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«Nationalization» of OOO Ariston Thermo Rus

Lately there has been a lot of talk about the “nationalization” of the Russian subsidiary of Ariston Holding N.V., the company “Ariston Thermo Rus”. What is it about?

On April 25, 2023, the President of the Russian Federation issued Decree n. 302 “On the temporary management of certain properties“.

As stated in the decree itself, this act was issued “in relation to the need to adopt urgent measures to respond to the unfriendly and contrary to international law actions of the United States of America and foreign States and international organizations aimed at illegally depriving the Russian Federation, Russian legal entities and individuals of property rights and/or limit their property rights, in order to protect the national interests of the Russian Federation and in accordance with the Federal Laws of 30 December 2006 No. 281-FZ “On special economic measures and coercive measures”, of 28 December 2010 n. 390-FZ “On security” and of 4 June 2018 N 127-FZ “On measures (countermeasures) to unfriendly actions of the United States of America and other foreign States“.

The decree establishes that “…if the Russian Federation and/or Russian legal or natural persons are deprived of property rights related to assets located in the territories of foreign States that carry out unfriendly actions against the Russian Federation, Russian legal and natural persons (hereinafter referred to as unfriendly foreign States) and/or property rights, suffer restrictions on such rights or there is a threat of such deprivations, restrictions, threats to the national, economic, energy or other security of the Russian Federation, its defense capacity, the temporary administration of:

  1. movable and immovable property located on the territory of the Russian Federation of foreign entities associated with unfriendly foreign States (even if such foreign entities are citizens or residents of these States or their place of registration, the place of their main commercial activity or the place of their main profits arising from their activities are located in the territory of these States) and of the entities that are controlled by these foreign entities (hereinafter referred to as entities of unfriendly foreign States);
  2. securities, shares or quotas in the share capital of Russian legal entities belonging to the subjects of unfriendly foreign States;
  3. rights in rem belonging to subjects of non-friendly foreign States.”

For the purposes of temporary administration, a manager is appointed, who can exercise the rights of the owner of assets but is not authorized to dispose of such assets. Furthermore, the manager is obliged to guarantee the protection of the assets placed under temporary management.

The assets against which the measure has been ordered are reported in a specific list attached to the decree. Among the first companies affected by this measure already during 2023 it is possible to mention Carlsberg, owner of the company producing Baltika beer, and Danone which saw their respective shareholdings in their Russian subsidiaries subjected to temporary administration.

The decree establishes that the temporary administration can be revoked by the President of the Russian Federation with a specific decree. In fact, with decree of 13 March 2024, the President revoked the temporary administration of Danone Russia.

Russian law allows to challenge presidential regulatory acts, such as Decree n. 302. The procedure is regulated by the Administrative Procedure Code, which attributes jurisdiction over such appeals to the Supreme Court. However, to date, there are no cases of appeal of the measures adopted pursuant to decree n. 302.

 

Olga Pljukhina