As of May 1, 2024, significant amendments to Council Regulation (EU) 833/2014 introduce additional reporting obligations for EU companies with certain ownership structures. Specifically, these obligations apply to companies more than 40% owned, directly or indirectly, by a legal entity or individual based in Russia, including Russian nationals with dual EU citizenship.
Key Reporting Requirements:
1. Scope of Reporting: Companies must report any transfer of funds exceeding €100,000 out of the EU. This includes direct and indirect transfers, whether executed in one or multiple transactions within a quarter.
2. Definition of “Transfer of Funds”: According to the regulation, transfer of “funds” encompass:
- Bank transfers, money orders, and other payment instruments.
- Transfers of deposits, account balances, debts, and debt obligations.
- Transfers of securities and debt instruments, including stocks, bonds, notes, and derivatives.
- Transfers of interest, dividends, or income generated by assets.
- Credit transfers, guarantees, performance bonds, and other financial commitments.
- Transfers involving letters of credit, bills of lading, and bills of sale.
- Documents evidencing an interest in funds or financial resources.
3. Reporting Process: Reports must be submitted to the competent authority of the member state where the company is established, within two weeks after the end of each quarter.
4. Bank Transfers: Notably, transactions are reportable based on the location of the recipient bank or financial institution, not the business or residence of the fund’s ultimate beneficiary.
Important Deadlines: The first reporting deadline is July 15, 2024, for transactions made in Q2 2024. Companies should ensure timely compliance to avoid penalties.
Additional Resources: For detailed guidance, refer to the European Commission’s FAQs on Article 5r.
Need Assistance? Book a consultation with us to ensure your company meets all reporting requirements.
