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Discover thought leadership and legal insights by our legal experts from across CMS. In our Expert Guides, written by CMS lawyers from across the jurisdictions where we operate, we provide you with in-depth legal research and insights that can be read both online and offline. You can also find Law-Now articles with focused legal analysis, commentary and insights to help you anticipate future challenges and much more.



Expertise
29/03/2022
Po­ten­tial chal­lenges in pay­ing VAT on elec­tron­ic ser­vices
In the cur­rent eco­nom­ic and polit­ic­al en­vir­on­ment, and tak­ing in­to ac­count the lim­it­a­tions now im­posed by many for­eign banks with re­spect to the trans­fer of funds to Rus­sia, we ex­pect that for­eign pro­viders of elec­tron­ic ser­vices may face prac­tic­al dif­fi­culties with pay­ing VAT to the Rus­si­an budget for the first quarter of 2022. Ac­cord­ing to the ap­plic­able le­gis­la­tion, the tax is due to be paid on or be­fore 25 April 2022.Ac­cord­ing to the in­form­a­tion at our dis­pos­al, In­ter­re­gion­al tax in­spec­tion No. 7 in charge of the elec­tron­ic ser­vices’ agenda is col­lect­ing in­form­a­tion from tax­pay­ers on ex­pec­ted prob­lems with pay­ments with a view to provid­ing tech­nic­al solu­tions.That be­ing said, for­eign pro­viders of elec­tron­ic ser­vices in Rus­sia should con­firm with their for­eign banks in ad­vance wheth­er it is pos­sible to pay VAT to the Rus­si­an budget in due time. Any prob­lems iden­ti­fied may be re­por­ted to the In­ter­re­gion­al tax in­spec­tion No.7 via the feed­back form in the tax­pay­er’s on­line ac­count.For­eign pro­viders of elec­tron­ic ser­vices may also dis­cuss with their Rus­si­an cus­tom­ers the VAT pay­ment mech­an­ism for the flows. For ex­ample, the Rus­si­an cus­tom­er may choose to vol­un­tar­ily with­hold the VAT due from the pay­ment made to the for­eign pro­vider, us­ing the mech­an­ism provided in the let­ter* of the Fed­er­al Tax ser­vice dated 24.04.2019 No. СД-4-3/[email protected] However, this ap­proach may be ap­plied only in re­spect of fu­ture pay­ments to the for­eign pro­viders.* In Rus­si­an
25/03/2022
Rus­si­an Pres­id­ent signs de­cree on the tem­por­ary pro­ced­ure for pay­ments...
On 5 March 2022, the Rus­si­an Pres­id­ent signed De­cree* No. 95 “On the Tem­por­ary Pro­ced­ure for Dis­charge of Ob­lig­a­tions to Cer­tain For­eign Cred­it­ors” (“De­cree No. 95”), which es­tab­lishes a tem­por­ary pro­ced­ure for dis­char­ging cer­tain fin­an­cial ob­lig­a­tions.Pro­ced­ure for dis­char­ging ob­lig­a­tionsFrom 5 March 2022, the Rus­si­an Fed­er­a­tion, con­stitu­ent en­tit­ies of the Rus­si­an Fed­er­a­tion, mu­ni­cip­al­it­ies and res­id­ents (“Debt­ors”) must dis­charge their ob­lig­a­tions un­der loans and fin­an­cial in­stru­ments to for­eign per­sons (and their con­trolled per­sons, ex­cept for those re­gistered in Rus­sia) con­nec­ted with states, which, with­in the mean­ing of Rus­si­an law, are com­mit­ting “un­friendly acts” against the Rus­si­an Fed­er­a­tion and Rus­si­an per­sons (“Re­stric­ted Cred­it­ors”), as well as