23.03.2022 Александр Сологуб

News digest (March 23)

Dear colleagues and partners! We present the new overview of changes in the legislation of the Russian Federation…

Measures to combat economic crime

The State Duma rejected the draft law that provided for amendments to the Criminal Code of the Russian Federation and the Criminal Procedure Codes of the Russian Federation.

The draft law proposed to introduce new types of crimes into the Criminal Code of the Russian Federation: forgery of accounting (taxation) documents, accounting (tax) reporting; fraud in tax matters. It was also supposed to supplement the elements of crimes under Articles 173.1 (illegal formation of the legal entity), 173.2 (illegal use of documents for formation of the legal entity), with indication of violations not only in the legal entities’ activity, but also in that of individual entrepreneurs.

Since the draft law was rejected on formal grounds (the procedure for its submission to the State duma to be violated), we assume that it may be re-submitted in coming days.

Draft Law № 89802-8 “On Amendments to the Criminal Code of the Russian Federation and the Code of Criminal Procedure of the Russian Federation”, rejected on March 23, 2022.

Civil law relations during the period of unfriendly actions by foreign states

The draft law has been submitted to the State Duma suggesting amendments to Federal Law No. 52-FZ, dated 30.11.1994, “On Enactment of Part One of the Civil Code of the Russian Federation”. So, it is proposed to introduce Article 23 into the Federal Law on the following:

  • obligations of individuals and legal entities are terminated in full or partly if their fulfillment becomes impossible because of restrictive measures of foreign states;
  • these individuals and legal entities will not be liable if they prove impossibility of fulfilling their obligations;
  • if the Party fails to fulfill its obligations, the other Party has the right to withdraw from the contract;
  • by agreement of the Parties, security payments may consist of shares, bonds, other securities or things defined by generic characteristics.

Moreover, the draft law proposes to restrict the right to unilaterally amend or terminate agreements related to exercising and protecting rights to intellectual property and means of individualization, and extend the validity of these agreements for the period of unfriendly actions by foreign states.

Draft Law № 92282-8 “On Amendments to Certain Legislative Documents of the Russian Federation”.

Advertising prohibited by Law

On March 21, 2022, the Tverskoy Court of Moscow recognized the American company Meta Platforms, lnc. as an extremist organization.

Comments: When the Court’s decision comes into force (taking into account possible appeal), it is advisable to remove Facebook, Instagram, and any other mentions of these platforms from companies’ official websites.

Controlled Foreign Companies (CFC)

In the third reading, the State Duma adopted the draft law amending the tax legislation. We consider it necessary to highlight the following changes:

  • application of the investment tax deduction by one of the Parties is no ground for recognition of any transaction made in 2022-2024 as a controlled one;
  • transactions with foreign counterparties will be recognized as controlled if the overall amount of income from such transactions exceeds 120 million rubles per calendar year;
  • penalties are not applied if the controlling person of the foreign company is unable to confirm the profit (loss) of the company in 2020-2021, when filing the CFC notification;
  • taxpayers are exempt from the 40% fine, when concluding in 2022-2023 controlled transactions that do not meet market conditions.

Draft Law No. 84984-8 “On Amendments to Parts One and Two of the Tax Code of the Russian Federation and Article 2 of the Federal Law “On Amendments to Part Two of the Tax Code of the Russian Federation”, submitted to the Federation Council on March 23, 2022.

Russia’s withdrawal from the World Trade Organization (WTO)

The draft law suggesting Russia’s withdrawal from the WTO has been submitted to the State Duma.

Draft Law № 91393-8 “On Denunciation by the Russian Federation of the Protocol on Accession of the Russian Federation to the Marrakesh Agreement Establishing the World Trade Organization, and invalidation of the Federal Law № 126-FZ dated July 21, 2012 “On Ratification of the Protocol on Accession of the Russian Federation to the Marrakesh Agreement Establishing the World Trade Organization on April 15, 1994″.