National Payment System
On 5 May 2014 the President signed Federal Law No. 112-FZ “On Amendments to
the Federal Law ‘On the National Payment System’ and Certain Legislative Acts of
the Russian Federation.”
The amendments aim to ensure uninterrupted money transfers on the territory of Russia.
Amendments regarding the national payment system
First of all, the amendments envisage the creation of a national system of payment cards
(NSPC): it will be operated by an open joint stock company, with 100% of its shares initially
held by the Central Bank (it will be possible to sell those shares afterwards, but subject to
certain limitations). The banks participating in NSPC are required to provide NSPC payment
cards to their clients for the drawing of salaries and social payments from the treasury and
state extrabudgetary funds. In addition, sellers (save for microenterprises) are required to
ensure that consumers can pay for goods (works or services) with NSPC cards or in cash
at their choice.
Further, as of 1 July 2014 there will be severe liability for unilateral suspension or termination
of the rendering of payment infrastructure services to the participants of a payment system
and their clients: for each day of suspension (termination) the Central Bank will impose a fine
in an amount of up to RUB 10 million on an operator of a payment system, which is regarded
as “nationally important” and up to 10% of a security deposit on an operator of a payment
system which is not considered “nationally important” (a security deposit must be deposited
in a special account with the Central Bank in a two days’ amount of transfers on the territory
of Russia within the payment system).
There is now a rule that new or increased rates of a payment system can take effect no
sooner than 120 days after the Central Bank is notified of them by the operator of the
In This Issue...
■■ National Payment System
■■ Anti-Money Laundering
■■ Corporate: LLC Charter Capital, Personal
Law of the Companies in the Crimea and
■■ Corporate Governance Code
For more information, please contact:
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White & Case LLC
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This update is a general summary of recent developments in Russian legislation and should not be treated
as legal advice. Readers should seek the advice of legal counsel on any specific question. All translations
of terminology in this update are unofficial.
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Russian Legislation Update
14 April – 25 May 2014
Russian Legislation Update
Further, as of 1 July 2016: (i) where transfers are made by
operators located in Russia, it is also necessary to engage
operators of payment infrastructure services that are located and
perform all the functions on the territory of Russia and comply with
the requirements of the Law on the National Payment System;
(ii) operators of payment infrastructure services are not allowed to
transfer abroad information on transfers made within a payment
system on the territory of Russia or grant access to such information
from the territory of a foreign state. These rules will not apply to
Operators of payment systems are required to bring their rules of
payment systems into conformity with the new rules of the Law
on the National Payment System within 60 calendar days of the
amendments’ entry into force.
The Law on Banks has been supplemented with a rule allowing
Russian banks to refuse opening a bank account or close an account
of a foreign individual or foreign legal entity if the laws of the relevant
foreign state require Russian banks’ entry into a special agreement
in order to exercise control over bank accounts opened by taxpayers
of such foreign state in Russia and the operations conducted through
such accounts. This rule may be relevant, in particular, with respect
The Currency Control Law has been supplemented with an
important rule regarding foreign trade proceeds of Russian
residents: residents are required to ensure receipt in their
accounts of proceeds in rubles in an amount specified by the
Government. The Government is also entitled to specify the
relevant types of goods (works, services) and the relevant
foreign states of the residents’ counterparties under foreign
The Law entered into force on 5 May 2014, save for some
provisions that will enter into force on other dates.
On 5 May 2014 the President signed Federal Law No. 110-FZ on
amendments to the Law on the National Payment System, the
Law on Combating Money Laundering and some other laws.
Previously, the law did not require banks to identify a client
being an individual in connection with a money transfer through
a credit organization without the opening of a bank account,
including an e money transfer, if the amount of the transfer did
not exceed RUB 15,000. Following the changes the identification
procedure would be required irrespective of the amount for
transfers to individuals, non-profit organizations (save for religious
and charitable funds) and non-resident companies, as well as
payments for goods (works, services) specified by the Government.
The amendments allow a simplified identification procedure
with respect to clients being individuals for transfers without the
opening of a bank account, including e-money transfers (provided
there are no suspicions that the transaction is made for money
laundering or financing of terrorism purposes). It means identifying
only the first name, patronymic and surname, series and number
of the identity document by one of the methods specified in
the Directive (in particular, with the use of the state information
systems that must be prepared for such use until 1 October 2014).
Subject to the simplified identification procedure, individuals
can transfer e money to legal entities and entrepreneurs provided
that the balance of e-money in any given moment is no more than
RUB 60,000 and the total amount of funds transferred within one
month is no more than RUB 200,000.
The Law entered into force on 16 May 2014, save for some
provisions that will take effect later.
LLC Charter Capital
On 5 May 2014 the president signed Federal Law No. 129-FZ
establishing a new procedure for the payment of an LLC
The Law introduces amendments to the Civil Code and the LLC Law
according to which: (i) the founders of an LLC are no longer obliged
to pay 50% of the LLC charter capital prior to its registration; and
(ii) the founders are now obliged to pay the LLC’s charter capital
in full within four months of the day of the company’s registration
(before the amendments – within one year of the moment
The amendments are expected to simplify and speed up the LLC
The Law entered into force on 5 May 2014.
