Law on remote identification of non-residents was signed

The President of the Russian Federation signed a law allowing for the identification of foreign clients remotely.

The purpose of creating this mechanism is to enable such clients to carry out transactions in the Russian financial market and open accounts in Russian banks and other Russian financial institutions.

“Identification of a client, client representative, beneficiary, beneficial owner, as well as updating information about clients, client representatives, beneficiaries, beneficial owners” will be carried out by Russian banks and professional participants in the securities market (except investment advisers), investment platform operators, investment management companies funds, mutual funds and non-state pension funds, as well as operators for the issuance of digital financial assets (DFA).

If the Central Bank of the Russian Federation required the bank not to transfer the identification of a foreign organization, the bank will have to terminate the agreement within five working days after receiving the decision of the regulator.

The government will approve the list of countries whose residents will be able to carry out remote identification in Russia, in agreement with the FSB and the Central Bank.

In addition, the new law lowered the thresholds for monitoring transactions with foreign clients in the Russian Federation - from 1 million rubles to 50 thousand rubles. That is, a transaction with funds in the amount equal to or above 50 thousand rubles is subject to mandatory control if it is carried out on behalf of a client-foreign citizen, and for legal entities this threshold is 500 thousand rubles. These thresholds are applicable only for remote client identification.

Federal Law No. 308-FZ of July 10 2023 “On Amendments to Articles 6 and 7 of the Federal Law “On Counteracting the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism” http://pravo.gov.ru/ proxy/ips/?docbody=&nd=102072376

Nadmitov, Ivanov and Partners Law Firm advises on banking law, foreign and Russian bank accounts.