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Press releases and law firm thought leadership

This page is dedicated to keeping readers informed of the latest news and thought leadership articles from law firms across the globe.

If your firm wishes to publish press releases or articles, please contact Shehab Khurshid on +44 (0) 207 396 5689 or shehab.khurshid@legalease.co.uk

 

Legal Developments Worldwide

Articles contributed by Pepeliaev Group

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Amendments to Part IV of the Russian Civil Code in 2015

July 2015 - Intellectual Property. Legal Developments by Pepeliaev Group.

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Author: Valentina Orlova, Head of Intellectual Property and Trademarks Practice, Pepeliaev Group

2014 saw most of the amendments to Part IV of the Russian Civil Code come into effect. The amendments were set by Federal Law No. 35-FZ dated 12 March 2014 "On Amending Part I, II and IV of the Civil Code of the Russian Federation and Certain Items of Legislation of the Russian Federation." Yet, some of the amendments stipulated by the federal law only became effective starting from 2015.

Parallel Import of Medicines: High Time or the Wrong Time?

June 2015 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Authors: Sergey Klimenko, Head of Life Sciences Group; Yuri Yahin, Head of IP Group, Pepeliaev Group

With Russia still heavily dependent on foreign medicines, the current rocketing of prices for these while the healthcare budget heads in somewhat the opposite direction has caused heated debate. In particular, once again there are discussions over lifting the ban on parallel imports of medicines. More precisely, the topic has been resurrected, as disputes have rumbled on over several years, occasionally fading into the background. The current, temporary difficulties provide fertile ground for argument to flourish again, with a new tide starting this February. However, the parallel import in general has become even more topical now given that the Federal Antimonopoly Service (FAS) has recently stated that it would like to expand the scope of parallel imports in other areas, such as cosmetics, perfumery, beverages and hygiene products,. These will be added to car parts and medicines, which were already included on the prospective list. It seems as though a green light for parallel importation of medicines will be presented as a fait accompli. This means that it is now the time to consider what kind of results can be expected.

A Look at Russia's Antimonopoly Legislation

June 2015 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Elena Sokolovskaya, Head of Antimonopoly Regulation Group, Pepeliaev Group

The main areas covered by Russian antimonopoly legislation are prohibition of the abuse of a dominant position, regulation of prohibited agreements, antimonopoly requirements for bidding, merger control, and prohibition of unfair competition.

In recent years more attention has been paid to the development of Russian antimonopoly legislation. For this purpose, the State Duma of the Russian Federation (the lower chamber of Russia's parliament) is considering draft measures billed as the 'Fourth Antimonopoly Package'. This comprises amendments to Law No. 135-FZ 'On Protecting Competition' (the "Law on Competition") as well as to the Russian Administrative Code. The measures have already been passed in the first reading and are expected to make it onto the statute book before the end of 2015.

A NEW DEVELOPMENT IN CRIMINAL LIABILITY FOR RESTRICTING COMPETITION

April 2015 - EU & Competition. Legal Developments by Pepeliaev Group.

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Pepeliaev Group Advises of Amendments to Article 178 of the Russian Criminal Code to Decriminalise Certain Offences and Introduce a New Condition for being Released from Criminal Liability for Restricting Competition

 

EXTENSION IN TARIFF TERMS OF AGREEMENT

April 2015 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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EXTENSION (until 31 December 2015) OF THE TERM OF THE INDUSTRY TARIFF AGREEMENT FOR COMPANIES IN THE CHEMICAL, PETROCHEMICAL, BIOTECHNOLOGICAL AND CHEMICAL AND -PHARMACEUTICAL INDUSTRIES IN RUSSIA

Julia Borozdna, Partner, Head of Employment and Migration Law Practice;   Alexander Korkin, Head of St. Petersburg Group, of Employment and Migration Law Practice, Pepeliaev Group's St. Petersburg Office, Pepeliaev Group     

At the federal level in Russia, an Industry Tariff Agreement (the "Agreement") was adopted for 2012-2014 for companies in the chemical, petrochemical, biotechnological and chemical and pharmaceutical industries in Russia. The Agreement sets additional obligations and automatically extends to companies in Russia's chemical industry.
An Agreement to extend the term of the Agreement until 31 December 2015 was signed on 26 November 2014 (the "Extension Agreement"). 
On 4 February 2015, Rossiyskaya Gazeta published a Letter of the Russian Ministry of Labour and Social Protection (the "Ministry of Labour") in relation to joining the Extension Agreement. To refuse to join the Extension Agreement, a well-grounded refusal should be submitted to the Russian Ministry of Labour by 5 March 2015. 

Legislative amendments are being prepared with regard to the production and circulation of alcohol

April 2015 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Substantial legislative amendments are being prepared with a view to placing restrictions on the issuing of licences to produce and circulate alcohol, and to make liability harsher if the production and circulation of alcohol is not duly declared

Elena Ovcharova (PhD in Law), Head of the Administrative Defence of Business, Pepeliaev Group

Pepeliaev Group advises that the State Duma has accepted for consideration a draft law under which, if licences to produce and circulate ethyl alcohol, alcohol and products containing alcohol are revoked, or are terminated early after being suspended, a replacement may be obtained only after a year has elapsed. Provision is made for other equally substantial amendments. These cover situations when the production and circulation of alcohol is not properly declared, and when a licence is reissued further to a reorganisation.

A group of deputies has put before the State Duma Draft Law No. 665811-6 “On amending article 19 and 20 of the Federal Law ‘On the state regulation of the production and circulation of ethyl alcohol, alcohol products and products containing alcohol, and on limiting the consumption (drinking of) alcohol products’ and article 15.13 of the Russian Code of Administrative Offences”.

Regulating dealer activities on the Forex market and FOs operating on the securities market

April 2015 - Finance. Legal Developments by Pepeliaev Group.

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Regulating dealer activities on the Forex market and foreign organisations operating on the securities market


Igor Marmalidi, Partner, Head of Banking and Finance Practice; Lidia Gorshkova, Group Head, Banking and Finance, Vladislav Korablin, Associate

The New Russian Contract Law

April 2015 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Roman Bevzenko, Partner, Head of Special Projects Practice, PhD in Law, Pepeliaev Group


The area of contract law seems to be an indicator of economic progress: a more developed economy needs a more developed law of contract. This is because the contract appears to be the best instrument for optimizing social costs and benefits; it is the motor that moves the resources from one person to the other. An economy based on less developed exchange has no need of complicated contractual forms and rules.

The reform of the Russian Civil Code started with the introduction of new rules for the law of real property, the law of intellectual property (2013), and corporate law (2014). This year, 2015, should be regarded as the birth year of the new Russian law of contract.
The new law of contract (technically it takes the form of amendments to Section III of the Russian Civil Code) is based on two foundations: judicial practice (primarily, the commercial courts, especially the practice of the Supreme Commercial Court of Russia) and the results of academic comparative legal studies of the contract law of the leading European jurisdictions.
All the recent improvements in the law of contract can be divided into two parts. The first deals with the implementation of the principle of good faith and fair dealing into contractual practices.

The parties to a contract must act not only in accordance with the law and the conditions of the contract but also in good faith and in accordance with the principle of fair dealing (the revised article (III)307). The good faith principle is of importance both for pre-contractual (negotiations) and post-contractual relations. The revised Code enacts the doctrine of good faith in negotiations: a party that disrupts the negotiations will be liable for the losses caused (article 434.1).

Important amendments have been made to the Law on Circulation of Medicines

March 2015 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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For the attention of developers and manufacturers of medicines

Pepeliaev Group advises that on 22 December 2014 the Russian President signed Law No. 429-FZ “On amending Federal Law 'On Circulation of Medicines'” (the “Law”). On 23 December 2014 this Law was published on the official online legal information portal (www.pravo.gov.ru).

Valentina Orlova is the best Russian IP expert according to WTR – 1000

March 2015 - Intellectual Property. Legal Developments by Pepeliaev Group.

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Valentina Orlova, Head of Pepeliaev Group's Intellectual Property and Trademarks Practice, has been named as the best expert in Russia (being placed in the gold category) by World Trademark Review-1000 for 2015 in the category 'Individuals: prosecution and strategy'.

A NEW PROCEDURE FOR COMMISSIONING TELECOMMUNICATION NETWORKS

March 2015 - TMT ( Technology, Media & Telecoms). Legal Developments by Pepeliaev Group.

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On 1 January 2015, Order No. 258 of the Russian Ministry of Communications dated 26 August 2014 “On approving requirements to the procedure for commissioning telecommunication networks” takes effect. At the same time the following orders will be repealed:

Restrictions have been set in terms of admitting certain categories of medical devices to state and

March 2015 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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For the attention of CEOs and heads of legal and commercial departments of companies involved in producing and distributing medical devices

Pepeliaev Group advises that Resolution No. 102 of the Russian Government “On restricting the admission of certain categories of medical devices originating in foreign countries for the purposes of procurement for state and municipal needs” dated 5 February 2015 (the “Resolution”) was published on 6 February 2015 on the official legal information portal (www.pravo.gov.ru) 
The Resolution was drafted by the Russian Ministry of Industry and Trade at the instruction of the Russian Government and in accordance with the Plan of the First Priority Measures to Provide for Sustainable Development of the Economy and Social Stability in 2015 .
Please note that Order No. 155 of the Russian Ministry of Economic Development “On the terms and conditions on which products originating in foreign countries are admitted for the purposes of procurement of goods, work and services for state and municipal needs” dated 25 March 2014 is still in force. This Order sets the terms and conditions on which foreign medical devices may be admitted to procurement procedures (regarding the 15% preference).
The Resolution will come into force 7 days after it is officially published, in other words on 14 February 2015.

 

Concession agreements as practised by Russian companies

September 2014 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Sergey Savseris (PhD in Law), Partner, Pepeliaev Group

It is becoming increasingly common practice for Russian companies to enter into what can be classed as concession agreements.
The most commonly encountered general definition of concession agreements involves one party (the grantor) granting to the other party (the concessionaire) the right to use an item that is state or municipally owned or to carry out a particular type of operation to which the grantor has a prerogative (monopoly) right.
There are several types of legal relationship that companies may become involved in and that fall within this definition.
The first of these that should be discussed is a concession agreement entered into under the Law No. 115-FZ dated 15 July 2005 ‘On concession agreements'. The notable legal feature of a concession agreement introduced by Law No. 115-FZ lies in the fact that it is not marked out as a separate type of contract which has its own specific regulation; rather, it is a mixed agreement containing elements of various contracts. Accordingly, the rules applied to the parties to a concession agreement are the civil law rules relating to the types of contract of which the concession agreement contains elements. For example, if the concession agreement can be broken down into elements of a lease and of a contractor agreement, then the relationship of the parties is considered with reference to the provisions of the Civil Code regarding leases and contractor agreements. The tax consequences are determined separately for those elements which comprise the concession relationship.

Foreign Medical Device Manufacturers: Should You Stay or Should You Go?

September 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Sergey Klimenko, Senior Associate, Pepeliaev Group

In March, the official governmental portal published the first draft of a regulation establishing a virtually complete ban on foreign medical devices from state and municipal purchases. By virtue of publication, the text was available for discussion, with the effective date set for 1 April. The draft was accompanied by a fairly lengthy and definitely controversial list of devices to which the prohibition was intended to be applied. This has set off a flurry of speculation among international manufacturers about what this draft legislation meant: was it an isolationist political measure or a signal for foreign companies to commit to Russia for the long haul, localizing the manufacturing of their products. Some experts considered this to be a suicidal move (foreign medical devices still make up to 80% of the whole market in Russia), while others hailed it as a necessary step on the road to developing a national medical industry.

In fact, it turned out to be merely an invitation for a discussion and a signal that the time for mincing words is over: the government now stands ready to drastically reshape the competition landscape between national and foreign manufacturers. When the hype began to grow and almost everyone became convinced that that the regulator was more than serious in its intentions, the Ministry of Industry and Trade has issued the next version of the draft regulation. In it, the approach switched from a harsh ban to a moderate restriction.



Personal data: new data localization requirements and enhanced state control

September 2014 - TMT ( Technology, Media & Telecoms). Legal Developments by Pepeliaev Group.

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Authors: Dmitry Zykov, Head of the Data Protection Group; Elena Ovcharova, Head of the Administrative Law Defence of Business Group; Vladimir Razbegaev, Head of IT Security and Network Infrastructure Maintenance; Alexander Korkin, Head of the Employment and Migration Law Group, St. Petersburg Office; Egor Lysenko, Head of Pepeliaev Group's Siberian Office


From 1 September 2016 personal data of the Russian Federation citizens may be kept in electronic form only in Russia. It is probable that this deadline will be shifted to an earlier date, i.e. 1 January 2015.

On 21 June 2014 Federal Law No. 242-FZ was signed. It amended Federal Law No. 152-FZ "On personal data" dated 27 July 2006 and Federal Law No. 149-FZ "On information, information technologies and data protection" dated 27 July 2006.

