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Legal entities obliged to disclose their beneficiaries within five days


Decree No. 913*, which has approved the rules that oblige legal entities to disclose the information about their beneficial owners (the “Decree”), came into force on 18 August 2017.

The new rules set out the procedure and timeframe within which legal entities must disclose the information about their owners to the Federal Tax Service and the Federal Financial Monitoring Service (Rosfinmonitoring). These new rules are aimed at strengthening the ongoing fight against laundering of illegally obtained revenues at national level.

As we previously reported, legal entities are required to collect, keep and update the information about their beneficial owners (at least once a year). A failure to provide such information at the request of the tax authorities, authorised agencies and federal executive agencies could attract a fine of up to RUB 40,000 (EUR 570) for corporate officials and up to EUR 500,000 (EUR 7,140) for legal entities.

Under the new rules, legal entities must provide information about their beneficial owners within five working days after receiving the relevant request from the authorised state agencies. Such information can be submitted either on paper or in electronic form with a cover letter.

Legal entities are required to re-submit such information within three working days if corrections or errors are discovered in the information provided or if the previously submitted data was incomplete.

The Decree has designated a list of officials from authorised state agencies who have the right to sign the requests for information about the beneficial owners of legal entities. Such officials include, for example, the head of the Federal Tax Service, the head of a subdivision of the Federal Tax Service.

The Decree, amongst other things, also contains requirements about how to prepare information that is sent electronically, such as the enhanced encrypted and certified digital signature of the head of a legal entity, cover letter, acknowledgement of receipt of an electronic message, etc.

The Decree’s provisions reflect the general current legislative trend of expanding the ability to recover legal entities’ debts from their founders in bankruptcy proceedings and the subsidiary liability of the founders and directors of legal entities during their liquidations.

* In Russian

CMS Client Alert | Dispute Resolution | September 2017
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Sergey Yuryev