As of 1 May 2024, entities, which fall within the scope of Article 5r of Council Regulation 833/2014 are to report to the competent authority of the Member State where they are established, within two weeks of the end of each quarter, any transfer of funds exceeding 100,000 EUR out of the Union that they made during that quarter, directly or indirectly, in one or several operations. The scope of this new reporting obligation is to give national competent authorities, such as the SMB, better visibility on the flow of funds related to Russian-owned entities out of the EU, without jeopardising the activities of entities that are party Russian-owned and are operating legitimately in the Union. This regulation covers all types of transfers leaving the EU/Member States’ jurisdiction, including for the purpose of profit repatriation and covers all types of funds regardless of currency.
Applicability:
This reporting obligation applies to:
(1) Legal persons, entities, and bodies established in the Union whose proprietary rights are directly or indirectly owned for more than 40% by a legal person, entity or body established in Russia, a Russian national, or a natural person residing in Russia; and
(2) Credit and financial institutions.
This regulation covers all types of transfers leaving the EU/Member States’ jurisdiction, including for the purpose of profit repatriation and covers all types of funds regardless of currency. Furthermore, Article 5r covers Russian nationals with a dual citizenship (including EU citizens). Article 5r does not refer to ownership by a single legal person and therefore, aggregate ownership should also be taken into consideration to determine 40% direct or indirect ownership.
Reporting Deadlines:
Legal persons, entities, and bodies established in the Union:
The first report to cover the period January 1 – March 31, 2024 was due on May 1, 2024. Following that, reports are due two weeks after each quarter ends: July 15 for Q2, October 15 for Q3, January 15, 2025 for Q4, and April 15, 2025 for Q1 2025.
Credit and financial institutions:
Reporting, using the template created by the EU Commission, started on July ,1 2024. The first report was due on July 15, 2024 and the report for the second semester is due by January 15, 2025. Reports are to be sent to reporting.smb@gov.mt with a clear subject line reference obligations under Article 5r. NIL reports are also to be sent to the SMB via email as per the stipulated reporting deadlines.
