On June 5, swilar spoke at the annual Conference for CFOs of the Tax and Financial Reporting Committee of the Russian-German Chamber of Commerce.

Daria Pogodina, CEO of swilar, spoke on the topic that the company constantly monitors — “The current situation with payments to friendly countries.” Conference participants highly appreciated the comprehensive analysis and effective practical recommendations that were given in the report.

The VTP conference became a platform for lively discussions and exchange of experience between CFOs of leading foreign companies, especially regarding the situation with expected tax changes, international payments and financial service management in the context of the economic crisis.

We hereby inform you that Federal Law No. 287-FZ of August 08, 2024 introduced a number of important changes affecting both limited liability companies (OOO) and joint-stock companies (AO). The changes come into effect at different times. In this message, we would like to talk about changes in relation to OOO that will be in effect from September 01, 2024.

From this date, the resolution on the election (appointment) of the sole executive body of the OOO – for example, the general director – will need to be necessarily certified by a notary. Also, when registering such changes in the Unified State Register of Legal Entities, a notary will be the applicant.

Thus, the procedure for changing the general director in an OOO has been significantly changed. Previously, participants could make such a resolution without a notary (if an alternative procedure was stipulated in the articles of association), and then the new director would sign the application for registration himself. Now the participants or their representatives will be required to be present at the Russian notary to make a resolution (with the issuance of the appropriate certificate), after which the notary will sign an application sent by him to the registration authority.

For foreign participants in Russian OOO, such changes mean the presence of two options:

• arrival in the Russian Federation and visiting a Russian notary to make a resolution on changing the director of a controlled Russian company;
• issuance of a power of attorney to Russian representatives for carrying out such actions (please note that the power of attorney must be properly legalized and translated into Russian).

At the moment, we are awaiting clarification regarding whether notarization will be mandatory for participants to make resolutions on extending the powers of the general directors of OOO, as well as the beginning of the liquidation of controlled companies.

With regard to the liquidation of an OOO, from September 01, it is legislatively confirmed that the notary submits to the Federal Tax Service (FTS) a notification about the formation of a liquidation commission/appointment of a liquidator. Such a notification is usually sent simultaneously with the message that the legal entity is entering into the process of liquidation. The notification shall be submitted to the Federal Tax Service by the notary who certified the liquidator’s signature on it, no later than the end of the working day on which the notification was signed.

According to another change, from September 01, the list of information on shares in the authorized capital of OOO, which is contained in the Unified State Register of Legal Entities, is being expanded. The Register will contain information about the arrest of the share imposed by the court or enforcement officer. So far, the Unified State Register of Legal Entities includes information on the size, nominal value of shares and shareholders.

In the future, we will inform you about other significant changes to corporate legislation introduced by Federal Law No. 287-FZ dated August 08, 2024.

We will be happy to answer your questions and, if necessary, support you in the preparation, signing and submission of relevant documents to the authorized bodies.

Please note that all representative offices and branches of foreign companies are required to submit information about the members and beneficiaries of their parent structures to the tax authority by 28.03.2024.

According to the clause 3.2 of the article 23 of the Tax Code of the Russian Federation, foreign organizations (FO), as well as foreign structures without formation of a legal entity (FSWFLE), are obliged annually no later than March 28:

• to submit information about the members of such a FO (for FSWFLE – information about its founders, beneficiaries and managers) as of December 31 of the year preceding the year of submission of the specified information to the tax authority at the place of their registration, as well as
• to disclose the procedure for indirect participation (if any) of an individual or public company in the event that the share of their direct and/or indirect participation in the FO (FSWFLE) exceeds 5%.

This obligation does not apply to foreign companies that are registered with the Russian tax authorities only because of the provision of services in electronic form, as well as to subsidiaries (OOO) with foreign participation.

The form of communication about the members of a FO (for a FSWFLE – about its founders, beneficiaries and managers), the format of its submission in electronic form, as well as the procedure for filling in the form are approved by the Order of the Federal Tax Service of Russia dated 01.12.2021 No. ED-7-13/1046@.

