Strategic companies may have to report opening of foreign bank accounts

Strategic companies could be compelled to report to the Federal Financial Monitoring Service (Rosfinmonitoring) the opening of accounts with foreign banks, and there are also plans to impose fines of up to 60 million rubles ($1.8 million) for the opening by and for such companies of accounts with the banks which fail to comply with certain requirements.

Strategic companies could be compelled to report to the Federal Financial Monitoring Service (Rosfinmonitoring) the opening of accounts with foreign banks, and there are also plans to impose fines of up to 60 million rubles ($1.8 million) for the opening by and for such companies of accounts with the banks which fail to comply with certain requirements.

Such are the provisions contained in a bill titled, "On changes to the Federal Law 'On banks and banking' and other Russian statutory acts" proposed to the State Duma by the government and setting requirements for the banks in which strategic companies could be account holders.

Under the bill, companies of strategic importance for the Russian defense industry and security, as well as their subsidiaries and affiliated companies, shall notify a federal executive body authorized to take measures to counter legalization (laundering) of criminal proceeds and the financing of terrorism, of any account opening, any letter of credit covered (deposited) with foreign banks, signing of bank account agreements and bank deposit agreements with foreign banks, and acquisition of foreign banks' securities.

The notifying procedure will be established by the Russian government.

The bill also contains changes to the Code of Administrative Offenses imposing a liability for the breach of the Russian legislative requirements for mandatory control over transactions by companies of strategic importance for the national defense industry and security.

The opening of accounts with the banks which failed to comply with the requirements will entail a fine of 100,000 ($2,970) to one million rubles ($29,700) for officials and of ten million ($297,000) to 60 million rubles ($1.8 million) for companies. Such fines will be imposed both on the companies and the banks which opened an account.

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