1. Are there any exclusions from the reporting requirement with regard to clients - Russian citizens who directly or indirectly control financial accounts in case he or she has double citizenship?
The Law doesn’t provide for any exclusions from the requirement to report about legal entities directly or indirectly controlled by the Russian citizens and Russian individuals reporting in cases of dual citizenship.
2. Does the FTS of Russia have plans to develop an online solution for foreign financial institutions to fulfill the reporting requirements in the near future?
The FTS of Russia is developing reporting forms in PDF format which can be filled in electronically.
3. Is there any correlation between the OECD Standard for automatic exchange of financial account information in Tax Matters (hereafter – the Standard) and provisions of article 6 of the Law?
Generally these regulations present different reporting frameworks and currently the possibility to align them is not being considered.
In contrast to the Standard, Article 6 framework requires reporting is limited to details of opened and/or maintained during the reporting period financial account of Russian taxpayers.
Moreover information under Article 6 framework is to be reported by foreign financial institutions (FFIs) directly to the FTS of Russia.
4. Is it required under the Article 6 framework prior to reporting the information to the FTS of Russia to obtain the consent of the client? Are there any consequences for reporting the information without such consent?
Article 6 framework doesn’t include any requirements with regard to the client consent as well as any consequences for reporting the information without the client consent.
Note: Russian legislation includes the requirement for individuals and legal entities acknowledged as residents for the purposes of controlling currency operations to report on opening the accounts in the foreign banks as well as regularly inform the FTS of Russia on the cash-flow on such accounts.
5. What are the criteria for determining direct and indirect control of legal entities by Russian citizens for the purposes of the Article 6 framework?
Criteria of control should be determined in accordance with provisions, established by the Russian tax legislation as in Article 25.13 of the Tax Code of Russia (controlled foreign companies and controlling persons)
6. Sanctions for foreign financial institutions
Sanctions against non-compliant FFIs are not currently established in Russian legislation. However Article 6 prescribes the existence of such sanctions.