Federal Law “On amending certain legislative acts of the Russian Federation on the prevention of illegal financial operations”
On 30 June 2013, Federal Law No. 134-FZ “On amending certain legislative acts of the Russian Federation on the prevention of illegal financial operations” (“the Law”) came into effect. The majority of provisions of the Law come into effect on the day of its official publication; some provisions will come into effect at a pre-arranged later date.
The Law introduces important changes and supplements to the Civil Code of the Russian Federation, the Criminal Code of the Russian Federation, the Federal Laws “On the securities market”, “On counteracting the legalisation (laundering) of illegal proceeds and financing terrorism”, “On insolvency”, and other fundamental laws.
The list of amendments is not limited to the above changes and additions. We would be pleased to provide additional information on request.
1. Amendments to civil legislation
Introduction of presumption of authenticity of certain types of data contained in the Unified State Register of Legal Entities, namely:
- presumption of authenticity of information for third parties; third parties have the right to presume that information contained in the Unified State Register of Legal Entities is authentic
- obligation of registration authorities to carry out authenticity checks on data included in the Unified State Register of Legal Entities
- new grounds for state registration to be rejected, including non-compliance of ID provided by citizens upon applying for state registration with the information received from the authorities responsible for the issue of that ID
- Chief Executive Officers shall bear civil responsibility for causing the bankruptcy of an entity. If a debtor is declared insolvent as a result of the CEO’s actions and/or inaction, the CEO is liable to repay the entity’s debts using his/her personal assets in the event that the entity’s assets are insufficient.
2. Amendments to the Federal Law “On counteracting the legalisation (laundering) of illegal proceeds and financing terrorism”
- “Beneficial owner” is now defined by law. Banks are now obliged to identify beneficial owners upon acceptance of services, as well as to update information on beneficial owners at least once a year
- Banks are able to unilaterally terminate an account agreement and refuse to enter into an account agreement with an individual or legal entity in accordance with the regulations on internal control of a credit organisation if they suspect that a party intends to enter into the agreement in order to perform transactions to legalise (launder) illegal proceeds
- The Federal Service for Financial Monitoring is now obliged to provide relevant information to law enforcement and tax authorities.
3. Amendments to tax legislation
- Tax authorities are now authorised to recover companies’ arrears from their founders or subsidiaries
- Tax authorities have the right to request documents regarding specific transactions from the participants in those transactions or other entities possessing documents on the transactions outside the framework of a tax audit
- VAT declarations can only be submitted electronically
- Tax authorities’ powers when carrying out desk audits have been extended/clarified
- Banks are obliged to provide tax authorities with any information on accounts and deposits of entities within three days of receiving the tax authorities’ request. Requests can only be made on the basis of a tax audit of such entities
- Entities submitting declarations electronically are obliged to provide all documents requested by tax authorities electronically. If this obligation is not met, operations on bank accounts held by the entity in question may be ceased
- Should contradictions or non-compliance arise in VAT declarations submitted by multiple taxpayers, tax authorities are authorised to demand VAT invoices, primary and other documents related to the relevant operations.
4. Amendments to criminal legislation and legislation on administrative violations
- Criminal responsibility for failure to fulfil obligations regarding the repatriation of funds denominated in foreign currency or Russian Rubles, and for the legalisation of funds received as the proceeds of criminal activity, has been toughened
- Criminal responsibility has been introduced for unlawful movement of cash and/or financial instruments across the customs border of the Customs Union within EurAsEC
- Additional administrative responsibility is provided for violating the customs legislation. For instance, individuals shall be liable for the failure to declare, or the incorrect declaration of cash, in which case they will be subject to administrative penalties in the amount of 100-200% of the sum of undeclared cash and/or the value of cash instruments, or to confiscation of the subject of the administrative violation.
If you have any questions regarding the contents of this alert, please contact the following specialists from our Tax & Legal department:
Partner, Tax & Legal
Director, Tax & Legal
Manager, Tax & Legal