Russia: Legal News

Sergey Pepeliaev, Managing Partner

23-25 June 2010, Minsk

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Russian Law On Trade dated 28 December 2009

Focus: supply of foodstuffs;

Disclosure of information on the selection of contracting parties;

Limitations on the types and amounts of fees payable to retailers;

Restrictions on deferring payments to suppliers;

Antimonopoly rules:

ban on the imposition of a number of contract terms;

ban on commissions in wholesale trade;

ban on discriminating conditions;

Restrictions on market dominance (25% of the local market).

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Liability for economic offences

Sources: Federal Laws of the Russian Federation dated 29 December 2009 and 7

April 2010

Remand in custody is no longer applicable as a measure of restraint, there are more

extensive opportunities for a pledge;

The concept of prejudice has been changed;

The size of financial transactions and arrears qualified as crimes has been increased;

The concept of active repentance has been introduced for tax offences;

Violations of licensing terms and requirements have been decriminalised;

Pseudo-entrepreneurship no longer constitutes a crime;

The money laundering concept has been modified.

4

Antimonopoly legislation

Drafting of third package of amendments:

offences relating to concerted practices and illegal coordination have been described

in more detail;

criteria have been developed on market comparability;

the notification procedure has been approved for group transactions;

fixed penalties have been introduced instead of turnover penalties;

violations have been decriminalised (in respect of concerted practices, vertical

agreements).

The Supreme Arbitration Court upholds the decisions of the Antimonopoly Service

(Resolution dated 25 May 2010 on the TNK-BP case).

5

Judicial system

Development of the system of authoritative interpretations

Amendments to the Russian Arbitration Procedure Code:

Сhapter 281 Review of Cases on Corporate Disputes

Chapter 282 Review of Cases on the Protection of the Rights and

Legal Interests of Groups of Persons

Development of the practice of collecting actual judicial expenses

Development of the practice of collecting expenses from the state

authorities.

6

Employment and migration law

The procedure of employing highly-skilled foreign professionals has been

simplified

Employers are subject to increasing state controls

Employees are becoming more proactive in protecting their rights

Politicians have called for reforms of the Russian Labour Code.

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Customs law

A Customs Union is being established between Belarus, Russia and

Kazakhstan:

unified tariff and non-tariff customs regulation of foreign trade;

unified customs tariffs;

Customs Code of the Customs Union.

8

Corporate legislation

Now rights of claim against a company can be used to pay for interest or

shares in the authorised capital.

An attempt was made to check the enforceability of shareholder

agreements through a court.

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Land law

Penalties for violations of land use and subsoil use have been increased

materially

Duties established for real estate transactions have been increased

materially

Resolution No.10/22 by the Plenums of the Russian Supreme Court and

Russian Supreme Arbitration Court dated 29 April 2010 was adopted “On

Certain Issues Arising in Judicial Practice when Resolving Disputes Relating

to Protection of Title and Other Proprietary Rights”.

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Tax law

Draft laws on transfer pricing and consolidated group of taxpayers

Prosecution of fraudulent tax minimisation schemes and arrangements

relating to the abuse of taxpayer rights:

absent suppliers

residency rules

thin capitalisation;

Transition from the unified social tax to insurance contributions.

11

Bankruptcy legislation

Legislation in respect of persons controlling the debtor has been rendered

more stringent to provide better protection for creditors.

12

IP Legislation

Russia completed the requisite procedures to accede to the Patent Law

Treaty (PLT)

Memoranda have been signed and projects have been launched within the

scope of the Patent Prosecution Highway (PPH) programme (Japan, Korea,

USA).

13

Banking law

Incentives have been introduced to stimulate consolidation in the banking

sector: the minimum equity of a bank has been increased: RUB 90 million

from 2010 and RUB 180 million from 2012 banks may not offset claims and

borrowings to form their authorised capital.

Control over the stability of banks has been increased: secondary liability

of bank management.

Regulations have been introduced to oversee the operations of payment

agents, which involve the collection of payments from individuals.

14

Market for legal services

New policy of the Russian Ministry of Justice:

The legal profession should be:

regulated

unified

Reform of advocacy

Evolution and self-regulation

Open market.

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Contact information

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54 Shpalernaya, Golden Shpalernaya Business Center, St Petersburg, 191015, RussiaTel.: +7 (812) 333 0717 Fax: +7 (812) 333 0716 E-mail: spb@pgplaw.ru