MOSCOW, December 21 (RIA Novosti)
Izvestia
Russian Banks Required to Track Account Beneficiaries
Russia’s Financial Monitoring Service has sponsored another anti-money laundering bill requiring companies to disclose beneficiary information to their banks, following Prime Minister Dmitry Medvedev’s order.
The bill contains a definition of “beneficiary owner” and requires companies – customers of banks, brokerages, insurers, real estate dealers, and other financial services providers – to disclose information on their actual beneficiaries.
A beneficiary is an individual who influences decision-making at the company directly or otherwise, independently or jointly with affiliated parties. Banks will be required to take “justified and feasible action” to identify beneficiaries of their corporate customers and collect personal details, including names, citizenship, date of birth, identification and taxpayer numbers. For companies, the required details will include their taxpayer number, legal address and physical address. More detailed criteria for identifying someone as a “beneficiary” will be outlined in separate government or Central Bank regulations.
Banks will have to update this information annually or more often if concerns arise about a customer.
PwC lawyer Dmitry Chirkin said the move is targeted at fly-by-night firms, money laundering and tax evasion. A lack of beneficiary information often prevents banks from understanding the economic benefit of customer transactions.
“Banks have one underlying principle: know your customer,” said Maxim Solntsev from SDM-Bank. “In Switzerland, a banker is personally responsible for the correct identification of the actual owner of a customer’s money.”
However, apart from an increase in paperwork, Russian banks are unlikely to be seriously affected by the bill. There is still no clear procedure for identifying beneficiaries. “It would be impossible to fulfill the new requirements without a comprehensive database of companies and their beneficiaries, similar to the one on terrorists,” Probusinessbank Vice President Andrei Fil said. “Without it, banks will have to take a new customer’s word for it.” Also, a company and its beneficiaries do not always use the same bank. A database should be regularly updated and provided to banks free of charge, he added.
Russian companies will probably be asked to name their beneficiaries when opening an account, Solntsev suggested. In 99% of cases, the company’s founders are also its beneficiaries. Although he did not rule out the risk of companies giving false information, Solntsev does not believe that falsifications will be common. The bill gives lenders the right to terminate bank account agreements if the customer fails to present correct information or valid documents when opening it.
A source familiar with the government discussion of the bill pointed out that the draft does not specify sanctions for failure to observe the requirement. For a first offense the bank could face a fine of 700,000 rubles ($22,760). A bank that serves a company involved in money laundering and deliberately hides information on its beneficiaries could lose its license.
The government’s recent financial control initiatives are justified, said Vitaly Borodkin from Prioritet law firm, citing another recent bill calling for tighter financial supervision of “foreign agents” – NGOs funded by foreign entities.
Kommersant
Authorities Fail to Convince Russians of Sincereity in Fighting Corruption
The current official anti-corruption campaign was started by the publication on August 6 of an open letter to President Putin from rock musician Andrei Makarevich, who claimed that standard bribes in Russia had come close to 70%, compared to 30% five or six years ago. But the drive seems to be petering out after having reached a high in the fall, when the country was rocked by a series of high-profile corruption scandals.
It is still unclear why the campaign is grinding to a halt. One explanation is that it has run its course, both politically and institutionally. Another is that the authorities no longer have the political will to continue the fight, even though President Putin declared it a priority in his recent address to the Federal Assembly.
It is believed that the anti-corruption campaign was a tool in the context of infighting in the President’s inner circle. The only way to restore order without suffering excessive losses was to stop the exposures. In addition, further anti-corruption efforts make no sense unless serious changes are made in the existing political and economic system.
According to Anatoly Leyrikh from Delovaya Rossia, if the authorities really want to fight corruption they should do their best to let the private sector prevail over the public sector. For this they have the tools of tax and price regulation.
Head of the National Anti-Corruption Committee Kirill Kabanov claims that Russia bureaucrats are now a caste that has turned corruption into a most lucrative business. Profit is their ideology; they owe loyalty only to their direct superiors and do not take orders from anyone higher up. “With a bureaucratic system of this kind in place, you can no longer run the state effectively,” he says.
But it looks like the majority of Russians do not think that the fight against corruption was started in earnest. According to a Levada Center poll, 60% of respondents believe that it is meant to “divert public attention from the real problems in the economy and the government’s inability to make good on its promises.” The same number of respondents said that the purpose of the campaign was to bolster people’s shaky confidence in the president and fend off charges that he had created a corrupt regime.
So far the authorities have taken no practical steps – nor made any statements – intended to enlist the support of the majority of people in the fight against corruption. Speaking in an interview with five federal TV channels, Dmitry Medvedev invoked the “presumption of innocence,” when asked to comment on the actions of the Defense Ministry officials against whom criminal proceedings had been instituted. Being indicative of the prevailing mood in the top echelons of authority, this remark is unlikely to convince many Russians that the authorities are sincere in their wish to clamp down on corruption.
Nezavisimaya Gazeta
Dating for Gifts Popular in Moscow, Minsk and Kiev
Economic reforms and income inequality in post-Soviet countries have given rise to a new kind of behavior called “the commercialization of intimate life.”
According to a survey conducted by the Higher School of Economics (HSE), 30% of respondents in Moscow, Minsk and Kiev said they had dated in exchange for gifts. Scientists say that this behavior, which has been thoroughly researched in other market economies, is not prostitution.
“Almost 30% of respondents said that they received some kind of remuneration for intimacy, and about 35% said they had given presents to remunerate a partner,” said Christopher Scott, assistant professor at the HSE Faculty of Sociology.
“Our survey shows that people in Moscow receive gifts more often than in Kiev or Minsk, and the smallest number was registered in Minsk,” said another researcher, Irina Vorobyova.
Dating for gifts means that a partner agrees to intimacy in exchange for jewelry, cell phones and other equipment, tours, clothes and living essentials, dinner at a restaurant and even money. “Such dating was first reported in Japan, where schoolgirls agree to have intimate relations with older men for gifts or money,” the HSE report reads.
In Russia, people on dating sites write what kind of partner they would like to meet and sometimes add that he should be able to buy her an iPhone. The HSE experts polled about 700 people aged between 18 and 55 who have had intimate relations, including sex. Some 80% of respondents had a partner at the time of the poll, and over half of them were married. The survey showed that those who date for gifts often visit dating sites.
Over 60% of respondents said sex is possible without love, 25% don’t think so, 12% said it is impossible, and the rest could not answer. When asked if they would marry a partner who meets their requirements if they don’t love them, only 5% said “Yes.” Thirty percent said they were likely to marry such a partner, 36% said “I’d rather not,” and 24% “absolutely not.”
The survey’s authors admit that gifts were also given in the Soviet era, but such dating has become widespread following the country’s dissolution and economic reforms. It was more difficult for women to find employment, which, combined with the economic problems of the 1990s, encouraged a more pragmatic attitude towards “romantic” relations.
“People in big cities have little time for stable and permanent relationships, and the attitude to family as an institution has become much simpler in society. The notion of freedom has reached personal life. The phrase, ‘No one owes anyone anything,’ has become a symbol of market relations in Russia. Life based on ‘supply and demand’ is destroying the family, which is a shame,” InvestCafe analyst Anna Kokoreva said. She added, though, that scientists are overestimating the popularity of dating for gifts.
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