Russia Considers New Anti-Transparency Measure to Shield Civil Servants From Sanctions

On Mar. 5, 2022, a veteran Russian parliamentarian introduced an amendment to shield Russian civil servants from sanctions “by unfriendly states,” the latest in a series of moves by the Russian government to limit transparency.

For a more comprehensive discussion of these prior actions, check out the recording of our February Master Class: “Transparency Threatened – How Russia is Restricting Corporate Data to Protect Sanctioned Companies” and the accompanying report.

Vladislav Reznik, a deputy since 1999 in the Russian Federation’s State Duma, introduced the proposed amendment to Russia’s Federal Law No. 273-FZ of December 25, 2008, according to Russian news agency Interfax and state media outlet TASS. The proposed amendment would prohibit Russian government entities at all levels (federal, federal subjects, and local) as well as state companies and public law companies from disclosing the income, property (including vehicles), expenses, and familial details of certain Russian civil servants.

The civil servants protected by the proposed legislation include certain Central Bank of Russia employees, including the members of its board of directors, as well as members of the judiciary, local government employees, employees of state corporations, heads of local government, and other public servants.

Reznik, who was designated by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) in 2018, referenced sanctions in recent comments regarding the draft legislation to Russian state news agency TASS:

“As such, the provisions of the draft bill relate to other categories of civil servants who have been sanctioned, [such as] employees of public law companies, the Bank of Russia and state corporations.”

The proposed amendment also seeks to block the aforementioned civil servants’ information from being provided to media organizations who may publish it at a later date and does not apply to Russian ministers, senators, and deputies, whose personal disclosures are regulated by other legislation.

It is unclear whether the proposed amendment will pass. Reznik’s party, United Russia, clarified that the bill is Reznik’s personal initiative and has yet to be discussed within United Russia or with Russia’s presidential administration according to Russian business newspaper Vedomosti. Nonetheless, United Russia does have a supermajority in the State Duma, currently controlling 325 of 450 seats. According to Novaya Gazeta, one of Russia’s last independent news outlets, this supermajority allows United Russia’s bills to be quickly passed into law. During the term of the previous State Duma (2016–2021), 42 percent of draft laws were passed into law, with 37.5 percent failing to pass and the rest failing to be considered for debate.

Reznik’s proposed amendment is but the latest in a series of recent anti-transparency legislation such as Executive Decrees 400 and 729, which seek to shield legal entities from the effects of international sanctions.

This specific proposal appears to be a response to extensive U.S., UK, and EU sanctions levied in February and March of this year. Over 60 Belarusian, Russian, and Ukrainian nationals have been designated by OFAC since the Russian Federation’s February 21, 2022 recognition of the independence of the so-called Donetsk People’s Republic and Luhansk People’s Republic (located inside of Ukraine’s Donetsk and Luhansk oblasts, respectively) and President Vladimir Putin’s subsequent February 24 decision to invade Ukraine.