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Transcript of TABEL OF CONTENTS - gratanet.com newsletter 2018.pdf · TABEL OF CONTENTS AZERBAIJAN ... advocate...
TABEL OF CONTENTS
AZERBAIJAN ................................................................................................................. 3
BELARUS ....................................................................................................................... 3
CZECH REPUBLIC ......................................................................................................... 4
GEORGIA ....................................................................................................................... 5
KAZAKHSTAN ............................................................................................................... 6
KYRGYZSTAN ................................................................................................................ 7
MONGOLIA ..................................................................................................................... 8
POLAND ......................................................................................................................... 9
RUSSIA ......................................................................................................................... 10
SWITZERLAND ............................................................................................................ 21
TURKEY........................................................................................................................ 22
UZBEKISTAN ............................................................................................................... 22
AZERBAIJAN
AZERBAIJAN
New Customs Tariff Rates
Cabinet of Ministers of the Republic of Azerbaijan approved new foreign economic activity commodity
nomenclature, import and export customs duty rates by its resolution dated 17 November 2017.
According to the Resolution, 3 (three) different customs tariff rates (0%, 5%, 15%) are going to apply to
import/export goods in the Republic of Azerbaijan starting from 1 January 2018.
Amendments to Representation Rules on Court Hearings
On 31 October 2017, President of the Republic of Azerbaijan signed an Amendment Law to the Civil
Procedural Code of the Republic of Azerbaijan (Amendment Law), effective from 1 January 2018.
According to the Amendment Law, individuals can be represented on court hearings by their close
relatives or advocates. Legal entities can be represented by (i) their authorized representatives according
to laws or constitutional documents, (ii) by their duly authorized employees or by (iii) advocates.
Court of Appeal’s judgments on civil disputes concerning property related claims with the amount of a
claim less than AZN 2000 as well on economic disputes with the amount of a claim less than AZN 10000
cannot be appealed to the Supreme Court. Prior to the Amendment law, any eligible individual (whether
advocate or not) was able to represent legal entities and individuals on court hearings on a PoA basis.
Law on Unemployment Insurance
On 30 June 2017 a Law on Unemployment Insurance (Law) was adopted, coming into force from 1
January 2018.
The Law aims to ensure at strengthening of the social protection of the population through establishing
relations based on transferring risk and new financing mechanisms in the labor market of the Republic of
Azerbaijan, compensating lost salaries of insured persons and taking preventive measures to
reduce unemployment level. Read more:
BELARUS
Development of Entrepreneurship and Elimination of Unnecessary Requirements for Business
In 2018, the Decree of the President of the Republic of Belarus No. 7 of 23 November 2017, comes into
force in Belarus. This decree is planned to become motivating for the development of an entrepreneurial
initiative.
The decree prescribes a radical change in the mechanisms of interaction between state bodies and
business, minimizes the interference of officials in the work of business entities and strengthens the
mechanisms for self-regulation of business, responsibility for its work towards society. At the same time,
the minimum required level of control by the state remains. Read more:
New Customs Code of the EEU Enters into Force
The Council of the EEC decided to synchronize the procedures for ratification of the Customs Code of the
Eurasian Economic Union. Simultaneously with the Code, the commission's primary decisions in respect
of issues classified at the supranational level will enter into force, impacting the regulation of the activities
of authorized economic operators, rules for the movement of goods by individuals, etc. Read more:
Additional International Financial Reporting Standards Are Introduced
The Council of Ministers jointly with the National Bank adopted Resolution No. 830/12 from November 4,
2107. According to this document several international financial reporting standards are introduced from 1
January 2018. Read more:
Unified Register of Administrative Procedures Will Be Implemented in Belarus
The Ministry of Economy informs that from 1 January 2018 the Unified Register of Administrative
Procedures will start operating in Belarus. It is planned that by this time the state bodies will finish the
work on filling it with their administrative procedures, which will allow them to be systematized and to
ensure transparency in composition, cost and list of documents. Such an order will eventually result in an
electronic procedure for passing administrative procedures. By 2020 the share of administrative
procedures that can be made electronically should amount to 75% of the total.
VAT Introduced for Foreign Companies that Provide Services in Electronic Form
Belarus plans to apply VAT to 2018 foreign companies that provide services in electronic form in Belarus
or to individuals residing in the Republic of Belarus, will be taxed with value added tax. Read more:
Confirmation of Tax Residence of a Foreign Company by E-Mail
Earlier, the tax authorities accepted the document on the residence of a foreign company solely in paper
form. This created a number of difficulties, considering the fact that the tax authorities of some countries
issue such confirmation only in electronic form. The possibility of confirming the tax residence of a foreign
counterparty by email will significantly simplify the procedure and will prevent companies from
unnecessary steps.
Business Conditions for Companies and Individual Entrepreneurs Will Be Simplified
Resolution of the Council of Ministers of the Republic of Belarus of August 11, 2017 No. 605 changed the
list of administrative procedures made by tax authorities on applications of legal entities and individual
entrepreneurs. From January 1, 2018 the registration of the inspection record book by tax authorities is
canceled. The book will be sold and registered by RUE “Publishing House” Belblankvyd” and RUE
“Information and Publishing Center for Taxes and Duties”. In the future information about the inspection
record books will be specified by these companies into an electronic database of documents and
documents with a certain degree of protection.
Taxation in Free Economic Zones
In 2018, it is planned to abolish the profit tax for residents of FEZ in case of performing works and
services of own production. Today, residents of FEZ are exempted from income tax for 10 years from the
date of registration or until 2021 (if they were registered before 2012). Thus, from 2018 it is planned to
remove mentioned restrictions, but under condition of carrying out activities established within the
framework of the investment project.
CZECH REPUBLIC
Trust Funds
As a response to the Directive No. 2015/849 of the European Parliament and of the European Council,
the Czech Republic implements some minor changes to trust funds and the institute of official registry of
trust funds into its legal system. Czech law will differentiate between the founding and establishing of a
trust fund in a similar way that has been used in founding / establishing of corporations so far. The new
registry of trust funds will gather information not only on Czech trust funds but also on foreign trust funds
operating in the Czech Republic. The registry will consist of a private part, accessible only by certain
institutions and subjects, and a public part, which can be viewed by anyone. Trust funds established
before 1 January 2018 will have to apply for registration at a relevant court before 1 July 2018.
Return of the Pre-Emptive Right into the Civil Code
The institute of the pre-emptive right was previously removed from the Czech Civil Code. It is now back in
the Czech legal system with a legislation change to the Civil Code implemented by the Act No. 460/2016
Coll. Co-owners of any immovable property shall again have the option to buy another co-owner’s share
in the property which is to be conveyed onto a third person. An exemption from this rule is set when the
share is conveyed to a related person as defined by provision No. 22 of the Civil Code.
True Owners of Legal Entities
Also as a response to the above mentioned Directive legal entities shall be required to disclose their true
owners in a special registry established for this purpose. The definition of a true owner is provided by the
Act No. 235/2008 Coll. – a true owner is a natural person that has factual or legal power to, directly or
indirectly, crucially influence the legal entity.
Besides this general requirement set by the definition, to be considered a true owner a person must also
meet another requirement that is specifically set for each kind of legal entity. True owners shall be
disclosed in a private registry accessible mainly to the state authorities. All legal entities established
before 1 of January 2018 have to disclose their true owners by submitting a specific form to a relevant
court. By doing so until 31 December 2018 they will be relieved of all fees connected with this procedure.
Legislation Changes to the Building Act – Act No. 183/2006 Coll.
