RUSSIA BACKGROUND CHECK

We are providing comprehensive background verification Services which are providing you a safeguard with risk management consultancy throughout the Russia with strong network of professional, on-ground background screeners. We are rendering our compliance pertaining to our Services of checking the veracity of the information registered under various rules and regulations and these entities can record the authentic results of the background check.

Our ultimate goal is to find the facts behind the present proposal of association to take wise decision. We are providing you the background investigation Services in all over Russia which is also including Moscow, Saint Petersburg, Novosibirsk, Yekaterinburg, Nizhniy Novgorod, Samara, Omsk, Kazan, Rostov-on-Don, Chelyabinsk, Ufa, Volgograd, Perm, Krasnoyarsk, Saratov etc. Kindly contact us on our email: info@backcheckgroup.com to generate your query and we will revert you in stipulated time accordingly. Due to the sensitive nature of the Services all queries will dealt under strict confidentiality and under the influence of extreme ethical consideration.

GENERAL INFORMATION

GDP USD 1,861 bn (World ranking 10, World Bank 2014)
Population 143.82 million (World ranking 9, World Bank 2014)
Form of state Federation
Head of government President Vladimir Vladimirovich PUTIN
Next elections 2016, legisative

 

CURRENT LOCAL TIME

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PRODUCTS IN RUSSIA

Data Protection

Contribution Details

Michael Malloy

Partner

Pavel Arievich

Legal Director

Ekaterina Golodinkina

Associate

Maria Biryukova

Associate

Law

Fundamental provisions of data protection law can be found in the Strasbourg Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data (“Convention”) ratified by Russia in 2006 and the Russian Constitution establishing the right to privacy of each individual (articles. 23 and 24). There is also specific legislation, including the Data Protection Act No. 152 FZ dated 27 July 2006 (“DPA”) and various regulatory Acts adopted to implement the DPA as well as the Information, Information Technologies and Information Protection Act No. 149 FZ dated 27 July 2006 establishing basic rules as to the information in general and its protection. In addition, the Russian Labour Code contains provisions on the protection of employees’ personal data (Part XIV). Other laws may also contain data protection provisions which implement the provisions of DPA in relation to specific areas of state services or industries

Definition of Personal Data

Personal data is any information that relates directly or indirectly to the specific or defined physical person (the data subject).

Definition of Sensitive Personal Data

Sensitive personal data is defined as special categories of personal data in Russian legislation. Such special categories include data related to race, national identity, political opinions, religious and philosophical beliefs, health state, intimacies and biometrical data.

National Data Protection Authority

Federal Service for Supervision of Communications, information Technologies and Mass Media or, in short, roscomnadzor (“agency”).

Registration

The Agency is in charge of maintaining the Registry of data controllers.

Any data controller shall notify the Agency in writing about its intention to process personal data, unless one of the following exclusions applies:

  • The personal data is data about employees;
  • The personal data was received in connection with a contract entered into with the data subject, provided that such data is not transferred without the consent of the data subject, but used only for the performance of the contract and entering into contracts with the data subject;
  •  The personal data is the data about members of a public or religious association and processed by such an organisation for lawful purposes in accordance with their charter documents, provided that such data is not transferred without the consent of the data subjects;
  • The personal data was made publicly accessible data by the data subject;
  • The personal data includes the surname, name and father’s name only;
  • The personal data is necessary in order to give single access to the premises of the data controller or for other similar purposes;
  • The personal data is included in state automated information systems or state information systems created for the protection of state security and public order;
  • The personal data is processed in accordance with the law without any use of automatic devices; or
  • The personal data is processed in accordance with transportation security legislation in purposes of procurement of stable and secure transport complex and personal, community and state interests protection.
  • The notification letter shall contain information about:
  • The full name and address of the data controller;
    The categories of personal data processed;
  • The purpose of the processing;
  • The categories of the subjects whose personal data is processed;
  • The legal grounds for processing;
  • The types of processing of the personal data;
  • The measures of protection of personal data;
  • Name and contacts of physical person or legal entity responsible for personal data processing;
  • The commencement date;
  • Information on occurrence of cross border transfer of personal data;
  • The term of processing or the conditions for termination of processing the personal data; and
  • Information on personal data security provision.

Data Protection Officers

If the data controller is a legal entity it shall appoint a data protection officer. Such an appointment is considered to be a personal data protection measure. The data protection officer controls the data controller and its employees regarding the data protection issues, informs them off statutory requirements and organizes receiving and processing of communications from data subjects.

