Upper house of Russian parliament approves capital legalisation law

The Federation Council [upper house of the Russian parliament - TASS] approved the capital legalization law at its plenary session on Wednesday.

According to the text of the draft law, legalization of overseas capitals in the territory of Russia will be implemented through submission of a property and deposits declaration. It will be possible to declare the property (real estate, transportation means, securities, equity interests and capital units in charter (share) capitals of Russian and foreign companies), accounts and deposits with banks and controlled foreign companies owned by the declarer. Furthermore, individuals can formalize the ownership title to property earlier transferred to nominees. The declaration should be submitted to the tax authority. It will be possible to submit the declaration from July 1 to December 31, 2015.

A critical provision in the law is the exhaustive list of articles in the Russian Criminal Code with the one-time release from liability guaranteed for declarers. They will be exempted from criminal liability under articles covering evasion of repatriation of funds in foreign or Russian currency, evasion of customs duty payment, evasion of individual or corporate taxes and (or) charges payment, failure to discharge tax agent’s obligations, concealment of funds or property, illegal establishment (reorganization) of a legal entity and illegal use of documents for establishment (reorganization) of a legal entity.

The above list was agreed with the management of the international Financial Action Task Force on Money Laundering.

The declaration will be presented to the tax authorities and kept confidential. The content of such a declaration cannot be transferred to government agencies and cannot be the basis to open a criminal case or serve as evidence in the criminal case.

The draft law is expected to be passed in three readings and signed by the Russian president by June 15, Russia’s Deputy Finance Minister Sergei Shatalov said earlier.