Prosecutors instructed to oversee court cases involving foreign parties
Prosecutor's offices will have to oversee legal disputes involving foreign parties. This follows from draft amendments to the Prosecutor General's Order issued in 2022 that were published on 16 September on the portal of draft regulatory acts.
To prevent detriment to the Russian economy and capital outflow abroad, supervisory authorities will be instructed to "continuously oversee hearings of disputes in which foreign parties are involved, including applications for the recognition and enforcement of awards by courts in unfriendly jurisdictions, and also claims by Russian companies where circumvention of counter-sanctions restrictions is involved".
In addition, the order will be revised to include an instruction to "focus on verifying that foreign companies and foreign-invested Russian companies comply with the laws on counter-sanctions restrictions, particularly with regard to foreign trade transactions and currency operations". The same paragraph instructs prosecutors to ensure strict compliance with presidential decrees on the introduction of a special economic regime, "if it is necessary to protect public interests through the use of judicial mechanisms".
Another paragraph of the order, concerning the participation of prosecutors in arbitrazh (commercial) court proceedings, including bankruptcies of foreign companies, has been revised to include a requirement to "suppress attempts to use judicial mechanisms in order to launder illegal income, evade obligatory payments to the Treasury, withdraw assets and otherwise unlawfully enrich unscrupulous persons".
At the moment, neither criminal nor administrative liability is explicitly stipulated for violating the counter-sanctions regulations, but lawyers warn that there are high risks of civil liability, namely that transactions can be invalidated, RBC reported earlier. Transactions may be declared invalid under Article 169 of the Civil Code as having been made for purposes that undermine law and order or morality.
Some transactions involving the transfer of funds abroad have already attracted the attention of the Prosecutor General's Office. In two relatively recent cases – the Glavproduct case and the Raven Russia case – the Prosecutor's Office revealed a scheme to split payments so as to fall within the allowable transfer limit (RUB 10 million or the equivalent in foreign currency per calendar month), and demanded that the amounts transferred be recovered for the benefit of the state.