Land law reform: how will amendments to the Land Code affect the real estate market?

August 2014 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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Natalia Stenina, Head of Land Law, Real Estate and Construction Practice, Pepeliaev Group
Ilya Machavariani, Junior Associate, Pepeliaev Group

On 23 June 2014, a federal law (the "Law") was adopted (Federal Law No. 171-FZ dated 23 July 2014 On amending the Land Code of the Russian Federation and certain items of the legislation of the Russian Federation. ) which has substantially amended and added to the current regulation of land law relationships. Because the amendments are so extensive, the date from when the law will apply has been put back to 1 March 2015. The Ministry of Economic Development and Trade developed the draft of the Law at the behest of the President himself. It also puts in place measures contained in the 'roadmap' of measures in the area of town planning and construction, which was approved by Directive No. 1336-r of the Russian Government dated 29 July 2013. The objective of the 'roadmap' was to refine the legal regulation of town-planning and improve the entrepreneurial climate in construction, in particular by cutting down administrative obstacles. The plan of measures lists federal laws which need to be adopted if the regulatory environment is to be improved and a list of administrative procedures which need to be approved in the area of construction. It also sets out other executive acts which need to be adopted in short order, such as approving urgently needed rules for land use and development.     

Confirming safety of the imported goods

July 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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The present Article provides information on the rules of confirming safety of the goods imported to the customs territory of the Customs Union of the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation.

The main functions of the safety requirements is the protection of 1) life and health of people; 2) property; 3) ecological environment; 4) life and health of animals and plants; 5) prevention of misunderstanding of the consumers; 6) energetic efficiency and resource preservation. The application of the safety requirements for other purposes (e.g. the use of the provisions of the technical regulations in order to substantiate the collection of customs payments, etc.) is not required.

The legislation of the Customs Union on technical regulation establishes single requirements in respect of the conformity confirmation of the goods imported to any of the states of the Customs Union.

Please click  here to view the complete article in English.

ALEXANDER KOSOV, Head of Practice "Customs and Foreign Trade Regulation

IS NEW DATA PROTECTION LAW A SIGN OF THINGS TO COME?

July 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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As the current crisis in Ukraine escalates, the talk is of Russia becoming increasingly isolated on the world stage. British Foreign Secretary Phillip Hammond even said this week that, without a change in policy, "Russia risks becoming a pariah state." A report by Bloomberg refers to the possibility of further sanctions by the United States being imposed over the coming weeks, with "industry-wide sanctions probable in September." Russia, meanwhile, seems in some areas to be embracing the idea of isolation, at least if the recent amendments to data protection legislation are anything to go by.

This month, the State Duma has adopted amendments to the existing laws in this field. The measure that has attracted most attention is the requirement that all personal data relating to Russian citizens will have to be stored in Russia from 1 September 2016. (In this context, personal data means information from which it is possible to identify a specific individual.) Moreover, administrative liability under article 13.11 of the Code of Administrative Offences will be applicable when personal data is processed (which includes being recorded, systematized, assembled and stored) in databases located outside Russia. Businesses which commit this offense will face a fine, as may their officers. 

Foreign companies doing business in Russia store information about partners and customers on servers located outside Russia, so will have to adjust. Some make use of industry-wide standard systems, such as the GDS online ticketing system in the aviation industry. This is used by Russian airlines as well as foreign carriers operating in Russia. However, the effect will be felt by Russian citizens, too: online travel booking, international payment systems and social networking sites will all be affected.

Peter Brophy, U.K. Qualified Solicitor, Pepeliaev Group

 

New developments in legal regulation of relationships regarding trade names

July 2014 - Intellectual Property. Legal Developments by Pepeliaev Group.

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With Federal Law No. 35-FZ dated 12 March 2014 being adopted, amending parts one, two and four of the Civil Code other items of Russian legislation, the legal regulation of trade names continues to be developed. To some degree, the changes represent an improvement.
Priority right. An addition has been made to article 1252(6) of the Civil Code in line with the general concept for regulating means of identification and industrial designs as well as to clarify the balance between rights to different means of identification When the law defines the terms for a priority to arise, it not only mentions the earlier date when an exclusive right was created (to trade names, commercial designations, generally known trademarks and appellations of origin, for example). It also points to the priority previously in effect: convention or exhibition priority, applicable, for example, to trademarks, service marks and industrial designs. As a sanction with adverse consequences if a right holder is in violation, the law allows a claim to be made to have a patent for an industrial design invalidated.

Criteria for protectability. Changes have also been made to the conditions (criteria) for trade names to benefit from legal protection. In line with the general concept mentioned above, legislators have repealed article 1473(4)(3) of the Civil Code, which prohibited full or abbreviated names of international or intergovernmental organizations from being included in a legal entity's trade name. Federal Law No. 35-FZ dated 12 March 2014 includes the corresponding provision in the new version of article 12311 of the Civil Code.
How clause 2 of this article applies to trade names is an interesting question. It is well known that article 1473 of the Civil Code does not refer to any elements of a trade name which are not protected. Clearly, since article 12311 of the Civil Code is general in nature, the provisions of this article will be applied to determine whether certain trade names are protectable, particularly those which include official symbols, names and distinguishing marks. As for the other names which are specified in article 1473(4) of the Civil Code, the law does make it possible for an element to be classified as not protected.

Number of forms of a trade name. A limit has been set for a holder of rights to a trade name in terms of the number of designations which may be protected as forms of its trade name. Under the new version, the right holder may have only one full trade name and one short trade name in Russian. A similar rule was established with regard to the forms of a trade name in a foreign language or in any language of the peoples of the Russian Federation or. In our opinion, it is somewhat unjust to restrict the number of forms of a trade name to one in a foreign language and one in a language of the peoples of the Russian Federation. A legal entity may expand its interests not only in terms of scope, but also geography. This may include another region of Russia where the language of a different people of the Russian Federation is widely used (as compared to the language in which the right holder already has an actively used trade name). It may equally include another country with a different official language or one commonly used in business activities.

The State Duma has passed in the second reading a set of amendments to the Land Code

July 2014 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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Alexey Konevsky, Partner, Pepeliaev Group

On 23 June the Federal Law No. 171-FZ "On amending the Russian Land Code and certain items of Russian legislation" was adopted to the extent of improving the procedure for state and municipally-owned land plots to be provided. This Federal Law enters into force on 1 March, 2015 except for particular provisions.    
The Draft Law was developed by the Ministry of Economic Development and Trade pursuant to the instructions of the Russian President as well as the 'roadmap' (plan of events) for refining the legal regulation of town-planning activities and improving the entrepreneurial climate in the area of construction. The roadmap was approved by Directive No. 1336-r of the Russian Government dated 29 July 2013:
The expected effective date of the amendments is 1 March 2015.

Paying tax based on the cadastral value vs. implementing the principle of a stable business...

July 2014 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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Paying tax based on the cadastral value vs. implementing the principle of a stable business environment

Anna Krygina, Senior Associate, Pepeliaev Group

Some time ago, the Russian Constitutional Court set out the principle of a stable business environment. This principle stipulates that "for the purpose of planning its business activities, a taxpayer should be informed in a timely manner about the structure and content of his tax liabilities, so that it may take into account in good time the expenses it may incur on such business activities. It should not unexpectedly have to spend money on paying tax, creating an insurmountable obstacle to its economic freedom."

 

The Russian Supreme Commercial ('Arbitration') Court provides explanations concerning VAT

July 2014 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Authors: Andrey Nikonov, Senior Partner; Natalya Faizrakhmanova, Senior Associate; Egor Lysenko, Head of Siberian office on Krasnoyarsk; Sergey Sosnovsky, Head of St. Petersburg's practice "Tax law and tax disputes", Pepeliaev Group

On 30 May 2014 the Plenum of the Russian Supreme Commercial ('Arbitration') Court adopted a Resolution concerning issues arising when VAT is being charged . With this explanation adopted, significant changes will be introduced to the practice of implementing chapter 21 "Value-added tax" of the Russian Tax Code. Please note the most important provisions of the Resolution which entail material risks or create fresh opportunities.


SUBSIDIES FOR CAR MANUFACTURERS

July 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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SUBSIDIES FOR CAR MANUFACTURERS

Alexander Strizhov, Associate


On 6 July, with the adoption of the Customs Code of the Customs Union, a unified customs territory was formed bringing together the customs territories of Russia, Belarus and Kazakhstan. Goods originating in the territories of the Customs Union's member states, as well as foreign goods released for free circulation in the territory of at least one of the member states of the Customs Union, may circulate freely within the unified customs territory with no customs formalities. The powers to set, change and cancel rates of import duty have been transferred to the Commission of the Customs Union, whose functions have been carried out since 1 January 2012 by the Eurasian Economic Commission.


The Russian Ministry of Economic Development has set the conditions for foreign goods to be admitted

June 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that on 1 June 2014, Order No.155 of the Ministry of Economic Development dated 25 March 2014 ‘On the conditions for releasing goods originating from foreign states for the purposes of purchasing goods, work and services to meet state and municipal needs' (the Conditions) has entered into force.
The Conditions set the regime under which access will be granted to foreign goods, notably medicines and medical devices, to take part in state and municipal procurement.  
The document has been adopted in furtherance of article 14(4) of Federal Law No. 44-FZ dated 5 April 2013 ‘On a contract system in the area of purchasing goods, work and services to meet state and municipal needs' (Law No. 44-FZ), which concerns the application of a national regime when purchases are made.
The document will have effect until 31 December 2015.

THE RUSSIAN CONSTITUTIONAL COURT SETS LIMITATIONS FOR AN ADMINISTRATIVE PENALTY

June 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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For the attention of companies' general directors and heads of legal departments

Pepeliaev Group advises that on 25 February 2014, the Russian Constitutional Court adopted Resolution No. 4-P in which it recognised as universal the position that an administrative penalty may be imposed lower than previously stipulated set out in Resolution No. 1-P dated 17 January 2013. However, the Court has imposed some limitations on it being applied.

News for employers: changes in the procedure for engaging foreign national employees and determining

May 2014 - Employment. Legal Developments by Pepeliaev Group.

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According to the Moscow City Department of Labour and Employment, the following deadlines have been set for employers to file Applications:

  • before 1 July 2014, Applications are to be filed for the next year;
  • before 1 September 2014, Applications are to be filed for the current year.


The key feature of the Application filing procedure is that the authorized body needs to be provided with the originals of the certificates confirming that the employer is registered or accredited as a legal entity or a branch / representative office in accordance with Russian legislation.

Russian Ministry of Industry and Trade can now control licensing to manufacture medicines

May 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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AN ADMINISTRATIVE REGULATION HAS BEEN APPROVED FOR THE RUSSIAN MINISTRY OF INDUSTRY AND TRADE TO PERFORM THE STATE FUNCTION OF LICENSING CONTROL OVER THE MANUFACTURING OF MEDICINES FOR MEDICAL USE
For the attention of heads of companies producing medicines

Pepeliaev Group advises that on 3 March 2014 the Russian Ministry of Justice registered Order No. 1607 of the Russian Ministry of Industry and Trade dated 4 October 2013 "On approving the Administrative Regulation for the Russian Ministry of Industry and Trade to perform the state function of licensing control over the manufacturing of medicines for medical use" (the "Regulation").


Requirements have been approved for healthcare organisations which conduct clinical trials of medica

April 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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For the attention of: heads of healthcare organisations which conduct clinical trials of medical products as well as R&D and registration units of producers/distributors of medical products.

Pepeliaev Group advises that on 14 February 2014, Rossiyskaya Gazeta, the official edition of the Russian Government, published Order No. 300n of the Russian Ministry of Healthcare dated 16 May 2013 "On approving the requirements for healthcare organisations which conduct clinical trials of medical products, and the procedure for establishing whether the healthcare organisations comply with these requirements" (the "Order"). This order entered into effect on the 25th of February.

AMENDMENTS ARE BEING PREPARED TO LEGISLATION REGARDING FOREIGN INVESTMENTS IN STRATEGIC COMPANIES

February 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Elena Sokolovskaya, Head of Antimonopoly Regulation; Sergey Spasennov, Partner, Head of St. Petersburg office; Egor Lysenko, Head of Krasnoyarsk office, Pepeliaev Group

The State Duma is preparing to consider in the second reading a draft law  that will significantly amend Federal Law No. 57-FZ ‘On the procedure for making foreign investments in business entities of strategic importance to ensure national defence and state security'. The draft law was passed in the first reading in May 2013 and is scheduled to be considered further in April 2014.

The goal of new amendments is to simplify even more the control mechanism, eliminate extra administrative barriers for foreign investors and to create favourabe investment climate. For the second reading of the draft law, the Russian Federal Antimonopoly Service (the ‘FAS') prepared a number of amendments that have not been approved yet by the Russian Government (these amendments are posted on the FAS's official web site ).
Below are the main provisions of the draft law and amendments to it.

