Risks or favorable measures for business in 2017

In February 2017 the Russian currency was showing the “miraculous” appreciation for several weeks in a row, having cleared the 57 rubles per one US dollar barrier (16.02.2017). The analysts accounted this fact by the expected deficit on the oil market; possible improvement of relations between countries; speculative operations; the necessity of exporters to transfer to the budget MET, excise, and VAT payments in February; leaving permanent the Central Bank of the Russian Federation key rate. In the current situation the economic experts started to speak about the fact that the strengthening ruble attacks the Russian economy as Russian exporters lose their edges.

From the end of February 2017 the ruble depreciation has been noted. Today the ruble is nigh unto the mark of 59 rubles per one US dollar. However according to the baseline forecast of the Ministry of Economic Development of the Russian Federation, it should amount to about 67, 5 rubles per one US dollar. Due to this the Ministry thinks that the currency still exceeds the fundamental values. The corresponding fluctuations of the ruble, oil prices, as well as the policy of the Federal Reserve System of the USA and the Central Bank of Russia, make it possible to consider these instruments problematic for the forecasting.

In the current conditions of the world and the Russian economy the domestic business outlines the main risks – low level of consumer confidence and the lack of comfort for the business to work transparently.

Companies’ managers name the following external factors threatening business in 2017:

  • ruble volatility
  • geopolitical insecurity;
  • problem of capital inaccessibility due to sanctions;
  • social instability;
  • unemployment;
  • outlived globalization.

The initiated discussion concerning changes of the tax system after 2018 provides fodder for business to be more worried. On the one hand, it is assumed that the tax revision is focused on easing of burden on business. On the other hand, it is always feared that “we wanted to do it better, but it turned out as always”. According to the Ministry of Finance plan, the primary target of the tax system itself remains constant – to save the sufficient quantities of the tax burden for the government to fulfil expenditure and social obligations. However the department doesn’t see any necessity to increase taxes, if they are paid properly.

In the course of tax system changing it is suggested to lower the insurance premium rates from 30% to 22% and to increase VAT from 18% to 22%, and moreover to make the insurance payment rate flat. As a result, the insurance premiums united into one payment will be distributed to non-budgetary funds in future. The goal of such redistribution lies in tax burden reduction and its displacement on consumer budgets. Among other changes there are – consolidation of benefits, improving of their targeting, abandoning the inefficient ones. All the discussions will be finished in 2017. The changes are to be initiated in terms of legislation in 2018 and to be implemented since 2019.

The small business situation suggests that there is a necessity in additional measures in order to improve the business climate. In particular, according to representatives of the All-Russian non-governmental organization of the small and medium business, the following things sit well with the small business: reduction of insurance burden on the payroll budget, VAT increase, determination of minimum wage non-liable to income tax, non-connecting of individual entrepreneurs’ insurance premiums to SMWI, increase of microloans for entrepreneurs from three to five mln RUB and for a term before five years; insurance of bank account balance similar to natural persons, individual entrepreneurs etc. These and other suggestions will be discussed in May 2017 with the participation of the President of the Russian Federation. The decisions made are expected to come into force since 2019.

Strengthening administrative responsibility for violation of the Law for Personal Data Protection

The Federal Law №13-FZ «On Amendments to the Code of the Russian Federation on Administrative Offenses» dated 07.02.2017 defines a new version of Article 13.11 of the Code.

In the previous version of this article the responsibility was defined only for violation of the procedure of collecting, storing, using and distribution of information about citizens, i.e. personal data. The article provided for punishment in the form of a warning or fine in the amount of: for citizens – from 300 to 500 RUB, for officials - from 500 to 1,000 RUB, and for legal entities - from 5,000 to 10,000 RUB.

The new version of Article 13.11 of the Code on Administrative Offenses provides for responsibility for the following law violations (given that such acts are not criminally liable):

  • processing of personal data for purposes not specified in the Federal Law №152-FZ «On Personal Data» from 27.07.2006;
  • processing of personal data that are inconsistent with the purposes of their collection.

In such cases a warning or penalty are provided in the amount of: for citizens from 1 000 to 3 000 RUB, for officials - from 5,000 to 10,000 RUB, for legal persons - from 30 000 to 50 000 RUB.

  • processing of personal data without written consent of the personal data subject in those cases where such consent must be obtained under the law;
  • processing of personal data with violation of rules on the composition of information included in the written consent of the subject of personal data.

These violations may result in a fine in the amount of: for citizens - from 3,000 to 5,000 RUB, for officials - from 10,000 to 20,000 RUB, for legal entities - from 15,000 to 75,000 RUB.

  • failure by an operator to perform publication or other guaranteed free access to documents that determine his/her policy on the processing of personal data. The same applies also to implemented information about requirements for the protection of personal data.
  • failure by an operator to provide the information to a personal data subject about his/her own personal data.

After such violation may follow: a warning or penalty for citizens - from 700 to 1,500 RUB, for officials - a fine from 3,000 to 6,000 RUB, for individual entrepreneurs - from 5,000 to 10,000 RUB, and for legal entities - from 15 000 to 30 000 RUB.

On the opinion of the authors of the law, the strengthening responsibility will contribute to the unavoidability of punishment, taking into account the severity of the consequences of offenses.

For comparison, the fine for illegal collection and distribution of personal data is: in Germany - 300 000 EUR, in France - from 150 000 to 300 000 EUR, and in Spain - from 40 000 to 600 000 EUR. In addition, the fiscal authorities in these cases may confiscate illegally obtained profits or impose a fine on turnover.

Now the Federal Service for Supervision in the Sphere of Communications, Information Technology and Mass Communications (Roskomnadzor) is made responsible for drawing up protocols on the relevant administrative cases, while earlier such cases were sanctioned by the Prosecutor's office.

According to Roskomnadzor, 911 scheduled inspections were carried out for 9 months of 2016 within control measures for the compliance of personal data processing with the requirements of the legislation of RF. Based on the results of 459 scheduled inspections 1495 violations were detected. The most frequent violations were: submission of notices on the processing of personal data, containing incomplete information or misinformation, to an authorized body (16% of the total number of violations detected); failure to submit information on the termination of the processing of personal data or on the change of information contained in the notice on personal data processing to an authorized body (14% of the total number of violations detected). Based on the results of all control measures in this direction the bodies of Roskomnadzor imposed administrative fines in the amount of more than 4.8 million RUB and recovered from them more than 2.4 million RUB.

As a reminder, Roskomnadzor is authorized to maintain the Register of operators, processing personal data. As of March 10, 2017 the Register has the information on 373 412 personal data operators. To get acquainted with their activities is possible by subscribing to the Information and Analytical system Globas-i.