cer­tain oth­er cred­it­ors, in ac­cord­ance with De­cree No. 95. The above­men­tioned states are lis­ted in Rus­si­an Gov­ern­ment Or­der* No. 430-r dated 5 March 2022 (“States”). They in­clude, in par­tic­u­lar, the EU mem­ber states, US, Canada, UK, Switzer­land and Ja­pan.This pro­ced­ure ap­plies to ob­lig­a­tions if their amount ex­ceeds: (i) RUB 10m per cal­en­dar month, or (ii) the for­eign cur­rency equi­val­ent of that amount at the of­fi­cial ex­change rate fixed by the Cent­ral Bank of Rus­sia (“CBR”) on the first day of each month.De­cree No. 95 also ap­plies to the dis­charge by Rus­si­an leg­al en­tit­ies of their ob­lig­a­tions re­lated to the is­su­ance by for­eign en­tit­ies of for­eign is­sue-grade se­cur­it­ies (Euro­bonds and de­pos­it­ary re­ceipts).Dis­charge of ob­lig­a­tions to Re­stric­ted Cred­it­or­sIn or­der to make pay­ments to Re­stric­ted Cred­it­ors, a Debt­or must ap­ply to open a spe­cial type “S” rouble ac­count in the name of a Re­stric­ted Cred­it­or (or a for­eign nom­in­al hold­er). The ap­plic­a­tion must be sub­mit­ted to a Rus­si­an cred­it in­sti­tu­tion or, in the case of se­cur­it­ies is­su­ance, to a cent­ral se­cur­it­ies de­pos­it­ory. Type “S” ac­counts also in­clude depo ac­counts opened in the name of either a Re­stric­ted Cred­it­or or a for­eign nom­in­al hold­er be­fore 5 March 2022.A type “S” ac­count may be a bank ac­count, spe­cial broker­age ac­count, clear­ing bank ac­count, depo ac­count or clear­ing depo ac­count. The con­di­tions of us­ing type “S” ac­counts are set out in the Res­ol­u­tion of the CBR’s Board of Dir­ect­ors dated 18 March 2022* (“Res­ol­u­tion”).Ex­cept for a num­ber of spe­cif­ic cases es­tab­lished by the Res­ol­u­tion, a Re­stric­ted Cred­it­or should sub­mit an ap­plic­a­tion for us­ing funds cred­ited to a type “S” ac­count. The ap­plic­a­tion must be sub­mit­ted in the man­ner pre­scribed by the CBR (where ob­lig­a­tions are per­formed by Rus­si­an fin­an­cial in­sti­tu­tions) or by the Rus­si­an Min­istry of Fin­ance (in the case of per­form­ance by any oth­er Debt­or).Dis­charge of ob­lig­a­tions to oth­er cred­it­or­sIn cer­tain cases, De­cree No. 95 also ap­plies to the dis­charge of ob­lig­a­tions to oth­er cred­it­ors.Firstly, ob­lig­a­tions to for­eign cred­it­ors that are not Re­stric­ted Cred­it­ors can be dis­charged in roubles in the amount of the rouble equi­val­ent cal­cu­lated at the CBR of­fi­cial ex­change rate as of the pay­ment date. Based on the word­ing of para­graph 1 of De­cree No. 95, the for­eign cred­it­ors that are not Re­stric­ted Cred­it­ors may in­clude: (i) for­eign per­sons not con­nec­ted with the States or their con­trolled per­sons, and (ii) Rus­si­an en­tit­ies con­trolled by for­eign per­sons con­nec­ted with the States. The CBR’s un­of­fi­cial cla­ri­fic­a­tions, which use the terms “cred­it­ors that are Rus­si­an res­id­ents” and “cred­it­ors from coun­tries that have not joined the sanc­tions against Rus­sia”, do not con­tain more de­tailed in­ter­pret­a­tions.Secondly, ob­lig­a­tions to res­id­ents whose se­cur­it­ies are held in depo ac­counts with Rus­si­an de­pos­it­or­ies