21 Aug 2023 13:37

RSPP asks PM to allow businesses not to disclose financials until July 2024

MOSCOW. Aug 21 (Interfax) - The Russian Union of Industrialists and Entrepreneurs (RSPP) has asked the government to allow companies to not disclose financial statements until July 2024, a source told Interfax.

The big business lobby group sent to a letter with this request to Prime Minister Mikhail Mishustin at the beginning of July, RSPP vice president for regulation and law enforcement Alexander Varvarin confirmed.

The letter was sent because the government resolution issued in the spring of 2022 that suspended companies' obligation to disclose information about their activities due to the threat of sanctions against Russian entities and individuals expired on July 1, 2023. A new government resolution, No. 1102, also allows companies to conceal information sensitive to the risk of sanctions in some cases, but unlike the previous rules it does not allow them to not disclose information such as balance sheets and reports about their financial results.

The RSPP believes that the current version of resolution No. 1102 is generally sufficient for medium businesses, but not enough to eliminate the risk of sanctions for the largest Russian companies. The document creates unjustified risks for the whole Russian economy, the RSPP argued, recalling in the letter that in June 2023 the European Union introduced expanded criteria for imposing sanctions against any legal entities and individuals working in sectors of the economy that provide substantial revenue for Russia's budget.

"Publicly accessible financial statements will simplify collection of information about the current financial condition of companies and their contribution to Russia's economy for substantiating the imposition of such restrictions. In the course of analysing companies' reporting, including financial, it will become possible to identify economic relationships that point to noncompliance with sanctions, such as what groups of goods are exported in a larger amount than expected and what critical processes are supported by parallel imports," Varvarin said, citing the letter.

In light of this, the RSPP asked the government to revise resolution No. 1102 "as soon as possible" so as to allow companies to not publish financial statements in full or in part until July 1, 2024.

If this initiative is not supported, the RSPP has an alternative option - for the government to approve a list of companies that will be allowed to conceal this information and to include in it legal entities that are allowed to not publish documents in the National Accounting Information Resource (GIRBO) in line with government resolutions Nos. 1625 and 1624.

The RSPP also asked the government to establish new rules for including bonds in the Moscow Exchange's quotation lists. This is usually done on the condition that companies disclose information. Now the RSPP proposes to stipulate that the necessary information can be received from the Central Bank, to which companies still submit financial statements, or from the issuer on the condition that this information will not be disclosed to the public.