Russian treasury suggests concealing commercial registry info to keep company owners safe from sanctions

Russia’s Ministry of Finance has put forth a proposition to conceal the commercial registry data regarding individuals that are under Western sanctions or may face them, according to BBC Russia.

According to the proposal, the Ministry of Finance is aiming to make data from the Unified State Register of Legal Entities and accounting documents secret. Information on enterprise managers and shareholders will become restricted, while their names will remain in the database. This way the ‘unfriendly’ countries will not be able to impose sanctions on owners and subsidiaries, as well as to freeze assets, believes the Russian treasury.

The data will become restricted by decision of the government or at the request of the companies themselves. It is unknown which legal entities will be included in the list; the government officials estimate their amount to be more than 10,000 companies.

Experts believe that such regulations are not only aimed at keeping companies safe from sanctions, but also at helping officials conceal corruption.

“This looks like a measure to cope with the sanctions, but it will also make life easier for corrupt officials and turn business operations into a nightmare. For instance, it will be easier for an official to assign a government contract or a dacha to a company belonging to their relatives or other third parties: their data will be considered state secret. At the same time, it will become even more challenging for a business person to check the purity of a planned transaction — or to find out if a manager is using a third party to steal money from the corporate budget,” believes Sergey Usoskin, a lawyer.

Russia faced a huge load of new economic sanctions after the country had invaded Ukraine on 24 February. The European Union, alongside the United States, Canada, the UK and Japan imposed the most sanctions on both Russian companies and individuals.