are dis­charged by trans­fer­ring funds in roubles to the cred­it­or’s ac­count (without us­ing type “S” ac­counts) in the amount of the rouble equi­val­ent cal­cu­lated at the CBR of­fi­cial ex­change rate as of the pay­ment date.Thirdly, ob­lig­a­tions to a for­eign nom­in­al hold­er are dis­charged by trans­fer­ring funds in roubles to a for­eign nom­in­al hold­er’s type “S” ac­count opened with a Rus­si­an de­pos­it­ory in the amount of the rouble equi­val­ent cal­cu­lated at the CBR of­fi­cial ex­change rate as of the pay­ment date. Fur­ther trans­fers to the se­cur­it­ies hold­ers that are Re­stric­ted Cred­it­ors are made in the amount due un­der the terms of the se­cur­it­ies is­su­ance (less the pay­ments to res­id­ents whose se­cur­it­ies are held in Rus­si­an de­pos­it­or­ies and for­eign cred­it­ors oth­er than the Re­stric­ted Cred­it­ors).The rel­ev­ant pro­vi­sions of De­cree No. 95 may be aimed at es­tab­lish­ing a man­dat­ory pro­ced­ure for dis­char­ging the reg­u­lated ob­lig­a­tions to oth­er cred­it­ors solely in the ways de­scribed above (ir­re­spect­ive of any pro­vi­sions to the con­trary in the con­tract or the ap­plic­able law). However, a fi­nal po­s­i­tion on this is­sue can be de­term­ined after of­fi­cial cla­ri­fic­a­tions are pub­lished.Ob­lig­a­tions as­signed by Re­stric­ted Cred­it­or­s­De­cree No. 95 also ap­plies to the dis­charge by the Debt­ors of ob­lig­a­tions, which have been as­signed by Re­stric­ted Cred­it­ors to res­id­ent cred­it­ors and for­eign cred­it­ors who are not Re­stric­ted Cred­it­ors after 1 March 2022 or in cer­tain cases, such as for cred­it in­sti­tu­tions sub­ject to the States’ sanc­tions*, oth­er date de­term­ined by the CBR’s Board of Dir­ect­ors.The as­sign­ment is men­tioned in De­cree No. 95 sep­ar­ately from the spe­cif­ic grounds for the dis­charge of ob­lig­a­tions to cred­it­ors oth­er than the Re­stric­ted Cred­it­ors. As a res­ult, un­til au­thor­it­ies give any fur­ther cla­ri­fic­a­tions, pro­vi­sions in con­nec­tion with as­sign­ments may be in­ter­preted to fall with­in the gen­er­al pro­ced­ure for dis­char­ging ob­lig­a­tions to Re­stric­ted Cred­it­ors.Oth­er pro­ced­ures for dis­char­ging ob­lig­a­tion­sThe CBR (if ob­lig­a­tions are per­formed by Rus­si­an fin­an­cial in­sti­tu­tions) or the Min­istry of Fin­ance (in oth­er cases) may de­term­ine oth­er pro­ced­ures for dis­char­ging ob­lig­a­tions un­der loans and fin­an­cial in­stru­ments. Un­til then, a per­mit to that ef­fect may be is­sued by the CBR or the Min­istry of Fin­ance, re­spect­ively. As far as we are aware, Rus­si­an au­thor­it­ies have already com­menced is­su­ing such per­mits at the re­quest of a num­ber of Rus­si­an com­pan­ies.Ex­emp­tions for per­sons con­trolled by Rus­si­an be­ne­fi­ciar­ies­De­cree No. 95 also es­tab­lishes ex­emp­tions from the concept of for­eign per­sons con­nec­ted with States, as defined in the Rus­si­an Pres­id­ent’s De­cree* No. 81 “On Ad­di­tion­al Tem­por­ary Eco­nom­ic Meas­ures to En­sure the Fin­an­cial Sta­bil­ity of the Rus­si­an Fed­er­a­tion” dated 1 March 2022 (“De­cree No. 81”). In par­tic­u­lar, De­cree No. 81 does not ap­ply to mak­ing trans­ac­tions with such per­sons if: (i) they are con­trolled by Rus­si­an be­ne­fi­ciar­ies, in­clud­ing through for­eign per­sons, and (ii) such con­trol is dis­closed to Rus­si­an tax au­thor­it­ies.We will con­tin­ue to mon­it­or these de­vel­op­ments and keep you in­formed of any fur­ther changes.* In Rus­si­an