The main purpose of this change is to simplify the approval procedure carried out by building offices in
the Czech Republic. Notification to a building office without prior planning permission or planning approval
shall now be sufficient for all residential and leisure-time buildings with one underground floor up to the
depth of 3m and maximally two above-ground floors and an attic, to be independently constructed on the
developed plot. The notification shall be processed by the relevant building office within 30 days. If the
building office fails to meet this deadline, it shall be considered that the building office has granted its
approval. All town and country planning shall be published on the Internet.
Usage of Monetary Instruments Gained from Property Criminal Punishments in Criminal
Procedures
The Act No. 57/2017 Coll. improves position of victims of crimes when claiming a remedy for the suffered
harm. It allows victims to obtain a remedy from the offender’s property which was seized in the trial as a
punishment. It tackles the existing problem of victims not being able to obtain any remedy due to the
offender’s lack of property, even in cases when it was seized by the state as a punishment for the
committed crime.
GEORGIA
Law on Electronic Documents and Reliable Electronic Services
On 21 April 2017 the Law on Electronic Documents and Reliable Electronic Services came into force.
According to the new legislative initiative, qualified electronic signature has the same legal force as the
material signature. Electronic documents are only in original forms and it does not have a copy. Electronic
documents and electronic signatures can be used in foreign countries and in the territory of Georgia. The
law also introduces electronic stamp confirming integrity and origin of the document.
Environmental Protection Evaluation
On 1 January 2018 the Law on Environmental Impact Permits comes into force. This regulation covers
activities that are subject to mandatory ecological expertise and rules of issuing environmental impact
permits. Furthermore, the law ensures that the person can obtain full information in regard of the
environment where he/she lives or works, participation of the society in decision making of significant
decisions concerning protection of the environment.
Organic Law on National Bank of Georgia
In order to strengthen Georgian national currency Organic Law on National Bank of Georgia was
amended. The amendment stipulates that if an entrepreneur is offering or advertising services or property
for sale, the price shall be indicated only in Georgian lari (GEL) According to Administrative Offences
Code of Georgia breach of indication of price in GEL will result in warning for the first occasion. Penalty
for the second occasion is 1000 GEL and 5000 GEL for each next one.
Civil Code of Georgia
According to the decision of Constitutional Court of Georgia dated 17 October 2017 Article 185 is to be
partially void. The buyer shall not be deemed to be the owner if she/he is so registered in the public
register if there is the claim against the extract of the registry and the buyer is aware of it.
On 15 January 2017 amendments to The Civil Code of Georgia, came into force. According to new
regulations upper threshold for annual efficient interest rate should not exceed 100 %. Maximum value of
financial sanctions for the borrower should not exceed annual 150 percent of the balance principal
amount of the loan, provided by contract. Amendment sets certain limits on raising loans in foreign
currency. Specifically, loan up to 100 000 GEL can be granting to a natural person only in national
currency while loans that exceed 100 000 GEL can be issued in foreign currency. Regulations related to
interest rate and forfeit are imperative in the case of raising bank credits.
Law of Georgia on Entrepreneurs
One-person company
From 30 June 2017 one person can register limited liability or joint-stock companies. Furthermore, if the
only partner becomes owner of all the shares, the company will become one-person entrepreneurial
company. Information about one-person company is public and must be registered in the Public Registry.
Any decision of one-person company must be in writing.
As from 1 September 2018 for the one-person companies whose annual turnover for a previous tax year
does not exceed EUR 1 000 000, equivalent in GEL agreement between the sole partner and the
company shall be in writing.
Pre-emptive rights
As from 4 May 2017 partners of the limited liability company shall have the pre-emptive right to acquire
the shares in proportion to their own shares, unless otherwise determined by the Charter of the company.
Changes concerning the pre-emption rights affected joint stock companies as well. If a joint stock
company issues new shares, a shareholder shall have the pre-emptive right to acquire the new shares in
proportion to his/her own shares.
Law on Securities Market
Amendment of Law on Securities Market grants any shareholder of the reporting company the right to
receive information with regard to salaries and other proceeds received by directors or members of the
board of directors and members of the supervisory board.Shareholders must not disclose this information.
Reporting company may not deliver the information if this information is already in the final financial
statement.This amendment entered into force from 29 May 2017.
KAZAKHSTAN
New Tax Code On 1 January 2018 new Tax Code came into force in Kazakhstan. This Tax Code is set to stimulate
growth of small and medium-sized businesses and strengthen Kazakhstan’s financial sector. The
principle of good faith was also introduced: all the ambiguities and inaccuracies of the Tax Code are
interpreted in favour of entrepreneurs.
From 2020 action limitation period is reduced from 5 to 3 years for SMEs, for the rest 5 years remain.
Additionally, all fines and penalties are abolished, if the entrepreneur acted in accordance with
clarifications of the tax authority, and on which the position subsequently changed. Moreover, there will
be fewer grounds for unplanned tax inspections. From 2020, all amendments and additions to the tax
legislation will only be possible only by one law on taxation.
The limits of the special tax regime (STR) on the basis of the simplified declaration on the number (30
people) and the marginal revenue (2,044-fold minimum wage) have been revised. In exchange for 70%
VAT benefits (in connection with WTO accession), adjustment of VAT offset for agricultural producers and
agricultural cooperatives is envisaged. For the development of small and medium-sized businesses, a
new alternative regime is also introduced on the basis of fixed deduction, on a voluntary basis. For this
regime to be applicable the maximum income per year must not exceed KZT300 million and the number
of hired employees must be 50 or less.
In order to ease the burden on small businesses, the current threshold for VAT in the amount of 30,000
MCI is retained. From 2019, a new mechanism is provided for the return of the debit balance on goods
acquired within the country, by introducing a control account for VAT, the application of which will be
voluntary. Revenues from e-commerce are exempt from corporate and personal income taxes.
Subsoil users are exempt from corporate income tax dividends and a gain in value at processing indices.
From 2018, the index is 35%, and from 2022 the index is 70% of processed raw materials. The
commercial discovery bonus will be canceled on all contracts. The subsoil user will be allowed to
compensate for the exploration costs for one deposit under another contract, where production was
started. An alternative mineral extraction tax is introduced for offshore and deep oil fields. The super-profit
tax is abolished with the transfer of the load to the rental tax on coal exports. The mineral exploration tax
rate for tin was reduced from 6% to 3%.
What to Expect from the Amendments in Land Legislation?
On 29 November 2017 the deputies of the Parliament of the Republic of Kazakhstan approved in the first
reading draft law "On Amendments and Additions to Certain Legislative Acts of the Republic of
Kazakhstan Regarding Regulation of Land Relations", developed following the work of the Commission
on Land Reform. The following is a review of the most significant amendments and additions to the Land
Code of the Republic of Kazakhstan proposed in accordance with this Draft Law. Read more:
New User Identification Requirements "Further Regulate Social Relations"
The President of Kazakhstan, Nursultan Nazarbayev, signed, on 28 December 2017, the Law of 28
December 2017 No. 128-VI on Amendments and Additions to Certain Legislative Acts of the Republic of
Kazakhstan on Issues of Information and Communication ('the Law'), with most of the provisions entering
into force on 9 January 2018. The Law imposes additional duties of website operators and
telecommunications operators, including the obligation to collect and store users' data. Read more:
Kazakhstan Has Ratified the Convention on Avoidance of Double Taxation with Ireland
On 29 December 2017 the Republic of Kazakhstan has ratified the Convention on avoidance of double
taxation with Ireland and the Protocol thereto.
The Convention will come into effect on the date of receipt through diplomatic channels of the last written
notification on execution of required interstate procedures by Kazakhstan and Ireland for the purposes of
entry of the Convention into force. If these procedures were finished in 2017, the residents of the states
entitled to apply the Convention provisions in respect of income received effective 1 January 2018. In
case these procedures are finished this year, the residents of the states will be entitled to apply the
Convention provisions in respect of income received effective 1 January 2019. Read more:
KYRGYZSTAN
Dispute Resolution
From 11 February 2018 the Law of the Kyrgyz Republic “On mediation” dated 28 July 2017 No.161
comes in to force. This law regulates resolution of civil, family, labour and some criminal disputes by the
way of mediation. The law establishes requirements to be a mediator and conditions of its activity.
