New regulations

According to a new Russian law, legal entities have to obtain and keep information on their beneficial owners, and to renew this information on a regular basis (at least once a year) (Federal Law of June 23, 2016 No. 215-FZ, hereinafter – “the Law”). 

Companies must keep the data on their beneficial owners and measures undertaken to identify them within at least five years from the date of obtaining such data, and provide this information to tax and other authorized bodies upon their request.

These amendments will come into force from December 21, 2016

Key Provisions

A beneficial owner is an individual who ultimately (directly or indirectly, through third parties) owns (has a prevailing share over 25% in the charter capital of) a legal entity, or is able to control the activity of a legal entity.

A company is entitled to request information necessary to identify its beneficial owners from its founders/participants or other persons otherwise controlling the company. The said persons in their turn have to provide the legal entity with available information necessary to identify its beneficial owners. Transfer of such information is not considered to be violation of Russian personal data regulations.

The Law provides the list of persons which are not subject to the new obligations, including:

• state corporations and organizations, over 50% of shares (participatory interests) of which are owned by the Russian Federation, its constituent units or municipal units;
• issuers of securities admitted to on-exchange trading that disclose information according to Russian securities legislation;
• foreign organizations securities of which passed listing on a foreign stock-exchange that is included in the list approved by the Bank of Russia.
• Violation by a company of obligations on identification, renewal, storage and provision of information on its beneficial owners is subject to fine. The fine for legal entities amounts to RUB 100,000 to RUB 500,000 (approx. EUR 1,400 to EUR 7,000).

Recommendations

To determine whether your company is obliged to identify its beneficial owners.