and/or other foreign states;
- Prohibition or restriction on the employment in Russia of citizens of the US and/or other foreign states, including highly qualified specialists;
- Prohibition or restriction on the import into Russia of medicinal products and preparations, originating from the US and/or other foreign states, except for cases when medicinal products and preparations do not have analogues produced in Russia. The Russian Government should draw up the relevant list;
- Prohibition or restriction on the import of any other goods originating from the US and/or other foreign countries. The Russian Government should draw up the relevant list.
The countermeasures are drafted broadly, their focus and actual content would be implemented by Presidential decrees.
According to the Draft, foreign states should be understood as those following the decisions of the US on the introduction of economic sanctions against certain Russian economic sectors and specific Russian legal entities and individuals. The Draft does not specifically mention particular foreign states, except for the USA. The list of the affected foreign countries is likely to be specified in Presidential decrees and decisions of the Russian Government.
The countermeasures could be introduced gradually or simultaneously. The countermeasures would have to be introduced by the Russian Government on the basis of Presidential decrees.
The Draft would also make it possible to introduce a special regime for goods and services originating from the US and foreign states if such states introduce any restrictions for goods and services originating from Russia.
The State Duma is expected to consider the Draft on April 24 and it has a very high chance of being approved and introduced within the next few weeks.