2019 UNIVERSIADE IN KRASNOYARSK: WHAT IT MEANS FOR BUSINESS

February 2014 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Andrey Tereschenko, Partner (Tax); Alexey Konevsky, Partner (Real Estate and Construction); Egor Lysenko, Head of Siberian office in Krasnoyarsk; Sergey Spasennov, Partner and Head of Saint Petersburg office

Preparations have started for staging the World Winter Universiade 2019 in Krasnoyarsk. There are several issues that companies face when major international sport events are staged in Russia.

On 14 January 2014, the Russian President signed Decree No. 16 ‘On preparing for the XXIX World Winter Universiade 2019 to be staged in Krasnoyarsk' (‘Universiade 2019').
This decree is a framework document addressed, first of all, to the Russian Government, which is charged with carrying out a set of organisational actions to prepare for Universiade 2019, as well as to executive authorities of constituent entities of the Russian Federation, which are recommended to participate in carrying them out.
In particular, the Russian Government needs to:

  • establish an organising committee;
  • develop and carry out, in cooperation with the government of the Krasnoyarsk Region, measures aimed at preparing and staging Universiade 2019;
  • determine the list of capital construction facilities belonging to the Russian state, which are required to prepare and stage Universiade 2019 with financial support from the federal budget;
  • assist with covering in the state mass media how Universiade 2019 is being prepared and staged.

Does the Russian government really need foreign investment?

February 2014 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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Alexey Konevsky, Partner, Pepeliaev Group

The Russian government has set for itself improvement of the investment and business climate in the country as its primary goal. A fairly wide range of measures and efforts are being taken with this in mind, not least in cooperating with investors and the business community.
Regrettably, they are not always consistent when they put this into action. One example is the draft bill on transactions with real estate (the "Bill"), which Russia's Ministry of Economic Development published in November 2013 .
The Bill restricts real estate transactions by foreign individuals and legal entities as well as stateless persons. Russian legal entities will face similar restrictions if they are more than 50% foreign owned.
The Bill envisages that there will be a permission procedure for such persons to be able to enter into transactions with immovable property in Russia. They will have to obtain permission from a specially authorized government body if they wish to pursue a transaction aimed at gaining ownership title to or the right to use immovable property.

Resolutions of meetings

February 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Arslan Dyakiev, Associate, Pepeliaev Group

In 2013 the Russian Civil Code was significantly amended in all kinds of areas touching on the country's corporate life, including: transactions (state registration, notarization, approval and invalidity), civil law rights, powers of attorney, securities, state registration of legal entities, and limitation periods. The Russian Parliament is now considering a fairly extensive list of further amendments to the Civil Code. This article focuses on the area of "resolutions at shareholders' meetings", which has, in fact, become regulated for the first time by civil legislation.
Chapter 9.1 of Part I of the Civil Code sets out the general terms and conditions covering any meetings of a so called "civil-law community". Though there is no specific legal definition of "civil-law community", this term applies to, among other things, meetings of creditors in the event of bankruptcy, meetings of a legal entity's members, and meetings of co-owners (e.g. owners of individual flats in a block of flats). Ostensibly, the main aim is to protect both members of the "civil-law community" who did not participate in the meeting and the interests of third parties; all of this seems positive. However, what effect it will actually have, how it will be interpreted, understood and enforced remains to be seen. This will be clearer when the provisions have been tested in courts.   

The Supreme Commercial Court clarifies how customs value is set

February 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Alexander Kosov, Head of Practice "Customs and Foreign Trade Regulation", Pepeliaev Group
Alexander Strizhov, Senior Associate, Pepeliaev Group


Important clarifications on setting the customs value of imported goods are contained in the Resolution adopted on 25 December 2013  by the Plenum of the Russian Supreme Commercial (‘Arbitration') Court (the "SCC") to replace the Plenum's Resolution No. 29 dated 26 July 2005.
1. Presumption that information supplied by a declarant is accurate
2. What is a sale?
3. Conditions which influence on the sale or the price of goods it is not possible to determine in terms of quantity
4. Providing additional evidence

NEW CENTRAL BANK APPROVAL PROCEDURE FOR MANAGEMENT, DIRECTORS AND SHAREHOLDERS OF CREDIT ORGs

February 2014 - Finance. Legal Developments by Pepeliaev Group.

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NEW CENTRAL BANK APPROVAL PROCEDURE FOR THE MANAGEMENT, DIRECTORS AND SHAREHOLDERS OF CREDIT ORGANIZATIONS


Igor Marmalidi, Partner and Head of Banking and Finance Practice and Lidia Gorshkova, Head of Banking and Finance Group, Pepeliaev Group


For the attention of management, Legal and HR departments of banks and other credit organizations
Pepeliaev Group advises that the new Regulation No. 408-P  of the Central Bank of Russia ("CBR") comes into force on January 31, 2014. This establishes a new procedure for the CBR to approve candidates for management positions at banks, as well as to attest to the business reputation of Board members and shareholders holding more that 10% of the shares in the bank in question.

The CBR's Regulation No. 408-P (the "Regulation") introduces new procedure for documents to be submitted to the CBR to attest concerning the professional qualifications and the business reputation of management members of credit organizations and certain other persons listed in Article 11.1 of the Federal Law "On Banks and Banking Activity".  The most substantial changes relate to the procedure for attesting to the business reputation of directors and shareholders of credit organizations. Moreover, the new requirements for attesting to the business reputation extend to incumbent members of the management, directors and existing shareholders; this would allow the CBR to lawfully demand the removal from office of persons whose business reputation no longer meets the regulatory requirements.   Below we provide an overview of the most important provisions of the Regulation. 

IMPLEMENTING MEASURES TO DEVELOP EASTERN SIBERIA

February 2014 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Andrey Tereshchenko, Partner; Sergey Sosnovsky, Head of Practice (St Petersburg) "Tax law and tax disputes" and Egor Lysenko, Head of Siberian office in Krasnoyarsk

For the attention of: managers of companies in Eastern Siberia and companies of the federal and interregional levels operating in Eastern Siberia.

Pepeliaev Group advises of the progress of measures being implemented to develop Eastern Siberia as communicated by the President of Russia in his Address to the Federal Assembly.

On 12 December 2013, Russian President Vladimir Putin gave his annual address to the Federal Assembly, announcing a number of initiatives to develop Eastern Siberia, including Krasnoyarsk Krai and the Republic of Khakassia. These initiatives aim to:
- set up a preferential tax regime for new investment projects; and
- create a network of special areas of advanced economic growth with special conditions for setting up non-resource enterprises.

TAXES IN 2014: ATTENTION ON CROSS-BORDER TRANSACTIONS

February 2014 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Foreign investors often arrive in Russia through companies incorporated in places like the Netherlands, Luxembourg, Cyprus and Switzerland, which are high up the list of the most popular jurisdictions in Russia. These companies are often created with a view to investing or are designed to finance other group companies. Though the above countries, of course, fall outside the definition of ‘offshore' jurisdictions, such structures could also be affected by measures for the ‘deoffshorization' of the Russian economy. Therefore, it is advisable for companies that are part of international holding structures to undertake a ‘stock take' in 2014 to check whether they face any risks and to take the steps that are needed so that the holding structure and its Russian subdivisions can work in peace in the future.

The Federal Service for Surveillance in Healthcare has published the recommended form for events

January 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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The Federal Service for Surveillance in Healthcare (Roszdravnadzor) has published the recommended form for giving notice of events organised (sponsored) by pharmaceutical companies in Russia

Vladimir Sokov, Senior Partner and Head of Corporate Division, Pepeliaev Group
Oxana Migitko, Head of Corporate/M&A Practice, Pepeliaev Group
Sergey Klimenko, Senior Associate, Pepeliaev Group


Pepeliaev Group advises that the Federal Service for Surveillance in Healthcare (Roszdravnadzor) has issued Letter No. 16I-1595/13 "On informing Roszdravnadzor about holding scientific or other events" (the "Letter").

The Letter can be found on the official website of Roszdravnadzor (http://www.roszdravnadzor.ru/main/oficial/27439).

The document in question contains recommendations regarding the form and procedure for informing Roszdravnadzor about any scientific or other events organised (sponsored) by pharmaceutical companies ("Companies") as provided for by article 67.2 of Federal Law "On the circulation of medicines".

Rules have been adopted to create a list of medicines to be purchased under their trade name

January 2014 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Vladimir Sokov, Senior Partner and Head of Corporate Division, Pepeliaev Group
Oxana Migitko, Head of Commercial/M&A Practice, Pepeliaev Group


Pepeliaev Group advises that on 28 November 2013 the Russian Government approved, through Order No. 1086, Rules to create a list of medicines to be purchased under their trade name (the "Rules"). These Rules determine the procedure for medicines to be included in the relevant list (the "List").

On 2 December 2013, the Order was published on the official web portal for legal information (http://www.pravo.gov.ru) and is to come into force in 7 days after its official publication. The Rules came into force on 1 January 2014.

VAT and bonuses: practice of the Federal Commercial (‘Arbitration’) Court for the Moscow Circuit

January 2014 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Valentina Akimova, Partner, Pepeliaev Group

Pepeliaev Group advises that positive judicial practice has been forming in relation to calculating VAT when receiving bonuses and other incentive rewards for fulfilling the pre-agreed terms and conditions of delivery. For instance, in late November the Federal Commercial (‘Arbitration') Court for the Moscow Circuit issued three awards in which it upheld the taxpayers' position.


Subject matter of the dispute and background


The tax authorities have for a long time kept a close eye on companies' revenue in the form of various incentive rewards (such as premiums and bonuses) which the companies received from their suppliers. The inspectorates have more than once attempted to make the companies pay VAT on these amounts under various pretexts:
- by obliging companies to recover VAT in relation to goods purchased which the tax authorities considered to be unlawfully deducted owing to discounts granted;
- qualified such revenue as consideration for services and charged VAT on sale, etc.
The taxpayers successfully challenged the tax authorities' claims in court.
One and a half years ago, after the Presidium of the Russian Supreme Commercial (‘Arbitration') Court had issued Resolution No. 11637/11 dated 7 February 2012 for the case of Leroy Merlin Vostok, the tax authorities raised again claims in connection with that case. They interpreted the legal position of the Supreme Commercial (‘Arbitration') Court as a pretext to treat incentive rewards as an attempt to decrease the price of the goods purchased and claim that the deductions of VAT declared be decreased accordingly. Virtually all regions of the country have evidenced tax audits with considerable amounts of VAT being additionally charged on the taxpayers.  
The three positive resolutions issued on the level of cassation mean that there is a strong judicial position coming into sight in the Moscow Circuit.
Pepeliaev Group's lawyers worked on two cases out of these three (refer to Resolutions of the Commercial (‘Arbitration') Court of the Moscow Circuit dated 14 November 2013 for case No. А40-5347/13-91-18 and dated 22 November 2013 for case No. А40-9139/13).

Top Trends in HR Regulation

November 2013 - Employment. Legal Developments by Pepeliaev Group.

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The year 2013 has been marked by numerous developments in HR-related regulation and law-enforcement practice. Here we will deal only with the most significant.
Most HR professionals, especially those in production industry, have noted the sea change in the area of compensation for work in hazardous conditions. At the start of 2013 both the Russian Supreme Court and the Russian Constitutional Court confirmed that those working in hazardous conditions are entitled to all three types of recompense allowed under the law (a shortened working week of 36 hours, additional paid leave of 7 days and a 4% salary increase), if hazardous conditions are revealed when their workplaces are assessed in terms of the working conditions. In October the new draft law "On special assessment of workplaces in terms of working conditions" was put before the State Duma. The law provides a new special assessment regime which replaces the old assessment procedure. According to the draft law (which may undergo further changes during the legislative process) the minimum compensation for work in hazardous conditions will remain the same, while administrative liability will rise substantially for violations of health and safety requirements.

Bankruptcy Case Law – 2013

November 2013 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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In 2013 bankruptcy case law has been affected by significant changes in the legislation concerning subsidiary liability of controlling persons and on regulating the bankruptcy of certain categories of debtors including developers and financial organisations.
This year several resolutions of the Supreme Commercial (‘Arbitration') Court ("the SCC") are worth mentioning including those concerning invalidating transactions (resolutions No. 16 dated 15 February 2013, No. 56 dated 2 July 2013 and No. 59 dated 30 July 2013) and paying value added tax when disposing of the property of a debtor which has been declared bankrupt (No. 11 dated 25 January 2013).
The following major areas of case law may be highlighted where the SCC has handed down legal positions in 2013:

  • grounds for invalidating a debtor's transactions;
  • the characteristics of how the amount of claims under a loan agreement should be defined;
  • maintaining corporate control of the members of a debtor during bankruptcy procedures;

•    preventing unjustified creditors' claims from being included in the register.

