Review of key bills and initiatives of 2019

Jan, 17 2020

1) Legislative initiatives in the sphere of small and medium businesses

In 2019, within the dialogue of business representatives and legislature several issues on improvement of business conditions in Russia were discussed. Thus, a plan on improving of business environment in Russia was compiled by the Ministry of Economic Development at the initiative of business representatives.

This plan will be updated twice a year and will be fully implemented by 2024. In addition, as the main tax measures, it was proposed to introduce a small businesses tax amnesty from the beginning of 2020. This initiative may provide for the state guarantees in amount of 75% of the loan, which is issued to small and medium-sized businesses in the framework of project financing.

Finally, the liberalization of the Criminal Code of the Russian Federation was discussed at the meeting of representatives of ministries and the President. It was proposed to amend or completely abolish criminal articles establishing liability for currency and tax violations as one of liberalization measures. Supposedly, such legal developments should significantly facilitate the process of conducting small business and attract much more investors to the Russian market.

2) Legislative developments in digital law

The term «digital rights» was enshrined in the Civil Code of Russian Federation by introducing a new Article 141.1. Also, a number of bills in the sphere of labor law, continuing the process of civil matters digitalization, was approved by the Government. Particularly, a transition to the online form of employment record books is expected to be approved. Starting 2020 employers will be required to store employment record books both online and in a hard copy.

Moreover, on second reading the bill on improving the regulation of electronic signature was adopted. In the framework of this law it is proposed to give the legal right to the procedures of person authentication via electronic services, ensuring an electronic interaction.

3) Discussion on the legislative regulation of cryptocurrencies

Since May 2019, the issue of prohibition or legislative regulation of cryptocurrencies has been actively discussed in Russia. The law “On digital rights”, adopted on first reading, affirms that the issue of cryptocurrencies’ legalization in Russia has been taken seriously at the legislative level. The second reading has been deferred repeatedly and in November 2019 the bill on prohibition of cryptocurrency, using for purchases in Russia, was proposed by Central Bank of Russia and Federal Financial Monitoring Service (Rosfinmonitoring). This initiative provides for establishing of a criminal liability for using cryptocurrency. At the same time, Russia has an obligation to the Financial Action Task Force (FATF), an Intergovernmental organization struggling with money laundering, to regulate the sphere of cryptocurrencies by law, so the issue should be resolved in the nearest future.

4) The procedure of permanent residence permit and temporary residence permit obtaining is simplified

The procedure of permanent residence permit (PRP) and temporary residence permit (TRP), obtaining for foreigners in Russia, is simplified: starting November 1st permanent residence permit has become unlimited, while previously was issued to a foreign citizen for five years. Grounds to obtain TRP and PRP in a simplified manner have been expanded: TRP can be issued without taking into the quota to foreign citizen under the age of eighteen and whose parent is a foreign citizen temporarily residing in Russian Federation.

5) Procedural revolution

Significant amendments to procedural legislation came into force from October 1st, 2019.

Thus, Representatives of the parties at civil and arbitration trials can only be persons with a higher legal education or a degree in law. This requirement does not apply to cases which are heard at lower district courts and to statutory representatives. In addition, nine new territorial cassation courts of general jurisdiction have been established, which means they will consider all cassation complaints.

All the initiatives mentioned above as well as adopted laws, testify the development and improvement of civil, civil procedure and arbitration procedure legislation in Russia. If the bills in the sphere of small and medium-sized businesses will be adopted, the investment environment in Russia will become more attractive for foreign investors in the nearest future and give a growth opportunity for Russian entrepreneurs.

In turn, legal regulation of electronic signature, codifying the term «digital rights», transition to electronic labor relationships will significantly simplify the process of civil relations in the field of digital economy.

Finally, large-scale amendments to procedural legislation will help to increase the efficiency of arbitration and civil proceedings, as well as proportionally spread the load among the relevant judicial instances.