Page 22 - bne_newspaper_May_24_2019

Opinion
May 24, 2019 www.intellinews.com I Page 22
On paper, redomiciliation is straightforward. After resolving to redomicile, a non-Russian commercial company may submit registration papers to one of the Special Administrative Areas if it satisfies three conditions. The company
must have carried out activities in Russia and elsewhere since January 2018, be incorporated
in a jurisdiction subject to certain international anti-money-laundering standards, and commit
to invest RUB50mn (about $780,000) in Russia within six months. With all the conditions met, the company will be registered in the relevant Special Administrative Area within five business days
and be required to have itself removed from the register in its original jurisdiction.
In practice, things are not quite so easy.
Redomiciliation may not be recognised, or may be restricted, by the company’s original jurisdiction. The effects of redomiciliation are defined by Russian law; however, the procedure may be ineffective or have different effects when viewed through the lens of the law applicable in the original jurisdiction. Even jurisdictions that do recognise redomiciliation may overlay their own requirements. For example, Jersey companies such as Rusal and En+ are required to give 21 days’ notice of redomiciliation, during which time creditors may raise objections if they can show redomiciliation would unfairly prejudice their interests.
Furthermore, redomiciliation may risk the company having to pay its debts early. To protect creditors, financing agreements allow creditors to demand that the borrower immediately repay its debt if certain events occur. Russian law contains provisions intended to ensure redomiciliation does not constitute such an event. However, these provisions of Russian law are not applicable to
the international financing arrangements used
by most major companies, which are typically governed by English or other foreign law. To complicate matters, creditor-protection provisions rarely use the term “redomiciliation”, which creates further ambiguity as to whether they are triggered by redomiciliation. To avoid triggering
repayment events, therefore, the company must analyse all its foreign-law financings at length and, where necessary, determine whether creditors will waive their protections. This may be particularly problematic in the case of bonds, where the identity of the bondholders may not be known to the company.
Moldova’s banking sector turning the corner
Moldova has long been a money-laundering black hole. Then in 2014 they had a shock when more than $1bn was stolen from the bank sector – equivalent to 15% of GDP.
Belatedly the government is now responding. Stakes in three of the country's biggest banks, which together account for about 80% of the sector’s assets, have been sold to the European Bank for Reconstruction and Development (EBRD) and private investors and the central bank has been given real teeth to enforce regulations.
bne IntelliNews editor-in-chief Ben Aris talks
to special advisor to the president and head
of strategic planning at Moldova-Agroindbank (MAIB) Corneliu Munteanu and asks if Moldova’s banking sector has turned the corner.
Corneliu Munteanu
special advisor to the president of Moldova, head of strategic planning at MAIB
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