Collection and Processing

Data controllers may collect and process personal data where any of the following conditions are met:

  • The data subject consents;
  • The processing is required by a federal law or under an international treaty;
  • The processing is required for administration of justice, execution of the court order or any other statements of public officers to be executed;
  • The processing is required for provision of state or municipal service;
  • The data controller needs to process the data to perform or conclude a contract to which the data subject is a party or beneficiary party or guarantor;
  • The processing is carried out for statistical or scientific purposes (except it is also for advertising purposes) provided that it is impersonalized;
  • The processing protects the data controller’s vital interests and it is impossible to have the data subject’s consent;
  • The processing is required for execution of statutory controller’s or third parties’ rights or for purposes important for community provided data subject’s rights are not in breach;
  • Personal data that is processed was publicly made accessible by the data subject or upon his or her request;
  • The processing is carried out by a journalist or mass media as a part of its professional activities or for the purposes of scientific, literary or other creative activities, except if the processing would damage the data subject’s rights and freedoms; or
  • Personal data that is processed is subject to publication or mandatory disclosure under law. As a general rule, consent may be given in any form, but it is the data controller’s obligation to provide proof that he has the data subject’s consent.
  • In the following cases the DPA requires that the data subject’s consent should be in writing:
  • Where the personal data is collected to be included within publicly accessible sources;
  • Where sensitive or biometrical data is processed;
  • In the case of the cross border transfer of personal data, where the recipient state does not provide adequate protection of personal data; or
  • Where a legally binding decision is made solely on the grounds of the automated processing of personal data.
  • Consent is deemed to have been given in writing where it is signed by hand or given in an electronic form and signed by an electronic signature.
  • Consent may be revoked.
  • Consent in writing must contain the following information:
  • The identity of the data subject, his/her address and passport details and identity of the subject
  • Data representative (if any);
  • The identity and address of the data controller or the entity that processes personal data on behalf of the data controller (if any);
  • The purpose of the processing;
  • The list of personal data that may be collected and processed;
  • The types of processing that are authorized;
  • The term for which the consent, remains valid and way of revocation; and
  • The data subject’s signature.

The data controller shall ensure the confidentiality of personal data. The data controller and other persons who have access to the personal data, shall not disclose any information to a third party without a prior consent of the data subject.

Transfer

Prior to a transfer of personal data out of Russia, the data controller must ensure that the recipient state provides adequate protection of personal data. The fact that the recipient state ratified the Convention is sufficient grounds to deem that the state provides adequate protection of personal data for the purposes of the DPA.

Where there is no adequate protection of personal data, a cross border transfer is permitted if one of the following conditions is met:

  • The data subject consents;
  • The transfer is provided for under an international treaty to which Russia is a signatory;
  • The transfer is necessary in accordance with federal laws for protection of the Constitution, state defense, security and transport system;
  • For the purposes of performance of a contract to which the data subject is party; and
  • The transfer protects the data subject’s vital interests where it is not possible to get the written consent of the data subject.

Security

Data controllers must take appropriate technical and organisational measures against unauthorized or unlawful processing and against accidental loss, changing, blocking or destruction of, or damage to, personal data.

There is a recent special regulation as to the measures that the data controller should undertake to ensure security of personal data, data systems, carriers of biometrical information and technologies.

Breach Notification

There is no mandatory requirement to report data security breaches or losses to the Agency or to data subjects.

Enforcement

In Russia, the Agency is responsible for the enforcement of the DPA. The Agency is entitled to:

  • Carry out checks;
  • Consider complaints from data subjects;
  • Require the submission of necessary information about personal data processing by the data Controller;
  • Require the undertaking of certain actions according to the law by the data processor including discontinuance of the processing of personal data;
  • File court actions;
  • Initiate criminal cases; and
  • Impose administrative liability.

If the Agency becomes aware that a data controller is in violation of the law, he can serve an enforcement notice requiring the data controller to rectify the position.

A data controller can face civil, administrative or criminal liability if there is a violation of personal data law. Officers of the data controller responsible for the offence may face disciplinary action.

Usually, in the case of violation of data protection law, the Agency will serve an enforcement notice requiring the position to be rectified and may also impose an administrative penalty and/or recommend imposing disciplinary action on the officers of the data controller who are responsible for the offence.

The maximum administrative penalty that can be imposed, as at the date of this review, is EUR 10,000. Lately, there has been much discussion at about dramatically increasing the administrative penalty.

