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May 06 2008

Law protects key Russian sectors

Global

By Agencies

Putin will hand over presidential power to Medvedev on Wednesday [AFP]
In one of his last acts before stepping down as president on Wednesday, Vladimir Putin has signed into law limits on foreign investment in key sectors of the Russian economy.

Under the terms of the law, any private foreign company wanting to buy more than 50 per cent of a company in any of 42 strategic sectors will need state authorisation.

Foreign state-controlled companies will have to go through the same procedure if they plan to acquire more than 25 per cent in a Russian company that is on the list, according to the text of Monday's decree.

The sectors include oil and gas, aviation, fishing, media, and arms production.

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 in a statement.

The law has been under discussion for two years and has raised concern among the foreign investor community in Russia as it will 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 Wednesday after eight years in power.

Medvedev is then expected to name Putin prime minister on Thursday.

Grozny attack

Meanwhile, a bomb attack on a security checkpoint in Russia's oil-important Chechnya province has killed five policemen, police said

The attack occurred just outside the capital Grozny on Sunday, the latest blow to a fragile peace established under Putin.

Ramzan Edilov, head of the police department of Staropromyslovsky district, said: "Five interior ministry personnel were killed as a result of an explosion.

"According to provisional information, the device was homemade, as nuts, bolts and ball bearings were found at the scene.

"The search for the criminals is underway, they will be found and liquidated."

Another policeman also died on Sunday from gunshot wounds after two police vehicles came under automatic-weapon fire on the outskirts of the capital.

The suppression of Chechen separatists has been touted as one of the main achievements of the eight-year government of Putin, who launched the second Chechen war in 1999.

The first war, launched against pro-independence fighters by President Boris Yeltsin in 1994, was widely regarded as a stain on the latter's presidency.

An estimated 100,000 civilians and 10,000 Russian soldiers were killed in the two wars.