Wrongful failure to submit (untimely submission) by a foreign organization (foreign structure without formation of a legal entity) of the above information to the tax authority entails a fine of 50,000 RUB (clause 2.1 of the article 129.1 of the Tax Code of the Russian Federation).

You can find information previously published by us on this topic here.

We will be happy to answer your questions and offer our assistance in creating the report.

Since Russia has been closely interacting with China in various fields over the past decades, many Russian representatives of small and medium-sized businesses are beginning to actively cooperate with Chinese partners. Russian businessmen who are not aware of the peculiarities of the Chinese mentality may encounter serious difficulties when signing contracts with Asian partners.

In this review we would like to draw your attention to the important features of concluding contracts between partners from Russia and China, which will help you to avoid a number of mistakes:

1. The only official language in China is Chinese. Thus, it is advisable to sign the text of the contract not in Russian and English, but in Russian and Chinese (the official languages of Russia and China).

If the Chinese partners do not insist on this, this can only mean that they do not intend to register the contract with the Chinese government authorities.

2. The name of a Chinese company registered in China can only be in Chinese, and the English name of the company is not legally valid to the full extent Chinese, as well as Russian, courts do not consider claims if the documents do not indicate the real (registered) company names.

3. It is necessary to check the registration of the Chinese company by requesting from the partner a certificate of registration of a legal entity, and also make sure that its representative has the appropriate authority.

It should be kept in mind that only the legal representative of the company has the right to sign a contract without a power of attorney. This may not always be the CEO of the company. The legal representative must be indicated in the certificate of registration of a legal entity.

If someone else signs the contract on the Chinese side, they are required to present a power of attorney. Therefore, when concluding a contract with a Chinese company, it is worth asking the future partner for a power of attorney confirming the authority of the signatory.

4. It is important to check the registration (legal status) of the Chinese seal.

Each Chinese company generally has one main seal, which is strictly controlled. However, to support various types of activities, companies often produce additional types of seals, including “contract seals.” Having produced such seals, Chinese companies often do not amend the registration documents accordingly or otherwise register their legal status.

In this regard, it is recommended to check whether the Chinese partner’s seal is registered by requesting a certificate from the State Commerce and Industry Administration of the government at the place of registration of the Chinese company. It is quite easy to obtain such a certificate, and falsifying it is dangerous for a Chinese partner.

5. To protect yourself, it is recommended to check the company’s website. The site must have a Chinese version, otherwise there is a high chance of encountering scammers. You should check the domain name registration date and ownership.

6. In order to avoid difficulties with the recognition and enforcement of decisions of Russian courts in China, it is recommended to introduce an arbitration clause and include in it one of the well-known institutional arbitration centers in China, for example, the China International Economic and Trade Arbitration Commission (CIETAC), the Beijing Arbitration Commission (BAC), etc.

On the one hand, this will require additional costs for contacting Chinese lawyers or Russian specialists with experience in representing the interests of parties in Chinese arbitration. On the other hand, this will simplify the issue of recognition and enforcement of the decision under the New York Convention of 1958.

If the Chinese partners do not want to resolve the dispute in arbitration due to the high cost of the procedure, then, in order to avoid difficulties with the recognition and execution of decisions of Russian courts in China, it is better to establish a clause for those disputes, for which this is possible, regarding their resolution in a Chinese state court, since Russian courts readily recognize decisions of Chinese courts.

On 01.09.2022 clause 3 of the article 1 of the Federal Law dated 02.07.2021 No. 347-FZ came into force, which amended the Federal Law dated 13.03.2006 No. 38-FZ “On Advertising” (hereinafter referred to as the “Law on Advertising”) and obligated participants in the Internet advertising placement market to transfer data about it to a unified information system created by Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications (Roskomnadzor) – the Unified Register of Internet Advertising (hereinafter referred to as “URIA”).

Important: the new requirements apply to internet advertising that is displayed only in the Russian Federation.

Distinguishing between advertising and other information of a non-advertising nature

According to the article 3 of the Law on Advertising, advertising is information distributed in any way, in any form and using any means, addressed to an indefinite number of persons and aimed at drawing attention to the object of advertising, creating or maintaining interest in it and promoting it on the market.