Electronic Marketing

Electronic marketing activities are subject to limitations set by the Russian Law on Advertising No. 38-FZ dated 13 March 2006 (“AA”), under which the distribution of advertising through telecommunications networks, in particular, through the use of telephone, facsimile and mobile telephone communications, is allowed only subject to preliminary consent of a subscriber or addressee to receive advertising.

Advertising is presumed to be distributed without preliminary consent of the subscriber or addressee unless the advertising distributor can prove that such consent was obtained. The advertising distributor is obliged immediately to stop distribution of advertising to the address of the person who made such a demand.

Online Privacy (Including Cookies and Location Data)

Russian law does not specifically regulate online privacy. The definition of personal data under the DPA is rather broad and there are views that information on number, length of visits of particular web-sites and IP address (in combination with other data allowing the user to be identified) could be considered personal data.

(Adopted by the State Duma on May 24, 1996, Adopted by the Federation Council on June 5, 1996.)

Special Part

Section VIII. Crimes in the Sphere of Economics

Chapter 22. Crimes in the Sphere of Economic Activity

Article 174. Legalization of Money (Money-laundering) or of Any Other Assets Acquired Illegally

1. The completion of financial transactions and other deals with money or any other assets acquired in an obviously illegal way, and also the use of said money for business or any other economic activity, shall be punishable by a fine in the amount of 500 to 700 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of five to seven months, or by deprivation of liberty for a term of up to four years, with a fine in the amount of 100 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of one month, or without any fine.

2. The same deed committed:

a) by a group of persons in a preliminary conspiracy;

b) repeatedly;

c) by a person through his official position;

Shall be punishable by deprivation of liberty for a term of four to eight years, with confiscation of property or without such confiscation.

3. The acts envisaged by the first or second part of this Article, and committed by an organized group or on a large scale, shall be punishable by deprivation of liberty for a term of seven to ten years, with confiscation of property or without such confiscation.

Article 175. Acquisition or Sale of Property, Knowingly Obtained in a Criminal Manner

1. Acquisition or sale of property, knowingly obtained in a criminal manner, shall be punishable by a fine in the amount of 50 to 100 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of up to one month, or by compulsory works for a term of 180 to 240 hours, or by corrective labour for a term of one year to two years, or by deprivation of liberty for a term of up to two years.

2. The same acts committed:

a) by a group of persons in a preliminary conspiracy;

b) in relation to a car or any other property of large value;

c) by a person who was earlier tried for stealing, extortion, or acquisition or sale of property, knowingly obtained in a criminal manner, shall be punishable by restraint of liberty for a term of up to three years, or by arrest for a term of four to six years, or by deprivation of liberty for a term of up to five years, with a fine in the amount of 50 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of up to one month.

3. The acts stipulated by the first or second part of this Article, and committed by an organized group or a person using his official position, shall be punishable by deprivation of liberty for a term of three to seven years, with a fine in the amount of 100 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of up to one month.

Article 176. Illegal Receipt of Credits

1. The receipt by an individual businessman or an organization manager of a credit or of favorable credit terms by means of knowingly submitting to a bank or any other creditor false information about the economic position or the financial condition of the individual businessman or organization, if this act has caused large-scale damage, shall be punishable by a fine in the amount of 200 to 500 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of two to five months, or arrest for a term of four to six months, or by deprivation of liberty for a term of two to five years.

2. Illegal receipt of a state special-purpose credits, and also its use not for its direct designation, if these deeds have caused large-scale damage to individuals, organizations, or the State, shall be punishable by a fine in the amount of 500 to 700 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of five to seven months, or by deprivation of liberty for a term of two to five years.Article 184. Bribery of Participants and Organizers of Professional Sports and Entertainment Profit-making Competitions

1. Bribery of athletes, referees, coaches, team leaders, and other participants or organizers of professional sport competitions, and also organizers or jurymen of profit-making entertainment competitions, with the purpose of exerting influence on the results of these competitions or contests, shall be punishable by compulsory works for a term of 120 to 180 hours, or by corrective labour for a term of six to twelve months, or by arrest for a term of up to three months.

2. The same deed committed repeatedly, or by an organized group, shall be punishable by deprivation of liberty for a term of up to five years.

3. Illegal receipt by athletes of money, securities, or any other property transferred to them for the purpose of exerting influence on the results of said competitions, and also the illegal use by athletes of property-related services granted to them for the same purposes, shall be punishable by a fine in the amount of 200 to 500 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of two to five months, or by disqualification to hold specified offices or to engage in specified activities for a term up to three years, or by arrest for a term of four to six months.

