Obligation to keep the beneficial ownership information


Legal Update No. 564

This update relies on legal acts and draft laws existing as of 23 June 2016.

Goltsblat BLP advises that, on 23 June 2016, Federal Law No. 115-FZ of 7 August 2001 “On Combating Legalisation of Criminally Derived Proceeds (Money-laundering) and Financing of Terrorism” (the “Law”) was amended to require virtually all legal entities to keep information on their beneficial owners being individuals who directly or indirectly (via third parties) ultimately own (hold a dominant share of over 25% in the capital of) the legal entity or are able to control its actions, and the Code of Administrative Offences of the Russian Federation No. 195-FZ of 30 December 2001 (the “CAO”) was amended respectively providing for an administrative liability for failure to comply with the aforesaid obligation.

In particular, the new version of the Law stipulates that legal entities must take any reasonable measures available under the circumstances to find out all necessary information about their beneficial owners, update and document such information at least once a year, and keep it for at least five years.

To ascertain the necessary information, a legal entity is entitled to request the data it needs to identify its beneficial owners from its participants or other controlling persons, who must provide the legal entity with all such information available to them. If requested by the authorities, the legal entity must provide such information, together with back-up documents.

Moreover, Article 14.251 (“Breach of the Legal Entity's Obligations to Ascertain and Provide Information about Its Beneficial Owners”) has been added to the CAO. This means that failure by a legal entity to fulfil the above obligations triggers administrative liability in the form of an administrative fine of RUB 30,000 to RUB 40,000 for officers and RUB 100,000 to RUB 500,000 for legal entities.

The relevant amendments to the Law and CAO come into force on 21 December 2016.

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