On 14.11.2023, in order to clarify the concept of advertising and eliminate ambiguities, as well as to distinguish advertising fr om other information of a non-advertising nature, the Federal Antimonopoly Service of Russia approved the Guidelines for compliance with mandatory requirements “The Concept of Advertising” (Order No. 821/23).

Additionally, the Federal Antimonopoly Service of Russia has provided answers to frequently asked questions about advertising, and also provides examples of advertising on the Internet that are subject to marking, which can be found here.

Important: each case is unique and is considered individually.

What exceptions are there?

All advertising on the Internet is subject to marking, with the exception of:

• social advertising;
• announcements on the websites of TV channels and radio programs that are duplicated on the Internet without changes compared to the original sources;
• mailings via own database of e-mail addresses and push notifications.

What must be done to carry out Internet advertising marking?

1. Familiarize yourself with the register of advertising data operators (hereinafter referred to as “ADO”) on the official website of Roskomnadzor, register on the website of one of the ADOs, read the terms of service, tariffs and accept the offer agreement.
2. After activating access in your personal account of ADO, fill in the information about the counterparties participating in the placement, about the agreement, about the advertising creative. Download a sample advertisement.

Immediately after registering the creative, ADO will assign it an advertising identifier (token) – erid, which looks like a set of numbers and Latin letters (for example, 5UGfwMukZ4).

Important: one token is given per creative; any change in the creative requires obtaining a new token.

1. Include in your advertisement:

• the mark “advertising”, other expressions cannot be used (for example, “sponsored material”, etc.);
• information about the advertiser – the full name of the company or a link to the website (website page) with information about the advertiser;
• advertising identifier (erid).

1. Enter in your personal account of the ADO service on any day, starting from the date of completion of placement, but no later than the 30th day of the month following the month of displaying advertising on the Internet, the information:

• about the platform(s) wh ere the creative was shown;
• on statistics of shows;
• on the fulfillment of obligations under the agreement.

1. Check the information in URIA. Access for Russian users without registration, with a State Services (Gosuslugi) portal account.

Important: not only you, but also your counterparty can receive an advertising identifier and transfer information about placement, if you provide for the corresponding obligations in the agreement. In this case, the same person must receive the advertising identifier and transmit statistics of shows.

You can find out more details about these stages here.

Who exercises control?

The controlling government authorities are the Federal Antimonopoly Service of Russia (issues of classifying information as advertising; control over the presence of the mark “advertising”; control over the indication of information about the advertiser) and Roskomnadzor (presence of an identifier (token); transmission of information about advertising to URIA through ADO).

What is the liability for violation of requirements?

On 01.09.2023, the Federal Law dated 24.06.2023 No. 274-FZ “On Amendments to the Code of the Russian Federation on Administrative Offenses” came into force, which establishes measures of administrative liability for violations in the field of marking of Internet advertising:

• Failure to provide, or untimely provision of information about distributed Internet advertising to URIA, or provision of incomplete, unreliable, irrelevant information (part 15 of the article 14.3 of the Code of the Russian Federation on Administrative Offenses):
• citizens: 10.000 – 30.000 rubles;
• officials: 30.000 – 100.000 rubles;
• legal entities: 200.000 – 500.000 rubles.
• Distribution of Internet advertising without an advertising identifier or violation of requirements for its placement when distributing Internet advertising (part 16 of the article 14.3 of the Code of the Russian Federation on Administrative Offenses):
• citizens: 30.000 – 100.000 rubles;
• officials: 100.000 – 200.000 rubles;
• legal entities: 200.000 – 500.000 rubles.

It should be noted that administrative liability applies to offenses identified after 01.09.2023. At the same time, the new rules apply, among other things, to Internet advertisements that were placed before that date, continue to be displayed after that date, and the transaction for them has not been closed.

For archived advertisements, the placement of which ended before 01.09.2022 (i.e. transactions for them have been closed) and which are currently available for reading, obtaining and placing an identifier is not required. However, it is recommended to indicate the date of their publication (see Recommendations of Roskomnadzor).