Update: Russia Imposes Economic Sanctions on Turkey

Publication December 29, 2015

On December 28, 2015, President Putin signed Decree No. 669 (the "Decree") amending  previously issued Decree  No. 583 on certain economic sanctions against the Republic of Turkey.

Pursuant to the Decree, not only are companies under the jurisdiction of the Republic of Turkey prohibited or restricted from providing certain works and rendering certain services on the territory of the Russian Federation, but also any companies controlled by either citizens of the Republic of Turkey or companies under the jurisdiction of the Republic of Turkey. The list of such works and services will be issued separately by the Russian government (as of December 29, 2015, no such list has been published).

According to the Decree, the term "control" shall have the meaning defined in the Strategic Law, which states that a company shall be deemed to be under the control of another person if one of the following is present:

  1. the person exercising control has the right to directly or indirectly dispose of over 50% of the voting shares of the person under control;
  2. the person exercising control has the right or authority to determine decisions to be adopted by the person under control;
  3. the controlling person has the authority to appoint a sole executive body, and (or) more than half of a collegial executive body of the controlled person, and (or) has the absolute ability to elect over half of the boards of directors of the controlled person;
  4. the controlling person has the authority of the managing company of the controlled person; or
  5. the controlling person controls directly or indirectly less than 50% of the voting shares of the controlled person, but, based on its shareholding ratio, it can determine the decisions made by the controlled person.

Additionally, according to the official website of the Russian government, a list of Russian employers exempt from the ban on employment of Turkish citizens was adopted by the Russian government on December 24, 2015. The referenced list includes 53 companies in the construction, automotive, building materials, plastic pipes and fittings, sanitary ware and flooring sectors. As of December 29, 2015, such list has been published.

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