Russia tightens grip on foreign investments in seafood industry

The tightening of control comes as Russia has classified its seafood industry as critically important to national food security amid escalating global tensions in response to its invasion of Ukraine.

In late September, the lower chamber of the Russian Parliament – the State Duma – passed changes to current legislation creating rules for investment in the domestic seafood sector. Any purchase by a non-Russian of more than 25 per cent in a Russian company involved in fishing, processing, storage, or transportation of seafood – essentially any business operation involving seafood in any way – would be subject for approval by a government commission.

Previously, this requirement only applied to fishing, leaving other parts of the industry open to foreign investment.

However, according to Intrafish, the changes would not apply to all processors. Under the draft legislation, a company would only be considered strategic if revenue from fish processing accounts for at least 50 percent of total revenue in the previous calendar year and the total book value of the company’s assets – including those of affiliated entities – exceeds RUB 800 million (€8.8 million/$10.3 million).

Supporters of the bill have argued that foreign ownership in seafood businesses could negatively affect Russia’s interests in the industry, with owners potentially not prioritising Russia’s food security or national interest.

The law now faces a vote in the Federation Council – the upper chamber of parliament – and if approved there, it will face approval or rejection from Russian President Vladimir Putin. Most legislation that makes its past the Duma is approved, as Putin’s party holds control of parliament.