Draft Federal Law.

17.12.2010

Legal Update No. 206.

Goltsblat BLP advises that the State Duma passed draft Federal Law “On the National Payment System” (the “Draft Law”) in the first reading on 10 December 2010. The draft federal law on amendment of legislative acts of the Russian Federation and invalidation of the Federal Law “On individuals' payments acceptance activities carried out by payment agents” and certain other legislative acts has also been submitted to and is under consideration by the State Duma.

As is known, the Russian legislation has not yet defined the concept of “payment system” and powers of the Bank of Russia in respect of such systems and their participants.

Pursuant to the Draft Law, “the national payment system” means the following entities jointly, when they carry out funds transfer activities:

  • money transfer operators;
  • payment agents (subagents);
  • payment system operators;
  • payment infrastructure services operators;
  • financial market participants;
  • federal treasury bodies; and
  • federal postal service organisations.

The draft law regulates general aspects of the national payment system, requirements to its participants, requirements to the organisation and operation of payment systems and their participants as well as supervision and control over their activities.

It should be noted that the draft law does not reflect widely discussed proposals on the establishment of a unified national payment card system, a competitor to international payment systems  (VISA, MasterCard etc), as well as an introduction of a single social card for a RF citizen.

The draft law recognises the concepts of “e-money”, “e-money operator”, “e-money transfer” and “electronic means of payment” (which include electronic storage media, including payment cards and procedures for inputting data into devices such as payment terminals and cash machines). Without this it would be impossible to imagine payments being regulated today.

“E-money” shall be construed as money as a settlement instrument. Amendments are made to the provisions of the Civil Code of the Russian Federation pertaining to the use of electronic payment facilities with and without a bank account. They establish mutual obligations of the bank and the client and provide for the grounds for liability and risk sharing between the parties.
One important novelty is that transfer of funds without a bank account, including by use of electronic means of payment, shall be deemed irrevocable and final. The draft law also establishes a format for effecting settlements by payments orders which can be used for direct debiting. Legislative provisions regulating settlements by payment orders are brought in line with the existing bank and court practice.

According to the draft law, only banks or specialised non-bank credit institutions subject to increased requirements regarding the authorised capital, insurance, compliance with standards established by the Bank of Russia etc may become money transfer operators (or e-money operators).  

Supervision functions are handed over to the Bank of Russia together with federal executive bodies, also in cooperation with central banks and other supervision bodies in national payment systems of foreign countries.

The approval of the Draft Law in the first reading means it is generally accepted, but owing to a large number of amendments which have been submitted to it, the above mentioned draft federal laws may be subject to considerable changes. 

For additional information, please contact:

Alexander Smirnov, Head of Commercial Practice, Goltsblat BLP,
T: +7 (495) 287 44 44,
E:info@gblplaw.com


Denis Balakin, Senior Associate, Commercial, Goltsblat BLP,
T: +7 (495) 287 44 44,
E:info@gblplaw.com

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