Putin signed a law allowing to check foreign deposits of the public officials

The New Amendment to the Dutch Trust Offices Supervision Act and the providing of domicile plus
The New Amendment to the Dutch Trust Offices Supervision Act and the providing of domicile plus
January 28, 2019
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Putin signed a law allowing to check foreign deposits of the public officials

Russian President Vladimir Putin has signed a law in accordance to which the Prosecutor General’s Office can request the Central Bank of Russia to provide information on the prohibited foreign bank accounts of all Russian residents.

At this point the prohibition applies to high-level officials, public servants, deputies and senators. These affected persons are prohibited from opening foreign bank accounts and depositing money in foreign banks, as well as using foreign financial instruments, including securities.

As RIA Novosti, the Russian news agency, informs, the mentioned law shall enter into force six months after the date of its promulgation.

According to the explanatory note, the Prosecutor General’s Office shall interact with the competent authorities of foreign states while performing the checks.

In the opinion of Vyacheslav Volodin, the Chairman of the State Duma, the new law will allow to oversee the compliance of public officials with prohibition from having accounts and making deposits outside Russia in a more effective way.

The Decree of the President of the Russian Federation can create some extra work for Dutch law firms. According to Sergey Litvin, a compliance expert, the tracing of foreign bank accounts of Russian public officials will be extremely difficult without assistance of private law firms.

Sergey says that it is often unclear where the above mentioned hidden money and assets are being kept and who is the ultimate beneficial owner (UBO) in the complicated ownership structure. One should be able to unravel the veil in order to receive money. And that is where the Central Bank of Russia and/or other public authorities can use assistance of Dutch lawyers in order to disclose the UBO and locate the funds obtained illegally by Russian public officials and entrepreneurs.