CHALLENGING INTERNATIONAL COMMERCIAL ARBITRAL AWARDS

November 2013 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Russian legislation has accepted the idea of an alternative to dispute resolution methods through the state courts, in particular through arbitration. To this end, it distinguishes between two types of arbitration governed by separate laws: international commercial arbitration, within the scope of which fall disputes with a foreign element (when parties are located in different countries, or when foreign substantive law is to be applied) considered in Russia, regulated by Law No. 5338-1 dated 7 July 1993 "On international commercial arbitration" (the "ICA Law"), and domestic arbitration under Federal Law No. 102-FZ "On arbitral tribunals in the Russian Federation" (the "AT Law"), which covers internal commercial disputes without any foreign elements.

Regardless of the fact that an award of international commercial arbitration ("ICA") is decisive for the parties from the date when it is handed down, the ICA Law contains in section VII rules that provide for the possibility of and a procedure for challenging ICA awards. The AT Law contains similar provisions in relation to purely domestic disputes resolved with recourse to arbitration.

Pepeliaev Group nominated for 2013 Best European Law Firm

October 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Pepeliaev Group is the only law firm from Russia nominated for 2013 Best European Law Firm - European Law Firm of the Year 2013 in the annual British Legal Awards organized by Legal Week magazine.

Legal Week's experts have noted the excellent performance of Pepeliaev Group in the FIFA project leading up to the 2018 World Cup being held in Russia. Our firm's lawyers were also commended for setting precedents in commercial (‘arbitration') court practice on a number of thorny issues for business, including court costs being reimbursed to legal representatives. The jury also noted Pepeliaev Group's role as legal adviser in the transaction that involved SCA purchasing a European subdivision of Georgia-Pacific for EUR 1.32 billion. The transaction covered a range of legal matters and several practice areas of the firm worked on it, handling M&A, corporate law, antimonopoly compliance and environmental issues.

Antimonopoly Legislation and Intellectual Property

October 2013 - Intellectual Property. Legal Developments by Pepeliaev Group.

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Valentina Orlova, Head of Intellectual Property and Trademarks Practice, Pepeliaev Group

Over the past few months numerous attempts have been made to extend antimonopoly legislation to intellectual property (IP) and means of identification. There have also been a number of discussions about so-called ‘monopoly' IP rights. It is often claimed that such monopoly rights are excessive and adversely affect scientific and technical development, and that certain limits should be imposed.

USER-FRIENDLY LEGAL INTERFACE FOR THE LIFE SCIENCES MARKET

October 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Sergey Klimenko, Senior Associate, Pepeliaev Group

Quite often, when describing the situation with regulating a specific Russian industry, we could construct analogies with the world of software, where the legislator (the actual regulator) is the designer, the law is the program, and the market players are the ever discontented users. Very often the reason for this frustration in Russia lies in the "user-unfriendliness" of the designer's programs: the interface is tricky and confusing, and the designer showed a clear lack of relish when writing the instructions, dragging his feet over responding to suggestions that the instructions should be amended or updated (if he offers any response at all). In short, the problem is that the creator of the rules has no communication with the users. Until recently, this metaphor has been an accurate reflection of how things are in the pharmaceutical and healthcare industries.

Now the tide has changed, and recent developments are marked by new and encouraging trends.

The role of compliance in relationships with state regulatory authorities

September 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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The role of compliance in relationships with state regulatory authorities and in mitigating risks that a company and its officers will be held liable

There are two reference points for a company's internal control system in terms of compliance with laws and regulations. On the one hand, common rules of conduct must be observed with the least possible expense; on the other hand, risks must be avoided that would result in the legal entity and its officers or other employees becoming liable. It should also be borne in mind that proceedings in a case that entails legal liability may be accompanied by other coercive state measures.

 

Recent amendments to Russia’s corporate legislation: implications for business

August 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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In the last year, several amendments have been made to Russian corporate law. Most of these amendments aim to promote a favourable business environment for both foreign and Russian companies and investors, in the long run, boosting Russia's economic growth.  

RUSSIA’S DECADE OF SPORT TO CULMINATE IN FIFA EVENT

August 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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In the last few weeks, what many have termed Russia's ‘decade of sport' has really moved into gear. After a relatively low key World Rugby Sevens tournament in Moscow, the main global student sporting festival the Universiade was held in Kazan, and then attention turned back to the capital for the World Athletics Championships. Next year the eyes of the world will be on Sochi for the Winter Olympics and Paralympics. In 2015, Kazan gets to show off some of its new facilities for the World Aquatics Championship, while in 2016 ice hockey fans are treated to the IIHF World Championship in Moscow and St Petersburg. Finally, it will be soccer's turn, as the game's governing body FIFA brings its 2017 Confederations Cup to Russia, that event acting as a curtain raiser to the World Cup in 2018.

 

CONCILIATION AS A NEW TOOL FOR RESOLVING DISPUTES

August 2013 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Pepeliaev Group highlights the significantly expanded range of possibilities for resolving commercial disputes and litigation arising out of civil law and other legal relationships by means of a new type of service - conciliation involving an intermediary, which includes:
1. expert determination;
2. facilitated negotiation or facilitation;
3. mini-trial;
4. mediation;
5. court mediation.

RECENT DEVELOPMENTS IN THE RUSSIAN LEGISLATION AFFECTING OPERATIONS OF BANKS

August 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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These Laws introduce a significant number of amendments to several Russian legislative acts, including the Russian Civil, Tax, administrative and Criminal Codes, the Federal Laws "On the Central Bank," "On Banks and Banking Activity", "On the Securities Market", "On Countering the Legalization (Laundering) of Proceeds from Crime and Terrorism Financing" and others.

SIGNIFICANT AMENDMENTS TO CURRENCY LEGISLATION

July 2013 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that the State Duma has passed two laws that relate to currency transactions. Moreover, draft amendments are being prepared to the Bank of Russia's Instructions No. 138-I dated 4 June 2012, which deal with currency control.

 

I. The Federal Law On amending the Federal Law ‘On currency regulation and control' (draft law No. 446118-5)

 

The law in question was passed with a view to including within the area of currency regulation cross-border transfers in roubles between residents. It also clarifies the legal rules in terms of non-residents making cross-border transfers in roubles and the ability for residents to open rouble accounts in banks located outside Russia.

 

The list of currency transactions is supplemented with the following types of transactions involving Russian roubles:

- cross-border transfers between the accounts of residents (a transfer of Russian currency from a resident's account opened outside Russia to another resident's account opened within Russia, as well as from a resident's account opened within Russia to another resident's account opened outside Russia);

- transfers between the accounts of residents abroad (a transfer of Russian currency from a resident's account opened outside Russia to another resident's account opened outside Russia);

- transfers between accounts of the same resident abroad (a transfer of Russian currency from a resident's account opened outside Russia to an account of the same resident opened outside Russia).

Russian customs formalities on personal belongings imported by foreigners

July 2013 - Transport. Legal Developments by Pepeliaev Group.

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Customs formalities in respect of personal belongings' crossing the boarders of the Customs Union by expatriates are stated in the Intergovernmental Agreement [of the Customs' Union states, i.e. Russia, Belarus and Kazakhstan ("CU")] of June 18, 2010 (as further amended on October 19, 2011).

The Agreement has as its Annexes the list of goods which can be imported into Russia for personal use without payment of import duties (Annex 3 - list of goods for personal use imported in the CU without payment of import duties and Annex 4 - list of goods for personal use, which are temporarily imported in the CU without payment of import duties). In respect of goods in both Annexes certain limitations apply (in respect of alcohol and tobacco, or depending on frequency of such imports and quantities of imported goods). The general principle is that personal belongings are exempt from levying customs duties if their customs value does not exceed 10000 EURO (in respect of the goods imported by avia) or 1500 EURO (in respect of the goods imported by other types of transport) and the total weight is under 50 kg. Importation of alcohol, beer and tobacco are regulated separately and quantity restrictions also apply. Cultural objects are exempt regardless of their value and quantity.

Disputes involving foreign parties: 2012 trends

July 2013 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Disputes involving foreign parties: 2012 trends. Issues of international jurisdiction, arbitrability, recognising and enforcing foreign courts' decisions and awards.

In 2012, the Presidium of the Russian Supreme Commercial (‘Arbitration') Court[1] adopted a number of newsworthy resolutions relating to recognising and enforcing foreign courts' decisions and awards, and concerning disputes involving foreign parties. The approaches formulated in these case decisions should be taken into account not only by those involve international proceedings but also parties to cross-border transactions when developing procedures for resolving eventual conflicts.

 

Resolution No. 1831 / 12 of the Presidium of the Supreme Arbitration Court dated 19 June 2012 featuring case No. А40-49223/11-112-401 "Russian Telephone Company CJSC v. Sony Ericsson Mobile Communications Rus".



[1] In Russia, the state court system is divided into two: courts of general jurisdiction and what, for historical reasons, are referred to as ‘arbitrazh' or ‘arbitration' courts. The latter hear commercial disputes and disputes with state authorities. When ‘Arbitration' is used in this article as a capitalised term in relation to a court, this is in reference to the relevant state courts in the Russian system and not to any kind of alternative dispute resolution system.   

The EurAsEc Court as a tool for protecting businesses’ rights and lawful interests

July 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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The main objective of the EurAsEc Court, as stipulated by article 8 of the Treaty to Establish the Eurasian Economic Community dated 10 October 2000, is to ensure that legislation of the Customs Union and the EurAsEc be implemented in a uniform manner. Today this issue is especially challenging from the viewpoint of developing foreign trade, since different law enforcement results in the objectives of integration which the Customs Union faces de facto not being met. What is the use of adopting unified customs legislation if different countries of the Customs Union implement it in different ways?

The EurAsEc Court is to exercise judicial control over how legislation of the Customs Union and the EurAsEc is implemented. The Court will ensure harmonised law enforcement when considering specific disputes and interpreting international treaties and decisions of the EurAsEc and Customs Union's bodies.  

 

M&A Trends in Russia

May 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Choosing Russian law as governing law for M&A transaction as a trend in M&A activity has recently been discussed widely in the context of the state’s proclaimed policy to this effect.  This trend could be set in motion in the context of the government’s de-offshorization policy in conjunction with plans to privatize state-owned assets.  The prospective privatization plan includes quite a long list of major companies which will be sold entirely or where the state intends to reduce its stake.The privatization methods will be set individually for each of the companies.

CHANGES IN REQUIREMENTS FOR CONSTRUCTING PUBLIC SWITCHED TELEPHONE NETWORKS (PSTN)

May 2013 - TMT ( Technology, Media & Telecoms). Legal Developments by Pepeliaev Group.

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On 5 February 2013 Order No. 284 of the Russian Ministry of Telecom and Mass Communications dated 6 December 2012 (the “Order”) entered into force. This has significantly changed the requirements for constructing PSTN.

Top HR Trends: Regulation and Enforcement Practice

May 2013 - Employment. Legal Developments by Pepeliaev Group.

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During 2012 there were a number of changes in the sphere of HR from the employment law standpoint. Among the upheaval, some key trends became evident in HR-related regulation and law-enforcement practice.
First thing that we would note is the rising attention to detail among employers. In previous years companies devoted much time to massive restructuring and downsizing projects, meaning that they had little time for current issues. Now businesses are spending more time on bringing their internal policies and HR paperwork into line with the laws and best practice. In this way, they avoid problems with their employees rather than closing the stable door after the horse has bolted.

Julia Borozdna, Head of Employment and Migration Law Practice, Pepeliaev Group
Alexander Korkin, Senior Associate, PhD in Law, Pepeliaev Group

SOCHI AN EXAMPLE OF HOW RUSSIA’S DECADE OF SPORT CAN TRANSFORM SPORTS FACILITIES

May 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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This year marks the start of a five-year period in which the eyes of the sporting world will be on Russia. In the summer of 2013, Kazan will host the Universiade, or World University Games, while the World Athletics Championship will take place in Moscow. In 2014, the Winter Olympics come to Sochi, and a year later some of Kazan’s new facilities will be put to use again when the city stages the World Aquatics Championships. Next up is the World Ice Hockey Championships, in St Petersburg and Moscow, in 2016, before soccer’s World Cup puts on its month-long show all across the European part of the country in 2018.

Peter Brophy, English Solicitor, Pepeliaev Group

CONSEQUENCES OF UNAUTHORISED ACCESS TO SERVICES USING ELECTRONIC COMMUNICATIONS

May 2013 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Facts of the case

A telecoms operator submitted to the court a claim against a subscriber which had not paid for Internet connection services. The subscriber's position was founded on the fact that the services were actually consumed by a third party which had stolen the subscriber's identification details (a court sentence that had come into force confirmed that the subscriber's actual name and password had been stolen).

FEDERAL LAW “ON THE CONTRACT SYSTEM IN THE SPHERE OF PURCHASES FOR...

