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"We still have to do so much
that would make Russia attractive for foreign investors." Russian Federation President Putin
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STATE GUARANTEES
for the Protection of Foreign Investments These guarantees are contained in Chapter 2 of the law "On Foreign Investments in the RSFSR" and in other statutory acts of the Russian Federation. The aforementioned law lays down that the treatment of foreign investments and of foreign investors' activity aimed at making such investments must not be less favorable than the treatment accorded to the property, property rights and investment activity of legal entities and nationals of the Russian Federation. The law guarantees that foreign investments will not be expropriated, i.e., nationalized, requisitioned or confiscated except for extraordinary cases provided by law. In the event of nationalization or requisition the foreign investor will be paid prompt, adequate, and effective compensation. Decisions of government bodies to expropriate foreign investments may be appealed in court. The compensation paid to a foreign investor must amount to the real value of the nationalized or requisitioned investments immediately before the nationalization or requisition or before the impending nationalization or requisition became public knowledge. The compensation must be paid without undue delay, in the currency in which the original investments were made or in any other foreign currency acceptable to the foreign investor. Until actual payment is made, interest will accrue on the amount of the compensation at a rate effective in the territory of Russia. Upon payment of the appropriate taxes and levies foreign investors are guaranteed the possibility to transfer abroad sums related to foreign investments, if these sums were obtained in foreign currency. This includes, in particular:
The aforementioned sums, if received in rubles, can be reinvested in the territory of Russia. To keep sums of money in rubles foreign investors can open current and settlement accounts at banks in the Russian territory, which hold an appropriate license of the Central Bank. The money on such accounts cannot be transferred abroad but may be used to buy foreign currency. Para. 1 of the Decree of the Russian Federation President No. 1466 of September 27, 1993 "On Improvement of Work with Foreign Investments" lays down that for a period of three years newly issued statutory acts regulating the terms and conditions of operation of foreign enterprises and joint ventures (unless these acts improve these terms and conditions) will not be applicable to enterprises which are in existence on the date on which these acts come into force. Restrictions may be imposed on the activity of foreign investors only by laws of the Russian Federation and decrees of the President of the Russian Federation. The number of such restrictions is rather limited. On April 4, 1994, the Russian Federation Government adopted Ordinance No. 277 "On Organization of Work with Foreign Investments and Advisory-Technical Assistance" which establishes the Russian Federal Center for Project Financing and Advisory-Technical Assistance at the Ministry of Economics of the Russian Federation. The Center will carry out expert examination of applications and proposals in the field of international investment cooperation, including those concerning the use or credits granted under the guarantees of the Government of the Russian Federation; carry out pre-investment studies; work out financing schemes and carry out expert-advisory maintenance of investment projects; act as a representative (agent) of the Government of the Russian Federation in coordination of the activity aimed at realization of advisory-technical assistance rendered to Russia.
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