Publications for:
Activity Start Date:

No. 12/2010 – No. 1/2011 December 2010 – January 2011

01.01.2011

Limited Liability Companies. Joint Stock Companies

 Adopted on December 28, 2010 and effective as of December 31, 2010, the Federal Law on Amendment of Certain Legislative Acts of the Russian Federation to the Extent of Regulation of Dividend Payments (Profit Distribution), No. 409-FZ, introduces changes in the Joint Stock Companies Law, Limited Liability Companies Law and Tax Code.
 In particular, it bans first-priority payment of dividends to certain holders of shares of one category and obligates joint stock companies to pay dividends simultaneously to all corresponding holders of shares. Besides, a shareholder (participant) may claim payment of the declared dividends at any time during three years upon expiration of the term set for payment. For both JSC and LLC, such term may not be more than 60 days from the date of resolution on payment of dividends (distribution of profit). The three-year term for claiming dividends may be increased up to five years by the company’s charter.
 No increase of the charter capital is allowed until the term for claiming payment of dividends has expired. Upon expiration of such term, any unclaimed dividends are recorded as the company’s undistributed profit and the shareholder (participant) forfeits the right to claim them. Company’s income in the form of unclaimed dividends is not subject to the profit tax.
 The Law also exempts certain revenues from taxation (Article 251(1)(3.4) of the Tax Code extending to the relationships that have originated since January 1, 2007): exempt from the profit tax are revenues in the form of property (property or non-property right) contributed by the participants (shareholders) to the company for the purpose of increasing its net assets, including by formation of additional capital or funds. This rule also applies where the company’s net assets are increased through remittance by the participants (shareholders) of the company’s indebtedness to them.

Foreigners’ Work

1. Federal Law on Amendment of Certain Legislative Acts of the Russian Federation, dated December 23, 2010, No. 385-FZ, simplifies the rules on entry and stay in the Russian Federation for highly skilled specialists and their family members.
 The Law specifies the term “highly skilled specialist” who is distinguished among the different categories of specialists by the level of his/her wages; introduces the term “members of the family of a highly skilled specialist”; establishes that a highly skilled specialist’s family members receive common work visas on the same conditions as the highly skilled specialist himself/herself, and the term of validity of such visas and the possibility of its extension correspond to those of the visa issued to the highly skilled specialist.

 A highly skilled specialist and the members of his/her family may, if they so wish, obtain a residence permit for the term of validity of the work permit issued to the highly skilled specialist. The Law, inter alia, makes it possible for the branches of foreign legal entities to apply for issuance of visa supporting invitations to foreigners who will work in Russia. For this purpose, such branches should be registered with the Federal Migration Service.
 The Law also introduces a preferred treatment in the registration of highly skilled specialists with migration authorities. Such persons are exempt from the obligation to get registered with local migration authorities: when arriving in Russia – for a term not exceeding 90 days following the arrival; when traveling in Russia – for a term not exceeding 30 days following arrival in the new place of stay.
 The Law comes into force as of February 15, 2011.

2. Adopted on December 29, 2010 and effective as of December 31, 2010, Federal Law on Expiration of Certain Provisions of the Legislative Acts of the Russian Federation, No. 438-FZ, revokes the rules on deposition by an employer (work or services requester) of money in a special bank account of the Federal Migration Service as security for the event of deportation of a foreign worker from Russia.

Employment Issues. Liability

 The Federal Law on Amendment of Article 145.1 of the Criminal Code of the Russian Federation, No. 382-FZ, was adopted on December 23, 2010 and took effect on January 7, 2011.
 Article 145.1 of the Criminal Code deals with criminal liability for the failure to pay workers their wages, allowances and other payments due to them (the “non-payment of wages”). The Law introduces punishments for partial and full non-payment of wages, as well as for partial and full non-payment of wages entailing severe consequences. For each of the corresponding offences the head of organization-employer is liable to pay a fine (from 100,000 rubles to 500, 000 rubles), may be deprived of the right to occupy certain positions or engage in certain activity, and imprisoned.
 Apart from the head of the organization-employer, criminally liable for non-payment of wages is the head of the branch, representative office or other detached structural subdivision of the employer.

