Russian officials banned from registering foreign assets on third parties

Russian officials banned from registering foreign assets on third parties

Lawmakers have passed a law that makes the fight against corruption more effective.

The State Duma has adopted a law prohibiting its members, officials, and law enforcement officers to own foreign financial instruments, including through third parties or by proxy. This decision is supposed to contribute to the national anti-corruption plan, TASS reported.

Previously, the term "foreign financial instruments" had a blurry interpretation, allowing Russian officials, for instance, to have a stake in a foreign company. Or, as the legislators note, it could be read in such a way that persons holding certain positions were banned from owning a foreign joint-stock company, bot could still possess a foreign limited liability company.

Following these amendments, a number of federal laws will be revised to include explanations regarding "foreign financial instruments." This term will now be referred to in the meaning of the law banning officials from having accounts and deposits abroad.

As pointed by the sources of the media outlet, third parties could mean former spouses and other authorized persons, provided that the official or his close relative is actually the one who owns and profits from foreign assets.

The list of foreign assets interpreted as "foreign financial" is quite extensive. It includes securities or other similar financial instruments, stakes, participation shares in the authorized capital, as well as in the property of foreign companies; contracts which are "derivative financial instruments", if at least one of the parties to such an agreement is a non-resident; property trust, incorporated under the laws of a foreign state, whose founder or beneficiary is a person subject to the ban; loan agreements, if at least one of the parties to such an agreement is a foreign structure. Finally, it will be impossible to get a loan in a foreign bank located outside the territory of the Russian Federation.

In the case of the final adoption, the new rules will come into force in six months since the date of official publication.

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