22/03/2022
Bank of Rus­sia lifts ban on cer­tain in­surer trans­ac­tions
On 18 March 2022, the Cent­ral Bank of the Rus­si­an Fed­er­a­tion (“CBR”) is­sued a per­mit to in­sur­ance mar­ket par­ti­cipants (“Per­mis­sion”) in ac­cord­ance with para­graph 2 of Art­icle 3 of Law No. 55-FZ*. In ac­cord­ance with the Per­mis­sion, in­sur­ance com­pan­ies and mu­tu­al in­sur­ance as­so­ci­ations may per­form a num­ber of op­er­a­tions, which were pre­vi­ously pro­hib­ited by this Law. The Per­mis­sion was sent to Rus­si­an in­sur­ance mar­ket par­ti­cipants through their per­son­al ac­counts on the CBR’s web­site and is in force un­til 31 Decem­ber 2022 (in­clus­ive).In ac­cord­ance with the Per­mis­sion, Rus­si­an in­surers are now al­lowed to carry out:op­er­a­tions with­in in­ter­na­tion­al mo­tor vehicle third-party li­ab­il­ity in­sur­ance schemes in ac­cord­ance with Art­icle 31 of Fed­er­al Law No. 40-FZ “On man­dat­ory mo­tor third party li­ab­il­ity in­sur­ance” dated 25 April 2002, in­clud­ing re­in­sur­ance, pay­ment of premi­ums and claims un­der re­in­sur­ance con­tracts; an­d­op­er­a­tions in con­nec­tion with re­in­sur­ance and pay­ments of premi­ums and claims (for dir­ect policies for cargo in­sur­ance con­tracts of goods im­por­ted in­to Rus­sia or re­lated fin­an­cial risks). Fur­ther­more, the Per­mis­sion al­lows in­sur­ance com­pan­ies and mu­tu­al in­sur­ance so­ci­et­ies to enter in­to trans­ac­tions with Rus­si­an in­surers and in­sur­ance brokers con­trolled by the res­id­ents of “un­friendly” states, and to make pay­ments in con­nec­tion with such trans­ac­tions.Fi­nally, the Per­mis­sion al­lows com­pan­ies to enter in­to any trans­ac­tions with and to make any pay­ments to any in­surers and in­sur­ance brokers, ex­cept for en­ter­ing in­to con­tracts or mak­ing pay­ments for in­sur­ance and re­in­sur­ance pur­poses.Co-au­thored by Max­im Telushkin, Paralegal in Bank­ing & Fin­ance.* In Rus­si­an
18/03/2022
Rus­si­an Fed­er­al Tax ser­vice com­ments on the arm’s-length level of loss-mak­ing...
The Rus­si­an Fed­er­al Tax Ser­vice has, for the first time, ac­know­ledged that a loss-mak­ing trans­ac­tion may still be con­sidered arm’s-length for trans­fer pri­cing pur­poses in Rus­sia in its let­ter No. ShYu-4-13/[email protected]* dated 5 March 2022 (the “Let­ter”).Ac­cord­ing to the Let­ter, in the cur­rent eco­nom­ic en­vir­on­ment, where the ap­plic­able sanc­tions in­tro­duced at the US and EU level may in­flu­ence the eco­nom­ic con­di­tions of com­mer­cial trans­ac­tions, Rus­si­an tax­pay­ers may be forced to sell their goods pro­duced for ex­port­a­tion abroad with a dis­count, which may in cer­tain cases lead to a loss res­ult­ing from such trans­ac­tions.This be­ing said, the Fed­er­al Tax Ser­vice should