Category: News

Since the beginning of 2021 the Decree of the Ministry of Economic Development of Russia N 478 came into force that implemented the obligation for the applicants of conformity declarations for products manufactured outside the territory of Russia or EAEU to specify the GLN (Global Location Number) in relation to the place of products manufacturing, as well as the GTIN (Global Trade Item Number), which allows to identify the object of declaration in the course of the declaration registration. 

These codes can be obtained by registering with the GS1 association (an international organization that deals with the standardization of accounting and bar coding of goods).

However, after numerous appeals from the business community representatives the implementation deadline was resceduled for the July 1, 2021 and the transition period was specified as follows:

1. The GLN code is specified only if available – until July 1, 2021.

2. The GTIN code is specified if available.

Currently, membership in GS1 is voluntary and the lack of the above mentioned codes and, accordingly, the impossibility of entering it into a specialized service for automated electronic registration of conformity declarations does not prevent the registration of such declarations. Still if the receipt of GLN code will become mandatory from July 1, 2021, importers will have to be registered with the GS1 association, which will incur additional costs and administration. 

Please check with your logistic department, if your company could be affected by the new regulation, to be prepared or initiate the necessary steps in advance.

We’ll keep you posted.

After the spread of the Covid-19 virus is sufficiently overcome in the opinion of the Russian authorities, the introduction of a new type of visa to enter Russia is expected: the ‘Unified e-visa’. This type of visa will be valid  throughout the Russian Federation for a short-term stay for guest or business visits, tourism, or participation in scientific, cultural, socio-political, economic and sports events. An invitation is not required.

The citizens of 52 countries will be allowed to apply for the Unified e-visa, among which Austria, Belgium, Germany, Spain, Italy, the Netherlands and France.

Visa applications will be facilitated on a special website and by a mobile app of the Russian Ministry of Foreign Affairs.

The Unified e-visa is a single-entry visa with a validity period of 60 days from the date of registration. The permitted period of stay in the Russian Federation on basis of this visa type is not more than 16 days from the date of entry.

Unified e-visas will be issued within 4 calendar days from the date of the application.

602,308,745 rubles were received by illegally dismissed employees from their employers through the courts for the period 2018 – the first half of 2020.

This figure perfectly demonstrates that the employees in Russia actively defend their rights in court, and the employers still make many mistakes while dismissing the employees.

On December 9, 2020, the Russian Supreme Court approved large Survey of the court cases related to the termination of an employment contract at the initiative of the employer (https://www.vsrf.ru/documents/all/29463/ ). In this document, the Supreme Court analyzes the courts’ mistakes and explains how the legal provisions on dismissal shall be applied.

One of the main points of this Survey is that the principle of humanity shall be applied by the courts in relation to the employees. It is forbidden to use the employment law instruments only for the purpose to get rid of an employee. The circumstances of the particular situation must be taken into account.

One interesting case was mentioned by the Supreme Court in its Survey. It concerns the dismissal of a remote employee for absence at work. Initially, this employee worked in the office. Then he started working from home. This was agreed with the employer. However, no amendments to the employment contract were made. One day (after several years working from home!), the employer decided to dismiss the employee for long absence at work. The employee filed a lawsuit and the court in this case took the side of the employee. The court indicated that the employee and the employer have reached an agreement on the remote performance of work. The employer was the one who was responsible for correct formalization of this agreement.

And we would like to remind you that as from January 1, 2021, the amendments to the Labor Code of the Russian Federation concerning remote work came into force. During this year remote work has become our new reality, and now, more than ever, it is important to have legally accurate internal regulations and employment contracts provisions associated with remote work issues.

Our team will be happy to advise you on all the nuances of the new legislation and elaborate all the necessary documents. For all the questions, please contact us.

After having pressed Cyprus, Malta and Luxembourg to renegotiate their Double Taxation Treaties (DTT) for a withholding tax rate of 15% to be applied to most dividend and interest payments, Russia failed to reach a similar agreement with the Netherlands and is now threatening to denounce the Russian-Dutch DTT.

The DTT termination between Russia and the Netherlands would result in:

• Upturn of the tax burden for Dutch residents (20% for interest and royalty payments and 15% for dividends);
• Difficulties with getting a foreign tax credit (no foreign tax credit would be granted to natural persons and legal entities in regard to dividend income, getting a foreign tax credit for further passive income would require extended documentation obligations);
• Increase of tax obligations for Russian companies and natural persons, as Dutch tax reliefs would cease to apply vice versa

Last week the Ministry of Finance of the Russian Federation announced the initiation of a draft law regarding DTT termination. Given the existing denunciation procedure (notification should be done at least 6 months prior the termination year), the new taxation reality might become effective as from 2022. Therefore, taxpayers would still have one more year to consider the effects on their business and restructuring possibilities.

Furthermore, there is still a chance both countries will come to a mutual agreement. The same announcements were published earlier after the negotiations with Malta ended in deadlock. However the parties finally managed to find a compromise and the Russian-Malta DTT was revised. The  day after this announcement the Russian Ministry of Finance confirmed they were still ready to find a compromise with the Netherlands and did not fully exclude further rounds of negotiations.

We will keep you updated on the topic and will be glad to provide further information upon request.

