Benefits and bottlenecks: Russia’s Investment Protection and Promotion Agreements

In early October, the Russian Government approved a number of Resolutions required for launching a new investment tool – Investment Protection and Promotion Agreements (IPPAs or “the Agreements”). 

The documents were adopted pursuant to the IPPA Law enacted on 1 April 2020. The Law has not so far been enforced because no approved agreement signing procedures are in place (by late October, no IPPAs had been signed).

The existing regulations establish:

• the rules for signing, amending, and terminating the Agreements;
• the rules and timeframes for compensating investors for their infrastructural investments;
• a new stakeholder – the autonomous, non-profit Agency for Investment Development, introduced into the management framework for this new investment tool for liaising with businesses regarding IPPAs.

The Government views IPPAs not only as a long-term tool for directing investments into industrial capital but also as an anti-crisis measure for boosting incoming investments, which are dwindling against the background of the economic crisis and the growing risks of doing business in Russia.

In this memo, FIPRA Russia / Kesarev addresses the main benefits and disadvantages of IPPA agreements from the perspective of foreign businesses and describes the stakeholders to be potentially involved in their preparation and signing.

Please click here for the full memo. 

If you missed the initial memo on IPPAs in Russia, you may find it here.