Update on RUSSIAN SANCTIONS against the Republic of Turkey

31.12.2015

Goltsblat BLP advises that, on 29 December 2015, the Russian Government adopted two Regulations, No. 1457 and No. 1458, (the “Regulations”) to implement Presidential Decree No. 583 (the “Decree”) imposing sanctions on the Republic of Turkey, Turkish companies and citizens.

The Regulations include two lists specified in the Decree:

1. List of works and services that Turkish companies are prohibited from carrying out or rendering in the Russian Federation (RF) from 1 January 2016:

  • construction of buildings, civil engineering and specialised construction activities (NACE 41-43 ОК 029-2014);
  • architectural and engineering activities; technical testing and analysis (NACE 71 ОК 029-2014); 
  • travel agency, tour operator and other reservation service and related activities (NACE 79 ОК 029-2014);
  • hotels and similar accommodation (NACE 55.1 ОК 029-2014);
  • works and services for state and municipal needs; and
  • woodworking.

Yet the Regulations allow performance of works and rendering of services under an agreement entered into before 30 December 2015 for the term of the agreement.

2. List of employers not prohibited from hiring Turkish citizens.

Even so, from 1 January 2016, the number of Turkish employees hired by an employer included on the list must not exceed the number of such employees hired by the employer as of 31 December 2015.

The Regulations came into force on 30 December 2015.

In addition, on 28 December 2015, the President of the Russian Federation adopted Decree No. 669 extending the ban on performance of works and rendering of services to organisations controlled by Turkish citizens or companies.

An organisation is considered to be controlled if a Turkish citizen or company:

  • is entitled to control, directly or indirectly, over 50% of the total voting shares of the organisation;
  • is entitled to determine the decisions made by the organisation (even if it controls less than 50% of the total voting shares when its ownership, compared with those of other shareholders, allows it to do so);
  • is entitled to appoint or elect (i) a chief executive officer of the organisation, (ii) more than half the collective executive body of the organisation and/or (iii) more than half the board of directors or any other collective management body of the organisation; or
  • is the managing company of the organisation.

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