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Thursday
Nov052015

Russia considers penalties for corporate money laundering

The Federal Financing Monitoring Service of the Russian Federation drafted a bill that would ratify the Council of Europe Warsaw Convention of 2005 on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism, which Russia signed in 2009.

If the draft of the act is approved and enacted, legal entities would be bear administrative liability for money laundering.

Under existing legislation, legal entities are liable only for the rendering of financial services, which are designated as financing terrorist attacks and related crimes. Offenses are punishable with a fine from 10 million to 60 million rubles ($155,000 to $935,000).

Individuals have criminal responsibility for money laundering under current law.

The draft bill is under review by the independent anti-corruption authorities. It can be accessed by the public here (in Russian).

The explanatory note to the bill says enacting the new law would lead to amendment of the Code of Administrative Offenses by establishing administrative liability of legal entities for money laundering.

The Federal Financing Monitoring Service previously drafted and submitted to the government for approval a related bill that would obligate Russian companies to report their beneficial owners to the state once a year.

That draft bill is under consideration and hasn't been sent yet to the State Duma.

Fines for failing to comply with the beneficial ownership reporting requirement would range from 100,000 to 500,000 rubles ($1,500 to $7,800), an amount unlikely to deter many non-compliant companies.

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Kristina Furle is a specialist in compliance based in Geneva.

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