The European Commission has implemented Article 5r of Council Regulation (EU) 833/2014 which introduces a new reporting obligation. The new requirement will give national competent authorities better visibility on the flow of funds related to Russian-owned entities out of the EU, without jeopardising the activities of entities that are (partly) Russian-owned and operating legitimately in the EU. This will allow NCAs to assess better whether certain types of transfers pose a risk of violation of Russia-related sanctions and contribute to mapping out Russia's sources of revenue.
In summary, Article 5r sets out a new reporting obligation that applies to legal persons, entities and bodies established in the Union whose proprietary rights are directly or indirectly owned for more than 40 % by a legal person, entity or body established in Russia; a Russian national; or a natural person residing in Russia and to credit and financial institutions. The new measure covers all types of funds transfers out of the European Union. The obligation to report applies for any transfer of funds exceeding 100 000 EUR out of the Union made directly or indirectly in one or several operations.
The report must be submitted to the competent authorities of each Member State within two weeks following the end of each quarter. This obligation commenced on 1 May 2024, covering the first quarter of 2024 (1 January 2024 to 31 March 2024). The forthcoming deadlines are as follows:
| PERIOD | DEADLINE FOR REPORTING |
| 1 April – 30 June 2024 | 15 July 2024 |
| 1 July – 30 September 2024 | 15 October 2024 |
| 1 October – 31 December 2024 | 15 January 2024 |
| 1 January – 31 March 2025 | 15 April 2025 |
MK Compliance Limited can assist you in complying with this newly implemented reporting obligation under Article 5r of Council Regulation 833/2014.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
