The draft law extends the provisions of the Federal Law on Counteracting the Legalisation of Proceeds from Crime (Money Laundering) and the Financing of Terrorism to the participation of foreign legal entities, including trusts, in the interest of identifying their beneficiary owners.
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The Draft Federal Law “On Amending the Federal Law on Counteracting the Legalisation of Proceeds from Crime (Money Laundering) and the Financing of Terrorism” (hereinafter, the draft law) was submitted by the Russian Financial Monitoring Service pursuant to the Government’s directive.
The draft law was developed in keeping with Financial Action Task Force (FATF) recommendations.
The draft law extends the provisions of the Federal Law on Counteracting the Legalisation of Proceeds from Crime (Money Laundering) and the Financing of Terrorism (hereinafter, Federal Law No 115-FZ) to the participation of foreign legal entities, including trusts, in order to identify their beneficiary owners.
Article 3 of Federal Law No 115-FZ is amended to include the concept of “an unincorporated foreign entity,” which refers to a form of collective investment and (or) property trust management, trust or suchlike formation established in accordance with the legislation of a foreign state (territory) that is not a legal entity under foreign law.
This concept was earlier introduced into the Federal Law on Amending Parts 1 and 2 of the Tax Code of the Russian Federation (regarding the taxation of profits of the controlled foreign companies and revenue of foreign organisations).
The draft law also expands the concept of “client” contained in Article 3 of Federal Law No 115-FZ, which will now include an unincorporated foreign entity.
In keeping with Article 7, Para 1, Item 2 of Federal Law No 115-FZ, organisations conducting operations with monetary resources or other property are obligated to take relevant and appropriate steps to identify the beneficiary owners of their clients. The amendments proposed in the draft law will make it binding on such organisations to take corresponding measures to identify the beneficiary owners of unincorporated foreign entities.
Amendments to Article 7, Para 1 of Federal Law No 115-FZ establish the requisite list of data disclosing information about a client/unincorporated foreign entity .
The draft law was reviewed and approved at a Government meeting on 9 July 2015.