New Standard Capital Investments Protection Agreement For Russia

Source: Beiten Burkhardt Newsletter (CENTRAL AND EASTERN EUROPEAN NEWS, 9/2001)

On June 9, 2001 the Government of the Russian Federation passed Regulation N 456 on Conclusion of Agreements Between The Government of The Russian Federation And The Governments of Foreign Countries Aimed at the Encouraging and Reciprocal Protection of Capital Investments. This Regulation set a standard form of Agreement between the Government of the Russian Federation and the Governments of foreign countries which is aimed at encouraging reciprocal protection of capital investments and used as a basis for intergovernmental negotiations.

The goal of the Agreement is to achieve favorable conditions for capital investment, and to encourage capital inflow and the development of trade and commerce as well as scientific and technical co-operation.

The standard Agreement defines the following terms:

• "an investor"
  
• "capital investments"
  
• "profit"
  
• "territory of a Party to the Agreement"
  
• "legislation of a Party to the Agreement"

The Agreement regulates the following issues:

• protection of capital investments;
  
• expropriation (allowed only for meeting public interest with further compensation);
  damages;
  
• unimpeded transfer of investors' payments abroad after their fulfillment of all tax obligations;
  subrogation;
  
• disputes settlement;
  
• consulting with respect to interpretation and application of the provisions of the Agreement;
  
• application of the Agreement;
  
• coming into effect and the term of the Agreement.

The Ministry of Economic Development and other executive authorities of the Russian Federation were commissioned to conduct negotiations with governments of foreign countries with the goal of concluding agreements aimed at the encouraging of capital investments and reciprocal protection of capital investments.

For further information:
Mikhail Borodin, Beiten Burkhardt St. Petersburg
[email protected]