Security Service demands international auditing firms locate servers in Russia - paper
MOSCOW. Aug 26 (Interfax) - The big four auditing firms have run into problems in Russia, business daily Vedomosti reported on Tuesday, citing sources.
The Federal Security Service (FSB) suspended CJSC K-Konfident's license to work with state secrets in July. This firm was engaged by KPMG, which does not hold such a license.
KPMG's competitors could lose their licenses altogether. The licenses of Deloitte and EY might be revoked, while PwC's license is expiring, the paper reported. However, EY has three such licenses, for various types of activity, and will probably not be left completely without a license, the paper reported employees of two big-four firms as saying, and the others can try to reapply for licenses. In any case, they need to be confirmed annually.
The FSB has issues with how auditors store information, the paper's sources said. The FSB believes that servers for data storage should be located in Russia, and that the remote access of foreign branches and offices to the information of Russian divisions should be restricted.
Since 2000, this is at least the third attempt to force the big four firms to keep all data in Russia and block access to this information for foreign parent companies, Vedomosti reported a source close to the FSB as saying. "However, before there was no political decision, but now it has come out," he said.
At least one big-four company, KPMG has already moved servers to Russia.
