Control of foreign investment in the fisheries sector

Milchakova Olesya Vladimirovna PhD in Law Associate Professor; Department of Competition Law; O.E. Kutafin Moscow State Law University (MGUA) 9 Sadovaya Kudrinskaya str., Moscow, 123995, Russia millov@yandex.ru Other publications by this author

Introduction. Problem statement

According to the remark of the President of the Russian Federation V. V. Putin, "the fisheries complex plays an important role in the domestic economy, has significant technological potential, makes a significant contribution to strengthening food security, to the development of regions and their social infrastructure" ^[1].

The fishing industry "must ensure a guaranteed and sustainable supply of affordable, safe, high-quality and useful products to the population... Fishing and aquaculture are a source of employment for a significant part of the country's inhabitants ..., have the most important recreational importance ..., contribute to the preservation of the traditional way of life and economic activities of the indigenous small peoples of the North, Siberia and the Far East" ^{[2, p. 5]}.

Thus, the strategic importance of this industry for the economy and food security of Russia is beyond doubt.

For several years now, the Russian economy has been developing "under the conditions of a combination of unprecedented sanctions, including the blocking of public and private assets, and a broad ban on import and export operations" ^{[3, p. 53]}.

Nevertheless, the fishing industry continues to develop steadily, the volume of extraction (catch) of aquatic biological resources and the production of fish and seafood are increasing, the geography of exports of fish products is expanding, primarily due to the countries of the Middle East and Africa ^[4].

At the same time, one of the objectives of the National Security Strategy of the Russian Federation, approved by Presidential Decree No. 400 dated 07/02/2021, is to strengthen control over foreign investments in strategically important sectors of the Russian economy (sub-item 33, paragraph 67).

Fishing is classified as an activity of strategic importance for ensuring the defense of the country and the security of the state, and Federal Law No. 57-FZ dated 04/29/2008 "On the procedure for Foreign Investments in Business Entities of strategic Importance for ensuring the defense of the country and the Security of the State" (hereinafter – the Law on Foreign Investments) establishes prohibitions and restrictions on acquisition by foreign persons of assets of Russian fishing organizations.

The need for close attention to foreign participation in the field of fisheries is reflected in the instruction of the President of the Russian Federation No. Pr-2338GS (item 4), issued following the meeting of the Presidium of the State Council of the Russian Federation held on 10/19/2015. The State authorities specified in this instruction are instructed to strengthen their work on identifying transactions, including legal documents that allow for the possibility of managing domestic fishing companies and establishing control over them by foreign citizens and foreign legal entities, including citizens with dual citizenship. A report on the results of this work is submitted annually.

Analysis of the "File of Arbitration cases" (kad.arbitr.ru ) allows us to note the tendency of an increase in the number of court cases related to the elimination of illegal foreign control over fishing organizations and compensation for damage caused by organizations under the control of non-residents of the Russian Federation.

At the same time, the scientific literature does not pay sufficient attention to the comprehensive study of regulatory issues and the practice of implementing and controlling foreign investments in the field of fisheries, although some experts analyze certain aspects of foreign participation in strategic sectors of the economy ^[5-18].

These factors determine the relevance of this study, the purpose of which is to identify the features of the legal regulation of foreign investment in the field of fisheries, to determine the level of surmountability of existing barriers to foreign investment in this industry, the presence or absence of legal uncertainty in the legislative regulation of investment relations in this area.

"Strategic economic company engaged in fishing"

In accordance with paragraph 2 of Part 1 of Article 3 of the Law on Foreign Investments, a business company of strategic importance for ensuring the defense of the country and the security of the state is a business company established on the territory of the Russian Federation and carrying out at least one of the types of activities of strategic importance for ensuring the defense of the country and the security of the state and specified in Article 6 this law. Paragraph 40 of this article refers to fishing as such activities.

In addition to the above, attention should be paid to the fact that fishing is one of the areas of activity that are fundamental to the preservation of the national heritage and resource conservation of the state: natural resources are used and protected as the basis of life and activity of peoples living in the relevant territory (Article 9 of the Constitution of the Russian Federation).

Based on Paragraphs 1, 2 of Article 10 of Federal Law No. 166-FZ dated 12/20/2004 "On Fishing and Conservation of Aquatic Biological Resources" (hereinafter referred to as the Law on Fisheries), aquatic biological resources are federally owned, with the exception of aquatic biological resources living in ponds, flooded quarries, which may be in federal ownership, so it is in the ownership of the subjects of Russia, municipal and private property.

Considering the concept of a "strategic economic company engaged in fishing," first of all, attention should be paid to the fact that in the Law on Fisheries (ch. 2, 3, art. 11), when establishing a ban on the extraction (catch) of aquatic biological resources by organizations under the control of a foreign investor, a group of persons to which it belongs (except in cases where such control is agreed upon in accordance with the procedure of the Law on Foreign Investments), the wording "legal entities" is used.

