Sanctions Against Offshore Companies

The new Civil Code may contain not only the requirement for offshore companies operating in Russia to disclose the names of the beneficiaries but severe sanctions for the violation of this rule.

It seems likely that offshore companies operating or holding assets in Russia will be asked to reveal their beneficiaries. So far, however, it has not been clear what would happen if such an entity broke the law.

If a company from a tax haven does not disclose its owners, the person acting on its behalf or just authorized to represent its interests may become liable for its debts. The company itself will be seen as acting in bad faith, its contracts terminated and everything it got will be returned to former owners.