May 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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FEDERAL LAW “ON THE CONTRACT SYSTEM IN THE SPHERE OF PURCHASES OF PRODUCTS, WORK OR SERVICES FOR STATE AND MUNICIPAL NEEDS”

Unlike Federal Law No. 94-FZ dated 21 July 2005 that only regulates how public orders are to be placed, the law on the system of public procurement contracts will regulate all stages of the public procurement process. Notable among these stages are planning, forming, placing and executing an order. The new public procurement system is based on the modern principles of conducting business: openness, competition, unification, responsibility for meeting state and municipal needs and effective spending. Besides, the Law provides for the rights and obligations of the state official who makes purchases, which creates legal background for his area of activity to be turned into a profession.

IMPORTANT AMENDMENTS IN CONTROL OVER TRANSFER PRICING

May 2013 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Amending the deadline for notifications to be filed and audits to be conducted

Article 4 (transitional provisions) of Federal Law No. 227-FZ dated 18 July 2011 “On amending specific items of the legislation of the Russian Federation in connection with improving the principles of determining prices for tax purposes” has been supplemented with a clause 8.1 which reads as follows: “8.1. A taxpayer shall submit a notification of controlled transactions, income and/or expenses in relation to which is booked in accordance with article 25 of the Tax Code in 2012, to the tax authority where such taxpayer is located (resident) no later than 20 November 2013.”

PUBLIC POLICY AS A GROUND FOR REFUSING TO RECOGNISE AND ENFORCE FOREIGN COURT JUDGMENTS

May 2013 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Statutory Regulation

According to article 241 of the Russian Arbitration Procedure Code (the “APC”), judgments of courts of foreign states regarding disputes or other cases arising in the process of commercial or other economic activities (foreign courts), awards of commercial courts and international arbitration courts adopted in foreign countries regarding disputes or other cases arising in the process of commercial or other economic activities (foreign arbitral awards) should be recognised and enforced in Russia by commercial (arbitration) courts if this is provided for by an international treaty to which Russia is a party and by federal law. In accordance with article 244 of the APC, a commercial (arbitration) court should refuse to recognise and enforce a foreign court judgment or arbitral award in full or in part if enforcing such judgment would be inconsistent with Russia’s public policy.

OUTSOURCING IN RUSSIA: ADVANTAGES AND RISKS

April 2013 - Employment. Legal Developments by Pepeliaev Group.

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The word outsourcing has become a staple of Russian business language, but is still not encountered in Russian law. Generally, outsourcing contrasts with the leasing of personnel in that outsourcing involves certain business processes being contracted out to an external service provider. Outsourcing is typically used to transfer processes that are vital for the company’s activity but are of an auxiliary nature to its core activities: for example, IT, HR processes and payroll.

One of the biggest advantages of outsourcing is the lower cost of operations and workforce: as the saying goes, a company can do what it does best and let someone else handle the rest. This may provide a serious competitive advantage, especially in an industry where outsourcing is not common.

Another advantage is that outsourcing is flexible. It helps to reduce the risks and potential liability connected with the extensive legal requirements in Russia. For example, Russian employment law is burdensome for an employer and offers little flexibility in terms of dismissing an employee.  When company uses an outsource provider, it does not have the obligations of an employer for the employees in question. 

Negotiations, mediation, litigation or arbitration: what to take into account in dispute resolution

April 2013 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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In a modern world, an important trend promoting ethical business practice is for civil society to regulate itself when resolving legal disputes. The increased burden on the courts and a growing number of business entities and disputes between them, have resulted in increased attention to different types of dispute resolution procedures. It would be helpful to highlight certain advantages and disadvantages of the relevant method for resolving a dispute in the economic field, as this may help to choose the method that is the most efficient in a specific situation.

Before the Russian Arbitration Procedure Code (the "APC") entered into force in 2002, the Russian legal system only provided for two types of dispute resolution procedure: negotiation or arbitration. The APC provided an option for the parties to file a petition to postpone the proceedings if the parties had turned to a mediator to resolve their dispute. However, only after Federal Law No. 193-FZ On alternative procedure for resolving disputes with an intermediary (mediation procedure) (the "Mediation Law") dated 27 July 2010 entered into force did it become genuinely possible to talk about a new dispute resolution method that had appeared in the Russian legal system.

NEW LEGAL CHANGES SET TO TRANSFORM THE TENANCY MARKET

April 2013 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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The Russian Supreme Commercial Court's approach to the landlord and tenant sector is marked by its balance. In its attempts to tailor its approach to the developing practice on the Russian market, the Court is trying to meet the needs of both tenants and landlords.

It is, in fact, impossible to overstate the demand for such legal developments. This is especially so among foreign tenants and landlords, who are used to being able to agree more or less any term in a contract unless it violates general legal principles.

On the 21st of March 2013 the Russian Supreme Commercial Court issued a legal opinion clarifying the legal framework of landlord-tenant relations.

VAT on bonuses, premiums and retrospective discounts: the disputes go on

April 2013 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Major foreign trading companies have been active on the Russian market for more than 15 years. With them, they have brought Western standards of doing business, including, among other things, offering financial incentives to distributors and stores in the form of bonuses, premiums and retrospective discounts.

These ways of working have taken root quickly in Russian soil, becoming widespread. However, tax legislation and the courts and regulators who applied this legislation were not ready for this. In 2005, after numerous court disputes, a provision was introduced to the Russian Tax Code, according to which bonuses (discounts) granted for performing certain terms and conditions of agreements should be deducted as expenses (article 265(1)(19)(1) of the Tax Code). This provision has almost completely prevented the tax authorities from raising claims with regard to profit tax.

However, to date, the VAT implications in terms of bonuses, premiums and retrospective discounts remain uncertain. Since tax legislation fails to regulate the payment of rewards, companies have been treating these relations in various manners for VAT purposes and have determined the tax implications differently.

Is it possible to prove that a related party transaction has not caused losses to creditors?

April 2013 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Resolution of the Ninth Commercial (‘Arbitration') Court of Appeal dated 19 June 2012

Parties in dispute

Receiver of Digital Electronics CJSC

Digital Electronics CJSC (the "Debtor")

SITRONICS OJSC (a party to the challenged transaction with the Debtor, the "Creditor")

Russian Government’s Initiatives to Develop the Medical Devices Market

April 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Medical devices in Russia are feeling the heat from the state's interest in the industry. This interest has not only resulted in a series of new regulations passed over the last few months. There are also several very exciting drafts now under discussion.

SUPREME COMMERCIAL COURT CONCEDES TO BUSINESS PRACTICE AND CHANGES THE RULES FOR LEASE AGREEMENTS

March 2013 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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On January 25, 2013, the Plenum of the Supreme Commercial (‘Arbitraiton') Court ruled on specific aspects of case law regarding lease disputes (Resolution of the Plenum of the Supreme Commercial (‘Arbitration') Court of Russia dated January, 25, 2013 No. 13"On amending Resolution No. 73 "On particular aspects of applying the rules of the Civil Code of the Russian Federation regarding lease agreements" dated 17 November 2011 (the "Resolution"), published on the site of the Supreme Commercial (‘Arbitration') Court of Russia at: http://www.arbitr.ru/as/pract/post_plenum/81907.html. This resolution substantially changes the established case law with respect to some issues that are crucial for commercial property in a business context.

IP amendments to the Civil Code: when will they happen, what will they look like?

February 2013 - Intellectual Property. Legal Developments by Pepeliaev Group.

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Recently, at the second annual international research and development conference Civil law in Russia: the year in review an entire report was dedicated to intellectual property issues that await to be solved by the Civil Code. At the conference, chaired jointly by Pavel Krasheninnikov, Anton Ivanov and Veniamin Yakovlev, participants were pessimistically cautious in their forecasts about the earliest point when part four of the Civil Code will be amended, hope remains that such amendments will be passed in 2013. Still, the form they will take remains a mystery. After the first reading of the draft law (with respect to intellectual property) multiple amendments and additions were made to it. Regrettably, these have passed the general public by.

Important amendments to migration legislation

February 2013 - Employment. Legal Developments by Pepeliaev Group.

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Pepeliaev Group informs you of important amendments to migration legislation

  • Foreign citizens temporarily residing in Russia will need no work permits
  • Employees of foreign companies that make investments will be able to obtain business visas for five years
  • The procedure for hiring highly qualified specialists (HQS) has been amended
  • A definition of the inviting party and its obligations have been introduced into legislation
  • The procedure for dactylographic registration and photographing of foreign citizens receiving a Russian work permit or a patent has come into force

THE RUSSIAN CONSTITUTIONAL COURT HAS CONFIRMED THAT ADMINISTRATIVE FINES MAY BE REDUCED

February 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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FAO: Heads and employees of legal and litigation departments

Pepeliaev Group advises that the Russian Constitutional Court in its Resolution No. 1-P dated 17 January 2013 laid down a versatile legal position, according to which it should be ensured that the amount of an administrative fine is appropriate by having regard to the nature and other features of a specific administrative offence as well as to the material and financial positions of the offender. Therefore, if the amount of the administrative fine is significant, the fine may be reduced below the minimum threshold.

Job offer Letters: How to Exclude Employers’ Risks

February 2013 - Employment. Legal Developments by Pepeliaev Group.

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Job offer letters are a relatively new development in Russian practice, and there is no mention of the concept in Russian labor law. This useful instrument is one of those things that has been commonplace internationally for decades, without impinging on the consciousness of Russian companies or employees. Until recently, they were only used by representative offices of foreign companies and companies with foreign investment, or when foreign nationals were hired. Nonetheless, over the past decade, they have become a standard tool in Russia, and are especially popular when employers are competing to hire top and mid-level managers or rare specialists.

ADMINISTRATIVE LIABILITY TIGHTENED FOR VIOLATING CURRENCY LEGISLATION

February 2013 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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The amendments to part 1 of article 15.25 of the Russian Code of Administrative Offences tightening the liability for violating currency legislation will go into effect on 13 February 2013.

“Effecting illegal currency transactions or in other words currency transactions prohibited by the currency legislation of the Russian Federation or performed in contravention of the currency legislation of the Russian Federation, including buying and selling foreign currency and cheques (including travellers’ cheques) whose nominal value is provided in foreign currency by bypassing authorised banks, or effecting currency transactions, payments under which were made bypassing accounts in authorised banks or accounts (deposits) in banks outside the Russian Federation, when the currency legislation of the Russian Federation does not provide for this, or effecting currency transactions, payments under which are made from the funds, credited to accounts (deposits) in banks outside the Russian Federation when the currency legislation of the Russian Federation does not provide for this – shall entail an administrative fine being imposed on citizens, officials and legal entities in a sum between three quarters and the full amount of the illegal currency transaction”.

Tax Planning and the Tax Code in 2013

February 2013 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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The Russian taxation outlook for 2013 may be viewed as having three main strands: transfer pricing, case law, and de-offshorisation.

Trends and prospects for administrative law regulation of business in Russia

February 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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As 2013 begins, a clear trend has already developed in administrative law regulation: rhetoric proclaiming liberalism and a willingness to listen to business, stands side by side with ever harsher regulation. To this end, new regulatory obligations have been imposed, some going beyond what is standard for business and all increasing the state's power over business. This trend is seen in antimonopoly regulation, tax and currency control, measures against insider dealing and market manipulation, technical regulation, consumer protection, industrial safety, fire safety and civil defence. It is most notable, though, in state regulation of the manufacture and sale of products containing alcohol and of tobacco.

PROPOSED AMENDMENTS TO THE REGULATION OF CERTAIN BANKING AND FINANCIAL OPERATIONS AND CONTROLS OVER

February 2013 - Finance. Legal Developments by Pepeliaev Group.

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Pepeliaev Group wishes to bring to your attention the fact that the Russian Government has introduced into the State Duma the Draft Law On Combating Illegal Financial Transactions (Draft Law № 196666-6), which, among other changes, enhances the level of controls over, and establishes criminal and administrative liability for violations in the sphere of countering legalization of proceeds from crime and terrorism financing.

COURT RULES ON ADJUSTED VAT INVOICES

January 2013 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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On 11 January 2013, the Supreme Arbitration Court issued Decision No. 13825/12 with regard to adjusted VAT invoices, which has attracted serious attention from the business community.  Taxand Russia finds out why this decision is causing such a debate.

THE RATES OF CUSTOMS CHARGES ARE REDUCED BY 25% WHEN CUSTOMS DECLARATIONS ARE FILED ELECTRONICALLY

January 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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For the attention of directors and heads of legal departments and experts on customs issues in companies conducting cross-border trade.

 Pepeliaev Group advises that additions have been made to the Russian Government's Resolution No. 863 dated 28 December 2004, under which the rates of customs charges are reduced by 25% when a declaration is filed electronically. Further, companies have been given the right to have returned to them the corresponding amounts they have overpaid since 21 August 2012.

Antimonopoly policy: time for a change?

