Enter to open, tab to navigate, enter to select
PLC Global Finance update for August 2010: Russian Federation
Practical Law UK Articles 1-503-2104 (Approx. 4 pages)
PLC Global Finance update for August 2010: Russian Federation
by White & Case LLP
| Published on 31 Aug 2010 • Russian Federation |
The Russian Federation update for August 2010 for the PLC Global Finance multi-jurisdictional monthly e-mail.
Companies and corporate governance
Russian companies will be fined for a failure to report on movements of funds in their overseas accounts
On 23 July 2010 the President signed Federal Law No. 174-FZ amending the Administrative Offences Code. The Law will enter into force on 26 October 2010.
The amendments seek to eliminate gaps in the current regulation of administrative liability for breaches of currency regulations. As such, the scope of the breaches has been expanded to include:
- Non-compliance with the procedure and terms for submitting reports on the movement of funds in the residents' overseas accounts.
- Non-compliance with the procedure and terms for submitting supporting documents and data related to currency operations.
- Violation of the terms for storage of supporting documents and data related to currency operations.
Corporate loans and security
A mandatory offer requirement will not apply when enforcing share pledges until 1 January 2011
On 27 July 2010, the President signed Federal Law No. 218-FZ regarding the application of the mandatory offer requirement in the context of share pledge enforcement. The Law entered into force on 10 August 2010.
The mandatory offer requirement established by the Law on Joint Stock Companies was not applicable in the context of a share pledge enforcement until 1 January 2010 (this requirement implies that an acquirer of shares above certain thresholds must make a buy out offer to the other shareholders). The Law extends the term during which this requirement is not applicable to 1 January 2011.
Therefore, where a share pledge secures a debt toward a credit organisation and, following the borrower's default, the credit organisation or a third party acquires the pledged shares, they are exempt from the mandatory offer requirement until 1 January 2011.
Financial institutions
A CEO of a subsidiary bank is allowed to hold management positions in a parent bank
On 23 July 2010 the President signed Federal Law No. 181-FZ amending the Law on Banks and Banking Activity. The Law entered into force on 6 August 2010.
The Law on Banks and Banking Activity prohibits the top executives of a credit organisation from holding positions in other credit organisations.
The amendments introduce an exemption from this rule and provide that the sole executive body of a subsidiary credit organisation may hold positions (other than chairman) in the collective executive body of a parent credit organisation.
Financial crime
Improved rules on combating money laundering are to enter into force
In July, the President signed two laws aiming to improve the rules on combating money laundering.
Federal Law No. 176-FZ amending the Anti-Money Laundering Law and the Administrative Offences Code
On 23 July 2010 the President signed Federal Law No. 176-FZ amending the Anti-Money Laundering Law and the Administrative Offences Code. The Law will enter into force on 24 January 2011.
The amendments to the Anti-Money Laundering Law expand its application to overseas branches, representative offices and subsidiaries of Russian controlling organisations (that is, organisations carrying out operations with their clients' monetary funds and other assets, which are obliged to perform a number of anti-money laundering duties).
The amendments to the Administrative Offences Code detail and apply different degrees of liability to various types of breaches by controlling organisations of anti-money laundering provisions. They also vest the Central Bank with the power to impose administrative liability on credit organisations for such breaches.
Federal Law No. 197-FZ amending the Anti-Money Laundering Law
On 27 July 2010 the President signed Federal Law No. 197-FZ amending the Anti-Money Laundering Law. The Law will enter into force on 29 October 2010.
According to the Anti-Money Laundering Law, an operation with cash funds or other assets is subject to mandatory anti-money laundering control if at least one party to the operation is an entity or an individual known to be involved in extremist or terrorist activity. Such individuals and entities are recorded in a special private list (it is accessible only by various controlling organisations) by the controlling authority (that is, the Federal Service for Financial Monitoring).
The amendments introduce the grounds on which listed individuals and entities may be taken off the list, and also provide that most of the data on the individuals and entities that were at some point included in the list will be publicly available on the controlling authority's website (www.fedsfm.ru) and in an official publication.
Restructuring and insolvency
Rules on a public register of data on the bankruptcy of Russian companies are to be developed by 1 July 2011
On 27 July 2010 the President signed Federal Law No. 219-FZ regarding a public register of bankruptcy-related data. The Law entered into force on 30 July 2010.
The Federal Law No. 296-FZ, dated 30 December 2008, established the Unified Federal Register of Information on Bankruptcy. Rules on the creation and maintenance of the Register were meant to be developed by 1 July 2010. This deadline has now been extended to 1 July 2011.