Putin Limits Foreign Investment

Limits of ownership placed on companies that fall in 42 strategic sectors

President Vladimir Putin on May 5 signed into law limits on foreign investment in key sectors of the Russian economy in one of his last acts before stepping down.

Putin signed the law on "The conditions for foreign investment in economic enterprises with strategic importance for the defence of the country and the security of the state", the Kremlin said.

Under the terms of the law any private foreign company wanting to buy more than 50% of a company in any of 42 strategic sectors will need authorization from a commission made up of economic and security officials. Foreign state-controlled companies will have to go through the same procedure if they plan to acquire more than 25% in a Russian company that is included on the list, according to the text of the decree.

The new law has been under discussion for two years and has raised concern among the foreign investor community in Russia as it would widen the powers of the FSB security service, successor to the KGB, in business transactions.

Putin is due to hand power to president-elect Dmitry Medvedev on May 7 after eight years in power. Medvedev is then expected to name Putin prime minister on May 8.

Copyright Agence France-Presse, 2008

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