The Law on Foreign Investments also does not contain direct references or indications that the concept of "a business company of strategic importance" used in it should be applied in accordance with the Civil Code of the Russian Federation. Consequently, this prohibition applies to any legal entities (including unitary enterprises, partnerships), and not only to business companies, to which Article 66 of the Civil Code of the Russian Federation refers only to joint-stock companies and limited liability companies.

According to Part 1 of Article 1 of the Law on Fisheries, fishing is understood as the activity of extracting (catching) aquatic biological resources and, in cases provided for by this law, accepting, processing, reloading, transporting, storing and unloading catches of aquatic biological resources, and producing fish products. Aquatic biological resources are fish, aquatic invertebrates, aquatic mammals, algae, other aquatic animals and plants in a state of natural freedom. Extraction (catch) of aquatic biological resources is the removal of aquatic biological resources from their habitat. Catches of aquatic biological resources are aquatic biological resources extracted (caught) from the habitat.

The rights to extract (catch) aquatic biological resources arise from an economic entity on the basis of contracts provided for by the Law on Fisheries and (or) decisions concluded and (or) adopted by Rosrybolovstvo, its territorial bodies, and state authorities of the subjects of the Russian Federation in accordance with their competence.

However, it seems that in order to recognize a company as strategic in the understanding of the Law on Foreign Investments, it is not mandatory that such a company has a properly obtained and (or) formalized right.

Thus, it is impossible to agree with Y. S. Sizova and S. V. Nikolaev, who argue that, in accordance with the Law on Foreign Investments, permission is required to carry out foreign investments in accordance with this law, "if the target company is registered in Russia and actively participates in one of the specified types of activities listed in it… At the same time, the availability of a license is not a prerequisite for the company to be considered strategic. Now it is enough that there are "other permits" allowing the company to engage in this type of activity" ^{[17, pp. 69-70]}.

Firstly, not all types of activities listed in Article 6 of the Law on Foreign Investments (51 paragraphs, including paragraph 10.1, combining more than 100 types of activities) require, in accordance with the legislation, obtaining a license or other authorization document for such activities. Secondly, the above-mentioned normative definition of "a business company of strategic importance for ensuring the defense of the country and the security of the state" does not contain such a mandatory feature as the presence of a permit for this company to carry out a strategic type of activity.

Thus, an organization that does not have a formal right to extract (catch) aquatic biological resources, but actually carries out this type of activity on other legal grounds (for example, under a joint venture agreement with another company that has such a right, providing its vessel and (or) crew), should be recognized as a strategic economic entity a company engaged in fishing. In this regard, the prohibitions and restrictions established by law for foreign investors, a group of persons that includes a foreign investor, should apply to this organization.

Conversely, an organization that has a formalized right to extract (catch) aquatic biological resources, but actually ("actively") does not carry out this type of activity, should also be recognized as a strategic business company. This thesis is justified by the established judicial practice in disputes on violation of the Law on Foreign Investment in relation to other strategic companies, in which the courts note that the presence of a license or other authorization document (as well as the necessary infrastructure, the facilities of which are temporarily transferred to another person) means that the company has a potential opportunity at any time to actually to start implementing a strategic type of activity (see: judicial acts on cases no. A45-26808/2020, A53-16168/2021).

Part 1 of Article 16 of the Law on Fisheries identifies the following types of fishing: industrial fishing; coastal fishing; fishing for research and control purposes; fishing for educational and cultural and educational purposes; fishing for aquaculture (fish farming); amateur fishing; fishing in order to ensure the conduct of a traditional lifestyle and the implementation of traditional economic activities indigenous peoples of the North, Siberia and the Russian Far East.

At the same time, industrial fishing is defined as entrepreneurial activity in the search and extraction (catch) of aquatic biological resources, acceptance, processing, transshipment, transportation, storage and unloading of catches of aquatic biological resources, production of fish products on ships of the fishing fleet. In turn, coastal fishing is an entrepreneurial activity for the search and extraction (catch) of aquatic biological resources, transportation, storage of catches of aquatic biological resources, as well as fish products and unloading catches of aquatic biological resources in live, fresh or chilled form and live, fresh or chilled fish products to seaports of Russia, to other places unloading (paragraphs 9, 10 of Part 1 of the Law on Fisheries).

Taking into account the above provisions, as well as the available judicial practice (see: judicial acts on cases No. A51-7925/2020, A24-4528/2020, A24-4528/2020, A24-2587/2020), in some cases, based on the specific prevailing economic and production-technical circumstances of the business entity, such an entity may be recognized as a strategic economic entity the company, provided that it carries out any of the types of activities listed in paragraphs 9, 10, part 1 of Article 1 of the Law on Fisheries (transportation, storage, unloading of catches, fish products, etc.) not only in connection with the independent extraction (catch) of aquatic biological resources by such a subject, but also in the case of performing (rendering) such individual works (services) within the framework of a single production and technical cycle to other persons engaged in the extraction (catch) of aquatic biological resources. Thus, the extraction (catch) of aquatic biological resources by itself does not ensure profit, in the absence of the possibility of selling the extracted (caught) catch or products produced from it (such goods are not automatically introduced into civil circulation).

