On 1 April 2020, amendments* came into force allowing Russian legal entities and individual entrepreneurs to enter additional information about themselves on the Fedresurs* website, as well as information relating to individual terms of contracts they enter into.
In particular, the following information can now be published:
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when there is a right to repurchase a property;
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when the rights of the owner or possessor of an asset under a contract are restricted;
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when a debtor enjoys a possessory lien over an asset and how this lien can be terminated;
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when a party to a contract retains ownership rights to goods;
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when a surety commitment is in place; and
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when a party wishes to publish any other information, except in cases when access to such information is restricted under Russian law or a confidentiality agreement.
When information is published on Fedresurs, and provided that the objects in respect of which the respective rights or restrictions are established can be unambiguously identified, it will be presumed that third parties have been notified of such rights or restrictions from the day following the day of publication. This will be the case unless otherwise provided by law, or unless it is proven that the person knew or should have known about the rights or restrictions before the relevant information was published.
Who can benefit from this development?
This new instrument constitutes an additional guarantee for contractual creditors and can be used for a wide range of contracts, such as movable property sale and purchase agreements (for industrial equipment, large quantities of goods, etc.), share sale and purchase agreements, and corporate agreements.
For example, Fedresurs may contain information specifying that ownership over a large piece of equipment to be delivered under a contract will only be transferred after full payment, or information about restrictions contained in a corporate agreement relating to the alienation of shares.
In addition, information published on Fedresurs can be used to check counterparties before signing contracts with them. Companies can, for instance, assess the financial risks of interacting with a counterparty based on whether the counterparty is a surety in relation to any obligation.
Recommendations
We recommend that persons or entities who benefit from restrictions imposed over property (e.g. sellers, creditors under surety agreements) actively use Fedresurs to publish information on such restrictions. This will help reduce the risk that debtors enter into transactions in violation of the terms of the relevant contract. It will also make it easier for creditors to challenge these transactions.
As published information will be considered known to any third parties, all persons or entities planning on concluding contracts with Russian counterparties should check whether information on restrictions affecting their counterparties has been published on Fedresurs.
* in Russian
By Georgy Daneliya, Counsel, Alexey Shadrin, and Elizaveta Rakova, Associates, CMS