Arbitration Process

 Federal Law on Amendment of the Code of Arbitration Procedure of the Russian Federation, No. 379-FZ, was adopted on December 23, 2010.
 The Law changes the institution of the reopening of cases in view of newly discovered circumstances (facts). Now, the circumstances serving as a ground for the reopening of a case are split into two categories:
(1) newly discovered circumstances are the circumstances of the case which existed at the time of issuance of a court decision;
(2) new circumstances are the circumstances which occurred after the issuance of a court decision, but have material importance for a proper consideration of the case.
The lists of circumstances being recognized as newly discovered and new circumstances are exhaustive. The Law sets the deadlines and conditions for filing a plea to reopen the case.
For bringing the legislation in compliance with the approach of the Constitutional Court, as expressed in its Regulation of January 21, 2010, No. 1-R, the Law states that the determination or change of the practice of application of a law rule, as reflected in a ruling of the Plenum of the Supreme Arbitration Court or the Presidium of the Supreme Arbitration Court, also serves as a ground for reopening of cases, if the corresponding ruling indicates that reopening of a case is possible by virtue of the given circumstance.
The Law will come into force on March 28, 2011.

Civil Process

1. Federal Law on Amendment of the Code of Civil Procedure of the Russian Federation, No. 353-FZ, was adopted on December 9, 2010.
 The purpose of the amendment is to improve judicial proceedings in the appeal, cassation and review instances of common courts, and reopening of cases in view of newly discovered or new circumstances. The main novel is the introduction of the appeal instance in common courts for all types of civil disputes and the possibility to appeal from judgments of courts of first instance (previously, only decisions of justices of the peace could be appealed), as well as respective amendment of the rules on judicial proceedings in the cassation and review instances.
 The changes in the Code of Civil Procedure were discussed in more detail in our Newsletter No. 11/2010 (November 2010).
 The Law will come into force on January 1, 2012, except for certain provisions which will take effect on March 1, 2011.

2. In view of the said reform of civil judicial proceedings, Federal Constitutional Law on Common Courts in the Russian Federation, No. 1-FKZ, was adopted on February 7, 2011.
 The Law consolidates the system of common courts, regulates the procedure for their formation and abolishment, provides for their jurisdiction and the principles of activity. Among other things, a court of any of the federation constituents and a district court may have a permanent judgment seat located outside the court house but having the powers of the corresponding court and being its detached subdivision.
 The Supreme Court will form the bodies of judicial community: the general meeting of judges of the Supreme Court and the Council of Judges of the Supreme Court. By virtue of the Law, the Plenum of the Supreme Court and the Plenum of the Supreme Arbitration Court will hold joint meetings. The Law also regulates the issues of financing and logistics of common courts.
 The Law will take effect 30 days after its promulgation. Civil proceedings in the appeal instances will begin on January 1, 2012.

Electronic Documents Turnover in Arbitration Courts

 On January 12, 2011, the Supreme Arbitration Court approved Order No. 1 on the Temporary Procedure for Filing of Documents with the Arbitration Courts of the Russian Federation in an Electronic Form. This is the next step in the implementation of the concept of improvement of arbitration courts’ activity. The temporary procedure sets rules for filing documents electronically. The service is available at http://my.arbitr.ru/

Auditors’ Activity

 Federal Law on Amendment of Article 5 of the Federal Law on Auditors’ Activity, No. 400-FZ, was adopted on December 28, 2010 and took effect on January 1, 2011.
 The Law specifies the cases where an audit of organizations is obligatory. Among other things, the Law introduces obligatory audit for organizations if:
(1) they submit or publish consolidated financial statements (balance sheet);
(2) the revenue from the sale of products (work, services) in the year preceding the reporting period exceeds 400,000,000 rubles or the amount of assets on the balance sheet as of the end of the year preceding the reporting period exceeds 60,000,000 rubles. It should be noted that previously the thresholds for an audit were lower – 50,000,000 rubles and 20,000,000 rubles respectively;
(3) their securities are listed on stock exchanges;
(4) they are non-governmental pension or other funds, joint stock investment funds or management companies of joint stock investment funds.
The new rules on obligatory audit of organizations apply starting with financial statements for the year 2010.

