Putin signed a law on an agreement with China on the promotion and mutual protection of investments

Russian President Vladimir Putin has signed a law on the ratification of the agreement between the governments of the Russian Federation and the People's Republic of China (PRC) on the promotion and mutual protection of investments. The document was signed in Moscow on May 8, 2025 in order to enhance mutual cooperation on the basis of equality and mutual benefit.

The agreement clarifies the definitions of the terms "investor" and "investment", as well as the provisions on the scope of the agreement, aimed at limiting the ability of foreign investors to file unreasonable claims to international arbitration for damages against the Russian Federation.

Taking into account arbitration practice, the agreement now expressly provides that such types of property values as claims for monetary funds arising solely from commercial contracts for the sale or lease of goods or services or as a result of granting a loan in connection with a commercial transaction cannot be recognized as an investment within the meaning of the agreement. In the provisions ensuring the protection of investors' interests in the event of expropriation, nationalization or other measures having a similar effect, clarifications have been introduced aimed at limiting the broad interpretation by arbitration of what measures can be recognized as expropriation, giving investors the right to compensation.

The agreement provides for a clear list of measures that do not relate to expropriation, including the issuance of compulsory licenses for intellectual property, measures taken by the Russian Federation or the PRC to overcome the financial or economic crisis related to the moratorium on the payment of public debt, temporary suspension of interest payments or negotiations with investors on debt restructuring. The dispute resolution procedure between investors of the two countries has been clarified to increase its predictability and convenience for both investors and the state. In addition, a number of restrictions have been introduced for claims (including the statute of limitations), requirements have been established for the content of requests for consultations and for the transfer of a dispute to arbitration.

It provides for the possibility of the two countries to agree on the interpretation of the provisions of the agreement, which will be binding, including for the arbitration tribunal. The document adds norms aimed at simplifying investment procedures in order to create stable, predictable and transparent conditions for investment activities. With regard to the application of measures related to permitting procedures for investments, there is an obligation to ensure that such procedures are communicated to the public in advance and do not overly complicate or slow down investment activities. In addition, the agreement regulates the issues of consideration by the competent authorities of applications for the issuance of permits for investments.