Mediation can be conducted for a maximum of 60 days. The parties are free to choose any mediator for
their dispute. The law establishes the requirements for the contents of the agreement on the application
of mediation and the mediation agreement. The state judges will have a right to transfer cases to
mediation for resolving dispute by way of negotiation.
Medicine and Pharmaceuticals
Medical devices
From 15 February 2018 the Law of the Kyrgyz Republic “On the use of medical devices” dated 2 August
2017 No.166 shall take its effect. This law regulates issues on use, safety of production, manufacture,
storage, sale, disposal of medical devices. Medical devices can be used, manufactured and sold if they
are included in the State Register. Therefore, this law regulates procedure of state registration of medical
devices and content of Register. Read more:
Medical products
From 15 February 2018 the Law of the Kyrgyz Republic “On the use of medicinal products” dated on 2
August 2017 No.165 comes in to force. This law establishes unified requirements for the circulation of
medicines in the Kyrgyz Republic, and regulates the relations arising in connection with the development,
preclinical and clinical research of medicines, production, manufacture, evaluation of their quality,
effectiveness, safety, sale of medicines and other activities in the sphere circulation of medicines. The law
formed the State Pharmacopoeia of the Kyrgyz Republic is harmonized with the leading pharmacopoeias
of the world and is periodically updated in connection with a change in their standards. Read more:
Taxation
The Tax Code of the Kyrgyz Republic was amended with a new rates of excise tax for cigarettes,
cigarillos, cigars, tobacco for 2018, 2019, 2020, 2021 and 2022. The changes come into effect from 1
January 2018.
Conflict of Interests
After 6 months from its official publication (approx. in June or July 2018), the Law of the Kyrgyz Republic
“On conflict of interests” dated 12 December 2017 No.206 (11) shall take its effect.
The new law sets out the order of managing conflict of interests in activities of state, municipal, and other
officials, and provides certain restrictions for them, such as a prohibition to accept gifts worth over KGS
1,000 or a prohibition to oversee, control, or make contracts in which they or their affiliated persons are
personally interested.
The acts or contracts issued or made by the officials in breach of requirements of the law may be
recognised invalid by the court if a competent state authority, prosecution office, or a person whose rights
are offended files a relevant claim to the court.
MONGOLIA
National Payment System
New law on National payment system dated 31 May 2017 shall become effective from 1 January 2018.
This law introduces the launch of the integrated payment system between the Central Bank, commercial
banks, legal entities, other financial institutions and individual customers. As a result, the Central Bank
can control all payment transactions of all participants of financial market in Mongolia. It will help the
Central bank to have better picture of the economy through controlling all payment system of Mongolia,
protecting rights of customers, ensuring competitive market and granting new licenses for financial
services including operating the system, payment service provider, payment representative, outsourcing,
electronic money transfer service and issue of electronic money etc. Read more:
Personal Income Tax
Personal income taxation law has been amended on 14 April 2016, taking effect on 1 January 2018. The
personal taxation was 2 leveled system prior to this amendment. As a result of this amendment, 4 leveled
system has been introduced and taxation percentage will be increased. Read more:
Excise on Alcohol, Tobacco and Fuel Increased
Law on Excise Taxation has changed on 14 April 2017 and this amendment shall become effective on 1
January 2018. The excise taxation on alcoholic beverages, cigarettes and fuel shall be increased from
2018 to 2020. Read more:
Law on Physical Culture and Sports: Consequences for Legal Entities
The Law on Physical Culture and Sports dated 6 July 2017 shall become effective from 1 January 2018.
The purposes of this new law is defining management, coordination, activities and legal grounds of
physical culture and sports and regulate relations arisen from development of the sports.
All legal entities, regardless public or private owned, shall undertake the followings:
Create surroundings to have active movement and sports as taking consideration of features of
the workplace;
Plan employees proactive movement and sports and organize sports event;
Spend amount from the organizational budget for employees’ proactive movement and sports
events;
Identify employees physical conditions and undertake actions either not to worsen or better off
employees physical condition; and
Hire physical culture methodologist on voluntary basis.
Social Insurance
Social Insurance Law of Mongolia dated 1995 has been changed on 14 April 2017. The amendment to
the Law, affecting the Insured and Employer, shall become effective from 1 January 2018. The monthly
social insurance deduction percentage for employer and insured (employee) has increased. Read more:
POLAND
Changes in Personal Data Protection System
On 25 May 2018 the General Data Protection Regulation (GDPR) will enter into force and alongside the
EU Regulation relevant national supplementary regulations will be adopted. The changes are aimed at
adjusting personal data protection right to the rapidly changing technological environment. The
responsibilities of administrators and data processing entities will be expanded. The purpose of the new
legislation is also to equip individuals and regulators with effective tools to respond to violations of the
Regulation.
Insurance Distribution Law
The law is to apply from 23 February 2018. It implements into the Polish legal system the provisions of
European Parliament and Council Directive 2016/97 on the distribution of insurance. The Act includes
many consumer-friendly solutions and tightens the requirements for insurers, such as setting a new
register of insurance agents and it obliges the Financial Supervision Commission to supervise the
business of insurance and reinsurance distribution.
Changes in Tax Law
As of 1 January 2018 every active VAT taxpayer will be required to keep an electronic record in the form
of sale & purchase records and send it in the form of a Standard Audit File – Tax (SAF-T) to the
authorities authorized to carry out tax audits. The changes consist in embracing micro-entrepreneurs with
the obligation to transfer their data. In addition, from July 2018, every entrepreneur, in case of tax audit,
will have to keep other records listed in the act also in JPK (SAF-T) form.
Split Payment
On 1 April 2018 an amendment to the VAT Act will enter into force introducing a split payment
mechanism. This mechanism allows for a payment for purchased goods or services to be distributed in
such a way that the net sale payment is paid by the buyer to the vendor's bank account, and the
remainder corresponding to the VAT tax amount is paid into the special vendor's fiscal account.
Split payment is to be a voluntary scheme, the access to which will be subject to submission of the
application.
Ban on Sunday Trading
The act on Sunday trading restriction will be effective from 1 March 2018. Stores will open on the first and
last Sunday of the month. Throughout the year, there will be 23 Sundays with a ban on trading and 29
Sundays in which trade will remain possible. The changes are a transitional stage ahead of a total ban on
Sunday trading, which is planned in 2020.
Energy Market
On 1 January 2018 the energy market law will enter into force. The energy market is expected to be an
additional source of revenue for state-owned power supplying groups, which in turn are required to
maintain the capacity to offer additional power to the power plants. Energy consumers will pay a new fee
(power fee) added to energy bills.
RUSSIA
CORPORATE LAW
Factoring Agreement
Federal Law No 212-FZ clarifies the list of actions concerning monetary claims that financial agent must
perform under the factoring agreement:
Transfer funds to a client against monetary claims, including in form of a loan and advance
payment;
Maintain records of client’s monetary claims to third parties (debtors);
Exercise rights regarding client’s monetary claims, including but not limited to bringing monetary
claims for payment, collecting payments from debtors, etc;
Exercise rights under security agreements.
Financial agent shall perform not less than two of the aforementioned actions. New regulation lays out
explicitly that rules on sale-purchase agreements, debt agreements, and services agreements can be
applied to the factoring agreement. It used to be a contentious issue to date.
From June 1, 2018, financial agent may assign monetary claim (unless otherwise provided by the
factoring agreement), including monetary claims under agreements to be concluded. Furthermore, a
financial agent (factor) has been given the right to exercise set-off with a client.