con­sider that these cir­cum­stances may in­flu­ence the pri­cing ap­plied in, and the res­ults of such trans­ac­tions, when con­duct­ing the trans­fer-pri­cing con­trol over such trans­ac­tions and when con­sid­er­ing ap­plic­a­tions for ad­vance price agree­ments filed by tax­pay­ers.Com­ment­sAl­though Rus­si­an tax au­thor­it­ies have his­tor­ic­ally pro­nounced their in­ten­tion to con­sider the eco­nom­ic cir­cum­stances of the trans­ac­tions per­formed when con­duct­ing trans­fer-pri­cing audits, they have nev­er be­fore in prac­tice con­firmed the pos­sib­il­ity of re­cog­nising loss-mak­ing trans­ac­tions as per­formed in com­pli­ance with trans­fer-pri­cing re­quire­ments.This was not even the case dur­ing the COV­ID-19 pan­dem­ic, when tax au­thor­it­ies sug­ges­ted that tax­pay­ers ap­ply the ad­just­ments aimed at en­sur­ing the com­par­ab­il­ity of the com­mer­cial terms of tested trans­ac­tions, which was for­mu­lated rather vaguely in Rus­si­an tax le­gis­la­tion.However, this new ini­ti­at­ive, al­though rep­res­ent­ing a pos­it­ive shift in the per­cep­tion of Rus­si­an tax au­thor­it­ies, still leaves a vast num­ber of open ques­tions to be cla­ri­fied.For ex­ample, it is not clear what eco­nom­ic cir­cum­stances Rus­si­an tax au­thor­it­ies will ac­tu­ally con­sider when as­sess­ing the com­pli­ance of the trans­ac­tion with the arm’s-length prin­ciples. In prac­tice, ac­com­pa­ny­ing eco­nom­ic con­sequences of the sanc­tions, such as ex­change-rate volat­il­ity or tem­por­ary sus­pen­sion of cer­tain busi­nesses in Rus­sia, may have even stronger in­flu­ence on the res­ults of the com­mer­cial trans­ac­tions than the im­me­di­ate re­stric­tions in­tro­duced as part of the sanc­tions pack­ages.Moreover, the Let­ter ex­pli­citly ad­dresses the tax­pay­ers en­gaged in ex­port­a­tion of the goods pro­duced, while cur­rent eco­nom­ic con­di­tions will likely in­flu­ence the prices charged in and the res­ults of vari­ous types of trans­ac­tions per­formed in Rus­sia, in­clud­ing im­port­a­tion of goods to Rus­sia, pro­vi­sion of works and ser­vices, trans­ac­tions with in­tel­lec­tu­al prop­erty, etc. It is un­clear wheth­er sim­il­ar ap­proaches would ul­ti­mately be ap­plic­able to a wider range of cross-bor­der trans­ac­tions, fall­ing un­der trans­fer-pri­cing con­trol.Fi­nally, the Let­ter does not ad­dress the pos­sib­il­ity of per­form­ing cross-bor­der ad­just­ments aimed at re­duc­tion of tax pay­able to the Rus­si­an budget, cur­rently pro­hib­ited un­der the le­gis­la­tion in force. However, such ad­just­ments may in fact be re­quired in the cur­rent con­di­tions, es­pe­cially in cases when the Rus­si­an parties to the con­trolled trans­ac­tions hold en­tre­pren­eur­i­al status, and are thus gen­er­ally bound by the ob­lig­a­tion to en­sure arm’s-length prof­it­ab­il­ity to their routine coun­ter­parties.Our tax team will be closely mon­it­or­ing fur­ther anti-crisis de­vel­op­ments in the trans­fer pri­cing do­main and will re­port on any such changes.* In Rus­si­an
15/03/2022
Latest le­gis­lat­ive ini­ti­at­ives in the Life Sci­ences sec­tor im­pact­ing for­eign...
