In December 2024, the Russian Government adopted Resolution No. 1772, changing the procedure for obtaining permission to pay dividends to foreign investors from ‘unfriendly’ jurisdictions. Presidential Decree No. 767 of 9 September 2024 had previously transferred to the Government Commission on Monitoring Foreign Investment the power to issue permissions for ‘other debtors’ and ‘other residents’ under the relevant provisions of Decrees Nos. 95 and 254. This did not remove the Bank of Russia’s separate powers in relation to the financial institutions covered by those acts. The new resolution establishes the application procedure and more formal requirements for its contents.

Information required in the application

The principal change introduced by Resolution No. 1772 is a clearer specification of the information an applicant must provide. This includes:

  • the purpose and terms of the proposed payment;
  • information on key performance indicators and their target values, where applicable, proposed as conditions for fulfilling obligations;
  • information on dividend payments for previous periods covering at least the five years preceding the application;
  • any additional information the applicant chooses to provide.

The application is submitted to the authorised body and, where applicable, the federal authority responsible for the relevant industry, which provides a reasoned position on whether permission should be granted. This is a summary: the full contents of the application and supporting documents are prescribed by paragraph 5 of Rules No. 295.

Criteria for reviewing applications

Formal application requirements must be distinguished from the criteria for granting permission and the conditions attached to an individual decision. Resolution No. 1772 does not itself establish a universal payment limit of 50% of net profit. The applicable subcommission criteria and permission conditions must be checked separately as at the application date.

Practical significance

A complete application is necessary for consideration, but does not guarantee permission. Companies should reconcile the information on the proposed payment, financial results and dividend history, and verify the applicable conditions of the authorisation regime.

Preparing an application requires the involvement of finance and legal teams. Performance indicators are provided where the rules require them; a company’s ‘strategic significance’ should not replace the established documentary requirements.

Resolution No. 1772 clarifies the information required for the authorisation procedure. Its practical significance lies in preparing an application that can be verified and complying with applicable conditions. A more formal procedure does not itself constitute permission to pay or a relaxation of all restrictions.