In some cases, in order to understand whether a business company carries out a strategic type of activity, including performing a separate job, providing a separate service or supplying a specific product, it is necessary to refer to industry legislation regulating in detail the process of carrying out a specific type of activity, the complex, generalized name of which is indicated in the law. According to the remark of the Constitutional Court of the Russian Federation, based on the objectives of the Law on Foreign Investments, "the attribution of the activities of a business company to activities covered by the special procedure for transactions by a foreign investor provided for by this federal law ... is carried out taking into account the provisions of other normative acts that are part of the system of sectoral regulation" in the relevant field of economic relations (definition of 06/18/2020 No. 1106-O).

The concept of "foreign investor" for the purposes of regulating relations in the field of fisheries

According to Part 2 of Article 1 of the Law on Fisheries, the concept of "foreign investor" in this law is used in the meaning provided for by the Law on Foreign Investments.

In turn, this law uses various criteria to determine the so-called "nationality" of an investor, which make it possible to distinguish Russian investors from foreign ones: citizenship, incorporation, control, settlement, profit center ("center of influence").

Thus, a foreign investor is recognized as: 1) a foreign legal entity; 2) a foreign organization that is not a legal entity; 3) an organization, including one established on the territory of Russia, under the control of a foreign investor in accordance with the provisions of Parts 1, 2 and Part 2.1 of Article 5 of the Law on Foreign Investments; 4) a foreign citizen; 5) a Russian citizen who has a different nationality or a residence permit or other valid document confirming the right to permanent residence in a foreign country; 6) a stateless person who permanently resides outside Russia; 7) a foreign state; 8) an international organization; 9) a foreign agent.

The concept of "a group of persons that includes a foreign investor" for the purposes of regulating relations in the field of fisheries

The restrictions established by law on foreign participation in the field of fisheries apply not only to a foreign investor acting autonomously (individually), but also to a group of persons that includes a foreign investor. At the same time, exceptions from the scope of the Law on Foreign Investments established for a foreign investor do not apply to a group of persons if there is no direct indication of the application of such exceptions to transactions and actions of a group of persons contained in this law.

Based on Part 3 of Article 3 of the Law on Foreign Investments, Part 2 of Article 1 of the Law on Fisheries, the concept of "group of persons" is used in the meaning specified in Federal Law No. 135-FZ dated 07/26/2006 "On Protection of Competition" (hereinafter – the Law on Protection of Competition). This law does not contain a definition of a "group of persons", while specifying the signs on the basis of which a set of individuals and legal entities forms one group of persons. At the same time, "judicial practice defines a group of persons as a set of economic entities operating in a certain commodity market in a common economic interest and due to special ties (property, kinship, managerial and others) capable of having a tangible impact on the relevant economic activity" ^{[19, p. 90]}.

According to Part 1 of Article 9 of the Law on Protection of Competition, a group of persons is recognized as a set of individuals and (or) legal entities corresponding to one or more of the nine characteristics specified in this part. At the same time, paragraphs 1-7 unite two persons into so-called basic groups among themselves, paragraphs 8, 9 allow us to define a combined group of persons, including persons who make up the basic groups.

One group of people includes:

1) a business company and an individual or legal entity, if such a person has, by virtue of his participation in this company or in accordance with the powers received from other persons, more than 50% of the total number of votes attributable to voting shares (shares) in the authorized (share) capital of this company;

2) a legal entity and an individual or a legal entity performing the functions of the sole executive body of this legal entity;

3) a business company and an individual or legal entity, if such a person, on the basis of the constituent documents of this company or an agreement concluded with this company, has the right to give this company mandatory instructions;

4) legal entities in which more than 50% of the quantitative composition of the collegial executive body and (or) the board of directors (supervisory board, board of the fund) are the same individuals;

5) a business company and a natural or legal person, if, on the proposal of such a person, the sole executive body of this company is appointed or elected;

6) a business company and an individual or legal entity, if, at the suggestion of such a person, more than 50% of the quantitative composition of the collegial executive body or the board of directors (supervisory board) of this company has been elected;

7) an individual, his spouse, parents (including adoptive parents), children (including adopted ones), full and half-siblings;

8) persons, each of whom, according to any of the signs specified above in paragraphs 1-7, is included in a group with the same person, as well as other persons who are included with any of such persons in a group according to any of the signs specified above in paragraphs 1-7;

9) a business company, individuals and (or) legal entities that, according to any of the signs specified above in paragraphs 1-8, belong to a group of persons, if such persons, by virtue of their joint participation in this company or in accordance with the powers received from other persons, have more than 50% of the total number of votes, attributable to voting shares (shares) in the authorized (share) capital of this company.

