The draft federal law On Introducing Amendments to Article 7 of the Federal Law On Accounting with Regard to the Keeping of Accounts by Nonprofit Organisations was drawn up by the Ministry of Economic Development of the Russian Federation.

Under Clause 3 of Article 7 of the Federal Law On Accounting, the head of an economic entity, with the exception of a crediting organisation, must entrust the chief accountant, or another officer of the same economic entity, with keeping the accounts, or sign a services contract for the keeping of the accounts. An exception has been introduced solely for the head of a small or medium-sized business. Under the Federal Law, the head of these types of businesses can keep the accounts himself.

Thus, nonprofit organisations are placed on the same footing as Big Business in respect of keeping accounts.

At present, however, the heads of more than 3,000 NGOs keep the accounts themselves, as they are unable to hire accountants or specialised organisations to do this. Furthermore, many nonprofit organisations are not engaged in financial and economic activities.

This draft law permits NGO heads to keep the accounts themselves. The exceptions are nonprofit organisations whose monetary or property receipts for the preceding year exceed three million roubles, law firms, law bureaus, legal aid bureaus, law chambers, notary associations, household cooperatives, housing construction cooperatives, consumer credit cooperatives, consumer agricultural cooperatives, micro-financial organisations, mutual insurance companies, public sector organisations, public corporations, public companies, political parties and their regional branches or other structural divisions, self-regulating organisations, and nonprofit organisations on the register of nonprofit organisations performing the functions of a foreign agent under Clause 10 of Article 13 of the Federal Law On Nonprofit Organisations.

The draft law will be considered at a Government meeting.