Strategic flight

Foreigners will enter the Russian aviation industry through the hands of the president

Yesterday, the State Duma, in the second reading, adopted amendments to the law limiting the participation of foreigners in Russian aircraft manufacturing enterprises. The amendments give the President of Russia the authority to authorize (or not to authorize) in each case specifically significant foreign investments in the domestic aviation industry. According to Duma regulations, the bill must undergo two more readings. However, after the second reading, the projects are no longer subject to fundamental changes. Therefore, the “presidential” procedure for regulating international integration activities in the Russian aircraft industry can be considered practically completed.

A bill to amend Article 12 of the federal law “On State Regulation of Aviation Development” was proposed for consideration by colleagues by Martin Shakkum, a member of the State Duma Committee on Industry. 350 deputies spoke in favor of the proposal (there are 450 people’s representatives in the State Duma).

In its current version, Article 12 of the Law “On State Regulation of Aviation Development,” which came into force in January 1998, states: “Creation on the territory of the Russian Federation of an aviation organization with the participation of foreign capital, carrying out activities in the development, production, testing, repair and (or) recycling of aviation equipment is allowed under the conditions that the share of foreign capital is less than 25% of the authorized capital of the aviation organization and its head and members of the management bodies of such an organization are citizens of the Russian Federation.” The amendment is that the wording “less than 25%” is now added: “or by decision of the President of the Russian Federation.” In addition, the president of the country receives the right to allow foreign citizens to join the management of an aviation company. Neither the old nor the new editions make any distinction between enterprises based on their form of ownership. That is, the presidential licensing regime applies equally to state-controlled and private companies.

“I believe that the bill is being adopted for the sake of the UAC (United Aircraft Corporation. - Ed. ),” State Duma deputy Alexander Lebedev told Vremya Novostei yesterday. UAC, whose legal registration, according to the plan approved by the government, should take place this year, is intended to unite all the main aircraft manufacturing assets of Russia, public and private. Including OJSC Irkut Corporation, 10% of whose shares belong to the European holding EADS. “EADS must be shown that its shares in Irkut can be easily converted into UAC shares and that in the future it can count on increasing its share in the united corporation,” is how Mr. Lebedev imagines the meaning of the amendments discussed in the Duma.

In the UAC non-profit partnership, which plays the role of a coordination center for the organization of the corporation of the same name, the interlocutor, who wished to remain anonymous, positively assessed the amendments to the law, noting that “they are creating a mechanism for attracting foreign investment while maintaining strategic control over the industry as such in the hands of the state.” “However, we are ready to work in any regime that the government establishes,” noted a source in the KLA.

Mikhail KUKUSHKIN