4. Illegal receipt of money, securities, or any other property, illegal use of property-related services by referees, coaches, team leaders, and other participants or organizers of professional sports competitions, and also by organizers or jurymen of profit-making entertainment competitions for the purposes referred to in the third part of this Article, shall be punishable by deprivation of liberty for a term of up to two years, with disqualification to hold specified offices or to engage in specified activities for a term of up to three years.Article 193. Non-return of Funds in Foreign Currency from Abroad Non-return from abroad of funds in foreign currency by the manager of an organization, required to be transferred without fail to accounts in the authorized banks of the Russian Federation in accordance with its laws, shall be punishable by deprivation of liberty for a term of up to three years.

Note: The act envisaged by this Article shall be deemed to be committed on a large scale if the sum of the non-returned funds in foreign currency exceeds 10,000 minimum wages

Chapter 23. Crimes Against the Interests of Service in Profit-making and Other Organizations

Article 201. Abuse of Authority

1. The use of authority by a person discharging managerial functions

in a profit-making or any other organization in defiance of the lawful interests of this organization and for the purpose of deriving benefits and advantages for himself or for other persons or for the purpose of inflicting harm on other persons, if this deed has involved the infliction of substantial damage on the rights and lawful interests of individuals or organizations or on the legally-protected interests of the society or the State, shall be punishable by a fine in the amount of 200 to 500 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of two to five months, or by compulsory works for a term of 180 to 240 hours, or by corrective labour for a term of one to two years, or by arrest for a term of three to six months, or by deprivation of liberty for a term of up to three years.

2. The same deed, which has involved grave consequences, shall be punishable by a fine in the amount of 500 to 1,000 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of five to twelve months, or by arrest for a term of four to six months, or by deprivation of liberty for a term of up to five years.

Note.

1. A person who discharges on a permanent or temporary basis or on the basis of a special power the organizational and regulatory or administrative and economic duties in a profit-making organization, regardless of its form of property, or in a non-profit-making organization that is not a state agency, or a local self-government body, a governmental municipal institution, is regarded by the Articles of this Chapter as a person discharging managerial functions in a profit-making or any other organization.

2. If a deed stipulated by this Article or by other Articles of this Chapter has caused harm to the interests of an exclusively profit-making organization that is not a governmental or municipal enterprise, then prosecution shall be instituted upon the application of this organization, or with its consent.

3. If a deed envisaged by this Article or by other Articles of this Chapter has caused harm to the interests of other organizations, or to the interests of individuals, society, or the State, then prosecution shall be instituted on general grounds.

Article 202. Abuse of Authority by Private Notaries and Auditors

1. The use by a private notary or a private auditor of his authority, contrary to his duty and for the purpose of deriving benefits and advantages for himself or for other persons, or of inflicting harm on other persons, if this deed has caused substantial damage to the rights and lawful interests of individuals or organizations or to the legally-protected interests of society and the State, shall be punishable by a fine in the amount of 500 to 800 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of five to eight months, or by arrest for a term of three to six months, or by deprivation of liberty for a term of up to three years, with disqualification to hold specified offices or to engage in specified activities for a term of up to three years.

2. The same act, committed in respect of an obvious minor or a legally incapable person, or commited repeatedly, shall be punishable by a fine in the amount of 700 to 1,000 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of seven to twelve months, or by arrest for a four to six months, or by deprivation of liberty for a term of up to five years, with disqualification to hold specified offices or to engage in specified activities for a term of up to three years.

Article 203. Exceeding of Authority by Staff Members of Security of Detective Services

1. The exceeding of his licensed authority by a manager or an officer of a security or detective service, in defiance of his duty , if this deed has been committed with the use of violence or with the threat of its application, shall be punishable by restraint of liberty for a term of up to three years, or by arrest for a term of six months, or by deprivation of liberty for a term of up to five years, with disqualification to hold specified offices or to engage in specified activities for a term of up to three years, or without such disqualification.

2. The same act, which has involved grave consequences, shall be punishable by deprivation of liberty for a term of four to eight years, with disqualification to hold specified offices or to engage in specified activities for a term of up to three years.

Article 204. Bribery in a Profit-making Organization

1. The illegal transfer of money, securities, or any other assets to a person who discharges the managerial functions in a profit-making or any other organization, and likewise the unlawful rendering of property-related services to him for the commission of actions (inaction) in the interests of the giver, in connection with the official position held by this person, shall be punishable by a fine in the amount of 200 to 500 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of two to five months, or by disqualification to hold specified offices or to engage in specified activities for a term of up to two years, or by restraint of liberty for a term of up to two years, or by deprivation of liberty for a term of up to two years.

