Maxim Ali has commented for Forbes on amendments to legislation restricting banking for businesses selling through blocked websites and social media

On 6 July 2022 a bill amending the federal law on combating money laundering and terrorist financing was submitted to the State Duma. The proposed amendments would prohibit banks and other financial institutions from serving companies providing services through websites to which access is restricted. The sites would also have to be included in the Unified Registry of Banned Websites.

Maxim Ali, Partner and Head of IP/IT practice at Maxima Legal, named the amendments “technical”, as similar amendments to the same federal law were approved by the Federation Council and signed by President Vladimir Putinin 2021. In particular, last year’s edition of the law obliged banks to stop operations if their clients provide services through banned websites. As Maxim noted, this amendments are dormant for now. “In November 2021, the Bank of Russia postponed its implementation – first until April 1, 2022, and then until the end of 2022. This is due to the fact that the Central Bank is working out how best to notify banks that an entrepreneur is operating using banned websites,” Maxima Legal’s expert explained specifically for Forbes Russia.

According to Maxim, the new amendments will supplement previous ones, requiring financial institutions to take into account only those websites with access restrictions, not all banned sites. This clarification will allow to exclude “unreasonable prohibition” of banking services for a number of clients, for example, large platforms VK and Avito, some pages of which are in the the Unified Registry of Banned Websites among banned but access to them is not limited, said in an explanatory note to the bill.

Maxim Ali also drew attention to the fact that the domains of social networks Instagram and Facebook owned by Meta (recognised as an extremist organisation in Russia and banned) are included in two registers – the the Unified Registry of Banned Websites and the register of information distributed in violation of Articles 15.3 and 15.3-1 of Federal Law 149 (on information, information technology and information protection). Access to Instagram and Facebook domains is only restricted in the latter. However, the amendments to the money laundering law refer specifically to websites from the Unified Registry of Banned Websites, where access to Instagram and Facebook domains is not restricted. So if the bill is passed, banks will not be required to block payments that go through these sites, Maxim stressed.

In addition, as the expert noted, it is not clear from the wording in the amendments which companies are meant by those who “provide services through” banned websites, access to which is restricted, and how banks can track them down. “A general rule on how to define such services has not emerged. It [the definition of such services] is not in the law and the Central Bank has so far refrained from formulating it in its clarifications,” commented Maxim Ali. At the same time, in his opinion, it is much easier to assess whether bloggers fall under the wording, explanations on this issue can be found in the database “ConsultantPlus”. “The Bank of Russia was asked what to do with the use of advertising websites [in case they are banned and access to them is restricted]. And he replied that these norms [in the amendments to the money laundering law] do not apply to the distribution of advertising on such sites,” Maxim explained.

To read the full article (in Russian) please visit Forbes Russia`s website >>>