As we reported earlier, in May 2025 Russian lawmakers had proposed restricting foreign investors’ ability to repurchase assets they divested after February 2022. In July 2025, the Russian Ministry of Economic Development introduced a revised proposal featuring a judicial mechanism and stricter criteria. The scope was narrowed to companies operating in the production, retail, and hospitality sectors.
What Changed Compared to the May Draft?
The July proposal dropped the idea of unilateral termination and instead introduced a court-based process. Key improvements and changes included:
Court Involvement: Russian buyers must apply to the Moscow Region Arbitrazh Court to terminate a buyback right. This would override any foreign jurisdiction or arbitration clause in the original agreement.
Expanded Criteria: Termination is permitted only if all statutory conditions are simultaneously met (see below), unlike the simplified standard proposed in May.
Conditions for Terminating Buyback Rights
To terminate a buyback option, a Russian buyer must demonstrate that all eight of the following conditions are met concurrently:
Sensitive Sector: The Russian company operates in an area under federal sanitary and epidemiological supervision (e.g., food, retail, hospitality).
Unfriendly Origin: The foreign seller (or its affiliate) is connected to a state deemed “unfriendly” by Russia, including where control is exercised by such persons irrespective of the place of registration.
Political Withdrawal: Prior to the sale, the foreign party publicly announced its exit from Russia for political reasons and took clear steps to suspend or impair operations of the Russian business.
Timing: The sale took place between 22 February and 31 December 2022.
No Regulatory Clearance: The deal did not require approval from the Government Commission on Foreign Investments or presidential authorizations.
Below-Market Terms: The asset was sold at a price significantly below market, and the repurchase right was granted for a term of ten years or more on predetermined conditions.
Cooling-Off Period: At least three years have passed since the sale.
Proper Conduct: The Russian buyer has duly fulfilled obligations to employees and creditors.
A presidential decree may introduce further grounds for termination.
What Happens Now?
Both the May and July proposals to restrict foreign asset buybacks were originally introduced as amendments to draft law No. 1059849-7. However, the version adopted by the State Duma in the second and third readings on 22 July 2025 omitted any provisions on foreign repurchase rights. This means that, for now, the expected buyback restrictions remain outside the Russian legal framework.
Given the detailed structure of the July proposal prepared by the Ministry of Economic Development — and the clear political support behind the initiative — a separate bill specifically targeting foreign buyback rights is now expected.
Key Takeaways for Foreign Businesses
Foreign investors holding repurchase rights or exit options in Russian assets should closely monitor ongoing legislative developments. Proactive legal and commercial planning will be essential to mitigate risks related to future restrictions on asset repurchases.
To safeguard your contractual rights and anticipate legislative developments, contact Solstico Legal for tailored legal and strategic guidance.