2. The same acts, committed repeatedly by a group of persons in a preliminary conspiracy, or by an organized group, shall be punishable by a fine in the amount of 500 to 800 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of five to eight months, or by restraint of liberty for a term of up to three years, or by arrest for a term of three to six months, or by deprivation of liberty for a term of up to four years.

3. The illegal receipt of money, securities, or any other assets by a person who discharges the managerial functions in a profit-making or any other organization, and likewise the illegal use of property-related services for the commission of actions (inaction) in the interests of the giver, in connection with the official position held by this person, shall be punishable by afine in the amount of 500 to 800 minimum wages,

or in the amount of the wage or salary, or any other income of the convicted person for a period of five to eight months, or by disqualification to hold specified offices or to engage in specified activities for a term of up to two years, or by restraint of liberty for a term of up to three years, or by deprivation of liberty for a term of up to three years.

4. Acts provided for by the third part of this Article, if they are:

a) committed by a group of persons in a preliminary conspiracy, or by an organized group;

b) committed repeatedly;

c) attended by extortion shall be punishable by a fine in the amount of 700 to 1,000 minimum wages, or in the amount of the wage or salary, or any other income of the convicted person for a period of seven to twelve months, or by disqualification to hold specified offices or to engage in specified activities for a term of up to five years, or by deprivation of liberty for a term of up to five years.

Note: A person who has committed acts stipulated in the first or second part of this Article, shall be relieved from criminal responsibility, if he has been subject to extortion or if this person has voluntarily informed the body that has the right to institute proceedings in a criminal case about bribery.

Police Background Check Procedures

Who can apply?

• Russian nationals and resident foreign nationals can apply.
• Authorised third party representative may apply, with the power of attorney.
• Prospective UK employers cannot apply

Where?

• Local applications must be made in person at the MIAC (Main Information Analysis Centre) within the Ministry of Affairs, or through regional Directorate of Internal Affairs office (DIA).
• Overseas applicants a re advised to apply through the Russian embassy in London. Alternatively, they may apply in person or appoint an authorised representative at local branch of DIA office or MIAC.

What must the applicant supply?

Local applicants:
• Fill in online form
• Present original passport
Overseas applicants:
• Fill in online form
• Name
• Date and place of birth
• Address of Russian residence
• Reason for request
• Original passport

The embassy will contact the applicant when the certificate is ready to be collected. Authorised third party representative must present document reflecting power of attorney.

What are the costs/turnaround?

Local applicants:
• Enquire at office.
Overseas applicant:
• Consular fee of GBP £30
• Turnaround of 2-6 months

Contact Details

• Addresses for DIA offices across the country can be found here: http://www.mvd.ru/contacts/
• Local applicants can download the form here:
http://rusemb.org.uk/data/files/Zayavl-COC.doc (Russian)
• Overseas applicants can download the form here: http://rusemb.org.uk/nocriminal/ (Form must be filled in Russian)
MIAC Head Office in Moscow:
MIAC
Ulitsa Novocheremushkinskaya 67
Moscow 117418
Russia
Tel: (007) 495 332 31 77
Website: www.mvd.ru
Russian Embassy in London:
Embassy of Russian Federation
6/7 Kensington Palace Gardens
London
W8 4QP
Tel: (+44) 020 7229 6412
Email: office@rusemblon.org
Website: www.rusemblon.org

What does the certificate look like?

• Issued in Russian only.
• Notarisation, apostillisation and translation services provided by embassy.
• Black and white A4 landscape document
• Address of issuing body in top right hand corner
• Unique registration number
• Encrypted 14 character
• If criminal record is found:
• Type of conviction
• Date and place of conviction (name of court)
• Period and place of imprisonment
• Date of discharge

Know Your Customer (KYC) Rules

The current Russian administration aspires to establish Moscow as one of the key international financial centers.

However, despite significant progress in improving the legal and enforcement framework, the prevalence of money laundering (ML) in Russia, where there is a high level of organized crime and corruption, stands out as one of the major obstacles to this goal.

Domestic sources of laundered funds include organized crime, evasion of tax and customs duties, fraud, public corruption, and smuggling operations.

Criminal elements from Russia and neighboring countries continue to use Russia‘s financial system and foreign legal entities to launder money. Criminals invest and launder their proceeds in securities instruments, real estate, and luxury consumer goods.