At the same time, within the framework of monitoring compliance with the requirements of antimonopoly legislation, it is allowed to exclude from a single group of persons those persons who formally meet the listed criteria, but actually act separately from such a group. Thus, "the legal regime of this group may not apply to a person formally included in a group of persons if, during the consideration of the case, it is established that in fact this person is autonomous in determining his behavior in the commodity market, for example, due to the lack of sufficient legal (contractual, corporate) and organizational capabilities of other group members (managerial) means of influencing his behavior. In particular, when assessing the entry of organizations into a group of persons on the grounds provided for in paragraphs 7, 8, part 1 of Article 9 of the Law, the court has the right to take into account that there are no relations between citizens who are relatives and organizations whose participants are these individuals conduct unrelated activities" (paragraph 7 of the resolution Plenum of the Supreme Court of the Russian Federation dated 03/04/2021 No. 2).

It seems that this approach cannot be applied to relations regulated by the Law on Foreign Investments. The Constitutional Court of the Russian Federation has repeatedly stressed that "a feature of the restrictive legal regime provided for by this law is the introduction of full control over foreign investments in business entities of strategic importance. This is reflected in the establishment of appropriate exemptions for cases of participation in such business entities by foreign investors both directly and indirectly – through a group of persons to which they belong, as well as in a broad understanding of control, which covers the corporate influence exerted by foreign investors on business entities of strategic importance, not only directly, but also through third parties" (see: Definition No. 924-O-O dated 05.07.2011, Resolution No. 12-P dated 30.03.2023).

The difference in such approaches in law enforcement may be explained by the different purposes of these laws and the specifics of the public relations regulated by them. Thus, for the Law on Protection of Competition, it is important, first of all, to coordinate the actions of several persons on the commodity market in a certain period of time in order to determine the conditions of circulation of goods on the market, create obstacles to the entry of new participants into this market and (or) eliminate other economic entities from the market. In turn, the Law on Foreign Investments is aimed not only at persons who determine the behavior of a strategic business company, but also at those persons who will ultimately benefit from the actions of persons belonging to the same group of persons with a foreign investor (including by virtue of the norms of civil, family, inheritance, and labor law).

Another feature of the application of the Law on Foreign Investments is an expansive interpretation of the concept of "groups of persons", taking into account not only the presence of legally prescribed signs of attribution of several persons to one group, but also the presence of actual, actually established stable business, personal and other ties between individuals, in the absence of formal legal ties between individuals in order to create false visibility of activities as independent business entities.

In this regard, "proving the fact of common economic interests is permissible not only through confirmation of legal affiliation (in particular, individuals belonging to the same group of companies through corporate participation), but also actual, that is, affiliation can be factual without formal legal ties between the persons." These persons may perform "consistent and interrelated actions in order to circumvent the prohibitions and restrictions established by the Law on Foreign Investment and conceal the actually established foreign control", since "the final beneficiary, who does not have the appropriate formal authority, is not interested in disclosing his status as a controlling person. On the contrary, he usually hides the possibility of exerting influence. Its relations with controlled companies are not regulated by any regulatory or local acts that would establish appropriate rules and standards of conduct" (see: judicial acts in case No. A40-79356/22-142-590 ).

It should also be noted that the Law on Fisheries (ch. 2, 3, Articles 11, Article 14.2), as amended before Federal Law No. 339-FZ dated 07/02/2021, contained an indication to prohibit the extraction (fishing) of aquatic biological resources by legal entities under the control of a foreign investor (with the exception of if the control of a foreign investor over such persons is established in accordance with the procedure provided for by the Law on Foreign Investments). That is, there was no direct indication of the group of persons that the foreign investor belongs to in the Law on Fisheries.

However, this does not mean that until 2021, organizations under the control of a group of persons with the participation of foreign investors, the establishment of which was not agreed in accordance with the rules of the Law on Foreign Investment, had the right to carry out activities for the extraction (fishing) of aquatic biological resources.

This type of activity, both before the adoption of Federal Law No. 339-FZ and after, belonged to strategic types of activities and the establishment of control over companies engaged in this type of activity, both by a foreign investor and a group of persons that includes a foreign investor, were subject to mandatory approval by the Government Commission for Monitoring the Implementation of foreign investments in the Russian Federation (hereinafter referred to as the Government Commission) in accordance with the procedure established by the Law on Foreign Investments (paragraph 2 of Part 1 of Article 3, part 1 of Article 4, paragraph 40 of Article 6, Article 7).

At the same time, within the meaning of Part 1 of Article 3 of Federal Law No. 339-FZ, which established a transitional period for its entry into force for foreign investors and groups of persons that include a foreign investor (having, on the day of entry into force of this law, directly or indirectly dispose of 25% and no more than 50% of the votes attributable to shares (shares) in the authorized capital of a fishing company), provided that such investors and groups of persons have no other opportunity directly or through third parties to determine the decisions taken by the fishing company, that is, they did not exercise control over such a fishing company in the understanding of the Law on Foreign Investments as amended before the adoption of Federal Law No. 339-FZ (see: judicial acts in case no. A56-87228/2022).

