08.07.2016 — Why Is “Antiterrorist Package” so Vulnerable?

A wave of protest has convulsed since the President signed the “antiterrorist package” proposed by deputy Irina Yarovaya and member of the Federation Council Victor Ozerov. The adopted amendments are criticized for violation of fundamental human rights, excessive costs of implementation and illogical nature.

For instance, Edward Snowden called it an “evil day” in the history of Russia as this law not only violates the human rights but also contradicts common sense.

Firstly, according to experts, costs for infrastructure development to store data in such volume amounts for over five trillion rubles. The “Russian Post” announced the sum of 500 billion rubles only for purchasing the special equipment and hiring trained staff for all post offices.

Besides, the engineers urge to pay special attention to the technical aspect of the question. It is not clear how encrypted financial systems should be dealt with, for instance, SWIFT does not use Russian cryptographic algorithms. On the other hand, it is also unsettled how the authorities will secure the database with sensitive information such as, for example, banking details.

At this time activists gather signatures for cancellation of the new “antiterrorist package”. Experts also say that an opportunity to reverse these amendments still appears to exist. But what concessions the government will make is not on record so far.

07.07.2016 — Confession of Guilt Will Release Customs Applicants from Liability

The amendments which came into force at the beginning of July provide an opportunity to release customs applicants and customs representatives from administrative liability if they voluntarily report undeclared goods to the customs authorities and at the same time submit documents with changes to the previously provided information.

Such release will only be possible if the customs applicant reports the violation before it is revealed by the customs authority, and only if the customs applicant does not have any debts for customs duties and other payments.

Such opportunity to be freed from administrative liability will stimulate participants of customs activity to additional monitoring of the transported goods and will also serve as encouragement for good faith conduct. 

06.07.2016 — Constitutional Court Recognized Municipalities’ Right to Challenge Underevaluated Cadastral Assessment

In spite of the literal reading of the law on the cadastral assessment activity, the Constitutional Court recognized the municipalities’ right to challenge the results of cadastral assessment in case of its undervaluation. This decision seeks to balance the concerns of taxpayers interested in a decrease in the cadastral cost of the land plots and of public authorities aiming at an increase in tax revenues in the local budget.

The decision was based on a court case where the cadastral cost of the land plot in question was initially estimated to be over 7 billion rubles, but was then lowered due to an appeal from the owner almost by 15 times. In order to reverse such judicial practice, the Constitutional Court recognized the municipalities’ right to challenge cadastral assessment of the land plots in case of considerable undervaluation, especially if the land plot in question is large and is used for business activity, meaning that it can significantly influence the amount of tax income of the local budget.

05.07.2016 — Forests in Vicinities of Large Cities Are Now under Federal Protection

The new Federal law designed to protect cities’ vicinities from deforestation and to improve the ecological situation was approved by the President. In this regard creation of green belts around cities is envisaged. Clean felling will be forbidden within the borders of such belts, while any kind of construction activity and resource development will be limited.

Amendments also introduce increased liability for violation of the nature protection legislation on green belts with the fines for legal entities being raised from 250 to 500 thousand rubles.

Despite the fact that the document signed by the Russian President does not imply deprivation of property rights in respect of the land plots within the green belts, it could expose their owners to substantial administrative difficulties, for example, if they want to change the category of such land plots.

04.07.2016 — Russia Ratified DTT with Hong Kong

The Federation Council approved the bill ratifying the Double Taxation Treaty Agreement and the Protocol signed in Hong Kong on January 18, 2016.

As reported earlier, the DTT provides ways to avoid double taxation of profits from business operations, to prevent tax avoidance and to guarantee exchange of information between corresponding authorities. As for natural persons, individuals pay all income taxes in the country (Russia or Hong Kong) where he or she resided for at least 183 days during the last 12-month period.