Overview Of Certain Amendments To The Russian Laws In April 2014

BANKS AND FINANCE The Federal Law No. 37-FZ, dated 2 April 2014 (as effective from 2 April 2014) provides for specific features of financial system in the Republic of Crimea and the city of federal status - Sevastopol, for the transition period (up to 1 January 2015).

The Law is applicable to banks, non-banking financial institutions as well as to currency exchange offices registered and(or) operating in the Republic of Crimea and Sevastopol (hereinafter - the 'Financial Institutions').

Banks registered in the Crimea and(or) Sevastopol, the location of which are the said territories (hereinafter - the 'Registered Banks'), as well as banks operating in those territories through separate structural subdivisions (hereinafter - the 'Operating Banks') and holding a license of the National Bank of Ukraine effective as of 16 March 2014 may continue to operate on the territory of the Crimea and Sevastopol up to 1 January 2015 without obtaining a license issued by the Bank of Russia provided that they comply with the requirements established by the Law No. 37-FZ. In particular, up to 16 April 2014 inclusive, they should notify the Bank of Russia on the continuation of their operation, and fuher provide the Bank with the statements and other information on their activities in the procedure and terms established by the Bank of Russia, as well as properly perform their obligations under contracts.

Registered and operating banks may be registered as a credit institution with the Bank of Russia till 1 January 2015 and obtain a license to perform banking transactions by filling an application and other documents provided for by Article 6 of the Law No. 37-FZ (the list of which differs from the same provided by Article 14 of the Federal Law 'On Banks and Banking Activity').

If registered and operating banks fail to register under the Russian laws, they cease to operate no later than 1 January 2015.

From 2 April 2014, credit institutions newly-established in the Crimea and Sevastopol should be registered in accordance with the Federal Law 'On State Registration of Legal Entities and Individual Entrepreneurs' in view of specific features of registration of such institutions as provided by the Law No. 37-FZ and other acts.

The Law No. 37-FZ establishes:

- requirements and procedure for the state registration with the Bank of Russia as a credit institution, obtaining the license to perform banking transactions as well as obtaining a permit by a non-credit financial institution and state registration of a private pension fund;

- specific features of state registration of other financial institutions, obtaining licenses (other permits and accreditation) thereby, and activities termination;

- specific features of circulation of equity securities issued by emitters located in the Crimea and Sevastopol;

- procedure for the performance of obligations to creditors and consumers of financial services as well as to insurance companies (for certain types of obligatory insurance) operating in the Crimea and Sevastopol during the transition period (up to 1 January 2015).

The Federal Law No. 39-FZ, dated 2 April 2014, 'On the Protection of Interests of Individual Depositors of Banks and Their Separate Structural Subdivisions Registered and (or) Operating in the Republic of Crimea and the City of Federal Status - Sevastopol'(as effective since 2 April 2014) provides for the guarantees to individuals residing in the Crimea and Sevastopol holding deposits and accounts in the registered and(or) operating banks as well as in their structural subdivisions.

Such persons and those, for whose benefit a contribution was made (hereinafter jointly - 'Depositors'), as well as the heirs of deceased depositors shall have the right to receive compensation on deposits and accounts, where funds were placed under the bank deposit or bank account agreement before 2 April 2014 in cases stipulated by the Law No. 39-FZ :

- if the bank fails to perform obligations to the depositors within three calendar days after the due date;

- if the Bank of Russia decides to terminate activities of a separate structural subdivision of a bank operating in the Crimea or Sevastopol and registered...