Despite making progress in combating financial crimes, Russia remains vulnerable to such activities.

Russia‘s risk factors include the many large-scale financial transactions associated with its vast natural resources; the state‘s major role in the economy; the country‘s porous borders and its role as a geographic gateway between Europe and Asia; and chronic under-funding and lack of capacity of regulatory and law enforcement agencies. These factors help create an environment in which corruption and financial crimes flourish.

Russia is a member of the Financial Action Task Force (FATF) and two FATF-style regional bodies: the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) and the Eurasian Group on Combating Money Laundering and the Financing of Terrorism (EAG).

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs:

A PEP is an abbreviation for Politically Exposed Person, a term that describes a person who has been entrusted with a prominent public function, or an individual who is closely related to such a person. The terms PEP, Politically Exposed Person and Senior Foreign Political Figure are often used interchangeably.

    • Foreign PEP: YES
    • Domestic PEP: YES

Russia – KYC covered entities

The following is a list of Know Your Customer entities covered by Russian Law:

    • Banks & Credit unions
    • Russian Post
    • Payment acceptance and money transfer services
    • Securities, insurance and leasing companies
    • Investment and non-state pension funds
    • Casinos and gambling outlets
    • Dealers in precious metals and stones
    • Real estate agents
    • Pawnshops
    • Microfinance organizations
    • Consumer credit cooperatives
    • Persons providing legal or accounting services

Russia – Suspicious Transaction Reporting (STR) Requirements:

Number of STRs received and time frame: 2,508,718 in the first half of 2011

Number of CTRs received and time frame: 1,242,459 in the first half of 2011

The following is a list of STR covered entities covered by Russian Law:

    • Banks & Credit unions
    • Securities markets
    • Investment and pension funds
    • Russian Post
    • Insurance sector
    • Leasing companies
    • Dealers in precious metals and stones
    • Casinos
    • Real estate agents
    • Lawyers, notaries, and persons providing legal or accounting services
    • Microfinance organizations
    • Consumer credit cooperatives

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 141 in the first half of 2011
Convictions: 113 in the first half of 2011

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Through aggressive enactment and implementation of comprehensive anti-money laundering (AML) legislation, Russia has established a legal and enforcement framework to deal with money laundering and terrorist financing. In 2010, Russia adopted amendments to expand AML coverage to subsidiary branches, representative offices, and affiliates of financial institutions located outside the Russian Federation; make microfinance and short-term loans, which have grown significantly in Russia, subject to AML laws; and clarify definitions critical to enforcement.

Amendments to the Code of Administrative Infringements improve regulatory oversight related to AML legislation and broaden the authority of Rosfinmonitoring, Russia‘s financial intelligence unit (FIU), and the Central Bank of Russia to conduct investigations of ML violations.

AML law now makes it clear that identification is defined as the entirety of measures whereby the information about clients, their representatives and beneficiaries is established and the reliability of such information is confirmed. Order 59, issued by Rosfinmonitoring on February 17, 2011, requires customer due diligence where there are doubts about the veracity of previous identification.

While the Russian Federation has made steady progress overall in its AML/CFT implementation, some important issues remain. Russia needs to make sure that obligated entities are able to report every type of suspicious activity related to money laundering. Though the overall STR regime is working well in practice, presently there is no legal basis for reporting attempted occasional transactions. Furthermore, implementing regulations have not been issued for critical components of the 2010 amendments, such as monitoring of affiliates‘ operations outside the Russian Federation.

For years Russian banks did not properly understand the concept of beneficial owner, partly due to a lack of clarity in the law. While the term has now been better defined, private sector entities are still incorporating clarified definitions of beneficial owner into their AML practices.

While most international standards are applied in Russian legislation, several important discrepancies remain between the standards of international and local domestic banks. Some identification requirements are absent. Also, Russian AML law lacks more specific requirements pertaining to sanctions screening (like frequency of updates, screening of fields of transactions, transliterations, requirement for certain logic, etc). In addition, banks still are not able to refuse to carry out a transaction or to open an account when they have strong AML concerns regarding the transaction or prospective clients. Further attempts should be made to bring the AML efforts of all Russian banks to a more sophisticated level, including continued enhancement of the compliance training and certification process.

Current Russian law does not include insider trading as a predicate offense to money laundering. To address this deficiency, Law 224-FZ was adopted by the Russian Parliament in July 2010. Included in this law is an amendment to the Criminal Code to criminalize the deliberate use of insider information when carrying out transactions and giving recommendations to third persons; however, this provision will not take effect until 2014.

