Loopholes in the law get in the way of foreign investments. By Dmitry Kafanov for Fishnews.ru
Foreign investors cannot invest in the Russian fishing industry because there are no adopted regulatory instruments with conditions and criteria of obligatory processing of catches on the Russian shore, says Dmitry Kafanov, partner of Inmar Legal Ltd.
On December 6, 2014, Federal Law No. 343 “On Making Amendments to the Federal Law “Concerning the Procedure for Foreign Investment in Business Companies Which Are of Strategic Importance to National Defense and State Security” and to Some Legislative Degrees of the Russian Federation” was enacted. The additions made to Part 1 Article 12 “Concerning the Procedure for Foreign Investment in Business Companies Which Are of Strategic Importance to National Defense and State Security” are of immediate value for fishery sector. In particular, any foreign-invested business companies which are of strategic importance now must process their catches in the territory of the Russian Federation.
Dmitry Kafanov, a partner of Inmar Legal Ltd, noted that these alterations were long-pending; they serve the interests of domestic fishery industry.
Along with this, absence of statutory regulation in the practical application of the law and some gaps in administrative procedures make it nearly impossible to harvest aquatic bioresources by law-complying foreign investors, the expert said.
As Fishnews interviewer told, the legislation does not now regulate the conditions of processing of aquatic bioresources in the Russian territory which are caught by foreign-invested business companies. In addition, criteria to which the processing should correspond are not determined. In particular, it is unclear, what part of catches should be processed in the Russian Federation, and should it be done at the existing Russian enterprises, and should money be invested in the creation of new ones, to what extent the processing should be carried out, whether the cost of quotas for the investor is reduced by the sum of its investments in the processing infrastructure.
As a result, potential foreign investors are just unable to assess an amount of investments in the processing industry necessary for obtaining the right to legally catch Russian fish. In Dmitry Kafanov’s opinion, the situation taken place involves inviability of great projects for the development of a sectoral infrastructure, which are created by way of declaration, without due regard to interest of real investors and business.
The specialist pointed out, that now there is the unique situation when a relevant ministry such as the ministry of agriculture is completely excluded from the process of approval of projects on foreign investments in the fishing complex. Thus, the Government Commission for Control over Foreign Investment in the Russian Federation includes no representatives of the Russian Federal Fishery Agency.
According to Dmitry Kafanov, it is absolutely not clear how any decisions may be taken in respect to defining the obligations for foreign investors to process aquatic bioresources, not having a predictive resource assessment, clear idea of the state of sectoral infrastructure and overall analysis of all macroeconomic tendencies in the domestic fishing market.
For early solution of these problems, Inmar Legal Ltd sent the appropriate inquiry to the Governmental Commission for Control over Foreign Investment in the Russian Federation.
Source: Fishnews.ru