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Financial Transaction Regulation in the Civil Code: Improvement or Legal Uncertainty

On the second day of the VII Petersburg International Legal Forum experts discussed the reform of the Russian legislation on financial transactions.

Sergey Astashov, Judge of Supreme Court of the Russian Federation, Vsevolod Baibak, Associate Professor of Civil Law and Process at National Research University Higher School of Economics, Alexey Guznov, Director of the Legal Department at Bank of Russia, Igor Kondrashov, Vice-President - Director of the Legal Department at  Sberbank SIB, Pavel Krasheninnikov, Chairman of the Committee of the State Duma of the Federal Assembly of the Russian Federation on State Building and Legislation, Tatyana Kuzmina, Vice-President, Head of Legal Department at Gazprombank and Lyudmila Novoselova, Chairman of Court for Intellectual Rights of the Russian Federation, have taken part in the discussion. Elena Borisenko, Board Member – First Vice-President of Gazprombank, was moderating the session.

Pavel Krasheninnikov, Chairman of the Committee of the State Duma of the Federal Assembly of the Russian Federation on State Building and Legislation, has dwelt upon work on the Civil Code modernization, in particular, amendments to the second part of the Civil Code on financial transactions. ‘At the moment more than 100 amendments on financial transactions are being passed through the sessions of the working group. After the elections we have brought almost the whole text in compliance both with Bank of Russia and Sberbank. As interests of all the parties differ it was hard to reach an agreement with both of them. The issue has met a stumbling block. Now the bill is being brought in compliance at the Presidential Administration, Ministry of Finance and Ministry of Economic Development. Nevertheless the work is being carried out. But I can’t say that we’ll see the adoption of the text in the immediate future,’ he said.

According to Elena Borisenko proper regulation of financial transactions is a token of the development of Russian economy and attracting of investment. ‘This chapter is crucial for Russian law be more frequently applicable for companies. There is an escrow institute but it needs to have proper regulation in place,’ First Vice-President of Gazprombank said.

Igor Kondrashov, Director of the Legal Department at Sberbank SIB, has drawn attention of his colleagues to the fact that some institutes of the Russian legislation need further development. ‘Extrajudicial procedure of collateral enforcement is one of the painful issues for us. This institute is not quite efficient at the moment. State Duma is to provide us with more transparent rules,’ he said.

According to Alexey Guznov, Director of the Legal Department at Bank of Russia, one shouldn’t overuse the Civil Code. ‘There is a proposal that the Civil Code is to preserve only those norms which are necessary for the development of certified crediting institute. Other issues are to be covered in relative laws,’ he said.

Elena Borisenko has noted that there is nothing revolutionary in the proposed changes. ‘That is what the whole world has been working with for many years and what our companies are dealing with. There may be some revolutionary concepts we would like to fulfill but there are not in the bill on the table,’ she explained.

As a conclusion the moderator has emphasized that problems in the field of financial transactions regulation is not evident: the fact that professional community is suffocating without amendments is not widely discussed. According to Elena Borisenko, legal experts have been trying to invent different ways to solve business issues in the run of ten years. If such norms were stipulated in the Civil Code, it would facilitate our work drastically.’