What is (not) going on in Russia?

Please find an interim follow up note developed in cooperation with, and endorsed by, the following reputed lawyers:


No sense of urgency despite:
– New Swiss AML and due diligence requirements
– New Russian CFC rules, including amendments of February 2016
– Amended currency control regulations
– Voluntary Disclosure II will end in June 2016
– Russian FATCA as of September 2016 the end of grace period at the end of 2017
– Automatic Exchange of Information and CRS in 2018.

Pressure from international banks, trustees, corporate and other service providers already increases. Requests for information exchange and investigations by the Russian authorities will rapidly increase. Global transparency leads to increased exposure of persons, assets and structures on a worldwide basis.

The usual suspects:

– Reporting? Voluntary disclosure? What about personal integrity and security!
– Partnerships? Sub-funds? Securisation vehicles? Debt instruments? What about CRS!
– Doing nothing? Ignorance is expensive! Tax–free and penalty–free options to mitigate historic tax and regulatory risks will disappear soon.

CRS will be a reality in all relevant countries, including Switzerland, UK and its Overseas Territories, Singapore etc. Don’t wait for the “ideal solution” in the near future, it will never come, but go for a “solid solution” now.

Features of solid solutions:

– Legally and tax compliant
– Admissible in Russian court
– Geared on wealth preservation
– Robust civil law rational.

Solid protection of assets can be obtained through the use of modern financial instruments such as trusts, private trust companies, Private Placement Life Insurance and regulated investment funds.

Benefits of Private Placement Life Insurance solutions:

– Strongest asset protection against claims from third parties, including family members, business partners, raiders and others
– Flexible, long-term succession planning
– Very limited reporting requirements if properly structured
– “Information Integrity” with all information being streamlined and co-ordinated
– International portability in case relocation becomes an issue.

A solid structure allows buying time to monitor, in the best possible circumstances, how the situation evolves in Russia and act accordingly. Expert advice by reputed lawyers and tax consultants remains essential for each case and at all times.

Baker & McKenzie:
Sergei Zhestkov, Partner, International tax structuring, Moscow, sergei.zhestkov@bakermckenzie.com, +7 495 787 2700

Anton Ionov, Partner, Head of Private Client Services, Moscow, anton.ionov@ru.ey.com,
Viktor Kalgin, CFA, Director, International Tax Services, Moscow, victor.kalgin@ru.ey.com, +7 905 709 5284
Roland Suter, Executive Director, International Tax and Private Client services, Zürich, roland.suter@ch.ey.com, +41 58 289 3180

For specific and case advice, you will have to consult them individually.

Written by
Toon Meyer
Director Business Development

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