A Russian bank account: the bank file, choice of bank, support through review

What is happening

An Ecuadorian group holds its Russian LLC through a Panamanian holding company owned by a family trust. The bank wants to see the ultimate beneficial owners, which means collecting and explaining documents from three countries.

A bank has refused to open an account for the LLC of an Argentine company. The company needs to obtain the grounds, understand what was missing and decide whether to apply to the interdepartmental commission at the Bank of Russia or go to another bank with a corrected file.

The branch of a Mexican company has an account, but the bank has held the first large transfer from the parent and asked for the contract and an explanation of its business purpose. A prompt and substantive reply is needed.

What the law says

• A legal entity must disclose information about its beneficial owners (Article 6.1 of Federal Law No. 115-FZ of 7 August 2001 on Countering the Legalisation (Laundering) of Proceeds of Crime and the Financing of Terrorism).
• A bank identifies the client, its representative, beneficiary and beneficial owner, and may refuse to enter into a bank account agreement (Article 7 of Law No. 115-FZ, including paragraph 5.2).
• A bank may refuse to carry out a transaction (Article 7(11) of Law No. 115-FZ). After a refusal, the client is informed, may submit documents showing there are no grounds for refusal and may apply to the interdepartmental commission at the Bank of Russia (Article 7(13.4)).
• As a Russian legal entity, an LLC is assigned a risk group by the Bank of Russia on its Know Your Client platform (Articles 7.6 to 7.8 of Law No. 115-FZ); these articles do not apply to a branch of a foreign company.
• An LLC with foreign participation is a resident, while a branch or representative office is a non-resident (Article 1 of Federal Law No. 173-FZ of 10 December 2003 on Currency Regulation and Currency Control); this determines the rules under which the bank services the client.
• The countries of continental Latin America are not on the list approved by Russian Government Order No. 430-r of 5 March 2022. However, the restrictions of Presidential Decree No. 81 of 1 March 2022 also extend to persons controlled by persons from listed states, wherever they are registered, so the ownership chain should be checked before approaching a bank.

What we do

• We build the bank file: constitutional documents and the founder's apostilled register extract, the ownership chart up to the ultimate individuals, beneficial owners' passports, reputation information, a business description, contracts with suppliers and customers, and evidence of the source of the share capital.
• We check each link in the ownership chain against List No. 430-r, including the Bahamas and the British overseas territories, and prepare an explanation for the bank.
• We help select a bank experienced with foreign shareholders and with correspondent relationships in the currency you need.
• We brief the head of the company before the bank meeting: which questions to expect and which documents to bring.
• We reply to the bank's queries on transactions, assembling supporting documents and explaining the business purpose of deals.
• After a refusal we request the grounds, prepare documents to address them and, if needed, an application to the interdepartmental commission at the Bank of Russia.
• We recommend opening an account at a second bank in advance, so that a delay at one bank does not halt payments.

What we will need from you

• Documents of the LLC or branch and of the parent company, and the founder's apostilled register extract.
• An ownership chart up to the ultimate individuals and their passports.
• A description of the business and planned payments: currencies, countries, counterparties, expected turnover.
• Contracts or drafts with your first suppliers and customers.
• Evidence of the source of the share capital or of the branch's funding.