It is obvious that these legal norms are aimed at preventing the legalization (through the use of the mechanisms of Federal Law No. 339-FZ) of an unscrupulous foreign investor who had previously illegally established control over a fishing company, both directly and indirectly – through a group of persons that includes such a foreign investor.

It seems that in legislation and judicial practice in cases involving violations of legislation on the restriction of foreign participation in strategic sectors of the economy, a group of persons is not considered as a separate, independent entity or participant in civil turnover, in isolation from a foreign investor, and is not considered to have legal personality (is not a subject of law). At the same time, the establishment of control by a group of persons, which includes an investor, over a strategic business company is only a tool, one of the forms of participation of a foreign investor in the activities of a strategic company.

A different interpretation of the above legal norms would lead to a conflict between the provisions of the Law on Fisheries and the Law on Foreign Investments, which since 2008 prohibits the establishment of control by a foreign investor, as well as a group of persons that includes a foreign investor, over a strategic company engaged in the extraction (fishing) of aquatic biological resources, allowing for the possibility of circumventing the established laws of prohibitions and restrictions on foreign participation in the implementation of a strategic type of activity. The norms of Federal Law No. 339-FZ in this part are only of a legal and technical, clarifying nature.

Legal restrictions on foreign participation in the fishing industry

Based on the requirements of Part 3 of Article 16 of the Law on Fisheries, as a general rule, fishing, which is an entrepreneurial activity, can only be carried out by legal entities and individual entrepreneurs registered in Russia. Such activities also cannot be carried out from ships owned by foreign persons.

The Law on Foreign Investments has paid increased attention to foreign participation in this industry by imposing requirements on a wider range of transactions, other actions that are possible only with the consent of a Government Commission, and by establishing exceptions from the general provisions of the law on the admissibility of transactions, compared with transactions, other actions that are subject to agreement and are permissible in relation to business entities operating in other strategic sectors of the economy.

First of all, the legislator's approach to determining the share of participation in the authorized capital of a company engaged in fishing, the possession of which allows one to assert the control of a foreign investor, a group of persons to which he belongs, over such a company (Part 2 of Article 5 of the Law on Foreign Investments, paragraphs 1, 3 of Article 14.2 of the Law on Fisheries), is specific.

So, if, as a general rule, the main qualifying feature of control over a strategic business company requires the right, directly or indirectly (through other persons), to dispose of more than 50% of the total number of votes attributable to voting shares (shares) constituting the authorized capital of such a company, then in relation to fishing organizations, control recognizes the right, directly or indirectly dispose of 25% or more of the total number of specified votes.

Also, the control recognizes that a foreign investor (group of persons) has the right to appoint 25% or more of the composition of the collegial executive body of a fishing organization and (or) the unconditional opportunity to elect 25% or more of the board of directors (supervisory board) or other collegial governing body of this organization (in contrast to the general signs of control in relation to other strategic companies for whom such a right or opportunity must exceed 50% of the composition of the specified bodies).

At the same time, common signs of control for fishing organizations and other strategic business entities are: 1) the right or authority to determine the decisions taken by the controlled person, including the conditions for the controlled person to carry out entrepreneurial activities; 2) the exercise of the powers of the management company of the controlled person; 3) the right to directly or indirectly dispose of any number of voting shares (shares) of the controlled person, if based on the ratio of this number to those owned by other shareholders (participants) of the controlled entity with voting shares (shares), such that the controlling person has the opportunity to determine the decisions made by the controlled person; the presence of several foreign investors who are not part of the same group of persons, the right to dispose of more than 50% of the voting shares (shares) of the strategic company.

In development of these rules, the Law on Foreign Investments (Part 2 of Article 2) provides for requirements to prohibit the establishment of control (in the above meaning) over organizations engaged in fishing for so–called "public" foreign investors - foreign states, international organizations, organizations under their control, as well as for certain categories of "private" foreign investors are foreign organizations that have not disclosed their ownership structure to the Federal Antimonopoly Service, or other persons under the control of such organizations. In addition, for these categories of investors, an unconditional ban has been established on the acquisition of ownership, use, and disposal of basic production facilities, the cost of which is 25% or more of the book value of assets of business entities engaged in fishing.

It seems that the stricter restrictions on investing in strategic sectors of the Russian economy for foreign states and international organizations, established by the Law on Foreign Investment in general, are dictated by the fact that the main purpose of public investments (unlike private ones) is not so much to extract profits as to obtain positive external effects and satisfy political interests. Restrictions for "private" investors who have not disclosed their beneficiaries, beneficial owners and controlling persons are predetermined by the obvious need to inform the state and assess possible risks of threats to the country's defense and its security in the event of the transfer of strategic assets into the possession and (or) management of a specific foreign investor.

Transactions and other actions of the named categories of foreign investors are subject to prior approval by the Government Commission in case they acquire the right to directly or indirectly dispose of more than 5% of the total number of votes attributable to voting shares (shares) constituting the authorized capital of a company engaged in fishing.