Russia also has made some recent progress regarding new technologies and non-face-to-face financial transactions. On June 27, 2011, Federal Laws No. 161-FZ and No. 162-FZ ―On the National Payment System‖ and its amendments were adopted, which among other issues address the regulation of new technologies used by financial institutions. Transactions under 15,000 rubles (approximately $500) are not subject to client identification requirements. Thus non-bank payment service providers can act as payment agents or bank payment agents and are exempt from AML/CFT identification requirements provided the payment amount is 15,000 rubles (approximately $500) or less. In other words, money can be remitted under this amount without opening a bank account, and non-face-to-face electronic payment facilities are permitted, provided the monthly sum total of remittances does not exceed 40,000 rubles (approximately $1,650). According to Rosfinmonitoring Order No. 103, which applies only to non-credit institutions, such client transactions executed remotely by payment service providers, as well as the issuance of orders to execute transactions requiring no personal contact with an institution, constitute a basis for submitting an STR to the FIU.

Although Russia continues to establish and develop anti-corruption measures, corruption continues to be a problem. The Government of Russia should continue to aggressively pursue corruption; similarly, it should continue to pursue increased transparency in the financial sector and ensure that domestic PEPs are monitored with the same scrutiny as foreign PEPs.

Russia hosts and funds the Secretariat of the EAG, and through this effort has contributed to improving the region‘s AML/CFT capacity. Russia should continue to play a leadership role through sustained involvement in regional and international bodies focusing on AML regime implementation.

Risk

Sovereign risk

Public debt is low as a share of GDP and reserves still relatively large as a share of the financing requirement. However, international sanctions, as well as a fall in the rouble and in oil prices, have put pressure on the balance of payments and increased the risk of a banking crisis. A revised budget plan for 2015 targets a deficit of 3.8%a considerable widening from a shortfall of just 0.5% of GDP in 2014. This will contribute to a large fall in foreign reserves this year.

Banking sector risk

Banks are under strain as a result of the weakening rouble, international sanctions, high interest rates and declining asset quality. The government was forced to recapitalise a number of leading banks in December and January.

Political risk

The slowdown in the economy and government spending cuts could lead to isolated public protests. However, the recession will also increase the elite’s dependence on state support. We continue to believe that the risk of regime change is low.

Economic structure risk

The economy remains dependent on energy exports and the non-oil fiscal deficit is large. Much of the capital stock is obsolete and demographics are poor. The difficult business climate will limit productivity growth and investment.

Travel Risk

Security

The decision to travel is your responsibility. You are also responsible for your personal safety abroad. The Government of Canada takes the safety and security of Canadians abroad very seriously and provides credible and timely information in its Travel Advice. In the event of a crisis situation that requires evacuation, the Government of Canada’s policy is to provide safe transportation to the closest safe location. The Government of Canada will assist you in leaving a country or a region as a last resort, when all means of commercial or personal transportation have been exhausted. This service is provided on a cost-recovery basis. Onward travel is at your personal expense. Situations vary from one location to another, and there may be constraints on government resources that will limit the ability of the Government of Canada to provide assistance, particularly in countries or regions where the potential for violent conflict or political instability is high.

Rostov Oblast

The Russian government has declared a state of emergency in Rostov Oblast, where it maintains a significant military presence. The situation along the Ukrainian border is unpredictable and could evolve quickly. Exercise extreme vigilance if you must travel to this region, as armed clashes and violence pose serious threats to your security. If you are currently in this area, you should strongly consider leaving. The ability of the Embassy of Canada in Moscow to provide consular assistance in these districts is extremely limited.

Republics of Chechnya, Ingushetia and Dagestan (see Advisory)

Despite the end of the Chechen War in 2009, there remains an insurgency in the North Caucasus, during which terrorist attacks are frequent. The security situation is unstable and dangerous. Suicide bombings occur on a regular basis and targeted assassinations have also taken place. Unexploded mines and munitions are widespread. Kidnapping for ransom is also common.

You must obtain special permission from the Ministry of the Interior to enter certain areas of the country.

Republics of Karachai-Cherkessia, Kabardino-Balkaria (including the Mount Elbrus region) and North Ossetia (see Advisory)

Tensions remain high in the border regions with Georgia since the 2008 conflict in South Ossetia, and may affect the security situation in the republics of Karachai-Cherkessia, Kabardino-Balkaria and North Ossetia. Military operations are carried out with little or no notice, and are accompanied by travel restrictions. The border crossings to Georgia and Azerbaijan are subject to frequent, sometimes lengthy closures.