Escrow Accounts Gain Independence
An escrow account is now completely independent of external factors: Chapter 47.1 “Escrow” has been
added to the Russian Civil Code. Under escrow agreement, one party deposits money with an escrow
agent, who, in turn, makes a delivery to another party (a beneficiary) if and when the specified conditions
of the contract between the two parties are met. The suspension, arrest, and seizure of funds in the
escrow account for the escrow agent’s or beneficiary’s obligations towards third persons are not permitted
(source: The Federal Law No 212-FZ).
Changes in Enterprise Registration
From 1 October 2018, all persons will be able to receive information about the fact of sending the
documents to the registering authority by the legal entity or individual entrepreneur. Also from 1 October
2018, the number of reasons for refusal in registration will increase. If the applicant did not submit all the
required documents or made some mistakes, he can submit a package to the tax inspectorate without
paying a state fee twice, but only within 3 months from the moment of refusal of registration.
Contribution to Property Will Help to Save On Taxes
In accordance with Art. 66.1 of the Civil Code of the Russian Federation, a participant can contribute
money, goods, shares, bonds. Now, if the owner transfers the property to replenish the assets of the legal
entity, they will not be considered as a profit of the company, and therefore will not be subject to taxation.
To prevent disputes with the Federal Tax Service, it is necessary to register the obligation of the
participants to contribute property to the Charter (changes effective 1 January 2018).
Consensual Loan Agreement
According to No. 212-FZ of July 26, 2017 (“Concerning the Introduction of Amendments to Parts One
and Two of the Civil Code of the Russian Federation and Certain Legislative Acts of the Russian
Federation” (“the Law”)), major changes will affect the rules on the loan agreement.
Legal entities will be able to conclude the Consensual loan agreement, so the contract will be
considered as concluded after the signing of the agreement to lend money to a borrower (goods and
securities). Effective from 1 June 2018.
BANKING AND FINANCE
Amount of the Bank's Own Equity (Capital)
From 1 January 2018, the amount of own equity (capital) of a bank holding a universal license shall not
be less than 1 billion roubles, of a bank holding a basic license - not less than 300 million roubles.
If after 1 January 2018 a bank with a basic license reduced the amount of its equity (capital) below the
minimum amount of equity (capital) within 4 consecutive months, such a bank shall within 6 months upon
expiry of the said period replace its status with the status of a non-banking credit organisation or obtain
the status of a microfinance company and simultaneously terminate the status of a credit organisation
and cancel the license to conduct banking operations.
Obligatory Requirements to Founders, Corporate Bodies and Officials of Financial Organisations
From 28 January 2018, the unified requirements to the business standing of shareholders and managers
of banks, insurance organisations, non-state pension funds, microfinance organisations, management
companies of investment funds and mutual investment funds shall apply. Read more:
Finance and Securities
Federal Law No. 212-FZ 'On the Introduction of Amendments to the First and Second Parts of the Tax
Code of the Russian Federation and Individual Legislative Acts of the Russian Federation' comes into
force on 1 June 2018. Amendments introduced by the federal law are conceptual in nature and introduce
new approaches to regulate certain types of contracts. Read more:
New Types Of Bank Accounts Introduced
Public Escrow Account
The account holder can be a notary, a bailiff service, or a court This account can be used to perform
contracts or court decisions. For instance, to pay the debt, the debtor may deposit the debt amount into
the notary's public deposit account. A person, in whose favour the monetary funds is deposited
(benficiary), acquires the right of claim to the account holder with respect to such funds.
Account in Precious Metals
Withdrawal from the account can be both in precious metal, and in the amount equivalent to its value. The
content of the agreement for such an account shall contain the name of the transacted precious metal,
the procedure for calculating the equivalent amount, and the option for withdrawal thereof.
Joint Account
This account is used to place money by several clients. The agreement for such an account is concluded
with individuals only. It seems that the bank under this agreement is an obligated person for all clients
signed the agreement.
Requesting Information from Recipients of Financial Services
From 1 January 2018, civil legal relationships between a microfinance organisation and the recipient of
financial services in connection with the conclusion of the contract for POS-microloans shall be subject to
the provisions on requesting information from the recipients of financial services. Read more:
Banks Will Bear Joint and Several Liabilities for Failure to Perform or Improper Performance of
Obligations under the Letter Of Credit
The issuing bank and the confirming bank, which assumed obligations under the letter of credit, but failed
to perform them (or performed improperly) are jointly and severally liable to the funds beneficiary,
provided that the documents meeting the requirements of the letter of credit have been submitted, and
other conditions specified by the letter of credit have been fulfilled (Article 2.45 of Law No. 212-FZ).
Economic Standards for Microfinance and Microcredit Companies
From 1 January 2018, the instructions of the Bank of Russia come into force that set economic standards
for microfinance and microcredit companies. Read more:
BANKRUPTCY
Extension of the List of Persons Pre-Publishing the Notice of Filing the Bankruptcy Petition
Pursuant to Article 7 of the Bankruptcy Law (as amended from 1 January 2018), the right to apply to the
arbitration court is given to competitive creditors, debtor, employee, former employee of a debtor, who
preliminary (at least fifteen calendar days prior to applying to the arbitration court) published the notice of
their intention to file the petition for recognising them as bankrupt through including them in the Unified
Federal Register of Information on the Facts of the Activities of Legal Entities. Previously, this
requirement only applied to the bankruptcy creditor - a credit institution.
This procedure is not provided for the competent authority for the recognition of a debtor as bankrupt.
Therefore, the Law gives an advantage to the competent authority when submitting a bankruptcy petition,
i.e. there is no need for the competent authority to pre-publish the notice. (Federal Law No. 127-FZ 'On
Insolvency (Bankruptcy)' dated 26 October 2002).
Reduction in the Number of Procedures in the Bankruptcy of Developers
From 1 January 2018, according to Article 201.1 of the Bankruptcy Law, developers will be subject to the
financial rehabilitation and supervision. If the applicant's claims are recognised as justified, the arbitration
court will immediately introduce the procedure of bankruptcy proceedings and appoint an administrator,
who shall meet special requirements and shall be accredited with the Fund for Protection of Rights of
Citizens Participating in Shared-Equity Construction.
Where in the course of bankruptcy proceedings the administrator has sufficient grounds for restoring the
debtor's solvency, the administrator may apply with the arbitration court to stop the bankruptcy
proceedings and to go to the external management.
Extension of the List of Persons Participating in the Developer's Bankruptcy
From 1 January 2018, pursuant to Article 201.2 of the Federal Law 'On Insolvency (Bankruptcy)', a 'new
entity' will be a unitary non-profit organisation - Fund for Protection of Rights of Citizens Participating in
Shared-Equity Construction, which purpose is to pay creditors in case of the bankruptcy of developers as
well as to finance the construction completion. The fund has the status of a public company. Read more:
Publication of the Notice on Sending the Competent Authority's Petition to the Court
In accordance with Article 41 of the Bankruptcy Law, the notice of sending to the arbitration court a
petition of the competent authority for recognition of the debtor as a bankrupt shall be mandatory
published through including in the Unified Federal Register of Information on the Facts of the Activities of
Legal Entities within five business days after the submission of the petition to the arbitration court.
(Federal Law No. 127-FZ 'On Insolvency (Bankruptcy)' dated 26 October 2002).
