Translated material
The Internet will not be networked
The relevant State Duma committee has amended the law on foreigners’ access to strategic enterprises
Yesterday, the State Duma Committee on Construction and Land Relations at its meeting considered and recommended for second reading the law on access of foreign investors to enterprises of strategic importance for the country's security. At the same time, as the Vremya Novostey newspaper reported (see issue dated March 17) , the amendments that had caused heated discussion and public protest from some government members, which classified Internet providing services as strategic activities, were removed from the text of the bill.In fact, the committee’s work on the bill began yesterday with the adoption of the amendment on the Internet. The words of committee chairman Martin Shakkum that it is proposed to “remove” this area of activity from the list of strategic ones did not raise any questions or comments.
Committee members silently approved the proposal, apparently aware of its political implications. The provision on provisioning as a “strategic” activity appeared in the bill recently, during its preparation for the second reading, along with other significant restrictive innovations. Moreover, according to unofficial data, the author of these amendments was the Kremlin. But the authors of the amendments found a tough opponent in the person of the Minister of Information and Communications Leonid Reiman. At the end of last week, he expressed the opinion that the new version of the bill on the issue of Internet regulation “in no way provides additional protection of state interests.” Reiman predicted that if restrictions were introduced, “the Internet will leave our country, there will be not an ru-expansion, but something else.” In addition, the minister promised to convey his opinion to the presidential administration.
As Vremya Novostei sources reported, the idea of complicating the rules for investing in providing services for foreigners was categorically not liked by the elected President of Russia Dmitry Medvedev, whose interest in the Internet industry is known. Martin Shakkum, however, denies the influence of Mr. Medvedev on the decision. Moreover, formally it was actually prepared at a special meeting with the head of the presidential administration. But, says an informed source of Vremya Novostei, without a signal from Mr. Medvedev, such a meeting might not have taken place. In any case, the rule on the Internet was removed from the text of the document.
The bill “On the procedure for making foreign investments in commercial organizations of strategic importance for the national security of the Russian Federation” was adopted by the State Duma of the previous convocation in the first reading on September 14, 2007. In preparation for the second reading, the text of the document was supplemented with significant changes, which, according to various sources, were initiated by the Kremlin security forces. In particular, the list of industries of strategic importance for national security included the publishing and printing business (if the company dominates the market), as well as services for providing Internet access.
According to the bill, if a foreign company wants to acquire more than 50% of a strategically important enterprise, it will have to apply for permission to the transaction from the relevant government agency. The law does not apply to transactions that have already been completed, but if a foreign company owns more than 5% of the shares of a strategic enterprise, it will need to notify the authorities.
Yesterday the committee made a number of other significant amendments to the bill. For example, television and radio broadcasting is called a strategic industry only if it is carried out in a territory within which half or more than half of the population of a constituent entity of the Russian Federation lives. A printing enterprise can be classified as a strategic facility if it is capable of printing at least 200 million sheets of prints per month. Also classified as strategic objects are editorial offices or publishers of periodicals whose products are published in a single issue with a circulation of at least one million copies. “Neither Kommersant, nor the Vedomosti newspaper, nor Novaya Gazeta fall within the scope of regulation of this bill,” explained Martin Shakkum, adding that there is no need to fear for freedom of speech.
The name of the law itself was changed. Now it is called “On the procedure for making foreign investments in business entities that are of strategic importance for ensuring the defense of the country and the security of the state.”
The Duma will consider the bill in the second reading at a plenary session on Friday, March 21.