Law Against Sham Companies

 

On 7 December 2011 the President signed Federal Law No. 419-FZ amending the Criminal Code of the Russian Federation and Article 151 of the Code of Criminal Procedure of the Russian Federation.

The amendments aim at combating so-called day fly companies and introduce a new criminal activity – the unlawful establishment of a company. This means creation of a company by means of misleading fictitious persons – company founders or management bodies (e.g. when criminals unlawfully use somebody’s personal data to establish a company aiming to commit financial crimes). According to the amendments, this crime is punishable, in particular, by a fine of up to RUB 500,000 or up to 5 years imprisonment.

The Law entered into force on 19 December 2011.

For further information please contact Igor Ostapets, Grigory Chernyshov or Irina Dmitrieva in the Moscow office of White & Case, tel + 7 495 787 3000 .

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