WHITE-COLLAR CRIME
New Explanations of the Supreme Court on Fraud Issues
At the end of 2017, the Resolution of the Plenum of the Supreme Court 'On Judicial Practice in Cases
Concerning Fraud and Embezzlement' gave new explanations for the application of articles in the area of
WCC (fraud). The decree updates the legal positions that have been in force since 2007. Read more:
Increasing Penalties for Cartel Agreement
The Federal Antimonopoly Service of Russia proposed the draft law on increasing criminal liability for the
conclusion of a cartel agreement and establishing criminal liability for such an act committed by an
organised group, as well as by a person acting as a sole executive body, a member of the board of
directors or another collegial executive body in a commercial or other organisation, and also by a person,
who manages more than fifty percent of the total number of voting shares in the charter capital of the
economic company (partnership, economic partnership). Read more:
Introduction of a New Crime Such as Deliberately False Audit Report
The Ministry of Finance of Russia proposes to supplement the Criminal Code of the Russian Federation
with a new Article 202.1 'Knowingly False Audit Report' that establishes criminal liability for signing an
audit report, which was subsequently submitted to the audited entity or the person concluded the contract
for auditing services, and was deemed by the court to be knowingly false. Read more:
Introduction of a New Criminal Act
The Supreme Court also proposed the draft law on the introduction of a new criminal act such as a
misdemeanor. Read more:
ANTITRUST REGULATION
The Issue of Instructions Might Be Cancelled for a Number of Violations of the Procurement Law
The Draft Order of the Federal Antimonopoly Service of Russia 'On the Introduction of Amendments to
the Administrative Regulations of the Federal Antimonopoly Service' proposes to abandon the need to
issue instructions to eliminate violations identified by FAS Russia officers on an unscheduled basis, if
such violations did not or could not affect the results of a supplier (contractor, performer) selection for
state and municipal needs.
Changes in the Tariff Regulation
The Draft Order of the Federal Antimonopoly Service of Russia 'On the Introduction of Amendments to
the Methodological Guidelines for the Price (Tariff) Formation ...' specifies certain provisions regarding the
calculation of the long-term price (tariff) for electric power, as well as the rules for determining the amount
of invested capital and accounting thereof.
REAL ESTATE
Shared-Equity Construction
The Federal Law 'On Participation in Shared-Equity Construction ...' is intended to be supplemented with
the provisions regulating the interaction of regulatory authorities, the Fund for Protection of Rights of
Citizens Participating in Shared-Equity Construction, and Developers in the Unified Information System
for Housing Construction. This is due to the fact that the UIS for Housing Construction will become
effective from 1 January 2018 and the competent executive authority of the constituent of the Russian
Federation, where the construction is carried out, will have a duty to place information in the UIS as
provided by Article 23.1 of the Federal Law 'On Participation in Share-Equity Construction ... '.
In addition, from 1 January 2018, when considering a developer's bankruptcy case, supervision and
financial rehabilitation are not applied, but requirements are established for the management bodies of
the developer and its participant. Thus, the legislation keeps following the way of strengthening state
control over the implementation of shared-equity construction and tightening requirements for developers.
Preferential Procedure for the Purchase of State and Municipal Real Estate Objects Will Cease
The small and medium businesses shall take into account the termination of the preferential procedure for
the purchase of leased real estate owned by the constituents of the Russian Federation or being in
municipal ownership. The provisions governing the alienation of such property cease to be effective from
1 July 2018.
New Types of Mortgage Certificates, Including Electronic Mortgage Certificate
Draft Law No. 599011-6 'On the Introduction of Amendments to the Federal Law 'On Mortgage (Real
Estate Pledge)' introduces novelties regarding the definition of a mortgage certificate (Article 13 is
amended), the specifics of changing its conditions, and procedure for working with different types of
mortgage certificates. So, there is a new kind of mortgage certificates such as an electronic mortgage
certificate.
Documents for Accounting Real Estate Objects
Article 28 of the Federal Law 'On State Registration of Real Estate' is amended so that the state cadastral
registration shall be certified by an extract from the Unified State Register of Real Estate Objects, and
state registration of the origin or transfer of rights to the real estate object shall be certified by a certificate
of state registration of rights and an extract from the Unified State Register of Real Estate Objects.
Thereat, the certificate of state registration of rights can be only made as a hard copy document. The
amendments will become effective from 1 January 2018.
PPP
The Bidding for Services of Collection and Transportation of Solid Communal Waste for the
Regional Operator Will Be Held Under the Procedure of the Contract System Law
From January 1, 2018, the bidding for services of collection and transportation of solid communal waste
for the regional operator will be held under the procedure of the Contract System Law with a number of
features set out by the Government Decree N 1133.
New Tax Incentives for Investment Projects in Moscow
In accordance with the new regulation, new regime of tax incentives for investment projects carried out in
the city of Moscow is introduced. The tax rate for profit tax, payable to the budget of Moscow for the
members of regional investment projects, included in the special registry, shall be 10 percent if the
requirements are fulfilled. The tax rate shall be 0 percent for only the Investor who is a party to a special
investment contract for creating or upgrading and/or development of the production facilities in the
Moscow territory. (Law of the City of Moscow N22 publicized on 12 July 2017).
Concession Grantor Pay Is Now Considered a Budget Subsidy in Tax Base for Profit Tax
Under new revision of article 271 of the Russian Tax Code (changes effective January 1, 2018) the
monetary form of concessionaire's payment is recognized under non-operating income and will be
considered as budget subsidy. This sum is taken into account by determining the income tax base in the
same order as by subsidies recognizing for financing costs and compensation of expenses. Therefore, it
is now required to take into account the tax paid by the concessionaire from the sums of the concession
grantor pay.
Bashkiria Approved New Tax Incentives for Investment Projects
From January 1, 2018, organizations taking part in investment projects (including public-private
partnership projects) with the Government of the Bashkir Republic are exempt from property tax. The
incentive shall also apply to 5 projects totaling 34 billion rubles concluded in 2017.
Changes to Regulation of Investment Deduction for Profit Tax
From 1 January 2018 article 286.1 about investment deduction for profit tax will be introduced into Tax
Code of Russia. Investment deduction will address only fixed assets with the useful life between 3 and 20
years. Regions will have the right to restrict the list of such assets and set out which categories of
taxpayers will be exempt from the right to deduction. Taxpayers will be able to write off 90 percent of
expenses on the account of regional tax, and the remaining 10 percent on the account of federal tax.
TAX LEGISLATION
On 27 November 2017, the Federal Law 'On the Introduction of Amendments to the Tax Code of the
Russian Federation was signed, which introduced a new chapter 20.1 'Automatic Exchange of Financial
Information with Foreign Countries (Territories)' developed to collect the necessary information to meet
the conditions of bilateral and multilateral agreements. The provisions of chapter 20.1 of the Tax Code
define who are the financial market organisations, establish obligations of these organisations to provide
financial information regarding their clients. However, the content, terms, procedure and period for
submission of such information by a financial market organisation are established by the Decree of the
Government of the Russian Federation, which is currently under the public discussion.
Financial market organisations now have a new obligation to identify the tax residency of their clients, and
the legislation provides for different ways for such identification (in accordance with the draft Government
Decree):
on the basis of information available to the financial market organisation obtained, inter alia, in
connection with compliance with the legislation on combating the legalization (laundering) of
proceeds from crime and financing of terrorism;
on the basis of the obligatory request for information about the client and its beneficial owners.
The said information regarding non-resident clients shall be submitted by the financial market
organisation to the Federal Tax Service Inspectorate.
'Tax Free' System
From 1 January 2018, Russia implements a 'tax free' system, which involves the VAT refund when
exporting goods by citizens of foreign countries (other than EAEU countries) purchased by them in
Russia in retail organisations. Non-Russian nationals may apply for compensation of the tax amount
within 1 year after the purchase of goods provided that the goods are exported from Russia within 3
months from the date of their purchase. Read more:
Procedure for Confirming the VAT Zero Rate for Foreign Parcels
From 1 January 2018, it will be allowed to confirm the 0% rate for foreign parcels using payment
documents and CN 23 declaration. Article 165 of the Tax Code will be amended accordingly.