Terrorism

Terrorist incidents have occurred most frequently in the North Caucasus and in Moscow, but may happen throughout Russia. Exercise caution in public places, particularly on public transport (including subways, railways, airports and buses), and during large gatherings and events.

On December 29, 2013, an explosive device was detonated inside the main railway station of the city of Volgograd; on December 30, another explosive device was detonated on a public bus in the same city. These incidents caused deaths and injuries. Security measures have been reinforced throughout Russia, specifically in the Volgograd region. The Domodedovo International Airport and the Moscow subway system have also been targeted by terrorist attacks

Remain vigilant, monitor local news reports and follow the advice of local authorities. Authorities perform random identity checks frequently in public places.

Crime

Crime against foreigners is a serious problem. Harassment and attacks are prevalent, especially for foreigners of Asian and African descent. Some victims have died. Foreigners in the areas to which we advise against all travel (see above) are particularly vulnerable. Several journalists and local aid personnel have been killed or kidnapped. Criminals have targeted and destroyed well-marked aid convoys

Exercise extreme caution in crowds and places frequented by skinhead groups, including open markets.

Violent crime is common. Pickpocketing, assaults and robberies occur frequently and are often committed by groups of children and teenagers. Criminals employ various techniques to distract the victims, including luring people to help them. In such situations, walk away quickly. Underground walkways, public transport, tourist sites, restaurants, transport hubs, markets, and hotel rooms and residences (even when occupied and locked are preferred targets. Reduce your risk of being targeted by travelling in groups with reputable tour agencies.

Criminals may also pose as police officers, particularly in St. Petersburg. Real police officers wear a visible personal identification number on their uniforms. Avoid showing signs of affluence and ensure personal belongings, passports and other travel documents are secure at all times. Replacing travel documents and visas is difficult, and could considerably delay your return to Canada.

Cases of drugging followed by robbery and assault have been reported. Do not accept food and drinks from strangers, and do not leave food and drinks unattended in bars, nightclubs or restaurants. Order only bottled drinks in order to minimize risk.

Bogus checkpoints may be set up in rural areas in order to commit robbery.

Traffic police may stop motorists to collect fraudulent cash fines on the spot.

Credit card and automated banking machine (ABM) fraud occurs. Pay careful attention when your cards are being handled by others during payment processing.

Organized crime

Organized criminal groups remain active throughout Russia, especially in large cities. Credit card fraud is one type of activity. Extortion and corruption are common business practices, including among foreign businesses. Criminals demand protection money under threat of serious violence. Report extortion attempts to Russian authorities

Demonstrations

Rallies, protests and demonstrations occur in Russia. They can lead to significant disruptions in traffic and public transportation. Avoid all demonstrations and large gatherings, follow the advice of local authorities and monitor local media.

Transportation

Use only registered taxis and do not share a taxi with strangers. Negotiate the price before getting into a taxi.

Road conditions vary and are often poor outside major cities. Traffic regulations are mostly ignored. Road accidents are common and pedestrians should be particularly careful. In the event of an accident, do not move the vehicle until the police arrive, even if the car is obstructing traffic. Drive only during daylight hours.

When travelling by train, store valuables in a safe place and do not leave the compartment unattended. Lock the door from the inside.

Boat accidents are common due to the overloading and poor maintenance of some vessels. Safety standards differ from those in Canada. Exercise caution and common sense when using marine transportation. Do not board vessels that appear overloaded or unseaworthy.

See Transportation Safety in order to verify if national airlines meet safety standards.

Fraud

Fraud has been reported by victims developing friendships or romantic relationships over the Internet and becoming entangled in financial issues. Remain vigilant and be aware that neither the Embassy of Canada in Moscow or Foreign Affairs, Trade and Development Canada can help you recover lost funds or property in such cases.

See our Overseas Fraud page for more information on scams abroad.

General safety information

Power outages and shortages occur often throughout Russia.

Emergency services

Dial 01 for fire, 02 for police and 03 for ambulance.

Summary

Calendar GMT Reference Actual Previous Consensus Forecast
2014-12-11 01:00 PM Q3 0.7% 0.8% 0.7% 0.2%
2015-04-01 02:00 PM Q4 0.4% 0.9% (R) 0.2%
2015-05-15 02:00 PM Q1 -1.9% 0.4% 0.4%
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