In addition to our previous legal update, as being a relative development, please be aware that on 28 December 2015, Russian President signed Decree No: 669 clarifying and extending special economic measures against the Republic of Turkey introduced by Decree No: 583 dated 28 November 2015. Decree No. 669 was officially published and came into force on the same day. Following this, On 29 December 2015, the Russian Government adopted Resolutions No: 1457 and No: 1458 specifying the scope of sanctions and restrictions which were imposed by the President Decree No: 583 and further extended by Decree No: 669.
The Decree No: 669 clarifies and extends the ban or restrictions on performance of certain types of works/services in Russia under contracts with suppliers that are either; (*) organizations subject to jurisdiction of the Republic of Turkey or organizations controlled by Turkish citizens or (*) Turkish organizations.
For this purpose, we deem that the term “control” is assessed in accordance with Law No. 57-FZ “On Foreign Investments into Strategic Entities” (by reference to direct or indirect control on any basis over more than 50% of voting shares in the company, as well as other instances of control, such as rights to influence the company’s activities under various shareholders arrangements, right to appoint general director and so on). Therefore, the ban is extended to apply to direct or indirect subsidiaries of Turkish organizations in Russia and Russian entities whose activities are otherwise influenced by Turkish citizens or organizations. Yet, the fact is to be confirmed by the lawmaker and its practice.
Following the decree, the Resolutions No: 1457 and No: 1458 were officially published and came into force on 30 December 2015.
As per the resolutions, The list of types of works and/or services that Turkish organizations and organizations controlled by Turkish nationals or Turkish organizations are banned to perform in the Russian Federation from 1 January 2016, is adopted and including the following: (*) any works or services for the state or municipal procurement purpose; (*) construction of buildings, engineering structures, and other specialized construction works; (*) activity in the sphere of architecture and engineering-technical design, technical tests, research and analysis; (*) travel agencies and other services in the tourist area; (*) hotels and other accommodation services; and (*) wood processing.
Please note that, as per the resolutions, excluded from the ban are contracts that were concluded prior to 30 December 2015, for the duration of such contracts.
Please also note that, as per the resolutions, the list of employers in Russia that are excluded from the ban to employ new Turkish nationals in Russia from 1 January 2016 is announced and includes 53 legal entities and branches of Turkish companies. Also, the number of Turkish nationals employed by these companies after 1 January 2016 must not exceed the respective number as of 31 December 2015.
Complete list may be found here in Russian: http://government.ru/docs/21313/ (please mind the link to the PDF file).
All the special economic measures examined within our same captioned legal updates are announced without specifying a duration. Thus, will apply until they are abolished by another presidential decree.
We keep monitoring any further developments in relation to the restrictions in the Russian-Turkish relations and will keep you informed as they appear.
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