The Rules of 5%
From 1 January 2018, Article 170.4 of the Tax Code will be amended as follows:
application of the rule of 5% will still allow deducting the 'input' VAT in full. However, the option of
not keeping separate accounting in this case will no longer exist;
the rule of 5% will not work when the goods are used in VAT-exempted transactions only.
Introduction of the Rules on Investment Deduction for the Profit Tax
On 1 January 2018, the provisions on the investment deduction for profit tax come into force. The Tax
Code will be supplemented with Article 286.1 on the reduction of the profit tax by the investment
deduction amount.
Rules for Calculating Doubtful Debt
From 1 January 2018, the rules for calculating doubtful debt will be clarified. Article 266.1 of the Tax Code
will provide that to calculate the doubtful debt, the accounts receivable on the counter accounts payable
shall be reduced starting from the oldest accounts receivable.
New Rules for PIT Reporting in Reorganisation
From 1 January 2018, the Tax Code will establish the rules for reporting on personal income tax in
reorganisation. Pursuant to Article 230.5 introduced to the Tax Code: regardless of the form of
reorganisation, a successor shall submit 2-NDFL certificates and 6-NDFL calculation for the reorganised
legal entity, where such a legal entity failed to do so.
Decrease in the Coefficient for Calculating the Transport Tax for Certain Vehicles
From 1 January 2018 the coefficient for calculating the transport tax will be reduced for some expensive
vehicles. For cars costing from 3 mln to 5 mln roubles inclusive and being not older than three years, a
coefficient of 1.1 will apply. Article 362.2 of the Tax Code will be amended accordingly.
Abolition of the Property Tax Privilege
From 1 January 2018, the federal privilege for movable objects will be abolished. If in 2017 the
constituent of the Russian Federation does not adopt a law that introduces a privilege regarding movable
property, then from 2018 this privilege will no longer operate (Article 381.1 of the Tax Code).
Increase in the Deflator Coefficient for the Sales Tax
From 1 January 2018, an increased deflator coefficient will apply for the sales tax. In 2018, for the
purposes of application of the chapter of the Tax Code of the Russian Federation, the deflator coefficient
equal to 1,285 will apply in respect of the sales tax.
Launch of Tax Office Service for Inspection of Counteragents
From 1 June 2018, the Service for Inspection of Counteragents will start working on the FTS Website.
This will provide information on tax arrears, counteragent's tax violations, etc.
Option to Refuse the VAT Zero Rate
From 1 January 2018, there will be an option to refuse the VAT zero rate for exports and related services.
For this purpose, Article 164 of the Tax Code will be amended accordingly.
Introduction of the VAT Zero Rate for the Re-Export of Goods
A rate of 0% will be set for goods re-export. To apply the zero rate, a bundle of the following documents
shall be submitted to the tax authority: the foreign trade contract (original or copy); customs declarations;
transport and shipping documents. The amendments come into force on 1 January 2018.
Debt Forgiveness by a Participant to the Company Will Be Subject to the Profit Tax
The legislator significantly limited the use of loans within the intra-holding financing.
From 2018, the usual company's debt forgiveness by its participant will be subject to the profit tax
charged from the company, unless the company's debt is accounted for as an increase in the company's
charter capital.
Article 251.1.11 of the Tax Code will be not enough for the debt forgiveness, since the said paragraph
includes property only (in accordance with Article 38 of the Tax Code, property rights were excluded from
the property).
Investment Tax Deduction for Corporate Income Tax
From 1 January 2018, taxpayers may reduce the amount of tax (advance payment) payable to
the budget of a constituent of the Russian Federation by no more than 90% of the current period
expenditures for the purpose of completion, further equipping, reconstruction, modernisation and
technical re-equipment of fixed assets. Read more:
Gambling Tax
From 1 January 2018, the minimum and maximum gambling tax rates are doubled. In addition, the
taxable objects shall be deemed processing centres of interactive betting of totalizators and betting
offices. The tax rate for these objects can be established by the laws of the constituent entities of the
Russian Federation within the range of 2.5 to 3 million roubles.
The application for registration of objects taxable with the gambling tax must be submitted to the tax
authority no later than 5 days before the date of their installation.
Favourable Tax Regime in the Territory of the SEZ in the Kaliningrad Region
From 1 January 2018, in the territory of the special economic zone (SEZ) in the Kaliningrad region new
tax incentives will apply. Read more:
Double Taxation Convention between Russia and Brazil
From 1 January 2018, the Convention between the Government of the Russian Federation and
the Government of the Federative Republic of Brazil 'On Avoidance of Double Taxation and Prevention of
Evasion from Taxation with Respect to Income Taxes' dated 22 November 2004 (together with
the Protocol, dated 22 November 2004), shall apply.
CUSTOMS
The New Customs Code of the Eurasian Economic Union
From 1 January 2018, the Customs Code of the Eurasian Economic Union will enter into force, which
contains many novelties. Unlike the Customs Code of the Customs Union, the new Customs Code of the
EAEU provides for submission of an e-declaration by default. The new term for the release of goods will
be four hours after registration of the customs declaration, and the process of auto registration will take a
maximum of one hour after the date of filing. Read more:
ANTI-CORRUPTION LEGISLATION
From 1 January 2018, information on the liability of a person in the form of dismissal due to the loss of
confidence for the commission of a corruption offence, except for the information constituting state
secrets, shall be subject to inclusion into the register of persons dismissed due to the loss of confidence.
This register shall be published in the state information system on public service in Internet.
The procedure for inclusion of information into the register of persons dismissed due to the loss of
confidence, procedure for the removal of the information from the said register, as well as procedure for
the maintenance and placement of the register in the state information system on public service shall be
determined by the Government of the Russian Federation.
CURRENCY REGULATION
Currency Transactions with the Use of the Accounts of Resident Individuals in Foreign Banks
The list of currency transactions permitted for resident individuals with the use their accounts opened with
banks in the territories of OECD or FATF member countries bypassing accounts with authorised banks
was clarified. The list of such transaction no longer includes crediting of funds paid in the form of grants.
At the same time, the list includes crediting of funds received from non-residents as a result of alienation
of external securities listed on the exchange, as well as income from the transfer of cash and(or)
securities to a non-resident manager in trust management.
Sanitary and Epidemiological Welfare. Quarantine
From 1 January 2018, works on quarantine phytosanitary decontamination are included in the list of
licensed activities. On that date, the provisions regarding creation and operation of federal state
information systems in the area of plant quarantine will come into force. Many aspects of the interaction
between the regulator (Rosselkhoznadzor) and organisations will switch to electronic format. In particular,
interested parties will obtain quarantine certificates for circulation of quarantine products exclusively in
electronic form.
State Control and Supervision
From 1 January 2018, as part of the global reform of the system of business inspections, new principles
for carrying out control measures come into force.
When organising certain types of control determined by the Government of the Russian Federation, the
state authorities will have to apply a risk-oriented approach. With this approach, the choice of the intensity
of control measures depends on the certain risk category or hazard class (category) of the activities of a
legal entity, individual businessman and(or) production facilities used by them. Read more:
LITIGATION
Simplified Procedure in the APC and CPC
A simplified procedure in the courts of general jurisdiction will allow to settle disputes for funds recovery
or claiming for property at a claim price of not more than 500 thsd roubles. The current threshold is 100
thsd roubles. Read more:
Court Representation
Deputies of the State Duma proposed a draft law, under which civil and administrative cases will be
supported only by professional lawyers. Currently, the higher education requirement is only provided in
the APC RF. Read more:
Judgements without a Reasoning Part
The Supreme Court of the Russian Federation proposed to the State Duma a draft law, under which
reasoned decisions will be prepared by courts only upon applications of parties to the case or their
representatives.
