The operation of the ESO mechanism is extended until the end of 2026 - draft law

MOSCOW. May 23 (Interfax) - The procedure for recognizing companies as economically significant organizations (ESO) will be extended for another year until the end of 2026, according to the bill prepared for the second reading by the State Duma property committee.

The amendments are proposed to Federal Law 470-FZ "On the specifics of regulating corporate relations in business entities that are economically significant organizations." It was initially envisaged in 2023 that the law would be in effect until the end of 2024, and then the provisions were extended until the end of 2025.

The State Duma members are again proposing to extend its validity for another 12 months. The law allows for the temporary suspension of corporate rights of foreign holdings in relation to ESOs, for example, voting at meetings, receiving dividends, disposing of shares and stakes. The law also allows Russian beneficiaries to obtain shares and stakes in such companies through the courts in direct ownership, excluding foreign holding structures from the chain of owners, or transfer the right to them to someone else.

There are currently 19 organizations on the government list of ESOs.