Changes in legislation

The Bank of Russia has started testing the centralized information service Know Your Customer. According to the developers, this will enable banks to reduce the cost of analyzing clients' activities in terms of meeting the requirements of the Federal Law No. 115-FL dated 07.08.2001 "On Countering the Legalization (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism" and focus on high-risk transactions.

What is referred to here are the operations of organizations that do not conduct real economic activities, registered to front parties and controlled by third unfair parties.

According to the Central Bank estimates, the share of clients with a low level of risk is 99% of the total number of economic entities, and the share of clients with a high level of risk does not exceed 0,7%.

Information on the referring the clients to specific risk groups will be sent to banks on a daily basis through personal accounts on the official website of the Central Bank. Data on high risks will be accompanied by additional information on their typology. Banks, for their part, will determine how to use this information in their operating systems.

Further, the accounts of companies with a high level of risk will be blocked, and information thereof will be sent to the Federal Tax Service of the Russian Federation for removal from the Unified State Register of Legal Entities. In the future, such kind of measures may affect about 50 thousand economic entities.

In order to restraint the possibilities for the CEOs and shareholders of legal entities removed from the Unified State Register of Legal Entities to re-establish shell companies, a bill was introduced to the State Duma on November 16, according to which a three-year ban on the registration of such persons as shareholders may be introduced. Accordingly, it is also proposed to limit the entry of information about them into the Unified State Register of Legal Entities.