Foreign businesses will no longer need to register a separate company in Russia. The Ministry of Economic Development is planning to allow the branches of foreign companies in Russia to obtain a license without the need to establish a separate Russian entity. The draft law would apply to a wide range of business spheres and should facilitate the access of foreign investors to the Russian market.

At the present moment the grant of license is only possible to the companies established in Russia and registered with the Unified State Register of Legal Entities (USRLE). Branches of foreign legal entities are registered in a separate “Register of accredited branches and representative offices of foreign companies” (Accreditation register), which is kept by the Russian Federal Tax Authority. Currently more than 2000 branches are registered with it. Because of this difference, in case a foreign company is planning to carry out business in Russia, which falls under licensing regulation, it is forced to establish a Russian subsidiary. Thanks to the law amendments Russian and foreign businesses will gain equal opportunities without additional administrative burden.

The draft will enable the branches of foreign companies to obtain licenses based on their registration number and the date of registration in the Accreditation register. 52 types of activities would fall under the new regulation, among which are education, medicine, passenger traffic and pharmaceuticals.

The measure is advertised as stimulating foreign enterprises to expand, invest money into Russian economy and create new jobs. However, not all foreign entities would enjoy the facilitation of market entry. For example no changes are due for the financial sphere: The Central Bank of Russia will not issue a license to carry out banking activities to foreign companies.

If you wish to know more about doing business in Russia, proper choice of the legal form for your activities, advantages and disadvantages of having a Russian subsidiary vs. a foreign branch, envisaged costs, legal and reporting obligations in this regard we would be glad to provide you with detailed advice.

Since 17 November 2020 a number of new COVID-19 rules are applicable in Russia.

The most important new rules are:

1. The COVID-19 laboratory test must be no older than  48 hours now (there was no time limit set previously). 

2. Discharge from COVID-sick leave requires 1 negative test now, instead of 2 previously.

3. Self-isolation of 14 days is mandatory for the following persons:

– COVID-19 positive tested;

– having COVID-19 symptoms (suspected cases);

– having had close contact with persons who have tested positive for COVID-19. In case of absence of COVID-19 symptoms within 14 days, a COVID-19 test is not necessary.

4. The territorial bodies of Rospotrebnadzor are obliged to:

– notify persons who have tested positive for COVID-19 and all their contacts of mandatory 14 days isolation;

– notify medical organizations about the need to establish medical surveillance of the above persons.

The new rules will remain in force until 1 January 2022.

Please let us know if you have any questions. We will be happy to assist you.

Russia is preparing to join the Convention on the Recognition and Enforcement of Foreign Judgements in Civil or Commercial Matters of 2 July 2019.

On 19 October 2020 The Ministry of Justice of the Russian Federation together with the Ministry of Foreign Affairs of the Russian Federation, the Supreme Court of the Russian Federation and other authorities submitted to the Government of the Russian Federation documents proposing to sign the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters of 2 July 2019.

In case of a positive result (ratification), the Convention provides:

– a list of cases in which the courts of one state which ratified the Convention undertakes to recognize and enforce the decision made a court of another state which also ratified it;

– grounds for refusal to recognise and enforce a decision of a foreign court.

These provisions will increase the guarantees of enforceability of foreign court decisions in Russia and of Russian court decisions abroad.

Meanwhile Juralink is already actively assisting its clients in enforcement of foreign court and arbitrage decisions in Russia without waiting for the ratification of the above Convention but using the possibilities provided by international treaties at present.

When you decide that employees shall (partially) return to your Russian office, be well prepared. You must comply with detailed instructions from government agencies and sanitary inspectors, regarding documents, procedures and goods in place. Authorities take these strict measures to prevent a recurrence of the COVID-19 epidemic.

For a (partial) return to the office you need to purchase antibacterial agents, masks, gloves, and air cleaners etc. for use in the office. You must develop procedures for disinfection, temperature checks of employees and distancing measures. Internal orders are needed to assign COVID-19 prevention tasks to staff. Records must be kept to evidence compliance. And a local act must be drafted to issue requirements for the sanitary regime and personal hygiene of employees, the specifics of access modes, lunch time rules, sanitary treatment of premises, providing employees with protective equipment, and other necessary measures for preventing the spread of coronavirus infection.

Failure to comply with the required measures will result in a fine of up to 1 million rubles or a suspension of activity for up to 90 days.

Please let us know if you have any questions. We will be happy to assist you in drafting the correct documents and organizing the implementation of your return to the office after quarantine.

Recent changes in Russian labor legislation aim to digitalize records with regard to employees’ labor activities and implement so called «e-labor books». During 2020 employees have the right to choose between one of the following two options: to continue registrations in a paper labor book or retrieve their paper labor book and switch to submission of information on employment activity only in electronic form.

The law gives the employer a new obligation. Employers must notify their employees of the regulatory changes, including the procedure of maintenance of employees’ labor books, in writing no later than 30 June 2020 and adjust the employer’s internal regulations accordingly. Hereafter (till December 31, 2020) employees may inform their employer about their choice by filing a respective application. Furthermore, the employer must also notify the Pension fund on his employees’ applications.

Violation of the above mentioned deadline or requirements may lead to administrative fines up to 50.000 RUB, both for the General Director personally, as well as for the company.

Please do not hesitate to contact us should you have any questions or wish the assistance of our legal team in the implementation of the acknowledgment/notification.