UPDATE 2-Russia passes foreign investor law on 2nd reading

(Adds details, background)

By Gleb Bryanski

MOSCOW, March 21 (Reuters) - Russia's State Duma on Friday approved the key second reading of a long-awaited law on foreign investments in strategic industries, designed to clarify which assets will be off-limits to foreigners.

The vote took place against the background of a raid by Russia's Federal Security Service (FSB) this week on the offices of BP's (BP.L: Quote, Profile, Research) Russian venture TNK-BP TNBPI.MM, sparking concerns about a new Kremlin asset-grab campaign.

The FSB was heavily involved in drafting the law, seeking the right to block investment deals and wanting the law to apply to existing exploration licenses -- proposals not included in the draft approved by the Duma.

The draft says firms like TNK-BP -- half-owned by a foreign investor and possessing licences for deposits that would have qualified as strategic according to the new law -- need not seek permission for deals already concluded.

"This law will guarantee protection of Russia's national interests, and on the other hand will create conditions for forming a stable and transparent business climate for foreign investors," said Duma member Martin Shakkum in presenting the law.

The new draft lists 42 sectors where foreign investment will be restricted, such as nuclear energy, natural monopolies, exploration of strategic mineral deposits, aviation, space and other defence-sensitive industries.