Arbitration courts will require reasoning, if an appeal is filed or the case refers to a certain category (for
example, a corporate dispute or a bankruptcy case); as for the courts of general jurisdiction, the legislator
also wants to determine in the CPC, in which cases the reasoning part is necessary. Read more:
Clarifications on Subsidiary Liability
The Plenum of the Supreme Court is finalising the Draft Decree on Subsidiary Liability, which explains
how to apply Chapter III.2 of the Bankruptcy Law (introduced by Law 266-FZ, dated 30 July 2017).
The Draft also determines the signs of a controlling entity and significant benefits, and pays attention to
the division of subsidiary liability into joint and shared liability.
The legal community speaks about the debtor-oriented (note: for debtor's benefit) nature of the Decree
and possible negative effects such as complication of the bankruptcy procedure.
Unilateral Withdrawal from a Contract
In accordance with Article 310.3 of the Civil Code of the Russian Federation, unilateral refusal to perform
obligations is generally not allowed. At the same time, in cases where the right of unilateral withdrawal is
provided by law or the contract, the parties to the obligation may establish a certain amount of money to
exercise such a right. Read more:
E-Correspondence as Evidence in Court
The Supreme Court noted the option of the parties to prove their position in the case by providing their
electronic correspondence with counterparties. A notarial protocol for inspecting the e-mail box is
considered as proper evidence.
LABOUR LAW
Inspections by the State Labour Inspectorate
Employers will be inspected on a scheduled basis in accordance with the checklists. Checklist is a list of
special control questions covering the most important requirements of labour law related to the employer.
Currently, 107 checklists have been developed When conducting a scheduled inspection, the labour
inspector will be limited to the list of questions contained in the respective checklists.
From 1 January 2018, the checklists will be used to inspect companies that are referred to the moderate
risk level, while the other companies will be subject to another procedure as effective from 1 July 2018.
The Register of Persons Dismissed Due to the Loss of Trust
Dismissal due to the loss of trust is applicable to the officials or employees of the state corporation.
Information on the dismissal of a person due to the loss of trust for the commission of a corruption
offense, except for information constituting a state secret, shall be included in the Register of Persons
Dismissed Due to the Loss of Trust. However, the procedure for entering and excluding information from
the Register has not been approved yet.
INTELLECTUAL PROPERTY
From 1 January 2018, the protection of related rights of directors of theatrical works shall be enhanced.
The production made by directors of performances in a form that allows its repeated public performance
subject to preserving the recognisability of a particular production by the audience, is defined as a special
performance output.
A director is granted with personal non-property rights (right to the performance inviolability) to
the public performance, not limited to their protection while using the production in recorded form, in
broadcasting or transmitting through cable, in bringing the production to the public. The start date of
protection of the exclusive right of the director to the production depends on the time of the first public
performance of the production.
Repeated public performance of the production by a person who made the first public performance upon
the consent of the director before 1 January 2018, shall not be treated as a violation of Article 1317.2.10
of the Civil Code of the Russian Federation, unless the contract of the director with the said person
expressly provides for one-time public performance of the production or limited number of performances.
INTERNET AND MEDIA
Internet Messengers
From 1 January 2018, the internet messengers shall be obliged to:
identify by mobile phone number of the users, whose electronic messages they transmit;
within 24 hours from the receipt of the relevant request from the competent authority, limit the
possibility of the user to enjoy the messaging service;
provide the technical possibility for users of the instant messaging service to refuse to receive
electronic messages from other users;
ensure the confidentiality of transferred electronic messages;
ensure the possibility of transferring electronic messages on the initiative of state authorities;
not allow the transfer of electronic messages to users of the instant messaging service in cases
and in the procedure determined by the Government of the Russian Federation.
The ID information about the subscriber numbers shall be stored by messengers in the territory of Russia
only. Such information can be provided to third parties upon the consent of the user, except for the cases
provided for by law. The instant messaging service organiser shall be obliged to provide a proof of the
respective consent.
Requirements to the Information to Be Published by Online Media
From 1 January 2018, the online media shall ensure that the following information is published on its
website: name (title) of the publication, founders (co-founders), full name of the editor-in-chief, e-mail and
phone number of the editorial board, content mark (in certain cases). The founder of a mass media shall
be obliged to notify the registering authority on the termination, suspension, and resumption of media
activities. Read more:
INFORMATION SECURITY
Protecting the Critical Information Infrastructure of the Russian Federation from Hacking
On 1 January 2018, Federal Law No. 187-FZ dated 26 July 2017 "On the Security of the Critical
Information Infrastructure of the Russian Federation" comes into force.
The critical information infrastructure includes information systems, information and telecommunications
networks, automated management systems for critical information infrastructure facilities, and
telecommunication networks used to organise interaction between such facilities. Read more:
Criminal Liability for Undue Influence on the Critical Information Infrastructure of the Russian
Federation
From 1 January 2018, there will be the criminal liability for:
creation, dissemination and/or use of computer programs or other computer information that is
knowingly intended to unduly influence the critical information infrastructure of the Russian
Federation, including for destruction, blocking, modification, copying of information contained
therein or neutralising the means of protecting the said information;
unlawful access to protected computer information contained in the critical information
infrastructure of the Russian Federation, including with the use of computer programs or other
computer information that is knowingly designed to unduly influence the critical information
infrastructure of the Russian Federation, or other harmful computer programs, if it caused harm to
the critical information infrastructure of the Russian Federation;
violation of the rules for the operation of the means of storing, processing or transmitting
protected computer information contained in the critical information infrastructure of the Russian
Federation or information systems, information and telecommunications networks, automated
control systems, telecommunications networks related to the critical information infrastructure of
the Russian Federation, or the rules for access to the said information, information systems,
information and telecommunication networks, automated control systems, telecommunication
networks, if it caused harm to the critical information infrastructure of the Russian Federation.
STATE PROCUREMENT
Procurement from Small and Medium Enterprises
From 1 January 2018, the threshold values of revenues and assets of legal entities that are obliged or
may make purchases from small and medium enterprises (SMEs) are reduced. Read more:
Uniform Rules for Describing Medicines for Medical Use
From 1 January 2018, the specific requirements to the description of the medicines for medical use which
are purchased for the state and municipal needs in documentation on purchase of the medicines shall
become effective. Read more:
Requirements to Banks Issuing Guarantees to Secure Applications and State Contracts
From 1 January 2018, customers when making purchases for state and municipal needs shall accept
bank guarantees that meet the requirements set by the Government of the Russian Federation. The list of
banks that meet such requirements shall be kept by the Ministry of Finance of the Russian Federation
based on the information received from the Bank of Russia, and shall be posted on the official website of
the Ministry of Finance.
INDUSTRY
Rules and Criteria for Classifying Products as Industrial Products that Have No Analogues
Produced in Russia
On 1 February 2018, the Rules and Criteria for Classifying Products as Industrial Products that Have No
Analogues Produced in Russian Federation approved by the Decision of the Government of
the Russian Federation No. 1135 dated 20 September 2017, come into force.
Criteria for classifying products as industrial products that do not have analogues produced in Russia are
defined as differences between the product parameters and parameters of industrial products produced in
Russia. Read more:
Classification of Products as Products Manufactured in Russia
From 1 January 2018, more stringent requirements for industrial products are established to classify them
as products manufactured in Russia; in particular, the requirements for the percentage of foreign
components in the manufacture of machine tools; the number of operations performed on
the territory of the Russian Federation in the production of self-propelled single-bucket excavators and
loaders, crawler cranes, conveyors for the food industry, etc.
