From 17 July 2012 organizations will have to meet new internal control requirements designed to combat money laundering and the financing of terrorism.
There will now be a set list of internal control measures that have to be conducted and another new requirement is for a plan setting out how the structural divisions of an organization should interact in internal control matters.
The new rules regulate the following in more detail: the identification of a client, client’s representative and/or beneficiary; how to assess the degree of risk associated with a client, detect unusual operations and operations subject to obligatory control or recording; and also the suspension of operations.
Under the new rules an organization must conduct internal control checks at least once every six months.
Actions to consider
Organizations should make sure their internal control rules conform to the new requirements before 17 August 2012.
Failure to comply with the new internal control rules will result in a warning notice or lead to an administrative fine of from RUB 10,000 to RUB 30,000 (approx. USD 310 to USD 930) for the responsible employees of an organization and from RUB 50,000 to RUB 100,000 (approx. USD 1,550 to USD 3,100) for legal entities.
More importantly, failure to submit information on suspicious operations or operations subject to obligatory control (or submission of false information) will result in an administrative fine of from RUB 30,000 to RUB 50,000 (approx. USD 930 to USD 1,550) for the responsible employees of an organization and from RUB 200,000 to RUB 400,000 (approx. USD 6,200 to USD 12,400) for legal entities or administrative suspension of the organization’s activities for a term of up to 60 days.
The changes were introduced when on 30 June 2012 the Government of the Russian Federation passed Resolution No. 667 containing new requirements for internal control rules. The new rules apply to all organizations engaged in operations with monetary funds and other assets except lending institutions. The new rules supersede the earlier recommendations approved by Russian Government Ordinance No. 967-r of 10 June 2010.