Mandatory verification of clients against the Ministry of Justice's lists of foreign agents

Article 5 of the Federal Law No. 255-FZ of 14 July 14, 2022 “On control over the activities of persons under foreign influence” has been amended to regulate compliance with the restrictions imposed on foreign agents, which entered into force on August 4, 2023.

According to these additions, public authorities, organisations of all legal forms, as well as their officials and individuals, regardless of their citizenship or in the absence thereof, in carrying out their activities must take into account the restrictions related to the status of a foreign agent specified in Article 11 of this Federal Law, in particular:
  • a foreign agent may not take part in the procurement of goods, work and services to meet state and municipal needs, in the procurement of goods, work and services in accordance with Federal Law No. 223-FZ of July 18, 2011 “On the Procurement of Goods, Work and Services by Certain Types of Legal Entities" and also won’t be able to participate in the selection of service providers in accordance with Federal Law No. 189-FZ of July 13, 2020 "On the State (Municipal) Social Order for the Provision of State (Municipal) Services in the Social Sphere";
  • a foreign agent does not have the right to apply simplified accounting methods, including simplified accounting (financial) reporting;
  • foreign agents are subject to the restrictions and prohibitions provided for in Federal Act No. 57 of April 29, 2008 “Procedures for Foreign Investments in the Business Entities of Strategic Importance for Russian National Defence and State Security”.

In fact, this innovation means the need to check clients on the unified list of foreign agents published and updated on the official website of the Russian Ministry of Justice.

Since August 4, 2023, part 42 of Article 19.5 of the Code of Administrative Offences establishes administrative liability for failure to comply within the prescribed time limit with a lawful order or warning of the body exercising state control over compliance with the legislation of the Russian Federation on foreign agents to eliminate violations of the legislation in the form of a monetary fine, in particular, for officials – up to 100 thousand rubles, for legal entities – up to 300 thousand rubles.