Russia's State Duma passed a bill in its second reading on October 22 that would allow the Federal Tax Service (FTS) to independently restore public access to previously restricted company information. The government says the changes are necessary because restrictions introduced partly to protect businesses from Western sanctions have begun to interfere with the work of government agencies.
Following Russia's full-scale invasion of Ukraine, Russian companies were permitted to restrict access to certain information in the Unified State Register of Legal Entities (EGRUL). The measures were intended to make it harder to identify business owners, executives and corporate connections that could be used in imposing Western sanctions.
However, according to the government's explanatory memorandum, the lack of access to information has created problems for tax and customs oversight, public procurement and antitrust regulation.
Businesses themselves have also encountered difficulties. Companies cannot always establish who is authorized to represent their counterparties or how reliable the available information about business partners is. This increases risks for banks, creditors and investors.
Under the existing rules, information can remain restricted even after the grounds for withholding it have disappeared. To restore access, a company must submit a request to the tax authorities.
The bill approved in its second reading would change that procedure. The FTS would be able to make information accessible on its own initiative if it determines that there is no longer a legal basis for restricting access.
Before disclosing the information, the tax service would have to notify the company and provide at least three months' notice.
The bill would also allow company representatives acting under a notarized power of attorney to obtain restricted corporate information.
The Russian authorities do not, however, intend to abolish the earlier restrictions entirely. Companies that continue to meet the legal criteria for withholding information would still be able to use the exemptions.
The bill would not expand access to restricted corporate information for journalists or other outside parties.
The authorities therefore intend to partially revise sanctions-related restrictions that have become an obstacle to government oversight and business activity. The legislation must still complete the remaining parliamentary procedures and has not entered into force.