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Russia continues to reform its legislation by reducing the imperative nature of its regulations and putting emphasis on enhancing the protection of business investments. We hope that this reform will have a positive impact on Russian business as a whole and M&A transactions in particular.

In Russia, commercial disputes can be taken to state courts or arbitration tribunals.

At the end of 2014, part four of the Civil Code of the Russian Federation, which deals with intellectual property, was significantly updated. Since many of the amendments were conceptual in nature, there was a need for a substantial reworking of the regulations at the level of the supervisory authority, the Russian Federal Service for Intellectual Property (Rospatent).

The Pepeliaev Group has launched a Chinese Desk to provide legal assistance for Chinese investors in Russia and has announced that the firm is opening associated offices in Beijing, Shanghai, and Guangzhou. The Pepeliaev Group’s representative offices will operate in association with the Chinese law firm China Window.

Ruling No. 417-O of the Russian Constitutional Court dated 3 March 2015 is of great legal importance. Not only does it deal with how a specific decision of the Customs Union's Commission should be applied when it is the subject matter of proceedings. It also covers the general application of the provisions of customs legislation which set the rules for how customs payments should be established and collected.

Russian law recognizes an acquisition of stock or of another ownership interest (a share deal) as well as an acquisition of the assets and liabilities of a business.

The latter type takes the form of the acquisition of what Russian law terms ‘an enterprise as a property complex` (further referred to as an ‘enterprise’). However, it is poorly regulated both in civil law and in tax law, and is extremely rarely used in practice, so it cannot be recommended. One example of the rules applicable to the acquisition of an ‘enterprise’ is that, if the contractual purchase price of the ‘enterprise’ is less than the book value of its net assets, the difference is recognized as income on the part of the buyer, regardless of the circumstances that led to such difference. In other words, this rule applies even if the losses could reasonably have been anticipated, which is a valid commercial reason for the contractual price to be lower than the net assets. This rule effectively makes buyers pay tax for acquiring an ‘enterprise’ with an anticipated loss, which is contrary to underlying economic essence of such transaction.