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Russian lawmakers push for right to ignore Western company buyback options
Published by Global Banking & Finance Review®
Posted on May 22, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 22, 2025
2 min readLast updated: January 23, 2026
Russian lawmakers propose rules to ignore Western buyback options, aiming to control strategic sectors. This could lead to international arbitration.
(Reuters) -Russian lawmakers are pushing for new rules to give domestic companies the right to ignore any buyback options they agreed with Western firms that left the country, to keep a grip on strategic sectors and promote domestic production.
Hundreds of foreign companies have left Russia since Moscow's invasion of Ukraine, by selling, handing the keys to existing managers, or abandoning assets. Many, including McDonald's, Henkel and Hyundai Motor, secured buyback deals in case they wanted to return.
But Moscow is putting up barriers to re-entry, Reuters reported last month, and now, the State Duma's committee on property issues is seeking to enshrine those obstacles in law.
"The bill sets out the specifics of the repurchase of assets by departing foreign investors," the committee said in a statement published on Thursday to accompany the bill's second reading in the lower house of parliament.
"It allows Russian citizens and companies to refuse to return assets to foreign investors, subject to a number of conditions linked with their connection to unfriendly countries, dishonesty when selling assets and fulfilling obligations to employees and creditors."
Essentially, buyback options can be rejected if the buyer is from a country that imposed sanctions against Russia, the deal was concluded after February 24, 2022 - the day Russia invaded Ukraine - and the purchasing price is below the asset's current market value.
Furthermore, Russian authorities will be able to prohibit asset purchases by foreigners if there could be a significant impact on the Russian economy's development.
Kremlin spokesman Dmitry Peskov on Thursday said Russia would be interested in the return of companies that left "carefully", but decried the "rude" companies that abandoned staff and sectors.
"A special regime will naturally be applied during their attempts to return," Peskov said.
The committee chair, Sergei Gavrilov, said the bill would protect the rights and interests of Russian businesses, but lawyers Reuters spoke to said cancelling these buyback options could lead to international arbitration.
"The unilateral cancellation by the state of contractual obligations stipulated in investment agreements or even within the framework of ordinary civil legislation can be regarded as a violation of investment protection obligations," said Yekaterina Drozdova of law firm FTL Advisers.
(Writing by Alexander Marrow; Editing by Elaine Hardcastle)
Russian lawmakers are proposing new rules that would allow domestic companies to ignore buyback options agreed with Western firms that have exited Russia.
Buyback options can be rejected if the buyer is from a country that imposed sanctions against Russia, the deal was made after February 24, 2022, and if the sale was deemed dishonest.
The cancellation of buyback options could lead to international legal disputes, as it may be seen as a violation of contractual obligations outlined in investment agreements.
Dmitry Peskov expressed that Russia would be interested in the careful return of companies that left, but criticized those that abandoned their staff and sectors.
Russian authorities may prohibit asset purchases by foreigners if such transactions could significantly impact the development of the Russian economy.
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