Personal Law of the Companies in the Republic of the Crimea
and the Federal City of Sevastopol
On 5 May 2014 the president signed Federal Law No. 124-FZ
establishing the status of the companies existing in the
Crimea and Sevastopol as at the day of their admission into
the Russian Federation.
The Law establishes the legal basis for the companies’ operation in
the Republic of the Crimea and the Federal City of Sevastopol whose
executive body or person entitled to act on their behalf without a
power of attorney according to their foundation documents was
located in these territories as at the day of their accession to the
Russian Federation, and, accordingly, whose personal law was
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According to the Law, the companies, before 1 January 2015,
may opt to (i) bring their foundation documents in line with Russian
law and apply to be entered in the Unified State Register of Legal
Entities and thus fall under Russian jurisdiction (i.e. Russian law
becomes their personal law), or (ii) acquire the status of a branch or
representative office of a foreign company in Russia. The switch to
the Russian jurisdiction is not a company’s reorganization and does
not entail its liquidation.
The Law will enter into force on 1 July 2014.
Accreditation of Representative Offices and Branches
of Foreign Companies
On 5 May 2014 the President signed Federal Law No. 106-FZ
amending certain legislative acts of the Russian Federation
regarding the accreditation of representative offices and
branches of foreign companies.
The amendments provide for certain requirements to the
establishment and operation of a foreign company’s branch and
representative office in Russia.
As a general rule, according to the amendments, a company will
be entitled to operate in Russia through a branch or representative
office strictly as of the day of their accreditation (i.e. their inclusion
in the state register of accredited branches, representative
offices of foreign companies). The accreditation will be granted
by an executive authority appointed by the Russian Government
(it is expected that it will be the Federal Tax Service; currently
the Registration Chamber of the Russian Ministry of Justice is
performing these functions).
Furthermore, pursuant to the amendments, the Russian Chamber
of Commerce and Industry (the “CCI”) (i) issues permits for
the opening of representative offices and branches of foreign
companies (before the amendments – for representative offices
only); (ii) effects personal accreditation of foreign citizens –
employees of branches and representative offices, and (iii) may
represent foreign companies while effecting accreditation of their
branches and representative offices.
Given that accreditation of both branches and representative
offices of foreign companies by the new competent executive
authority will become mandatory after the amendments take effect,
the power of the CCI to issue permits for the opening of a branch
or representative office and the legal effect of such permits remain
unclear (before the amendments, a foreign company could obtain a
permit for the opening of a representative office either from the CCI
or the Registration Chamber of the Ministry of Justice, and these
permissions had equal power, at the same time branches only were
required to be accredited by the Ministry Justice).
By 1 April 2015, all existing branches and representative offices are
required to obtain accreditation according to this Law.
The Law will enter into force on 1 January 2015.
Corporate Governance Code
On 10 April 2014 the Bank of Russia issued Letter 06-52/2463
“On the Corporate Governance Code.”
The Code develops and broadens the principles and provisions
of the 2002 Code of Corporate Conduct taking into account the
modern corporate laws and court practice formed as relevant
disputes were resolved. The Code is of an advisory nature and
is recommended, first, for joint stock companies with shares
admitted to organized trades.
The Code includes, among other things, the following sections:
1. Shareholders’ rights and equality of conditions for shareholders
when exercising their rights
The Code, in particular, points to the need to ensure secure
and effective means of recording shareholders’ rights and to
provide for shareholders’ ability to dispose of their shares
quickly, without limitations. A company may assure such
rights by choosing a registrar with a good reputation and
possessing reliable technologies, as well as by establishing
cooperation with the registrar regarding prompt updates of
the shareholder information.
The Code provides for the recommendations on improving
the procedure for the convocation and holding the general
meeting of shareholders and the provision of shareholders
with relevant information.
The Code includes recommendations on establishing a transparent
and clear mechanism of determining the amount of dividends
and their payment. It stresses that a company should refrain from
detracting from the existing shareholders’ dividend-related rights
and from diluting their stocks when conducting corporate actions.
2. Board of directors; company’s executive bodies, liability of the
members of the board and the company’s executive bodies
The Code reflects the approach established by the Supreme
Commercial Court in its Plenum Resolution No. 62 dated
30 July 2013 “On Certain Matters of Indemnification of
Damages by Members of a Company’s Governing Bodies”
(please refer to our Special Alert for August 2013).
The Code clarifies in detail the rules of procedure and functions
of the board of directors that are meant to ensure progress of the
company and effective control over its operation.
The Code establishes requirements for an independent director1.
Pursuant to the Code, an independent director should be a
person who (i) is not related to the company; (ii) is not related
to a significant shareholder of the company; (iii) is not related to
a significant counterparty of the company; (iv) is not related to
1 These requirements are developed and broadened as compared to the similar
provisions of the 2002 Code of Corporate Conduct.