Ban for Production and Turnover of Low-Alcohol Tonic Beverages Except for Exports
From 1 January 2018, a ban for the production and turnover of alcoholic products with an ethyl alcohol
content of less than 15% of the volume of finished products containing tonic substances (components) is
introduced, except for the products produced for the purpose of export from the Russian Federation.
Read more:
MEDICINE AND PHARMACEUTICALS
Law on Telemedicine
From 1 January 2018 the Federal Law 'On the Introduction of Amendments to Certain Legislative Acts of
the Russian Federation on the Application of Information Technologies in the Area of Health Protection'
No. 242-FZ dated 29 July 2017 comes into force (except for certain provisions).
Medical assistance with the use of telemedicine technologies shall be organised and provided
according to the procedure established by the competent federal executive authority, the procedures for
the provision of medical care and based on medical care standards. Read more:
List of Vital and Essential Medicines for Medical Use
On 1 January 2018, the following lists approved by the Order of the Government of the Russian
Federation No. 2323-r, dated 23 October 2017:
list of vital and essential medicines for medical use;
list of medicines for medical use, including those prescribed by the decision of medical
commissions of medical institutions;
list list of medicines for people with hemophilia, cystic fibrosis, pituitary dwarfism, Gaucher
disease, malignancy of lymphoid, hematopoietic and related tissue, multiple sclerosis, persons
after the transplantation of organs and(or) tissues;
minimum range of medicines needed for medical care.
The new lists are supplemented with a number of medicines and dosage forms for medicines already
included in the lists.
Information on the Interconvertibility of Medicines for Medical Use
From 1 January 2018, information on the interchangeability of medicines for medical use will be included
in the state register of medicines (i.e. for the purposes of state and municipal procurements). It is also
allowed to use the results of determining the interconvertibility of medicines for medical use.
TECHNICAL REGULATION
From 1 January 2018, a number of sections have been excluded from the uniform list of products that are
subject to obligatory certification. Read more:
STATE CONTROL (SUPERVISION)
Risk-Oriented Approach in the Organisation of Certain Types of State Control (Supervision)
From 1 January 2018, a risk-oriented approach in organising and implementing state control (supervision)
over business activities will apply. Under this approach, in some cases, the choice of intensity (form,
duration, periodicity) of inspections and other control measures is determined by referring the activities of
a legal entity, individual businessman and(or) production facilities used by them in the performance of
such activities to a certain risk category or a certain hazard class (category). Read more:
Checklists for Scheduled Inspections
From 1 January 2018, in the course of scheduled inspections of legal entities and individual
businessmen, the controlling authorities will use checklists in certain cases. Read more:
SWITZERLAND
Federal Act on the Acquisition and Loss of Swiss Citizenship
Following the revision of the federal law, the conditions for the acquisition of Swiss citizenship have
been tightened. The main conditions are: ten years of lawful residency and integration (incl. sufficient
knowledge of a national language) in Switzerland.
Federal Act on the Value Added Tax revised
The application Swiss VAT depending on turnover has been revised. The turnover limit of CHF 100'000 is
applicable to turnover not just in Switzerland but also worldwide. There are some other
amendments regarding the tax rates. The main tax rate will has been lowered to 7.8%.
TURKEY
Mandatory Mediation In Labour Disputes
Law of Labour Courts numbered 7036 (the “Law”) published in the Official Gazette No. 30221 dated
October 25, 2017; introduced fundamental changes in the settlement of labour disputes. The radical
changes implemented with the Law are as follows.
Mediation is only adopted as a preliminary condition before legal action in the selected type of issues
noted at the Article 3 of the Law; ‘application to mediation is a pre-condition for cases dependent on
individual or collective bargaining employment contracts or cases of employee or employer claims and
compensation demands and for cases of employee reinstitution.’ This relevant Article 3, will enter into
force at January 1, 2018.
According to this arrangement, the claimant whether employee or employer should apply to a mediation.
Even if the claimant does not apply to mediation prior to bring an action before courts, his/her action will
be dismissed due toprocess of law. In respect of this dismissal, the claimant should apply to a mediation
within two weeks from the date of notification of this court decision.
UZBEKISTAN
Currency regulation
Liberalization of foreign exchange market remains a priority in Uzbekistan. It is expected that until mid-
2018, the Central Bank of Uzbekistan will develop a new version of the Law "On Currency Regulation". In
addition, according to Presidential Decree No. 3270 dated 19 September 2017, all commercial banks
were recommended to develop development strategies aimed at transforming banks into financially stable
and competitive institutions.
The procedure for compulsory declaration of foreign currency by individuals for import to Uzbekistan and
export from the country within the amount equal to or not exceeding the equivalent of $2,000 will be
canceled from 1 January 2018.
This change is reflected in the decree of the President of Uzbekistan "On measures to further simplify the
procedure for the import and export of cash foreign currency by individuals" dated 6 December 2017. The
decree states that "export by individuals of cash foreign currency outside the Republic of Uzbekistan is
carried out without any permits within the amount equal to or not exceeding the equivalent of $5,000".
International Trade
The Decree of the President "On measures for further liberalization of foreign trade activity and support
for business entities" dated 1 December 2017 intends to liberalize country’s export and import regime.
The Decree establishes the following measures:
Unification of currency repatriation period
The Decree abolishes the variable time periods for repatriation and instead provides for a unified, 120-
day term for all export operations.
Relief from payment security requirement
In prior years companies wishing to export goods and services previously were required to obtain from
the purchaser one of several types of security for payment of the purchase price: an advance payment, a
letter of credit, a bank guarantee or an export insurance policy. The Decree eliminates the payment
security requirement for most types of goods and services, provided that the exporter has no overdue
receivables under previous export operations.
Export without export contract
The Decree states that companies will be entitled to export goods (except fresh produce) and services
without an export contract, on the basis of an invoice, provided that the following conditions are met: (i)
the export operation is reflected in the Unified Electronic System5 for currency control purposes, and (ii)
100% prepayment is received in the Uzbek bank account of the exporter.
Strategy for Further Development
In 2018, Uzbekistan will continue to follow the Strategy for Further Development of the Republic of
Uzbekistan approved by Presidential Decree No.4947 dated 7 February 2017. It includes five priority
development directions:
reform of public administration and the introduction of the "Electronic Government" system;
reform of judicial and legal system;
development and liberalization of the economy;
development of the social sphere;
implementation of a balanced foreign policy.
Taxation
Effective 1 January 2018, numerous changes are introduced to tax administration sphere in accordance
with Presidential Decree No. 5116 dated 18 July 2018:
for the first time the government introduces the concept of tax holidays that will be granted to
bona fide taxpayers facing temporary financial difficulties;
the concept of large taxpayers will be incorporated into the Tax Code;
tax monitoring, a modern form of tax control, will be introduced. It includes an exchange of
information between tax authorities and bona fide taxpayers;
term for refund of overpaid taxes will be shortened from 30 days to 15.
Hydropower
Uzbekistan will continue to develop hydropower industry in accordance with Presidential Decree No. 2947
dated 2 May 2017. Specifically, the strategy for development includes the construction of 18 new and
modernization of 14 existing hydropower plants in the country.
Administrative reform
An administrative reform is accelerating in Uzbekistan. Uzbekistan continues to follow a Roadmap on
realization of Administrative Reforms’ Concept approved by Presidential Decree No. 5185 dated 9
September 2017. It includes:
step-by-step decentralization of public authorities;
reduction of an administrative impact on the economic sectors;
reduction of a budgetary burden and bureaucracy;
modernization of an Electronic Government system;
introduction of a new system of performance assessment of local authorities.
Chemical Industry
Uzbekistan will continue to develop chemical industry in accordance with Presidential Decree No. 3236
dated 23 August 2017. The development program includes realization of 43 investment projects. 25
projects are aimed at the construction of new chemical industry facilities, and 18 - at modernization of
existing plants.
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