January 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Currently, considerable discussion surrounds the so-called ‘Roadmap' that is being developed by the Russian Federal Antimonopoly Service (FAS). This document offers a programme of steps to develop competition between 2013 and 2018.  The Roadmap puts forward a range of measures aimed at making the FAS more independent in administrative, functional and financial terms. Moreover, this document being adopted entails functions in developing antimonopoly policy being transferred to the FAS. What danger is there in vesting additional powers in the FAS? Is it capable of making antimonopoly policy more effective or, quite the opposite, can this only add to the existing problems? 

REDUCING THE TAX BURDEN IN FAR NORTH REGIONS (THE EXAMPLE OF SAKHALIN)

January 2013 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Many taxpayers fail to use legitimate means to cut their tax burden, because they do not know that these means exist, they are afraid of having to prove their point before the tax authorities or are just unwilling to depart from their long-established accounting practice. In most cases, the companies operating in the Far North and equivalent territories (for example, Sakhalin Region is treated as such a territory) do not apply accelerated depreciation.

THE FIRST PRICING AGREEMENT FOR TAX PURPOSES HAS BEEN SIGNED

January 2013 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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The rules that have been in force since 1 January 2012[1] for the control of prices between related parties granted taxpayers who fall into the category of major taxpayers a right to enter into a pricing agreement for tax purposes with the Russian Federal Tax Service (the “FTS”).

WORK PERMIT UNDER THE NEW RULES

January 2013 - Employment. Legal Developments by Pepeliaev Group.

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Pepeliaev Group reports that amendments have been made to the requirements for obtaining a work permit by foreign employees who arrive under a visa-free regime in the Russian Federation and intend to work in the sphere of housing and utilities, retail trade or public amenities.

Pursuant to the amendments made to Federal Law No. 115-FZ On the Legal Status of Foreign Citizens in the Russian Federation dated 25 July 2002, which were enacted on 1 December 2012, in order to be authorised to work in the sphere of housing and utilities, retail trade or public amenities, a foreign citizen who arrived visa free in Russia must have at least a basic command of Russian. 

Amendment to the Methodology for manufacturers of medicines to set maximum sale prices for medicines

January 2013 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Amendments have been made to the Methodology for manufacturers of medicines to set maximum sale prices for medicines included in the list of vital and essential medicines approved by Order No. 961n/527a of the Russian Ministry of Health and Social Development and the Federal Tariffs Service dated 3 November 2010. The Amendments to the Methodology came into force on the date of official publication in official newspaper Rossiiskaya Gazeta, which occurred on 16 November 2012 in issue No. 265.

The regime for determining the estimated value when several minerals are extracted at the same time

December 2012 - Projects, Energy & Natural Resources . Legal Developments by Pepeliaev Group.

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29 January 2013, the Presidium of the Russian Supreme Commercial (‘Arbitration’) Court (the “SAC”) will consider the regime for calculating the tax base for mineral extraction tax (“MET”) if, in addition to minerals for which the tax base is calculated using the estimated method, the company extracts minerals for which the tax base is determined using other methods (Ruling No. VAS-11498/12 dated 6 November 2012 to refer the case to the Presidium of the SAC).

CHANGES TO RUSSIAN CIVIL CODE: A WHOLE NEW WORLD FOR DEVELOPMENT

December 2012 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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The Civil Code was initially developed in the early 1990s, but the new draft that appeared at the beginning of 2012 has been widely debated since then. After lengthy discussions the draft was approved by the State Duma in the first reading, but as the process goes forward, the reaction becomes ever more heated. Thus, endless disputes and controversies are continually arising. The next (second) hearing was postponed four times and will hopefully take place on 14 December 2012. The draft law covers civil law regulation as it currently stands across the board (corporate, real estate, contract law, tort law, IP rights, private international law, inheritance law, and so on).

The Crusade Against Inflation, Tax-law Style

December 2012 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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The cost of borrowing for business in Russia has been increasing for the last 2 years in a row and reached post-crisis records as the Russian authorities, through the Central Bank, demonstrate their implacable determination to suppress inflation and tighten the money supply for Russian banks and the economy as a whole. In doing so, they see themselves as waging a holy war against price rises, which they see as the main evil for the national economy. The result is that Russian banks and companies have to pay high interest on the borrowings, and this, quite naturally, is passed on to consumers in the form of high interest rates for mortgages and consumer credit.

Russia’s accession to the WTO: how it might affect the legal market

December 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Russia's accession to the WTO means that a huge range of new rules and legal regulatory mechanisms is included in its legal system; this, without doubt, will result in a demand for the services of lawyers specialising in the various areas covered by the WTO rules.  Russian lawyers do not currently have experience of the procedures for resolving disputes on WTO rules, so when such disputes arise, the Russian Government will initially have to engage foreign law firms that have this experience. However, most experts incline towards the view that in the disputes that might arise in the near future, Russia is likely to be the defendant rather than the plaintiff. Consequently, deep knowledge of Russian law will be needed to settle such disputes, and it will scarcely be possible to avoid involving Russian lawyers.

Blacklist of sites is already a reality

November 2012 - TMT ( Technology, Media & Telecoms). Legal Developments by Pepeliaev Group.

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On 1 November 2012, the Russian Government’s Resolution No. 1101 dated 26 October 2012 came into force. It approved the Rules for creating, compiling and maintaining the unified automated information system that contains details of domain names, website page indexes and network addresses allowing sites to be identified in the Internet that contain information which it is prohibited to distribute in Russia.

SHAREHOLDERS’ AGREEMENTS UNDER RUSSIAN LAW: A FEASIBLE INSTRUMENT FOR BETTER CORPORATE GOVERNANCE?

November 2012 - Finance. Legal Developments by Pepeliaev Group.

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Over the past 20 years Russian business has been desperately trying to adopt and apply the best US and European legal tools for corporate governance. Shareholders’ agreements is one of such tools, though the one which is still quite new to Russia. Even so, executives’ attention should be drawn to this instrument particularly now that corporate relations are in the spotlight of the Russian civil law reform.

New requirements for protecting personal data

November 2012 - Employment. Legal Developments by Pepeliaev Group.

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The Government has approved the new requirements for protecting personal data when it is processed in personal data information systems

The new requirements for personal data protection were approved by the Russian Government's Resolution No. 1119 dated 1 November 2012 (the "Resolution"), which was published on 7 November 2012 in official journal Rossiiskaya Gazeta (http://www.rg.ru/2012/11/07/pers-dannye-dok.html).

Russian Parliament ratified the DTT with Latvia, Argentina and the Protocol to DTT with Switzerland

November 2012 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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The Russian government has ratified their Double Tax Treaties (DTT) with Latvia and Argentina, as well as the protocol with their DTT with Switzerland.

INVESTING IN RUSSIAN REAL ESTATE: SURVIVING IN CHANGING A ENVIRONMENT

November 2012 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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Investing in the emerging Russian market is certainly a challenge for any business: not only are the systems overcomplicated, but the rules of the game change at short notice, such is the attraction that the idea of changing the market quickly and efficiently holds for the Russian authorities. This is why regulation in itself is favoured over market practice, which is trying to chart its own narrow course through the fluid legal environment.

Russian law is often ambiguous and inconsistent when it comes to regulating the funding of construction development. Statute law provides for insufficient regulation and this lack of regulation filters down into the case law, producing interpretation that cannot be justified in commercial terms.

The Russian Labour Ministry's proposal regarding the Federal Sector Agreement for Agriculture

November 2012 - Employment. Legal Developments by Pepeliaev Group.

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The Labour Ministry has proposed that employers sign up to the Federal Sector Agreement for Agriculture in the Russian Federation in 2012-2014

The proposal is contained in Letter No. 14-0/10/2-2202 of the Russian Ministry of Labour and Social Protection (the “Labour Ministry”) dated 8 October 2012, published on 12 October 2012 in official government publication Rossiiskaya Gazeta.

Business and state authorities in Russia: working to achieve compliance

November 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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In the current economic situation in Russia, when the state is actively involved in regulating the economy and robustly uses its administrative resources to regulate business processes, liaising with the state and local administration becomes an important component of a successful business. Implementing any business task requires compliance with administrative procedures relating to the need to obtain permits, submit notifications to executive authorities and local government or to obtain their approval with regard to the terms of business or specific transactions. All of this reduces the risk of potential claims.

Russia and WTO

October 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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After 18 years of negotiations, Russia has concluded its accession to the World Trade Organisation (WTO). According to an official spokesperson from the Russian Ministry of Foreign Affairs, on 23 July the Government of the Russian Federation notified the WTO that Russia had completed all the internal procedures required to assume membership, including the ratification of the Marrakesh Agreement dated 15 April 1994, which established the WTO and was signed in Geneva on 16 December 2011.

Proposed and potential amendments to the Russian Civil Code

October 2012 - Intellectual Property. Legal Developments by Pepeliaev Group.

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The amendments proposed for regulating disposals of exclusive rights continue the direction set when regulation of this important power was codified in detail.

Many of the proposals, such as, for example, amending the approach to registering grants of licences, have long been anticipated. They meet the modern requirements of both right holders and business. In view of this, they are, of course, welcome. The main danger for the future is that the administrative rules for performing the relevant state service contain excessive regulation.

Clarifying how guarantee-related disputes should be resolved

October 2012 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that on 12 July 2012 a Resolution of the Plenum of the Russian Supreme Arbitration Court (the “SAC”) was published. It clarifies how provisions concerning a guarantee should be applied when cases are considered by courts, as well as when bankruptcy cases are considered.

Transfer Pricing - Notifications of Controlled Transactions

October 2012 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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September 2012 - Law firm Pepeliaev Group reports that the Federal Tax Service of the Russian Federation has approved the documents which taxpayers will need in order to submit notifications of transactions that are subject to special control under the transfer pricing laws.

Import and repairing aircraft: customs issues

September 2012 - Transport. Legal Developments by Pepeliaev Group.

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Under Resolution No. 130 of the Commission of the Customs Union dated 27 November 2009, there is an exemption from import duty for civil passenger aircraft classified under the codes 8802 40 003 2 and 8802 40 004 2 (with a weight of between 20 and 120 tonnes and seats for between 50 and 300 passengers) which are imported into Belarus and Kazakhstan before 1 June 2014 for the purposes of being used for international and/or domestic transportation in the country into which the goods in question were imported, and/or between the Customs Union member states.

Customs Issues For Car Manufacturers

September 2012 - Transport. Legal Developments by Pepeliaev Group.

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The coming into force of the Customs Code of the Customs Union on 6 July, 2010 meant that a single customs territory was formed, uniting the territories of the Customs Union member states. The authority for establishing, amending or scrapping the rates of import duty has been transferred to the Commission of the Customs Union, whose functions since 1 January, 2012 are performed by the Eurasian Economic Commission (the “EEC”).

Russia and the WTO

September 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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In 2011, Russia completed negotiations regarding its accession to the World Trade Organization (WTO). Over the 18 years of Russia's negotiations with the WTO and its members, discussions have occurred in society from time to time regarding the implications of this event for the country's economy.

Import and repairing aircraft: customs issues

September 2012 - Transport. Legal Developments by Pepeliaev Group.

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The current rates of import customs duty on civil passenger aircraft are as follows: ■ 0% – in relation to small aircrafts (i.e. those that have less than 50 seats and weigh less than 20,000 kg), aircrafts with between 50 and 300 seats and weighing between 90,000 and 120,000 kg and large aircrafts (i.e. those that have more than 300 seats or weigh more than 120,000 kg); ■ 20% – in relation to all other aircrafts.

Interaction between medical representatives and healthcare professionals: surprises that the...

September 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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 law makers are cooking

The most discussible legislative news that severely affected practices of the pharmaceutical companies on the Russian market was the change introduces by the Federal Law On the Basis of Healthcare Protection of Citizens dated November 21, 2011 No. 323-FZ. It has established strict conservative rules of interaction between healthcare professionals and medical representatives of the pharmaceutical companies in the article 74.

Making amends: developments in Russia

September 2012 - Intellectual Property. Legal Developments by Pepeliaev Group.

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The first half of 2012 has been low key in terms of the further development of IP legislation. That said, work has continued on the amendments to the Russian Civil Code, with the corresponding draft law passed in its second reading.

Hidden Pitfalls in Hiring Highly Qualified Foreign Specialists

September 2012 - Employment. Legal Developments by Pepeliaev Group.

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This article highlights some practical issues connected with hiring highly qualified foreign specialists in Russia.

The tax risks of business: prospects for 2012

September 2012 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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The Russian President and Government have recently been talking more about the need to optimise groups of taxes, with high-quality economic growth depending on this.

The review of further development of IP legislation

September 2012 - Intellectual Property. Legal Developments by Pepeliaev Group.

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The first half of 2012 has been low key in terms of the further development of IP legislation. That said, work has continued on the amendments to the Russian Civil Code, with the corresponding draft law passed in its second reading.

The Russian Supreme Arbitration Court has supported the computation method for...