For other categories of foreign investors, in addition to the general rules on the need to coordinate transactions, other actions entailing the establishment of control over these companies (in the above meaning), or the acquisition of their fixed assets, the value of which is 25% or more of the book value of the assets of these companies, there are also requirements for obtaining the prior consent of the Government Commission for obtaining the right to directly or indirectly dispose of any number of voting shares (shares), if a foreign investor or a group of persons that includes a foreign investor planning to make a corresponding transaction already have such a right in respect of 25% or more of the voting shares (shares) of such a company. Thus, in the field of fisheries, there are no exceptions from the scope of application of the Law on Foreign Investments (Part 4 of Article 4) when a foreign investor makes transactions in respect of a company in which such an investor already has the right to dispose of more than 50% of voting shares (shares), as well as transactions between organizations under control (ownership of more than 50%) of the same foreign investor.

Also, as with any strategic business companies, the provisions of the Law on Foreign Investments (Part 5 of Article 7) on the need for subsequent coordination of the established control over the company (with a reservation about the above-mentioned special rules for determining the presence of "control"), which did not occur as a result of a foreign investor, are applicable to companies engaged in fishing. a group of persons with his participation in any transaction in relation to such a company, and due to other circumstances:

1) as a result of a change in the ratio of votes attributable to the shares (shares) of the company at the general meeting of its shareholders (participants) as a result of the acquisition by such a company, transfer to it or repurchase of its own shares (shares constituting its authorized capital), distribution of shares owned by such a company among its participants, conversion of preferred shares into ordinary shares promotions;

2) as a result of the acquisition of foreign citizenship by a citizen of the Russian Federation controlling the company, a residence permit in a foreign state, the cancellation of the decision to accept him into Russian citizenship, registration of withdrawal from it;

3) in other cases provided for by law (for example, recognition of a citizen of the Russian Federation as a foreign agent, which changes his status from a Russian investor to a foreign one).

If the Government Commission refuses to approve the establishment of such control, a foreign investor, a group of persons that includes a foreign investor, must reduce their share of participation in the company within three months in such a way that it does not provide an opportunity to exercise control over this company.

With the adoption of Federal Law No. 577-FZ of 12/29/2022, the provisions of the Law on Foreign Investments (Part 7 of Article 7) provide for direct rules on the need for prior approval by a business company controlled by a foreign investor or a group of persons that includes a foreign investor to obtain rights to extract (catch) aquatic biological resources, if such rights are There are no societies.

The above legal norms do not mean that such a need was absent before the adoption of Federal Law No. 577-FZ dated 12/29/2022. Earlier, attention was drawn to the provisions of Paragraphs 2, 3 of Article 11 of the Law on Fisheries, which establish a ban on the extraction (catch) of aquatic biological resources by a legal entity, the control of a foreign investor (a group of persons with his participation) over which is not coordinated in accordance with the Law on Foreign Investments.

In addition, Part 3.1 of Article 7 of this law provides that, along with the transactions specified in paragraphs 1-3 of this article, other actions are also subject to prior approval in the manner prescribed by this law for the preliminary approval of such transactions, as a result of which a foreign investor or a group of persons acquires the right to determine the decisions of the management bodies of a business company, of strategic importance, including the conditions for its entrepreneurial activity.

In a situation where a company that does not have the rights to extract (catch) aquatic biological resources obtains such a right, it de facto acquires the status of a strategic business company, and a foreign investor controlling such a company actually establishes control over such a strategic company from the date of conclusion of the contract by the company and (or) making a decision regarding it which led to the emergence of the right of the company to extract (catch) aquatic biological resources. Consequently, the provisions of Federal Law No. 577-FZ in this part are of a legal and technical, clarifying nature.

New requirements with the adoption of this law are the control over the consolidation of the share in the markets of extraction (catch) of aquatic biological resources, organizations controlled by foreign entities. In particular, the obligation has been introduced to pre-approve, in accordance with the Law on Foreign Investments, the receipt by a company that has the right to extract (catch) aquatic biological resources and is under the control of a foreign investor or a group of persons to which it belongs, a new volume of such rights to certain types of aquatic biological resources in cases where such a company, or collectively it the company and persons belonging to the same group of persons with such a company will have the right (rights) to extract (catch) certain types of aquatic biological resources in all areas of their extraction (catch) within the boundaries of the fisheries basin in the amount of the total allowable catch of these aquatic biological resources, distributed in relation to types of quotas, in the amount of more than 35% from the established total volume of the total allowable catch of the corresponding type of aquatic biological resources.

The list of these types of aquatic biological resources, which are obviously of the most important importance for food security and (or) the greatest "currency-intensive value", was approved by Decree of the Government of the Russian Federation No. 14-55-r dated 06/03/2023 (cod, herring, mackerel, halibut, crab, etc.).

The notification procedure for making individual transactions and other actions entailing the emergence of rights in relation to fishing organizations and not granting the right to control them is the same as the procedure provided for other strategic business entities (Article 14 of the Law on Foreign Investments).

