Lease agreements for state and municipal property with small and medium businesses are to be extended without a tender in the Republic of Crimea and Sevastopol, as a result of amendments to the Competition Law[1] that entered into force on July 13, 2015.

This rule applies to agreements concluded both before and after March 18, 2014 and until July 1, 2015 года. Such agreements will be extended according to the general rule for a period of no less than three years, though such period can be reduced on request of the small or medium business.

That provided, the rent will be established not upon results of market assessment of the cost of the facility, but by regulatory acts of the Republic of Crimea and Sevastopol.

The proper performance of obligations under such agreements by the small and medium businesses will be essential for applying this rule.

It is important to note that the authorities in the Crimean Region are not entitled to deny businesses the conclusion of such lease agreement in the event of extension. If an authority refuses, a tenant which duly performed its obligations under the agreement, is entitled to request through court that the rights and obligations under the agreement between the authority and another entity for the contested property be transferred to it.

Irina Akimova  Of Counsel                                Moscow   iakimova@cls.ru  Tel.: +7 (495) 970 1090

Dmitry Gavrilenko     Associate                Moscow       Tel.: +7 (495) 970 1090

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Irina Akimova or Dmitry Gavrilenko, Moscow Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.