Russian Secret Service to Regulate Foreign Investors

A long-awaited bill regulating foreign investment in Russia will set rules for 39 "strategic sectors" while giving the sercret service veto power over deals, Russian newspapers said Thursday.

The law, which has been delayed and revised repeatedly since President Vladimir Putin ordered its drafting in 2005, was submitted to the Russian parliament for approval on Tuesday.

The law restricts foreign ownership of 39 kinds of Russian enterprises to less than 50 percent, including in the fields of arms, aviation, space, and atomic energy, the ministry of industry and energy said in a statement.

The law does not cover investment in the oil and gas sectors, as a separate law regulating them is still being worked out.

A specially-formed government commisssion will have six months to approve or deny deals in the 39 sectors, while the FSB security service, formerly the KGB, "has received the right to veto deals," daily Kommersant wrote.

US Under Secretary for the Economy, Reuben Jeffery III, said on Wednesday that the law would cover sectors "where Russia has unique strengths... and where it would benefit from foreign partnerships."

   "We hope this law will be shaped to help keep the Russian economy open and competitive," he said during a Moscow visit, according to an official transcript of his speech.

   "Formalizing the rules of the game, whatever they may be, can only be a positive process," business daily Vedomosti wrote Thursday in an editorial.

   Vedomosti noted, however, that "the lack of a law did not stop the government from controlling all major foreign projects in Russia, and most likely, this informal practice will continue regardless of the law's existence."

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