There are plans to:pro­hib­it man­u­fac­tur­ers and dis­trib­ut­ors of med­ic­al devices from leav­ing the Rus­si­an mar­ket without at least six months pri­or no­tice; an­dper­mit the sale of for­eign medi­cines in their ori­gin­al pack­ages.Exit no­tice for man­u­fac­tur­ers and dis­trib­ut­ors of med­ic­al devicesThe Rus­si­an gov­ern­ment has de­veloped and in­tro­duced to the State Duma a bill* to amend the laws “On the ba­sics of pub­lic health pro­tec­tion in the Rus­si­an Fed­er­a­tion”, “On the cir­cu­la­tion of medi­cines” and “On the con­tract sys­tem in the pro­cure­ment of goods, works, ser­vices for state and mu­ni­cip­al needs”. To re­duce the risk of un­avail­ab­il­ity of med­ic­al devices and the threat to the life and health of cit­izens (in­clud­ing due to un­timely pro­vi­sion of med­ic­al care), there are plans to pro­hib­it man­u­fac­tur­ers and dis­trib­ut­ors of med­ic­al devices from sus­pend­ing or ter­min­at­ing the pro­duc­tion of med­ic­al devices or their im­port in­to Rus­sia without giv­ing the Rus­si­an Min­istry of Health no less than six months’ no­tice.Sale of for­eign medi­cines in their ori­gin­al pack­agesIt is pro­posed to ac­cel­er­ate the pro­cess of put­ting newly-re­gistered medi­cines on the Rus­si­an mar­ket. In case of their short­age (or the risk of short­age) while sanc­tions are in place, it will be pos­sible to im­port medi­cines, put them on the mar­ket and use them in Rus­sia in the ori­gin­al (i.e. for­eign) pack­aging without a Rus­si­an trans­la­tion.The rel­ev­ant bill* has already passed first read­ing and, if ad­op­ted, will come in­to force on the date of its of­fi­cial pub­lic­a­tion. Giv­en the prompt­ness of the ad­op­tion of counter-sanc­tions in Rus­sia, the ad­op­tion of this law can be ex­pec­ted in the com­ing days.* In Rus­si­an
15/03/2022
Rus­si­an counter-sanc­tions: an in­sur­ance per­spect­ive
On 14 March 2022, a new law was pub­lished as a part of the Rus­si­an re­sponse to sanc­tions im­posed by for­eign states. Law No. 55-FZ* af­fects a num­ber of areas in­clud­ing in­sur­ance and re­in­sur­ance.Para­graph 2 of Art­icle 3 of the Law provides that, un­til 31 Decem­ber 2022, Rus­si­an in­surers can­not enter in­to con­tracts with in­surers, re­in­surers and in­sur­ance brokers res­id­ent in un­friendly states, and with in­surers, re­in­surers and in­sur­ance brokers con­trolled by res­id­ents of un­friendly states. Ac­cord­ing to Pres­id­en­tial De­cree No. 95* dated 5 March 2022 and Gov­ern­ment Res­ol­u­tion No. 430-r* dated 5 March 2022, the list of un­friendly states in­cludes the US, EU, UK, Aus­tralia, Canada, Ja­pan and a num­ber of oth­er coun­tries.The Law fur­ther provides that Rus­si­an in­surers can­not trans­fer money to any of the above en­tit­ies un­der con­tracts con­cluded pri­or to the ef­fect­ive date of the Law (14 March 2022). Such trans­fers as well as new con­tracts can only be made in ex­cep­tion­al cases sub­ject to a Cent­ral Bank per­mit. By ac­ci­dent or not, Rus­si­an in­sur­ance com­pan­ies, re­in­sur­ance com­pan­ies and brokers con­trolled by for­eign in­vestors are also sub­ject to this ban.There could be the fol­low­ing im­plic­a­tions for in­surers in­clud­ing Rus­si­an in­surers and re­in­surers con­trolled by for­eign in­vestors:They will not be able to place re­in­sur­ance through brokers based in or con­trolled by res­id­ents of un­friendly states or Rus­si­an sub­si­di­ar­ies of in­ter­na­tion­al brokers even if the risk ends up in a friendly