Perhaps there are several cases where the requirements of the Law on Foreign Investments do not apply to transactions of foreign investors in relation to business entities engaged in fishing:

1) the transaction does not meet the above criteria provided for in Article 7 of this law;

2) the implementation of the transaction is provided for by a ratified international treaty to which Russia is a party (Part 6 of Article 2);

3) the transaction is made by an international financial institution with which Russia has concluded an international agreement, or established in accordance with an international agreement to which Russia is a party (Part 3 of Article 2);

3) if, before and after the transaction in respect of such a company, the Russian Federation has the right to directly or indirectly dispose of more than 50% of the votes constituting the authorized capital of this company (Part 6 of Article 2);

4) if the transaction is carried out by an organization under the control (more than 50% of voting shares, shares) of a citizen (citizens) of Russia who does not have (do not have) another citizenship, residence permit or other document confirming the right to permanent residence in a foreign country, and information about the ownership structure of such an organization is disclosed by the Federal Antimonopoly Service service (part 9 of Article 2).

At the same time, if the Federal Antimonopoly Service receives information about the planning of any of these transactions (with the exception of the transaction specified in paragraph 4 above), it is obliged to initiate a procedure for informing the chairman of the Government Commission about the transaction of a foreign investor and, by his decision, such a transaction may nevertheless be submitted to this commission for consideration (Article 6 of Federal Law No. 160-FZ dated 07/09/1999 "On Foreign Investments in the Russian Federation").

Transactions and other actions of a foreign investor or a group of persons with his participation are considered by a Government Commission, which has the right to make decisions on their approval, refusal to approve or on approval, provided that these persons assume obligations in relation to a strategic business company determined by this commission (on investing in the development of the company, continuing the implementation of a strategic type by such a company activities related to the processing of aquatic biological resources extracted (caught) by the company in Russia, the preservation of the average number of employees, etc.).

In general, the Government Commission has the competence to adopt not only acts of individual regulation, but also of a regulatory nature ^{[9, p. 64]}. It seems that the decisions on the issues considered in this study, taken within the framework of the Law on Foreign Investment, are exclusively individual in nature, since they relate to a specific transaction (other action) of a foreign investor (a group of persons with his participation), are not aimed at an indefinite circle of persons and are not designed for repeated application, having a limited validity period.

Consequences of violation of the rules on the permissibility of foreign participation in the field of fisheries

The legal consequences of non-compliance with the requirements of the Law on Foreign Investments (Article 15) include a set of measures of state coercion of a civil nature (consequences of the invalidity of an insignificant transaction, including the collection of shares (shares) of a strategic business company to the state's income, the deprivation of a foreign investor's right to vote at the general meeting of shareholders (participants) of such a company, compensation damage caused to this company, unilateral termination of the contract granting the right to extract (catch) aquatic biological resources) and administrative and legal nature (suspension and cancellation of permits for the extraction (catch) of aquatic biological resources).

The specified law does not limit the list of entities that have the right to file a lawsuit in connection with a violation of this law, while both the Federal Antimonopoly Service and the prosecutor can apply to the court with a demand in order to protect public interests.

Other persons, when filing a lawsuit with the court, are obliged to prove that they have a private material and legal interest (for example: the seller of the transaction - in the return of assets that were disposed of from his possession in violation of the law, the minority shareholder – in maintaining the stability of the company's activities, preventing a decrease in the market value of its assets; etc.).

The administrative and legal mechanism for the compulsory termination of the right to extract (catch) aquatic biological resources is applied on the basis of the conclusion of the Federal Antimonopoly Service, which records the fact that a foreign investor (a group of persons that includes a foreign investor) has established control over a fishing organization, or a company under such control has obtained the right to extract (catch) aquatic biological resources in violation of the requirements of the Law on Foreign Investment.

It seems that the specified conclusion simultaneously records several legal facts: 1) the company has the status of a strategic economic company engaged in fishing; 2) the presence of control by a foreign investor or a group of persons, which includes a foreign investor, over such a company; 3) the fact of violation of the Law on Foreign Investment in establishing said control and (or) obtaining rights to extract (catch) aquatic biological resources.

A legal fact is traditionally understood as "such a circumstance that is the basis for the emergence, modification or termination of legal relations (in a broader sense, it is considered as the basis for the emergence of legal consequences)" ^{[20, p. 42]}.

This conclusion is one of the grounds for the compulsory termination of the rights to extract (catch) aquatic biological resources in accordance with the decree of the Government of the Russian Federation dated 06/03/2016 No. 502. "In addition, the presence of this conclusion ... does not allow such an economic entity to participate in the auction for the sale of a share of quotas conducted by Rosrybolovstvo… In practice, there are cases of non-admission of business entities to participate in the auction on this basis" ^{[16, pp. 29-30]}.

Accordingly, the identification of the above-mentioned legal facts, the presence of which is indicated in the above-mentioned conclusion, may entail both the termination of legal relations for the extraction (fishing) of aquatic biological resources with a specific business entity, and prevents the emergence of new legal relations in this area.

