Only domestic companies can be users of Russian subsoil

Only domestic companies can be users of Russian subsoil.

The State Duma actually obliged foreign legal entities to give up their licenses for the development of subsoil resources in the Russian Federation in favor of domestic firms. The lower house of parliament has already passed the corresponding law. According to its provisions, only legal entities formed under the law of the Russian Federation FZ-129, and individual entrepreneurs with Russian citizenship can be users of Russian subsoil. Cases of transfer of rights to the subsoil of the Russian Federation to foreign companies will be established specifically in federal laws.

Thus, a ban has been introduced on the development of Russian subsoil by foreigners, except for individual cases expressly provided for in federal legislation.

The law describes in detail the process of transfer of rights. Foreign companies that have the appropriate licenses will have to, within ninety days after receiving a letter from Rosnedra, which the state body is obliged to send within thirty days after the entry into force of the law, re-register the documentation for Russian legal entities. In order to transfer rights, a foreign company has the right to form a Russian legal entity, if one does not already exist.

Further, the Russian company, within one hundred and eighty days from the date of receipt of the notification from Rosnedra, must apply to the licensing authority for renewal of the license. In order to meet licensing requirements, a contract is concluded between a foreign company and a Russian one, according to which the necessary equipment and property are provided on a reimbursable basis. If the legal entities cannot agree on the terms of the transfer, the dispute is resolved by the Arbitration Court.

If a foreign company ignores the requirement of the law, this will not save it from adverse consequences. The law states that the basis for early termination of a special right is a violation of the rules for its renewal.

Currently, the bill is being considered in the upper house of parliament, in the Federation Council, after which it will go to the signature of the President of the Russian Federation. If adopted, the law will enter into force immediately after the official publication on the Internet portal of regulatory legal acts.

Legislators expect the law to protect Russia's economic interests. It is noted that now some unfriendly countries (Japan, for example) continue to receive income from production sharing agreements signed back in the 90s. Legislators outlined the importance of this sector for the Russian economy.

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