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The beneficial owners disclosing procedure has been adopted


The Russian Government has adopted the rules on disclosure of information on (1) the ultimate beneficial owners of the companies and (2) measures taken by the companies in order to ascertain the information on the company’s ultimate beneficial owners. The rules were adopted by the Regulation of the Russian Government dated 31.07.2017 No. 913 (hereinafter — the “Rules”) and entered into force on 18 August 2017. The companies are required to gather the information on their ultimate beneficial owners and to disclose such information to the authorized bodies pursuant to the Federal Law No. 115-FZ1 (hereinafter — the “115-FZ”).
 
According to the 115-FZ, a beneficial owner is an individual which ultimately holds (whether directly or indirectly) more than 25 % of the company’s charter capital or otherwise controls its business2
 
Pursuant to the 115-FZ, the companies have to:
 
  • gather and document the information on its beneficial owners;
  • update the information on its beneficial owners at least once in a year;
  • maintain the information of its beneficial owners at least 5 years from the date such information has been obtained;
  • disclose such information at the request of the Rosfinmonitoring3 and/or the Federal Tax Service and their local bodies.
 
According to 115-FZ, the information on the beneficial owner includes the following:
 
1. full name,
2. citizenship,
3. date of birth,
4. ID details,
5. migration card details,
6. details of the document giving the beneficial owner the right to domicile in Russia,
7. full registered residence address or domicile address,
8. taxpayer identification number.
 
In order to obtain the information on the company’s beneficial owners, the authorized body has to submit to the company a written or electronic request. The electronic request is submitted via the operators of the electronic document management systems which have the capability to exchange the electronic documents with the Federal Tax Service4. Such request can be submitted only in case the company has the necessary electronic infrastructure.
 
The company has to submit the information on its beneficial owners within 5 business days of the date it received the request from the authorized body. The information has to be accurate as of the date indicated in the request.
 
The information on the company’s beneficial owners has to be submitted to the authorized body in the form of an electronic message which the company can submit either through the electronic document management system or via registered email or in person (in this case the company has to place the information on a CD or a digital data carrying device and enclose a written cover letter). The format of the electronic message is not yet adopted. According to the Rules, the format shall be adopted by a special order of the Federal Tax Service.
 
The information on the beneficial owners is deemed as submitted to the authorized body as follows:
 
  • if the information is submitted via electronic data management system — on the day indicated in the confirmation issued by the electronic data management system;
  • if the information is submitted via registered mail — on the day indicated in the postal receipt;
  • if the information is submitted in person — on the day indicated in the confirmation document issued by the official of the authorized body.
 
The information on the beneficial owners will not be accepted by the authorized body in the following cases:
 
  • the structure or format of the electronic message is not correct;
  • the electronic message is not signed by the enhanced encrypted and certified digital signature of the company’s CEO (or other authorized person) or the information indicated in the certificate of the electronic signature is not valid;
  • the cover letter is not signed by the company’s CEO (or other authorized body);
  • the CD or the digital data carrying device is defective.
 
For non-disclosure of the information on the company’s beneficial owners the company may be fined in the amount from RUB 100.000 up to RUB 500.000 (Art. 14.25.1 of the Russian Administrative Offences Code).
_____
 
1Federal Law dated 07.08.2001 No. 115-FZ “Concerning the Counteraction of the Legitimization (Laundering) of Proceeds of Crime and the Financing of Terrorism”
2Clause 8 Art 6.1 of the 115-FZ
3Federal Financial Monitoring Service (Clause 1 of the Rules)
4The list of the operators of the electronic document management systems which have the capability to exchange the electronic documents with the Federal Tax Service can be found on the official website of the Federal Tax Service: https://www.nalog.ru/rn77/taxation/submission_statements/operations/
 
 


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