These measures of influence are aimed at depriving a foreign investor of the opportunity to carry out a strategic type of activity through an illegally controlled company, does not replace or exclude the parallel use of civil law measures to protect public interests in court (in the form of applying the consequences of the invalidity of contracts for the extraction (catch) of aquatic biological resources, compensation for damage caused).

The presence of this conclusion is not mandatory when filing a lawsuit with the court on the application of civil consequences of an offense.

In connection with the violation of the Law on Foreign Investments, the consequences provided for in Article 169 of the Civil Code of the Russian Federation may also be applied, since this law is an integral part of the foundations of the rule of law (see: rulings of the Constitutional Court of the Russian Federation dated 05.07.2011 No. 924-O-O, dated 06/18/2020 No. 1106-O), and transactions committed in violation of this law These laws are contrary to the foundations of law and order, since they are aimed "at taking possession of a strategic enterprise by non-residents hidden from society and from controlling persons, non-compliance with the Russian law and order in the economic sphere, contradicting the public interests of society, creating obstacles in ensuring the defense of the country and the security of the state, depriving the possibility of preserving national interests through participation in enterprises with special significance" (see judicial acts in case no. A50-10758/17).

In addition, when detecting the facts of extraction (catch) of aquatic biological resources by a company under illegal foreign control, liability measures are applied in the form of recovery of damage caused to aquatic biological resources by such illegal extraction (catch). Paragraphs 2, 9 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated 11/30/2017 No. 49 clarified that the non-involvement of a person in administrative, criminal or disciplinary liability does not exclude the possibility of imposing on him the obligation to compensate for environmental damage. Persons who have jointly caused harm to the environment are jointly responsible (Article 1080 of the Civil Code of the Russian Federation), while the joint nature of such actions may be evidenced by their consistency, coordination and focus on the implementation of common intentions for all persons involved in the company's activities.

In addition to the listed consequences of violation of Article 19.8.2 of the Code of Administrative Offences of the Russian Federation, a fine has been imposed for failure to submit petitions, notifications (information) provided for by law to the federal executive authority authorized to perform functions to monitor the implementation of foreign investments (Federal Antimonopoly Service).

Conclusions

As a result of the conducted research, it seems reasonable to formulate the following conclusions:

1. As part of the control of foreign participation in the field of fisheries, it is necessary to use a comprehensive approach to the concept of a "strategic business company", which allows recognizing a legal entity as a strategic company:

regardless of whether or not he has the right to extract (catch) aquatic biological resources in accordance with the established procedure, while actually carrying out such activities;

in the presence of the specified right, if such a legal entity does not extract (catch) aquatic biological resources on the basis of an existing agreement (decision, permit);

when performing (rendering) by such a legal entity part of the works (services) that are an integral part of a single technological process within the framework of fishing activities, in which other organizations also participate (including transportation, storage, unloading of catches, fish products, etc.).

2. The legal regime of a single economic entity, a foreign investor, applies to a group of persons that includes a foreign investor, which is subject to the same prohibitions and restrictions that are established for a foreign investor. At the same time, exceptions from the scope of the Law on Foreign Investments established for a foreign investor do not apply to a group of persons if there is no direct indication of the application of such exceptions to a group of persons contained in this law.

3. Stricter barriers to the admission of foreign participation have been established in the field of fisheries, compared with other strategic sectors of the economy. At the same time, some of these barriers are surmountable, in particular by obtaining the approval of a Government Commission for a transaction or other action aimed at acquiring assets of a fishing organization within the limits permitted by law. Such rules are justified by the high importance of aquatic biological resources for ensuring food security in Russia.

4. When detecting violations of the requirements of legislation on the restriction of foreign participation in the field of fisheries, measures of both a civil and administrative nature are applied. These measures can be implemented simultaneously (in parallel) and the application of any one of them does not exclude the possibility of using the other. The complex application of various measures of state coercion makes it possible to fully ensure the elimination of illegal foreign control over a strategic company, to stop the possibility of foreign persons to participate in the implementation of a strategic type of activity, as well as to protect public interests and compensate for the damage caused.

Conclusion

In conclusion, it should be noted that the specifics of controlling foreign investments in the field of fisheries are justified by the goals of ensuring national, including economic security and are based on the provisions of Part 3 of Article 55 of the Constitution of the Russian Federation.

At the same time, in order to achieve legal certainty and a positive investment climate, it is necessary to amend the Law on Foreign Investment, detailing the concept of a "business company of strategic importance", taking into account the broad, comprehensive interpretation of this concept in law enforcement, as well as the production and technical cycle in the process of fishing.

In addition, in order to increase the preventive function of liability for violation of the rules of access of foreign persons to fishing, it is advisable directly in the Law on Foreign Investments to provide for the possibility of recovery by the court of damage to aquatic biological resources caused in connection with their extraction (catch) on the basis of law (contract, decision, permit) obtained and (or) used by the organization, a group of persons under the illegal control of a foreign investor, which includes a foreign investor.