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Information on Contractual Restrictions Can Now Be Published on Fedresurs.Ru

Information on Contractual Restrictions Can Now Be Published on Fedresurs.Ru

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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:

  • when there is a right to repurchase a property;

  • when the rights of the owner or possessor of an asset under a contract are restricted;

  • when a debtor enjoys a possessory lien over an asset and how this lien can be terminated;

  • when a party to a contract retains ownership rights to goods;

  • when a surety commitment is in place; and

  • 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

Russian Knowledge Partner

Founded in 1993, Egorov Puginsky Afanasiev & Partners is the leading full-service law firm in the CIS with offices in Russia, Ukraine and Belarus and associated offices in the UK, the USA and Cyprus.

We advise its clients in many areas of law, including: dispute resolution in Russia and abroad, corporate law, M&A, antitrust issues, project finance and PPP, restructurings and insolvencies, energy and natural resources, property management and privatization, environment, technical regulation and industrial safety, banking and finance, intellectual property, criminal law, real estate and construction, taxation, family and labour disputes, marine and transport law, and international trade and customs.

We combine high academic qualifications, internationally acknowledged moral and ethical values, senior partners' professional experience and practical abilities with the vigour and knowledge of younger attorneys that enables thus providing clients with reliable, first-class service according to both Russian and western standards through a flexible structure.

All News about, and Legal Analysis by, Egorov Puginsky Afanasiev & Partners can be found here.

Firm's website: www.epam.ru

 

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