August 2012 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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determining profit tax when the documents of the taxpayer’s counterparty are not accurate

Pepeliaev Group advises that Resolution No. 2341/12 of the Supreme Arbitration Court dated 3 July 2012 has been handed down. It clarifies the application of article 31(1)(7) of the Russian Tax Code for the calculation of profit tax with ‘problematical suppliers’.  

Protection of personal data and other confidential information

July 2012 - TMT ( Technology, Media & Telecoms). Legal Developments by Pepeliaev Group.

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Pepeliaev Group lawyers from the firm’s practice groups dedicated to the legal protection of information and the administrative law defence of business have published ratings of the main events of 2011-2012 in the area of the legal protection of information. The ratings focus on events that have had the greatest resonance in the business environment as well as commenting on the results of compliance checks carried out by regulator Roscomnadzor in relation to personal data protection legislation in 2011.

Legislation on international taxation amended

July 2012 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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For the attention of managers, finance directors and heads of companies’ finance and tax departments.

New stance of the Russian Supreme State Commercial (‘Arbitration’) Court on the...

June 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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recovery of court costs

Pepeliaev Group advises that in its Resolution No. 16067 dated 15 March 2012, the Presidium of the Russian Supreme Arbitration Court (SAC) confirmed that it was lawful to recover from the tax authorities expenses of almost RUB 3 million on the taxpayer’s representatives involved in its defence. 

Recovering Court Fees: Effective Tool to Make Judicial Administration Less Arbitrary

June 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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This decision will become a precedent that benefits the whole business community. A person involved in business will be more eager to go to court to challenge the claims of state executive authorities than to solve the issues using corrupt methods.

Royalty scheme and information exchange between Russia and Cyprus

June 2012 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that the Federal Arbitration Court of Ural area decided the case “Trading house “Monetka” on 17.05.2012, that was a finish word in a long way of claming.

Draft Amendments to the Civil Code. To what extent is it justified to stop providing...

May 2012 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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land plots for construction under leases?

By Alexey Konevsky, Head of Real Estate and Construction Practice, Pepeliaev Group

OVERVIEW OF THE CASE LAW OF THE RUSSIAN SUPREME STATE COMMERCIAL (‘ARBITRATION’) COURT IN...

May 2012 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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RELATION TO APPLYING INSOVENCY (BANKRUPTCY) LEGISLATION FOR QUARTER I OF 2012

Specifics of enforcing the consequences of the invalidity of a transaction whereby a pledgeholder leaves pledged property in its ownership.

Russian M&A landscape: does using English law give an investor 100% protection?

May 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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It is well known that most Russian M&A transactions, especially private equity deals, are governed by English law.

Insuring the Civil Liability of Firms Managing and Operating Commercial Real Estate

April 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Despite the obvious advantages for owners of commercial real estate to engage management companies, the issues inevitably arise of apportioning liability and potential risks between an owner of a building and a management company and of how to reduce these risks.

Russia and the WTO

April 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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In 2011, Russia completed negotiations regarding its accession to the World Trade Organization (WTO). Membership of the WTO will give Russia the advantages of being able to play a role in setting world trade rules, of Russian manufacturers not seeing their goods discriminated against on foreign markets, and of trade disputes between Russia and other partners being able to be resolved using procedures within the WTO framework.

Roszdravnadzor has approved Administrative Regulation on pre-clinical and...

April 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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clinical trials conduct monitoring 

Pepeliaev Group advises that the Ministry of Healthcare and Social Development of RF issued Order No. 1091n dated 09/29/2011 “On adoption of Federal Service for Surveillance in Healthcare and Social Development (Roszdravnadzor) Administrative Regulation regarding the performance of state controlling function over medicines pre-clinical trials and medications for medical usage clinical trials”( hereinafter the “Regulation”), which came into effect on the 1st of April, 2012.

Israeli court recognises a decision of its Russian colleagues

April 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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By Yuri Vorobyev

In February 2009, the Moscow City State Commercial (‘Arbitration’) Court handed down a decision allowing russian company to recover debt from the Israeli-registered company (the “Defendant”) under a supply contract. The court also awarded interest of more than EUR 5 million on the amount due.

Russian Employment Law Issues

April 2012 - Employment. Legal Developments by Pepeliaev Group.

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It comes as a surprise to many people that non-Russian nationals working in Russia even for a short period of time cannot escape the clutches of Russian employment law rules.

Recovering court costs – an effective tool to make judicial administration less arbitrary

April 2012 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Sergey Pepeliaev, Managing Partner of Pepeliaev Group, PhD in Law

On 15 March 2012, the Presidium of the Russian Supreme Arbitration Court (SAC) heard the ‘Aelita Software Corporation’ case, in which the corporation, having won a case against the tax authorities, sought to recover RUB 2.89 million from those authorities in legal costs for its representatives’ fees. 

Personal income tax: the start of 2012 tax return filing period

April 2012 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Pepeliaev Group remind you about the start of the filing period for 2012 returns. Individuals who generated taxable income in 2011 and have not paid personal income tax on it may start filing their tax returns now. The last day of the filing period is 30 April 2012. Under the general rule, individuals must pay the personal income tax, as stated in their returns, before 15 July 2012.

The Impact of Customs and Foreign Trade Regulation on the Automotive Industry: Trends and Prospects

April 2012 - Transport. Legal Developments by Pepeliaev Group.

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Alexander Kosov

This article looks at the trends and prospects of the automotive industry from the standpoint of customs and foreign trade regulation. In particular, it provides an overview of the most significant issues in customs and foreign trade regulation that may impact the automotive sector. 

Insuring the civil liability of companies managing and operating commercial real estate

March 2012 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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Natalia Stenina, Head of the Environmental Group, Pepeliaev Group

Despite the obvious advantages for owners of commercial real estate to engage management companies, the issues inevitably arise of apportioning liability and potential risks between an owner of a building and a management company and of how to reduce down these risks. 

New risks for those involved in cross-border trade

March 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Alexander Kosov, Head of Customs and Foreign Trade Regulation, Pepeliaev Group

In December 2011, adjustments were made to the Russian Federal Law On customs tariffs, the changes coming into force in the same month.  

Legal support in an arbitration proceeding abroad: How to have the arbitral award enforced in Russia

February 2012 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Commercial arbitration proceedings play an important role in settling commercial disputes in the modern business environment despite the high costs and possible complications with having the arbitral awards enforced (note that here and below we mean commercial arbitration).

Significant changes to the application of Russian thin capitalisation rules

February 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that the Russian Supreme Arbitration Court (the “SAC”) has published on its web site Resolution No. 8654/11 dated 15 November 2011 in the case of OAO Coal Mine Severny Kuzbass touching upon the issues connected with the application of the Russian thin capitalisation rules.

The licensing of radio and television broadcasting

February 2012 - TMT ( Technology, Media & Telecoms). Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that 22 February 2011 saw the publication on the website of the Federal Service for Supervision over Telecommunications, Information Technology and Mass Media (“Roskomnadzor”) of its Order No. 048 dated 31 December 2010 On temporary rules for administrative procedures performed by the Federal Service for Supervision over Telecommunications, Information Technology and Mass Media to grant, renew, extend and cancel licences at the licensee’s request, to issue additional copies of licences, and to provide information contained in the licence register on specific licensees while rendering the state service of licensing radio and television broadcasting (the “Order”).

Amendments to legislation in the area of corporate law

February 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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In January 2012, the Federal Law ‘On organised trades’ came into force

This law governs the relationships that arise when trades are organised on commodities and financial markets. It establishes requirements on those organising such trades, and on the members, management bodies and employees of the organiser of the trades. It defines the fundamentals for the state regulation of and control over this activity.  

Third set of antimonopoly measures: prospects and risks for business

January 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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The third set of antimonopoly measures, which comes into force on 6 and 7 January, significantly amends antimonopoly legislation, affecting business across the board. The most important new developments include:

Tax discrimination against foreign investors in Russia

January 2012 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Julia Alexandrova, Senior Associate, Pepeliaev Group

Alongside actively developing cross-border economic, trade and customs law and adjusting to European standards and the WTO principles, Russia is seeing the adoption of rulings actually hampering foreign capital flow into the country.  

The Russian Labour Code regime for resolving collective labour disputes has been amended

January 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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5 December 2011 saw the entry into force of Federal Law No. 334-FZ dated 22 November 2011 On amending the Russian Federation Labour Code to improve the regime for resolving collective labour disputes. This Law amends the Russian Labour Code in terms of both the time limits and procedure for examining and resolving collective labour disputes.

Rates amended for insurance contributions in 2012 – 2013

January 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that on 23 November, the State Duma adopted a Federal Law that amends the rates of insurance contributions payable to the state social security funds.

Amendments to legislation on controlling foreign investments in strategic enterprises

January 2012 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that Federal Law No. 322-FZ dated 16 November 2011 “On amending article 6 of Federal Law ‘On foreign investments into the Russian Federation’ and Federal Law ‘On the procedure for making foreign investments in business entities of strategic importance for national defence and public safety’”  came into force on 18 December 2011. The law lays down measures for easing control over foreign investments in strategic areas of the Russian economy.

Amendments to the Russian Civil Procedure Code

December 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Starting from 1 January 2012, amendments to the Russian Civil Procedure Code (CPC) will come into force by virtue of Federal Law No. 358-FZ dated 09 December 2010.

New rules for determining origins of goods in the CIS

December 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that Federal Law No. 103-FZ dated 1 June 2011 has ratified the Agreement on the Rules for Determining the Origin of Goods in the Commonwealth of Independent States, signed in Yalta on 20 November 2009 (the "Agreement"). According to the CIS Executive Committee, the Agreement came into force forussr the Russian Federation on 23 July 2011.

Several key changes in Russian tax legislation will take effect on 1st January 2012.

December 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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The new Transfer Pricing Law significantly changes the existing TP regulations in Russia. Under the new Law, there is no longer requirement that, to be subject to TP control, the price applied by the taxpayer must deviate by more than 20 % from the fair market price. Now, the tax may be recalculated based on the fair market price even if the actual price deviates from the fair market value by less than 20 %.

Some issues involved in ensuring that shareholders’ agreements under Russian law are performed

December 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Foreign investors doing business in Russia have come to believe that Russian law falls short when it comes to safeguarding their interests properly. More specifically, it does not have enough flexibility to deal with the issues faced by particular businesses. It is small wonder that investors are keen to ensure that their Russian transactions are governed by more flexible foreign law. This is undoubtedly due to the fact that Russian law is underdeveloped in corporate matters and far from being perfect on the protection of investments.

Amendments to Russia’s double tax treaties with Switzerland and Luxembourg

November 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that the Russian Government has approved draft Protocols amending the Agreement between the Russian Federation and the Grand Duchy of Luxembourg for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, and the Agreement between the Russian Federation and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income and Capital.


Rules approved for deactivating a capital construction facility

November 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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14 October 2011 saw the entry into force of the Russian Government’s Resolution No. 802 dated 30 September 2011 On approving the Rules for deactivating a capital construction facility (the “Rules”).

ESTABLISHING JUDICIAL PRECEDENT IN TERMS OF USING PROMISSORY NOTES AS SECURITY

October 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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This summer, the Russian Supreme Arbitration Court drew a line under a promissory note dispute that had dragged on since 2009. By its Resolution No. 16623/10 dated 21 June 2011  in case No. A40-120754/09-55-921, it corrected the lower courts which had considered the only lawful basis for issuing a promissory note to be, in essence, a loan relationship and which had stated that a promissory note may not be paid if issued to secure a third party’s obligation.

Labour protection: New rule for assessing individual workplaces and increase of liability

October 2011 - Employment. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that a number of laws and regulations have been adopted that amend labour protection rules. In particular, a new procedure for assessing individual workplaces for compliance with labour safety rules has been adopted and a draft law on increasing the criminal and administrative liability for violating the labour protection requirements has been introduced.

What is new in the application of Russian thin capitalisation rules

October 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Pepeliaev Group law firm advises that the Presidium of the Supreme Arbitration Court (the “SAC”) will for the first time consider how the non-discrimination provisions of international double tax treaties correlate with Russian thin capitalisation rules, which in certain cases provide for interest accrued on a taxpayer’s debt to be reclassified as dividends.

HARSHER COURT PRACTICE IN CASES CONCERNING THE FILING OF STATEMENTS WITH BANKS...

October 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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FOR CURRENCY CONTROL PURPOSES 

Pepeliaev Group advises that court practice has become harsher in cases on filing statements with banks for currency control purposes.

New rules for documenting relationships in the area of investment and construction: tax implications

October 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that, on 28 July 2011, a Resolution of the Plenum of the Russian Supreme Arbitration Court [1]  (the “SAC”) with direct implications for construction and investment activity was published on the SAC’s website. The Resolution creates substantial tax risks for all those involved in that sector: builders, investors and developers.