Russian Legislation Update
the state (the Russian Federation or its constituent entity) or a
municipal body. The Code clarifies these categories in detail and
recommends that independent directors make up at least one-third
of the board of directors.
According to the Code, the board of directors must establish
committees for the preliminary consideration of the more
important aspects of the company’s operation: (i) an audit
committee; (ii) a remuneration committee; (iii) a strategy
committee; (iv) a nominees’ committee; (v) a corporate
governance committee; and (vi) an ethics committee.
3. Remuneration for members of the board of directors, executive
bodies and other senior employees of the company
The Code establishes basic attitudes to the calculation of the amount
of fixed remuneration and retirement benefit, recommends ways of
short-term and long-term motivation for members of the board of
directors and other corporate managers.
4. Disclosure of information
Among other things, the Code recommends that the company
disclose significant information about its operation even where
the law does not require such disclosure. The company should
disclose, in particular, information about the structure of the
company’s capital; the system of corporate governance; the
company’s investment and information memoranda; information
about all significant risks that may affect the company’s operation.
5. Significant activities
Among other things, the Code contains recommendations for
a company’s entry into major transactions, reorganization or
acquisition of the company, listing and delisting of shares, the
company’s charter capital increase, splitting, consolidation and
conversion of shares.
The Government approved the draft Code on 13 February 2014.
The Board of Directors of the Central Bank approved the Code
on 21 March 2014.
On 18 February 2014 the Central Bank issued Directive
No. 3192-U on amendments to Directive No. 1317-U on
correspondent relations with banks resident in offshore zones.
The Directive was registered with the Ministry of Justice
on 24 April 2014.
Under the Directive, the Principality of Liechtenstein has been
moved from the third to the first group of offshore zones. It means
that Russian banks can set up correspondent relations with banks
registered in the Principality of Liechtenstein without the limitations
that apply if a non-resident bank’s country is in the second or third
group. This change should also be taken into account for making
provisions for losses related to transactions of residents of offshore
zones as per Directive No. 1584-U of 22 June 2005.
The Directive entered into force on 19 May 2014.
On 1 April 2014 the Central Bank issued Directive No. 3223-U
“On the Requirements to the Heads of the Risk Management
Department, Internal Control Department and Internal Audit
Department of a Credit Organization.”
The Directive was registered with the Ministry of Justice
on 23 April 2014.
Under the Directive, a bank’s head of the risk management
department, head of the internal audit department and head
of internal control department are to meet certain qualification
requirements (to their education and professional experience)
and requirements as to the business reputation.
Banks are required (i) to notify the Central Bank of appointments to
and dismissals from the above positions, as well as of changes in
the data submitted earlier within the terms specified in the Directive,
and (ii) no later than 90 days after the Directive’s entry into force
send to the Central Bank the data about persons who currently
hold such positions.
The Directive will enter into force ten days after the date of its
On 27 February 2014 the Central Bank issued Directive
No. 3194-U “On the Disclosure by Credit Organizations of
Information on Interest Rates for Individual Deposits.”
The Directive was registered with the Ministry of Justice
on 29 April 2014.
Under the Directive banks are required to disclose monthly
interest rates they offer for individual deposits on their website or
a newswire of one of the Russian information agencies. The rates
must be indicated separately for different terms and currencies
(rubles, US dollars and Euros).
The Directive entered into force as of 1 June 2014.
On 5 May 2014 the President signed Federal Law No. 86-FZ
“On Accession of the Russian Federation to the UNIDROIT
Convention on International Factoring.”
Russia has acceded to the UNIDROIT Convention on International
Factoring of 28 May 1988. It is expected that accession to this
Convention will contribute to further development of Russian
laws in the sphere of factoring and, eventually, to the promotion
of factoring in Russia.
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The Law entered into force on 16 May 2014. The Convention will
enter into force for Russia on the first day of the month following
the expiration of six months after the date of the deposit of its
instrument of accession.
On 24 April 2014 the Government approved Resolution
No. 368 on amendments to concession agreement terms
with respect to the public utility infrastructure.
Following the recent amendments to the Federal Law
“On Concession Agreements,” an approval from the Federal
Antimonopoly Service (its territorial department) is required
in order to change the terms of a concession agreement with
respect to heat-, water supply and (or) water disposal facilities.
The Resolution determines the procedure and conditions for
the granting (refusal) of such approval. In particular, the parties
to a concession agreement may apply for such approval in the
■■ change of federal or regional law making it impossible for
the parties to perform their obligations;
■■ force majeure; or
■■ changes made to the pattern of heat-, water supply and (or)
water disposal also making it impossible for the parties to perform
their obligations. In such instances, the concessionaire’s costs of
building or renovating a concession facility may not be reduced.
Please note that approval of changes to the terms of a concession
agreement may be applied for if such agreement was signed at
least three years prior to the date of such application.
The Resolution entered into force on 6 May 2014.
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