Legal entities are obligated to disclose information about beneficiaries

In June 2016 The Federal Law No. 215-FZ of June 23, 2015 «On the amendments to the Federal Law on the countermeasures against legalization (laundering) of incomes obtained in a criminal way and financing of terrorism» and the Code of Administrative Offences of the Russian Federation» was endorsed by the President of the Russian Federation.

The Law defines the beneficiary owner as a physical person, who directly or indirectly owns the legal entity or has the ability to control its actions. The ownership means the dominant participation in the share capital, in other words, the share more than 25%.

According to the Law, the legal entities are obligated to know about their beneficiary owners, make possible and reasonable steps aimed to identify the data specified by the Federal Law No. 215-FZ. Such information contains the following:

  • first name, second name and paternal name; 
  • nationality;
  • date of birth;
  • the requisites of identity paper;
  • the data of migration card or document, confirming the right of foreign citizen or the person without citizenship to stay in Russia;
  • residential/registration address or place of residence;
  • taxpayer identification number (upon availability).

The legal entities are obligated to update the above data at least once a year, to document this data and keep it for at least 5 years from the date of receipt.

Besides, the legal entities are have to provide this information upon the request of the relevant authorized government bodies in terms established by the Government of the Russian Federation.

The breach of duty is punishable by an administrative fine from 30 to 40 th RUB – for officials and from 100 to 500 th RUB – for legal entities.

According to The Federal Law No. 152-FZ of July 27, 2006, the data about physical persons is a personal data. The requirements for collection, accumulation, storage and dissemination of personal data are identified by the same Law. To satisfy the requirements, the personal data processors are obligated to make the relevant organizational and technical operations, which require the certain material costs. These are quite expensive operations even for large enterprises; it might be tens of millions RUB. To reduce costs in this case is quite difficult as the corporate information systems have their specifics, this, in turn, leads to additional threats. For this reason the execution of procedures relating to personal data will be quite expensive for small and medium enterprises. 

Information about personal data processing and storage procedures in the Internet can be found in our publication:

Criminal responsibility for fraud of shared construction participants is introduced

By the Federal Law as of 01.05.2016 №139-FZ the amendments in the Criminal Code of the RF and certain legislative acts were introduced. They relate to allocation of criminal responsibility for breach of legislation concerning participation in shared construction of multi dwelling units and real property items.

Such a dramatic strengthening of responsibility in the field of the shared participation of citizens in construction occurs due to violations of mass proportions. According to the Ministry of Construction, Housing and Utilities of the RF, more than 70 thousand people have become victims as a result of these violations. In the aggravating economic conditions, disappearance of cheap credits including in the field of construction, bankruptcy of real estate developers and delayed periods of construction became more frequent. 

In order to demonstrate the situation in the construction industry the data from Information and Analytical system Globas-i should be given with the results of selection analysis of construction companies, having submitted the accounting report for the last accounting 2014 year to the State statistics authorities. Thus 8% of the amount of these companies are in the process of being wound up, 27% don’t have profit or bear a net loss, 4% don’t have revenue from the operational activity, liquidity ratio (company’s assets adequacy for meeting the short-term liabilities) of 56% don’t stay within regulatory values and 19% have an unsatisfactory solvency index Globas-i. 

Inactivity or sharply decreased activity on the construction site, sale of residential space in partially constructed houses with big discounts, frequent change of general contractors, introduction of amendments into the planning documentation in the process of construction and ignorance of communication with customers – these are the main features of long term construction and pre-bankruptcy of developers.

Thus the adoption of severe measures may be considered quite appropriate. 

The new article 200.3 was introduced by the Federal Law into the Criminal Code of the RF. According to the article, the breach of legislation on participation in shared construction of multi dwelling units and real property items committed in major amounts, i.e. if the sum of money raised from the citizens exceeds 3 million RUB, subjects to a punishment of 360 hours’ compulsory community service, correctional or hard labor for a period from one to two years or up to two years’ imprisonment.    

The more severe punishment is to be carried for those who have committed the crime with aggravating circumstances, i.e. by a group of persons by previous concert or in grand amounts (the sum of raised money – more than 5 million RUB.) - up to 480 hours of compulsory community service, or correctional labor for up to two years or hard labor for up to five years or up to five years’ imprisonment.    

However the developer can be released from the responsibility in case of completion and fulfillment of obligations to the participants or compensation of losses in full to the injured.

The corresponding amendments were as well introduced into the Criminal Procedure Code of the RF, Code of Administrative Offences of the RF and the Federal Law as of 30.12.2004 №214-FZ “Concerning participation in the shared construction of multi dwelling units and other real property items and on amendments being made to certain legislative acts of the Russian Federation”.