Introduction
Russia adopted the Federal Law on the National Payment System (161/2011) on June 26 2011, although many of its provisions will come into force over time. The new law had been on the road to adoption for over two years, and although some changes in banking sector legislation have been under discussion for much longer, the national payment system project had been notable for the number of aims and projects that had been linked to it. In the course of the legislative process, one of the most politically high profile of these related plans - the proposed introduction of a smartcard for receiving state benefits - was split into a separate proposal. The new law thus focuses on the regulation of e-money and payment systems, as well as dealing with issues related to money transfers.
Electronic payments
The emergence of internet-based payment systems appears to have been the main catalyst for the regulations put forward in the law. Among other things, the law states that:
- e-money can be issued by banks (on an anonymous basis or otherwise), provided that the amounts thus issued do not exceed the thresholds set by anti-money laundering regulations; and
- clients of mobile operators are permitted to transfer advances for communications services to banks, to be disposed of as e-money.
The law also regulates the activities of payment kiosks by allowing them to engage sub-agents.
The law does not establish the contractual consequences of violating its rules, but it does require that clients be notified of the amount that they are owed and of every relevant operation by the e-money operator. In turn, the operator must ensure that it has a notification process in place in the event of the transferred amount being lost. The operator must take action within one day of receiving notification and reimburse the client in the event of losses, but it appears to bear no liability if the notification comes later. Although the law clarifies that a client is not required to open an account, considerable efforts have been made to ensure that the operator acts in a manner that is compatible with anti-money laundering and consumer credit legislation. For instance, legal requirements are imposed on the application of anti-money laundering rules where the transfer is made in foreign currency; further requirements prohibit the imposition of interest charges on the client.
Payment systems
In regulating payment systems, the legislature has focused on requiring some of the functions of the payment system to be performed within Russia and increasing the regulatory supervision of system operations. Given the global nature of payment system operations, the implementation of these aims has necessitated a detailed exposition of payment system functions.
Transactions can be authorised abroad, but certain clearing operations must be performed within Russia. The rules that govern payment systems must be registered with the Central Bank of Russia. Every payment system must appoint an operator and what the law defines as ‘operational, clearing and settlement centres’ in Russia. This means that electronic communications between the participating banks themselves must be performed in Russia. The same applies to such communications between:
- participating banks and their clients (ie, billing entities and consumers) on the one hand, and the relevant clearing centre and the relevant settlement centre on the other; and
- the clearing centre and a settlement centre.
The law explicitly allows the payment system operator to subcontract with a foreign operational centre to the extent allowed by the payment system’s internal rules, while remaining liable to the payment system participants. Further, the net positions of the participating banks must be calculated by a clearing centre in Russia.
Money transfers
The law’s attempts to regulate money transfer issues appear to be driven by perceived shortfalls in practice which, it could be argued, have not been found to be as problematic when brought before the courts. Indeed, it is not immediately clear whether the provisions clarify the legal situation. For instance, the law provides that transfers can be revoked until the debit has been made to the transferor’s account (or, if more than one bank is involved, until the money arrives at the transferor’s bank). Although payments initiated by the transferee are rare, the law makes a number of specific provisions on this point - most notably, that such transactions must be accepted by the transferor.
Max B Gutbrod
Baker & McKenzie