Will offshores disclose their beneficiaries?

24.01.2012 24 January 2012 the final meeting of the working group chaired by the Russian Federation Minister of Justice Alexander Konovalov on the Russian Federation Civil Code reform was passed. Let’s recall that in autumn 2011 the Russian President Dmitry Medvedev ordered to provide a list of related amendments by 1 February 2012.

The main amendment that created numerous discussions among lawyers-theorists and practitioners is the requirement to disclose the beneficiaries of offshore companies operating in Russia. The "running" company will be considered the company with the existence of assets in Russia as well. Also, the project provides penalties for violation of this provision, if offshore doesn’t not disclose its owners, individuals acting on behalf of the company or authorized to represent it will have joint for liability for offshore obligations. Directly offshore company may be considered unfair and will have to return all received in contracts.

Expert’s opinion

“Changes related to disclosure of the beneficiaries of offshore companies operating in the territory of the Russian Federation, in our opinion, do not have any grounds. In fact, there is little that changes for the Russian state – if it knows it not the beneficiaries of such companies. But directly for investors such legal provision clearly become an obstacle for the normal functioning of business.
In any case, if these changes take the form of the law, it must be a clear procedure for implementing the mechanism, otherwise there will be serious confusion, which will affect all the Russian investment climate”.

On the basis: www.rg.ru

Andrianova Irina ( the leading lawyer of legal support and banking consulting department of Honest&Bright)