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Russia Introduces Beneficial Ownership Disclosure Requirements

Moscow - The Russian government has issued a regulation requiring companies to disclose beneficial ownership information, amid efforts to combat money laundering and terrorist financing.

New Rules Come into Effect on February 14, 2018

The new rules require legal entities to identify and store information about their beneficial owners, defined as individuals who control more than 25% of the charter capital. Companies must update this information at least once a year and keep it in documents.

State Authorities Have Access to Beneficial Ownership Information

State authorities, including the Federal Tax Service and Federal Service for Financial Monitoring (Rosfinmonitoring), have the right to request this information from companies. Failure to provide it may result in administrative fines of up to RUB 500,000 (approximately $7,800).

Procedure for Reporting on Beneficial Owners

The regulation sets out the procedure for reporting on beneficial owners and requires companies to respond to requests within five days. The authorities can request the data in electronic or hard copy form, with companies able to provide it through a telecommunication system or using a USB/disk.

Consequences of Non-Compliance

Companies that fail to provide requested information may face fines ranging from RUB 100,000 to RUB 500,000 (approximately $1,600 to $7,800). Executives of non-compliant companies may also be subject to fines ranging from RUB 30,000 to RUB 40,000 (approximately $480 to $640).

Recommendations

To mitigate risks and ensure compliance, companies are advised to:

  • Identify their beneficial owners as soon as possible
  • Keep records up to date
  • Respond promptly to requests for information
  • Provide the required data in the specified format

Disclaimer

This article is intended as an educational and informational resource only. It does not constitute legal advice, and readers are advised to seek specific professional guidance before relying on any information contained herein.

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