The State Duma of Russia, the lower house of parliament, has passed a law permitting law enforcement authorities to seek confiscation of illegally obtained funds from government officials, including cryptocurrency. The state may attempt to seize the assets through court if they exceed the officials’ income.
New Law Allows Russia to Prosecute Officials With Illegal Crypto Assets
Government officials who own financial assets — including digital coins — that exceed their reported income over the past three years risk losing them to the state, according to a law passed by Russia’s State Duma this week. It allows law enforcement to request their seizure through the judiciary.
The current legislation allows Russia to confiscate real estate, vehicles, securities, and stakes if the civil servants owning them fail to prove they have legally received the funds spent on their acquisition. That applies to officials who are required to show that their expenses correspond to their income.
The newly approved law extends the practice to funds transferred to such persons’ accounts in banks and other intermediaries, RIA Novosti reported. Prosecutors will be able to require verification of the sources of funds not only from traditional financial institutions and payment providers, but also from entities issuing or processing digital financial assets.
“Since a new instrument has appeared, accordingly, it must be declared and income from it must also be indicated,” the head of the parliamentary Financial Market Committee Anatoly Aksakov explained earlier, referring to cryptocurrency assets.
Respective amendments have been introduced in the Russian laws “On Banks and Banking Activities” and “On Combating Corruption”. The new provisions are expected to come into force 10 days after the law is officially published, the report notes.
The legislative changes come after in August of last year President Vladimir Putin ordered the federal government to check officials with crypto holdings. He tasked several ministries and the central bank to prepare to verify information about the digital assets of government employees provided with their mandatory income declarations.
The move was announced as part of a new government anti-corruption plan for which Putin signed a special decree. The latest legal changes have been made as authorities in Moscow strive to comprehensively regulate cryptocurrencies, closing loopholes left after the law “On Digital Financial Assets” came into force in January 2021.
In 2020, the Russian president signed an order compelling government employees and candidates for public office to declare the crypto assets in their possession. Russian officials were required to submit detailed accounts of where they bought the coins and their value by June 30, 2021. The obligation applies to their family members as well.
