International AML and Tax Compliance

Russian clients have never been more international. Today, families frequently have dealings – through residence, birth, marriage or investments – with multiple countries, and multiple systems of law. At the same time, compliance burden and Anti-Money Laundering (AML) regulations, as well as the domino effect of the US sanctions, make it increasingly harder for honest tax-paying Russian businessmen to keep their money and investments abroad.

The increased international transparency and introduction of new regulations mean that it becomes impossible for Russian clients to make and keep international investments without being able to explain and document the source of wealth and without being able to show that the wealth was reported and taxed. These measures in combination with increasing international political pressure on Russia, put international structures for Russian clients under ever-increasing scrutiny.

Also in 2016-2017 Russia has agreed to automatic exchange of information with many countries of the world, with an aim for the Russian tax authorities to obtain information on foreign accounts and structures controlled by Russian tax residents. This means that the Russian tax authorities will automatically receive on an annual basis balances of financial accounts held by Russian tax residents in partner jurisdictions and by passive non-financial entities that are controlled by Russian tax residents, as well as types of income paid or credited to those accounts, including interest income, dividends, income from certain insurance products, and gross proceeds from sale or redemption of financial assets. This information may be used by Russian tax authorities in checking that Russian taxpayers have correctly fulfilled their tax obligations. Hence, the Russian authorities will be able to find out about hidden assets of Russian taxpayers and impose administrative and/or criminal liability.

To assist with international compliance Boltenko Law’s experts can provide you with a discreet, legally privileged, practical advice on the following issues:

• Identify risks of your assets ownership arrangements for purpose of international AML and source of wealth checks;
• Devise compliant strategy of structuring ownership of foreign assets for the future; and
• Assist in ensuring swift compliance with KYC and AML requirements.