The Russian Government has introduced a bill concerning the disclosure of information on beneficial owners of legal entities for consideration of the State Duma. The bill is aimed at amending the Federal Law on Countering Legalisation (Laundering) of Proceeds of Crime and Financing of Terrorism, and it imposes additional duties on legal entities doing business in Russia, obliging them to obtain, store and annually update information regarding their beneficial owners. 

According to the bill, legal entities doing business in Russia will not only be obliged to provide information regarding their beneficial owners upon the request of empowered authorities (the list is to be determined by the Russian Government), but also support such information with relevant documentation. The information shall be updated at least annually.

Notably, the term ‘beneficial owner’ includes individuals who directly or indirectly own more than 25% in the legal entity’s charter capital, or can control its activities.

The bill also proposes to amend the Russian Administrative Code and introduces penalties for breach of the said obligations. Thus, a fine of up to RUB 50.000 can be imposed on the company’s official, and a fine of up to RUB 500.000 can be imposed on the company itself.

According to the explanatory notes, the bill is aimed at increasing the transparency of legal entities’ activities, decreasing the risk of their involvement in unlawful activities, including those connected with money laundering and financing of terrorism.

At the moment the bill is a proposal submitted for consideration by the State Duma, and therefore it may be substantially amended. We will keep our readers informed of its development.