Legal & Regulatory

Azerbaijan to simplify visa issuance for foreigners

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By Marina Romanova

azerbaijan_map_markedAzerbaijan ministry of culture and tourism is about to finish all needed preparation to launch new e-visa issuing system called ASAN Visa, reports. The ASAN Visa is scheduled to begin operating since September 1, 2016.

Abulfaz Garayev, the head of the ministry of culture and tourism, has stated that the technical conditions of the system have already been approved, while added that “the introduction of new system does not envisage the elimination of the current system of issuing e-visas through travel agencies, and the latter can continue accepting orders and provide tourists with a visas”.

Functionally new e-visa system would be available online for all applicants and would support the following operations: it will accept applications, process them (including the collection of state fee) and then issue e-visa. According to the ministry, applicants should expect their e-visas to be emailed to them in 3 working days. ASAN Visa will be integrated with entry-exit system.

Continue reading…

IKEA to Beat “The Way to Communism” and to Invest US$2.1 BLN in its Russian Malls

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By Marina Romanova

1454919171_ikeaThe Supreme Court of Russia has affirmed the lower court’s ruling rejecting a claim of an agricultural enterprise, former collective farm “The Way to Communism”, which demanded to demolish two 15 store’s buildings of the “Khimky” business park, belonging to Swedish furniture retailer. Thus the court has settled the claim of IKEA, Russian news agency RIA Novosti reports.

The 16.4 hectare plot of land has been at the root of a long-term dispute between the retailer and former collective farm, now called Khimki Collective Agricultural Enterprise. They accuse IKEA of faking the documents required to obtain the land on the Leningradskoe highway, the Russian Kommersant daily reported.

Agricultural Enterprise board members claim that their signatures were faked and that they never agreed to give away the disputed land to the Khimki administration. Khimky city administration leased out the plot of land to IKEA for 49 years in 1993 and then sold the land to the retailer in 2011. Continue reading…

EU to roll over Crimea ban for another year

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By Marina Romanova

The European Union decided last Friday to prolong the ban for a year on business dealings with the Black Sea peninsula of Crimea, which was annexed by Russia from Ukraine in March, 2014.

The sanctions are prohibit imports and export of certain products from the region, any investment there or cooperation in tourism services.

“The European Council (of member states) has extended until June 23, 2017 the restrictive measures adopted in response to the illegal annexation of Crimea and Sevastopol by Russia,” the EU official statement said.

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French deputies recommend country’s authorities to oppose extension of EU anti-Russian sanctions

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By Marina Romanova

Deputies of the lower house of the French National Assembly voted for the resolution, encouraging state authorities to oppose extension of European sanctions on Russia, Parliament press office reports.

55 of 98 deputies supported the resolution. The voting was initiated by “Franco-Russian Dialogue” association together with conservative lawmaker Thierry Mariani, lower house Foreign Affairs Committee’s member.

“(The sanctions are) totally ineffective today to solve this international crisis and are dangerous for France’s interests,” the Reuters reported Thierry Mariani as saying.

Sanctions remain in place, and some observers call it “French symbolic vote” — the non-biding resolution is of a strictly recommendatory nature and doesn’t commit the authorities to specific actions. However, Republican party member Nicolas Dhuicq called the resolution “historic victory” on Twitter. Continue reading…

Product Certification According to TR CU – Key Date

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On March 15, 2015 the transition period for several Technical regulations of the Customs Union comes to an end.

 Technical Regulation of the Customs Union Decision as of 
 TR CU “On the Safety of Low-Voltage Equipment
(TR CU 004/2011)
 TR CU “On Safety of Machinery and Equipment
(TR CU 010/2011)
 TR CU “On the safety of lifts” (TR CU 011/2011)  18.10.2011
 TR CU “On Safety of Equipment for work in explosive environments” (TR CU 012/2011)  18.10.2011
 TR CU “On Safety of devices Operating on Gaseous Fuels” (TR CU 016/2011)  09.12.2011
 TR CU “Electromagnetic Compatibility” (TR CU 020/2011)  09.12.2011

Do all conformity documents according to GOST standards lose their validity?

For the last two years, even after the above listed technical regulations came into force on February 15 2013, GOST certificates and declarations of conformity could still be used. However, on March 15, 2015 the transition period for affected product categories ends, and old GOST conformity documents lose their validity, regardless of the expiry date indicated on the certificate itself. The only exception is for conformity documents that were issued before the Commission of the Customs Union took the decision on the respective technical regulation. Those certificates and declarations may be used until their date of expiry.

What should be done next?

First of all it will be necessary to define which Technical Regulations apply to your products. In order to carry out such an analysis a detailed product description, as well as the Russian customs tariff number, needs to be determined. On the basis of this information it is possible to verify if formerly issued GOST certificates are still valid or if you need to apply for certificates or declarations of conformity according to the Technical Regulations of the Customs Union. In the latter case, we recommend that you approach the rather time-consuming certification process as soon as possible. Companies should also pay attention to the new requirements regarding the function of the applicant, who needs to be a legal entity of the Customs Union, bearing responsibility for the certification process as well as for product quality and safety.

If you have any questions on this topic, please do not hesitate to contact us. We will be glad to support you in the application for conformity documents according to TR CU and in the certification process as a whole.