state.Rus­si­an in­surers con­trolled by res­id­ents of un­friendly states will be ad­di­tion­ally hit by the in­ab­il­ity to ac­cept new re­in­sur­ance busi­ness from Rus­si­an in­surers.As it will not be pos­sible to trans­fer any re­in­sur­ance premi­ums to or by these “un­friendly” in­surers, re­in­surers and brokers, ex­ist­ing re­in­sur­ance policies could be ter­min­ated leav­ing the in­sureds without suf­fi­cient in­sur­ance and re­in­sur­ance pro­tec­tion.Also, trans­fers of re­in­sur­ance or ret­ro­ces­sion share of any loss to these en­tit­ies would not be pos­sible.Cus­tom­ers of Rus­si­an in­sur­ance com­pan­ies could also face neg­at­ive con­sequences, such as:An in­surer may re­fuse to enter in­to an in­sur­ance con­tract be­cause its own re­ten­tion lim­its will be ex­ceeded and it will not be able to trans­fer the risk abroad or to a Rus­si­an sub­si­di­ary of a for­eign “un­friendly” in­surer.New risks as­sumed by Rus­si­an in­surers can­not be trans­ferred un­der ex­ist­ing treat­ies to for­eign “un­friendly” in­surers or their Rus­si­an sub­si­di­ar­ies (no re­in­sur­ance premi­ums can be paid), the risks will re­main on their own re­ten­tion or will be trans­ferred to com­pan­ies with low rat­ings. If an in­sured event oc­curs, there is a high risk of bank­ruptcy for Rus­si­an in­surers as they are un­able to trans­fer the risk to highly-rated re­in­surers, there is also a high risk of not re­ceiv­ing the in­sur­ance in­dem­nity.There could be a breach of pro­vi­sions in loan agree­ments re­quir­ing in­sur­ance/re­in­sur­ance policies to be is­sued by reput­able com­pan­ies with high in­ter­na­tion­al rat­ings (tech­nic­al de­fault with all its con­sequences). Some activ­it­ies will be at risk of stop­page (e.g. air trans­port) due to in­ab­il­ity to re­in­sure high risks in for­eign com­pan­ies loc­ated in un­friendly coun­tries.The Law provides for a pos­sib­il­ity to ob­tain a spe­cial per­mit from the Cent­ral Bank “in ex­cep­tion­al cases”.  It re­mains to be seen how will­ing the Cent­ral Bank will be to is­sue them as there is no pro­ced­ure or timeline for the is­su­ance.* In Rus­si­an
14/03/2022
Fourth stage of Rus­si­an cap­it­al am­nesty be­gins
On 9 March 2022, the Rus­si­an Pres­id­ent signed the Law* on the fourth stage of the cap­it­al am­nesty. Ac­cord­ing to the Law, un­der the fourth stage, in­di­vidu­als will be able to sub­mit, between 14 March 2022 and 28 Feb­ru­ary 2023, a spe­cial de­clar­a­tion re­flect­ing as­sets sub­ject to leg­al­isa­tion. The am­nesty will ap­ply to acts com­mit­ted be­fore 1 Janu­ary 2022.Cap­it­al am­nesty is the vol­un­tary de­clar­a­tion by in­di­vidu­als of their for­eign ac­counts, real es­tate, se­cur­it­ies and oth­er prop­erty held abroad. It in­volves the trans­fer of de­clared prop­erty to Rus­sia without crim­in­al, ad­min­is­trat­ive and tax li­ab­il­ity when the rel­ev­ant vi­ol­a­tions are re­lated to the de­clared prop­erty and ac­counts.Un­der the first three stages, which took place in 2015, 2017 and 2019, in­di­vidu­als were en­titled to sub­mit in­form­a­tion to the Fed­er­al Tax Ser­vice on land and oth­er im­mov­able prop­erty, vehicles, se­cur­it­ies (in­clud­ing shares), as well as par­ti­cip­at­ory in­terests and equity stakes in or­gan­isa­tions, con­trolled for­eign com­pan­ies and bank ac­counts loc­ated out­side Rus­sia that had not been de­clared be­fore.In con­trast to the pre­vi­ous stages, in­di­vidu­als will also be able to de­clare cash. Also, the word­ing “se­cur­it­ies” has