Strategic Protectionism? National Security and Foreign Investment in the Russian Federation

Jesse R. Heath, George Washington University

Abstract

Russia recently joined the growing list of nations that formally control foreign investment in ‘strategic’ industries. The new law regulating foreign investment generated mixed reviews, ranging from harsh criticism in the media to restrained optimism from investors. In this note, I will argue that the new strategic industries law, though not perfect, is less restrictive than critics claim and helps establish the ‘rules of the game’ for foreign investors in sensitive industries. Most importantly, the law is generally consistent with standards promoted by the Organization for Economic Co-operation and Development and will likely help promote foreign investment in Russia.