Please contact:
Bettina Wisthaler
Head of Import Department

RUSSIA CONSULTING supports companies on matters concerning doing business in Russia, irrespective of their size and industry sector. Over 500 experts advise on market entry structure, accounting and reporting, IT/ERP-connection and tax consulting in Russia / CIS and Poland.

Longstanding professional experience combined with local know-how enable the team to be not just a service provider but a business partner in Russia and to help and assist foreign companies safely and reliably on the issues affecting Russian market entry.

URGENT Changes to the Accreditation of Branch and Representative Offices in Russia

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A Branch or Representative office of a foreign company is a common way to establish a business presence in Russia. The main advantage is that money can be transferred freely between the head office and the Russian office. Of course, there are many other advantages and a few disadvantages which should be considered as well.

Russian legislation concerning Branch and Representative offices has recently changed and we want to ensure you are up to date with these changes.

What is changing?

Single state agency with authority over accreditation – The accreditation of Offices will be handled by a single state agency (hereinafter – the “SSA”). While it is currently not clear which agency will be appointed to deal with the accreditation of Offices, it is widely presumed that the Federal Tax Service of the Russian Federation (hereinafter – the “FTS”) will be responsible for the accreditation of Offices.

Register of accredited branches and representative – The SSA will maintain the unified register, determine the procedure for accreditation, and establish forms and formats of required documents. The register will be freely accessible via the official website of the SSA. It will also be possible to obtain an extract from the register for a fee within 5 business days.

Accreditation of and visa support for foreign employees – The Chamber of Commerce and Industry of the Russian Federation will be responsible for the accreditation of and visa support for foreign employees of Offices.

Automatic termination of accreditation (unless re-accreditation) – As of April 1, 2015, accreditation will be automatically terminated unless the office complies with the procedure outlined below.

  • If the accreditation expires in January 2015, Offices should apply for accreditation under the new law in February 2015.
  • If the accreditation expires between February 1, 2015, and April 1, 2015 (inclusive), Offices are permitted to apply for accreditation in accordance with the new law within 30 days before the expiration of their current accreditation.
  • If the accreditation expires after April 1, 2015, Offices are required to apply for accreditation in accordance with the new law before April 1, 2015.
What does this mean for you?

Your urgent attention and action is required, if you wish to keep your office in the Russian Federation. The accreditation of your office will be automatically terminated on April 1, 2015, unless you comply with the mandatory requirement for “re-accreditation”.

RUSSIA CONSULTING is your trustworthy partner to assist you with the “re-accreditation” procedure, ensure that you meet all deadlines, and help you with the continued operation of a successful Office in the Russian Federation.

For further information, please contact:
Helge Masannek
Director Taxes & Legal

Michael Hartleben
Deputy Director Taxes & Legal

Legal Framework: What do Russia’s Sanctions Really Mean?

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By Helge Masannek

In March 2014, the EU and the United States introduced sanctions against certain Russian and Ukrainian persons as a reaction toward Russia’s role in the Crimea crisis. European “Regulations concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine” included economic sanctions, asset freezes and travel bans and have been implemented on March 5 (2014/119/CFSP), March 17 (2014/145/CFSP), May 12 (2014/265/CFSP) and July 12 (2014/455/ CFSP) as well as July 30 (2014/507/CFSP). As of July 31, there were 123 individuals and legal entities on the sanctions list. Continue reading…

Q&A: Certification and Import in the Russia – Kazakhstan – Belarus Customs Union

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1. I’m working with a Russian business partner who is a member of the Customs Union and they are asking me to sign extra documents. Why?

From the perspective of your Russian partner, the tax code requires that completed works and services be evidenced by signed “acts” as these are the primary documents used to record revenue and expense. Therefore, at different stages of your work, you may be asked to sign these documents simply to satisfy the requirements of the Russian tax code.

2. I’ve sold services to our Russian business partner and now I’m being asked to provide a copy of my company tax registration document and it should be apostilled. Why?

Under Russian legislation, in the absence of a double taxation avoidance treaty, Russian-sourced income is taxed at the source which means your Russian partner should withhold taxes from your payment. However, to enjoy the benefits of the tax treaty, the Russian tax office requires that you demonstrate your eligibility by providing a copy of your tax registration certificate to your client. The apostille is simply a protocol that countries follow to recognize the legitimacy of documents between different countries. Continue reading…

Import of Goods Between Affiliate Companies in the Russia – Kazakhstan – Belarus Customs Union

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By Bettina Wisthaler

While for imports between non-related companies, the invoice is usually sufficient as the main source for the calculation of the customs value. But for imports between affiliated companies, customs require additional confirmation of the value of goods. This is due to the fact that in the past, parent companies often tried to support their subsidiaries by invoicing lower values in order to save on customs duties and import VAT.

Nowadays, affiliation needs to be indicated even in the declaration of the customs value which is part of the customs declaration of goods. Additional confirmation should be provided in form of a price list stamped by the Chamber of Commerce of the exporter’s country, the export declaration and the official order confirmation. The situation becomes more complicated when the exporting company is not selling only to its subsidiary but also to other distributors in the Customs Union. Continue reading…

VAT Procedures in the Customs Union

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By Paul Sprague

Very often, cross-border transactions present obstacles for foreign companies due to cumbersome legislation, a lack of clarity on what should be done and how to account for the transaction in the accounting system. The following is some practical advice on how to navigate VAT transactions in the Customs Union. Continue reading…

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