been re­placed by “fin­an­cial as­sets”, al­low­ing not only shares and bonds, but also de­riv­at­ive fin­an­cial in­stru­ments (e.g. fu­tures, op­tions, etc.), to be de­clared in the fourth stage. The list of sup­port­ing doc­u­ments to be at­tached to the spe­cial de­clar­a­tion has been sup­ple­men­ted.In re­la­tion to cash, guar­an­tees will be giv­en provided that the de­clar­ant de­pos­its the cash spe­cified in the de­clar­a­tion in­to cur­rent or sav­ings ac­counts with Rus­si­an banks with­in 30 days from the date of sub­mis­sion of the de­clar­a­tion to the tax au­thor­ity.Com­ment­sThe Law does not cla­ri­fy how cash de­pos­its in­to bank ac­counts will be con­firmed. It is also un­clear wheth­er cash flow state­ments on for­eign ac­counts will be audited and wheth­er it is ne­ces­sary to have doc­u­ments to prove the trans­ac­tions re­flec­ted in them. In this re­gard, we will fol­low fur­ther de­vel­op­ments in this area and keep you in­formed of new cla­ri­fic­a­tions.Those who par­ti­cip­ated in the pre­vi­ous stages of the cap­it­al am­nesty can also par­ti­cip­ate in the fourth stage. However, the Law does not provide for re­peat de­clar­a­tions with­in a single stage (i.e. a de­clar­a­tion can be sub­mit­ted only once). As a res­ult, it is im­port­ant to ana­lyse all as­sets and as­sess the pos­sib­il­ity of de­clar­ing, guar­an­tees and risks.The CMS Rus­sia team is ready to as­sist in this field by not­ably:car­ry­ing out an as­set ana­lys­is to as­sess the feas­ib­il­ity of par­ti­cip­at­ing in the cap­it­al am­nesty (in­clud­ing wheth­er it is pos­sible to file a de­clar­a­tion, con­sequences, be­ne­fits of ob­tain­ing guar­an­tees and po­ten­tial risks);pre­par­ing a spe­cial de­clar­a­tion and re­ports for pre­vi­ous peri­ods (i.e. ODDS, 3-ND­FL);as­sist­ing with the pre­par­a­tion of a set of sup­port­ing doc­u­ments;as­sist­ing with fil­ing re­turns to the tax au­thor­it­ies.  * In Rus­si­an
25/07/2021
Rus­sia to re­quire some for­eign na­tion­als to un­der­go med­ic­al ex­ams, fin­ger­print­ing...
From 29 Decem­ber 2021*, cer­tain cat­egor­ies of for­eign na­tion­als will have to peri­od­ic­ally un­der­go med­ic­al ex­am­in­a­tions, as well as go through one-off fin­ger­print re­gis­tra­tion and pho­to­graph­ing.Be­low you...
14/09/2020
Waste re­form in Rus­sia poses chal­lenges and op­por­tun­it­ies for in­vestors
Start­ing from 1 Janu­ary 2019, Rus­sia has been im­ple­ment­ing a pro­gramme of “waste re­form” to rad­ic­ally change its mu­ni­cip­al waste-man­age­ment sys­tem across the coun­try. Many of the sched­uled pre­par­a­tion...
09/08/2020
Rus­si­an Duma re­ceives bill on widen­ing the scope of sanc­tions
A bill that ex­pands the ap­plic­a­tion of sanc­tions by the Rus­si­an Fed­er­a­tion and spe­cifies the pro­ced­ure for their ap­plic­a­tion has been sub­mit­ted to the Rus­si­an State Duma.In par­tic­u­lar, the bill:cla­ri­fies...
06/08/2020
E-visas to be avail­able for Rus­sia
From 1 Janu­ary 2021, for­eign na­tion­als will be able to enter Rus­sia with elec­tron­ic visas at bor­der con­trol posts to be spe­cified by the Rus­si­an gov­ern­ment in a sep­ar­ate doc­u­ment.Be­low you will find...
23/06/2020
Sanc­tioned Rus­si­an com­pan­ies and in­di­vidu­als now pro­tec­ted against law­suits...
On 19 June 2020, amend­ments* to the Com­mer­cial Pro­ced­ure Code of the Rus­si­an Fed­er­a­tion came in­to force, which provide for the ex­clus­ive jur­is­dic­tion of Rus­si­an courts to con­sider dis­putes in­volving Rus­si­an...