Appraisal

 On December 31, 2010, took effect Federal Law on Amendment of the Federal Law on Appraisal in the Russian Federation and Article 5 of the Federal Law on Amendment of the Federal Law on Appraisal and Certain Legislative Acts of the Russian Federation, dated December 28, 2010, No. 431-FZ.
 The Law provides for the possibility to draw up an electronic report on appraisal which should be signed by an electronic digital signature. Besides, it provides for the possibility and establishes the procedure for an expert checkup of appraisers’ reports by self-regulating organizations (the “SRO”). The types of checkup, procedure for conducting it and requirements to an expert opinion are to be established by the federal standard of appraisal. The Law introduces a uniform qualification examination for obtaining the status of an expert. CPO bear joint and several liability for damage caused to the client (third party) by the appraiser whose report underwent the checkup but further was found by a court unlawful.

 


Trade. Administrative Liability

 Federal Law on Amendment of the RF Code of Administrative Offenses, dated December 28, 2010, No. 411-FZ, took effect on December 31, 2010.
 The purpose of the Law is to secure administrative liability for a breach of Federal Law on the Fundamentals of the State Regulation of Trade in the Russian Federation, dated December 28, 2009, No. 381-FZ (the “Trade Regulation Fundamentals”).
 The Law supplements the Code of Administrative Offences with Articles 14.40 – 14.42 which establish administrative liability for various offences in trade (committed, inter alia, by trade networks), such as breach of anti-monopoly rules, non-compliance with requirements to the terms and conditions of foodstuff supplies and provision of information about such terms and conditions. The Law also introduces liability for non-compliance with the direction of the anti-monopoly authority on revocation or amendment of an act contravening the Trade Regulation Fundamentals and (or) on discontinuation of actions (inaction) which lead or might lead to the establishment of illegal rules in the commodities market.

Customs Regulation

1. On December 8, 2010, the Customs Union Commission adopted Resolution on the Instruction Regarding Submission and Use of an Electronic Customs Declaration, No. 494. According to the Resolution, the structures and formats of an electronic customs declaration are determined by the laws of the Customs Union and/or the laws of the member states of the Customs Union. The peculiarities of submission, use and storage of electronic customs declarations and documents may be determined by the customs laws of the member states of the Customs Union.

2. On December 8, 2010, the RF Government adopted Regulation No. 1002 on Amendment and Expiration of Certain Acts of the RF Government.
 In connection with the formation of the Customs Union, the RF Government amended 69 and revoked 173 regulations in the area of customs and tariff regulation. The Regulation came into force on December 31, 2010.

Bankruptcy

 Federal Law on Amendment of the Bankruptcy Law and Expiration of Articles 4(18), 4(19) and 4(20) of the Federal Law on Amendment of the Bankruptcy Law, No. 429-FZ, was adopted on December 28, 2010. The changes concern the provisions on sale of the debtor’s enterprise and the procedure for publication of information subject to publication. The Law makes more specific the procedure for keeping the Consolidated Federal Register of Information on Bankruptcy. Certain changes concern electronic auctions for sale of debtors’ property.
 The Law came into force on December 31, 2010, except for some provisions which will take effect later.

 

Court Practice

 On December 23, 2010, the Plenum of the Supreme Court and the Plenum of the Supreme Arbitration Court adopted joint Regulation No. 30/64 on certain issues that arose in the consideration of claims for a compensation for violation of the right to court proceedings within a reasonable period of time or the right to execution of a court decision within a reasonable period of time. The Regulation explains how to apply Federal Law on Compensation for Violation of the Right to Court Proceedings Within a Reasonable Period of Time or the Right to Execution of a Court Decision Within a Reasonable Period of Time, dated April 30, 2010, No. 68-FZ.