Starting from December 21, 2016, companies will be obligated to disclose information on their beneficial owners
On June 23, 2016, the President of the Russian Federation approved Federal Law No.215-FZ “On introducing amendments to Federal Law “On combatting money laundering and terrorism financing’ and the Code of Administrative Offences of the Russian Federation” (the “Law”) which takes effect from December 21, 2016.
Under the Law, starting from December 21, 2016, all legal entities are obligated to obtain, renew, store and provide on request of authorized bodies the information on their beneficial owners (individuals holding directly or indirectly over 25% in the legal entity’s charter capital or capable of controlling its actions).
The Law establishes that an organization must have information on its beneficial owners and take justified and accessible measures to obtain such information. At the same time, the concept of “justified and accessible” is not defined in the Law.
In addition, under the Law, an organization must on a regular basis, but no less frequently than once a year, update the information on its beneficial owners and document the information received.
To fulfill this obligation, the legal entity is granted the right to request from its participants or entities otherwise controlling it the information necessary for establishing its beneficial owners. That provided, it is noted that the transfer of such information does not breach the law of the Russian Federation on personal data.
A legal entity will be obligated to provide information on its beneficial owners or on the measures taken to establish such information, on request of the Federal Service for Financial Monitoring, tax authorities or other federal executive bodies authorized by the Russian government. The procedure and timeframes for providing the said information to the authorized bodies will be established later by the Russian government.
The Law establishes liability for not fulfilling these obligations in form of an administrative fine of 30,000-40,000 rubles for officials and 100,000-500,000 rubles for legal entities.
At the same time, the Law does not establish liability for participants of a legal entity for not providing information available to them and necessary for establishing the beneficiary owners.
Should any questions arise in connection with the above or if you need any additional materials, please contact Dmitry Churin or Ekaterina Chernenkova, St. Petersburg Office of Capital Legal Services.
This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.