NEW LEGISLATION ON INSPECTIONS

October 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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NEW LEGISLATION ON INSPECTIONS AND PROVIDING A LEGAL BASIS FOR THE EXTENSION OF AN ADMINISTRATIVE SUSPENSION OF ACTIVITY

NEW VERSION OF THE LAW 'ON PERSONAL DATA' PROTECTS THE RIGHTS OF PERSONAL DATA OPERATORS

September 2011 - Employment. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that the Russian State Duma has passed in its third reading draft law No. 282499-5 On amending the Federal Law 'On personal data'. The legislative body is proposing a fundamentally new, more user-friendly text of the law, which will clarify and simplify many provisions of the current legislation concerning personal data (“PD”).

 

 

Accelerated depreciation of fixed assets for Sakhalin Region companies

August 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Companies that operate in Sakhalin Region and a number of other regions are entitled to use accelerated depreciation of fixed assets and deduct larger amounts as expenses for tax purposes

On 5 July 2011, the Federal arbitration Court for the Far Eastern Circuit issued its precedent forming resolution No. F03-2566/2011 which states that companies operating in Sakhalin Region are entitled to apply a special coefficient for their fixed assets depreciation (but not more than 2). The court’s conclusions may also apply to companies operating in other regions of the Far North and areas equivalent to the Far North.

GRAVE AMENDMENTS TO RUSSIAN TRANSFER PRICING RULES

August 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that, on 22 July 2011, Federal Law №227-FZ was officially published. This Law makes extensive amendments to the Russian Tax Code with regard to transfer pricing rules. Such amendments are due to come into force on 1 January 2012, so the Russian Federal Tax Authority has already created a new department of transfer pricing and international cooperation. Staff of this department will be drawn not only from public officials, but also from private businesses.

 

Changes in Tax Control of Transfer Pricing

July 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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On 8 July 2011 the Russian State Duma adopted in the third reading the law On amending certain legislative items of the Russian Federation in connection with improving the pricing rules for tax purposes.


LAW ON A NATIONAL PAYMENT SYSTEM PUBLISHED

July 2011 - Finance. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises of the official publication of federal laws creating the legal basis on which a national payment system to function [1].

These laws introduce the legal regulation of contemporary non-bank payment instruments, such as electronic funds. They clarify the legal regulation of payment using terminals (the activity of payment agents engaged by banks and suppliers).

Amendments expected to currency control regulations

July 2011 - Finance. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that, on 1 June 2011, the Russian Government introduced three draft laws in the State Duma which provide for amendments to the currency control procedure and also to liability for infringing legislation on currency regulation and currency control.

Tax treatment for foreign investors selling Russian stocks has changed

July 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that on 07.06.2011 were forced some regulations of Federal law №132-FZ "On Amendments to article 95 of the first part and to the second part of Russian Tax Code regarding creating favorable tax conditions for innovation activity and article 5 Federal law "On Amendments to the second part of Russian Tax Code and some laws of Russian Federation".

On migration records for foreign citizens and stateless persons in the Russian Federation

June 2011 - Employment. Legal Developments by Pepeliaev Group.

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Federal Law No. 385-FZ “On amending certain laws of the Russian Federation” entered into force on 15 February 2011. The law introduced amendments to the procedure for the registration of foreign citizens for migration purposes. We also noted that the State Duma was considering a draft law that would restore some of the previous procedures of migration registration, albeit modified to some extent.

Amendments to legislation on communications in Russian Federation

June 2011 - TMT ( Technology, Media & Telecoms). Legal Developments by Pepeliaev Group.

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Pepeliaev Group notes: On 26 January 2011, the Russian State Duma passed the first reading of the Draft Law “On amending article 19 of the Federal Law ‘On telecommunications’” (the “Draft Law”). The Draft Law clarifies the procedural requirements for connecting communications networks and for them to cooperate with an operator which occupies a significant position in a general use telecommunications network. 

The licensing of radio and television broadcasting

June 2011 - TMT ( Technology, Media & Telecoms). Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that 22 February 2011 saw the publication on the website of the Federal Service for Supervision over Telecommunications, Information Technology and Mass Media (“Roskomnadzor”) of its Order No. 048 dated 31 December 2010 On temporary rules for administrative procedures performed by the Federal Service for Supervision over Telecommunications, Information Technology and Mass Media to grant, renew, extend and cancel licences at the licensee’s request, to issue additional copies of licences, and to provide information contained in the licence register on specific licensees while rendering the state service of licensing radio and television broadcasting (the “Order”).

Change in the legislation concerning joint stock companies: keeping documents

June 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Pepeliaev Group notes that 2 March 2011 saw the publication on the official website of Russia’s Federal Financial Markets Service (the “FFMS”) of the FFMS’s Order “On approving the Regulations on the procedure and timeframes for a joint stock company to keep documents”, which stipulates changes to the list of documents which must be kept and the time periods for which they must be kept.

Patterns of corruption in licensing and state regulation in Russia

June 2011 - Crime. Legal Developments by Pepeliaev Group.

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Yelena Ovcharova, PhD in Law, Attorney,

Head of the Administrative Defence of Business Group, Pepeliaev Group, Senior Lecturer in the Law Faculty of Lomonosov Moscow State University

New Licensing Law Adopted

June 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that on 4 May 2011 the President of the Russian Federation signed Federal Law No. 99-FZ “On licensing specific operations” (the “Law”) that will replace the current licensing law.

Improving corporate law is a prerequisite for creating an international financial centre in Russia

June 2011 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Sergey Pepeliaev, managing partner of Pepeliaev Group, took part in a meeting hosted by the Russian President to discuss the new version of the Russian Civil Code drafted by the Russian President’s Council for the Codification of Civil Law.

When a property should be classified as fixed assets

May 2011 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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Property tax is levied on property treated as fixed assets for accounting purposes. However, the Russian accounting regulations (PBU 6/01) do not specify when property should be classified as fixed assets.

Interest on a late refund of VAT

May 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that on 24 April 2011, the Russian Supreme Arbitration Court published on its official website Resolution No. 14233/10 of the Court’s Presidium dated 17 March 2011. The Resolution considered the issue of the payment of interest on a late refund of VAT (clause 10, article 176 of the Russian Tax Code) in cases in which a taxpayer who has submitted a tax return declaring an amount of VAT to be refunded has not applied to the tax authority for the tax in question to be refunded.

Social payments for foreign employees and processual peculiarity tax disputes

April 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Pepeliaev Group advises that on 11.04.2011 panel of judges Supreme Arbitration Court passed rulling in addition regarding to two questions, which can be very important for Companies, making business in Russian with foreign employees. The panel of judges SAC RF has told about social payments (in the Pension found RF for obligatory pension insurance) which should (not) be paid for foreign employee without plans of permanent living in Russia. In addition the panel of judges SAC RF has said about necessity of professional translator in tax authority and foreign taxpayers relations.

Taxes in Russia. The Lessons of 2010.

February 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Looking back on the year gone by, let me go through the most significant events that have affected taxpayers, the business climate and the tax system in Russia.

Skolkovo innovation centre: tax ‘super benefits’

January 2011 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Federal Law No. 243-FZ has amended the Russian Tax Code with the aim of promoting and supporting investors’ activity in the Skolkovo innovation centre. The changes provide for benefits on an unprecedented scale for participants in the Skolkovo project.

Employment Disputes in Russia - Litigation and Mediation

November 2010 - Employment. Legal Developments by Pepeliaev Group.

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Employment Disputes and Court Practice    .    Termination Cases - Pitfalls and Preventive Measures    .    New Tool - Mediation

Latest changes to the regulation of medicines import

October 2010 - Litigation & Dispute Resolution. Legal Developments by Pepeliaev Group.

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Through Decision No. 19, dated 27 November 2009, of the Inter-State Council of the Eurasian Economic Community (the Customs Union’s supreme authority), from 1 January 2010 the Member States of the Customs Union, Russia, Belarus and Kazakhstan, transferred to a supranational body (the Commission of the Customs Union) the power to adopt measures arising from national interests and concerning the external trading of goods. As a general rule, therefore, such measures may no longer be enacted by way of national legislation.  

Latest Amendments to Tax Legislation: brief overview

September 2010 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Federal Law No. 229-FZ dated 27 July 2010 introduced significant amendments to tax legislation relating to the calculation and collection of taxes, which will affect most taxpayers. The majority of these amendments will enter into force as of 2 September 2010

Transfer Pricing: Expected Innovations

April 2010 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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Russian tax law has applied transfer pricing rules since 1999. Law enforcement practice has, however, demonstrated that these rules are ineffective and that the tax authorities are incapable of applying them and exercising effective control over transfer pricing. The developers of the draft law have to a large extent taken into account the shortcomings and limitations of existing legislation in this area. We analysed the draft law on tax control for transfer pricing purposes to identify the underlying aspects of the proposed innovations.

PRESUMPTION ABOUT THE MARKET LEVEL OF PRICES: WILL IT SURVIVE TOMORROW?

April 2010 - EU & Competition. Legal Developments by Pepeliaev Group.

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On 19 February 2010 the State Duma adopted in a first reading draft law No. 305289-5 on transfer pricing. Officials from the Russian Ministry of Finance claim that the draft law will retain the current presumption on the compliance of contractual prices with the market price level. To what extent are these assertions consistent with the draft law?

Trends in the Development of Court Practice for Foreign Trade Businesses

April 2010 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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Although Russia's foreign trade turnover contracted by 40% in 2009 compared with 2008, the Russian customs authorities still managed to meet the target budgeted for the remittance of customs proceeds, which was reduced by the Russian Government only by 20%. According to the Federal Customs Service of Russia, this became possible owing to the increased efficiency of customs administration of imports.

Secondary Liability of the Persons Controlling a Debtor with Respect to Monetary Obligations

December 2009 - Finance. Legal Developments by Pepeliaev Group.

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The authors of the article provide a legal assessment of amendments to bankruptcy legislation and analyse the conditions where the persons actually controlling a debtor may be held financially liable.

Amendments to the rules of antimonopoly regulation and control

December 2009 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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A number of regulatory acts, which introduced amendments to the rules of antimonopoly regulation and control, were adopted in July 2009. In particular, material amendments were introduced to the Law “On the Protection of Competition”.

Placing the Investor's Safety in the Hands of the Lawyer

December 2009 - Finance. Legal Developments by Pepeliaev Group.

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The volume of foreign investments in the Russian economy has contracted perceptibly. The global crisis, a decrease in corporate revenues and the uncertainty of macroeconomic forecasts have led investors to scale down large projects and cut existing investment expenses. In this scenario, investors perceive more than ever that they need competent legal support. What issues do Western investors raise with their legal advisers? This was the topic of our conversation with Sergey Sosnovsky, partner and head of the St. Petersburg Practice of the law firm Pepeliaev, Goltsblat & Partners.

Hi-Tech Companies Need “Green Channel”

November 2009 - Projects, Energy & Natural Resources . Legal Developments by Pepeliaev Group.

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Lawyers from the customs and foreign trade regulation practice of Pepeliaev, Goltsblat & Partners, headed by Galina Balandina, are delighted to announce completion of a project entitled “Green Channel” for innovation companies. The assignment was ordered by the Russian Corporation of Nanotechnologies (RUSNANO). The project proposes a “Green Channel” for innovation companies, which will help remove a number of customs barriers and thereby expand the foreign economic activities of Russian hi-tech companies and also enhance the international exchange of research data between scientific and research institutions.

The rights of a shareholder are proportionate to the size of its shareholding

August 2009 - Finance. Legal Developments by Pepeliaev Group.

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The rules for such buyouts are enshrined in the Law “On Joint-Stock Companies” . The law uses several concepts, including voluntary and mandatory buyout offers and a simple buyout. I would like to stress here that these requirements only apply to open joint-stock companies. Let us now consider each of the categories in more detail.

Simplification of the Procedures for Enforcement of a Mortgage/Pledge

June 2009 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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Until recently, a mortgage over immovable property was in general enforced on the basis of court rulings. This tended to be a fairly time-consuming procedure. Some practising lawyers noted that the process sometimes took 1.5 to 2 years to complete.

General Review of Tax Disputes in Russia

June 2009 - Tax & Private Client. Legal Developments by Pepeliaev Group.

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When a company operates in a foreign country, it has to comply with local tax obligations. At the same time it can sometimes appear more important to know about the specifics of tax law practice and the modus operandi of the tax authorities than legal norms. In this article we draw the attention of readers to the most typical claims of the Russian tax authorities.

Agreements and Concerted Practices: Analysis of Russian and European Approaches

May 2009 - Corporate & Commercial. Legal Developments by Pepeliaev Group.

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In view of forthcoming amendments to Russian antimonopoly legislation (relating inter alia to agreements and concerted practices that restrict competition), the authors of this article will analyse the practice applied by European antitrust agencies and the Federal Antimonopoly Service of the Russian Federation (FAS Russia) to detect and investigate respective cases.

A practical insight to cross-border Real Estate work

May 2009 - Real Estate & Property. Legal Developments by Pepeliaev Group.

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The International Comparative Legal Guide to: Real Estate 2009