Bank of Russia to receive more opportunities to bring to justice persons controlling failed financial institutions
The procedures for bringing to justice controlling persons of bankrupt credit institutions, non-governmental pension funds and insurance companies are set to be improved. The draft law, which has passed today its second reading in the State Duma, also assumes lifting the so-called ‘corporate veil’ from real beneficiaries.
The draft law is likely to come into force from 1 July 2021. It expands the definition of controlling persons. From now on, this term will also include persons that can be defined as such in accordance with the international financial reporting standards recognised in the Russian Federation.
The Bank of Russia will maintain and publish lists of persons who control financial institutions on an ongoing basis. These lists will include information provided by the organisations themselves, as well as data on persons recognised by the Bank of Russia as controlling persons if they meet the established criteria.
The Bank of Russia will also be able to file petitions to court for bringing controlling persons to subsidiary liability along with its current authority to file petitions for bringing them to liability in the form of compensation for losses.
At the same time, before filing such petitions, the regulator will be able to apply for preliminary injunctive relief, including seizure of funds, securities and real estate of persons controlling a financial institution. That said, the size of such preliminary measures should not exceed the amount required to replenish the capital of the financial institution up to the level necessary and sufficient for it to comply with the established requirements. If the preliminary injunctive relief is granted, the court sets the term of up to 30 days within which the Bank of Russia should file a principal claim.