29.07.2016 — Key Interest Rate of Central Bank to Remain Unchanged

On the previous meeting that took place in June, 2016, the Central bank reduced the key interest rate from 11% to 10,5%. During the last meeting of the Board of Directors, which took place on July 29, the Bank of Russia made a decision to keep the key interest rate unchanged. This decision is based on external economic impulses, being based mostly on the falling oil prices and the ruble.

At the same time, analysts explain that in the event longstanding and sustainable decline in inflation persists in the context of favorable external circumstances, the Central bank can reduce its key interest rate to 9,5%. Be reminded that the key interest rate is an important indicator  used for calculations in legal relations as well. For instance, the key interest rate is used for calculation of interest for wrongful use of money (Art. 395 of the Russian Civil Code).

28.07.2016 — Ministry of Economic Development Suggests to Amend Supervision Procedures

The Ministry of Economic Development has developed a bill “On the foundations of the state and municipal control (supervision) in the Russian Federation” designed to change the regulations on control and supervision activity of all executive authorities except for control by sеcurity agencies and administrative proceedings.

The bill introduces a number of new provisions regarding the state control (supervision) procedures. In particular, the list of grounds for unscheduled inspections is intended to become exhaustive, a ban on inspections following up on anonymous complaints is established, and all unscheduled inspections are to be coordinated with the prosecutor's office. Besides, the authorities’ requirements for the company under inspection have to be published in advance.

The bill caused a number of objections from the regulatory agencies. FAS, FTS, Rosfinmonitoring, Rostekhnadzor and other federal authorities demand autonomy and object to the proposed unified rules for state control. The Ministry of Economic Development attributes settlement of these disputes to the political level.

27.07.2016 — Rosreestr Reduces Cadastral Value of Real Estate Objects in Majority of Cases

Due to imperfection of the methods used for mass valuation of real estate, the Federal Service for State Registration, Cadastre and Cartography (Rosreestr) is forced to grant owners’ requests to reduce cadastral value in the majority of cases. Courts also willingly reconsider cadastral valuation results if Rosreestr denies their reduction.

According to the statistics published by Rosreestr, cadastral value of real estate objects is on average overstated by 30%, which forces many owners to challenge the mass valuation results. Thus, in the first half of 2016 the number of applications as compared to 2015 has increased by 50%.

Such indicators, according to Rosreestr, are caused by imperfection of the existing system of cadastral value assessment, which is conducted by independent appraisers engaged at the discretion of each territorial entity of the Russian Federation. Shortly, this system will be essentially reformed. On January 1, 2017, a bill that provides for a transfer of cadastral assessment powers to state cadastral appraisers, which are to use a unified technique of cadastral valuation across Russia, is scheduled to enter into force.

26.07.2016 — Unified Register of Individuals to Be Created by 2025

The Government reckons that the unified register of individuals will become a unified informational database about all living and deceased Russian citizens and foreign citizens that permanently reside in Russia. The information stored in the register shall include the taxpayers identification number (INN), insurance number of the individual ledger account (SNILS), passport data and other necessary information. It is expected that this register will enhance efficiency of the rendered state services and will cut state expenses.

The register will be based on the currently decentralized resources of the Register Office (ZAGS) and also on some data from the Federal Tax Service (FTS) as well as other state authorities. There is some evidence that this database will not only contain the key information about individuals, such as full name, birth date and birth place, but also their main personal identifiers (INN, SNILS, passport data, etc.), as well as information on their place of residence, place of work or study, criminal record and other data.

25.07.2016 — Ten-year Limitation Period Should Not Start Running Earlier Than on September 1, 2013

The Government has introduced to the State Duma a bill which clarifies the procedure for calculating the ten-year limitation period under the statute of limitations. According to the proposed amendments, the ten-year limitation period applicable to obligations with indefinite time of performance (with on-demand performance), which was recently established, shall start not earlier than on September 1, 2013.

Be reminded that starting from January 1, 2013,, the law that established the ten-year limitation for all obligations, deadline for which is not defined or defined as on-demand, entered into force. This absolute limitation period generally starts from the moment when the obligation arose and was introduced to ensure a balance of judicial protection: on the one hand, to ensure that there is sufficient time for judicial protection of on-demand liabilities, and, on the other hand, to exclude judicial protection of claims which arose well in advance of their performance.

However, since the regulation introducing the said ten-year limitation period was applied retroactively, affecting claims that arose before it was passed, in practice it turned out that the limitation period on a number of obligations had already expired while the applicant did not manage to appeal to court. The Constitutional Court recognized such situation unconstitutional, and the Government proposed relevant amendments providing that the statute of limitations shall only start running from the date when the new rules became effective (September 1, 2013). At the same time individuals whose claims have already been denied due to the expired limitation period will be entitled to appeal against the relevant judicial acts.