Duma tightens rules on ‘undesirable’ organisations and transactions
The Russian State Duma approves amendments to legislation on individual transfers and CSO expenses
09.06.2021
Transfers from a number of countries will be monitored while intermediaries involved in financial transactions made by “undesirable” organisations may also be classed as “undesirable”.
This refers to amendments to Article 6 of the law on “Countering the laundering of the illegal proceeds of crime and financing of terrorism” and Article 3.1 of the law on “Measures to influence individuals involved in violations of basic human rights and freedoms and those of citizens of the Russian Federation”.
According to the amendments, the federal agency Rosfinmonitoring will be monitoring transfers from a number of countries to citizens and companies, as well as any transaction that involves the receipt or expenditure of funds by CSOs.
For “undesirable” foreign organisations, the text introduces a provision that prohibits the “participation in the activities of a foreign or international CSO outside the Russian Federation by Russian citizens, as well as stateless individuals who have permanent residence in Russia and Russian legal entities”.
An additional specific provision has also been introduced for classifying a foreign or international organisation as “undesirable”. This involves acting as an intermediary in financial or property transactions involving organisations already recognised as “undesirable” in the Russian Federation “for the purpose of carrying out activities of such an organisation that threaten the foundations of Russia’s constitutional system and the defence capability or security of the State”.
Changes have also been made to the rules for CSO reporting on the receipt and expenditure of funds. Prior to the approval of the legislation, the receipt and disbursement of foreign funds and assets by CSOs were subject to strict oversight if the transaction amount equalled or exceeded 100,000 roubles. Now, any “transaction” receipt or expenditure of funds and/or other assets by CSOs will be subject to statutory control.
The following will not be subject to mandatory controls: State bodies, corporations or companies, public law firms, consumer cooperatives, State (municipal) educational institutions implementing pre-school and general education programmes. Property owner associations, horticultural and non-commercial organisations and employers’ associations are also exempt.
The amendments are due to come into force on 1 October.
