Download Recent developments in Russian bankruptcy legislation

IAIR
II Bucharest Workshop
Nowadays Bankruptcy System
& Recent developments in
Russian bankruptcy legislation
Ministry of Economic
Development and Trade of the
Russian Federation
Terentiev Alexei
Bankruptcy division
Deputy head
Introduction
Bankruptcy act 2002 - balance between
the interests of the creditor and the debtor;
Bankruptcy act 2002 is the basis of the
bankruptcy reform in Russia.
Bankruptcy act 2002
fundamental issues:
Introducing self-regulation (trustees’ professional
community);
Dividing the functions of the Government as a
creditor (fiscal), a controller and a regulator;
Introducing a new rehabilitation procedure in
bankruptcy
Changing the order for the settlement of tax
claims from priority into general (with the rest of
the creditors)
Self-regulation in Russia
Arbitrage trustees should be members of self-regulated
organizations of arbitrage trustees (SRO)
today - 31 SRO
more than 6000 arbitrage trustees
SROs controls the activity of its members and should
consist at least of 100 members (but not limited)
SROs are non-profit, non-governmental organizations
Federal Registration service controls SRO’s activity
The main role plays public control, role of public opinion
increases (great role of professional community)
Sublegislative acts
2002 - 2006
– Acts of Government (more than 20 acts)
– Acts of The Ministry of Economic
Development and Trade (more than 20 acts)
– Summarizing of the judicial practice (acts of
The Supreme Arbitrage Court)
Updating bankruptcy legislation in
Russia
Within the second stage of the bankruptcy
system reform the following law
amendments are being developed:
Technical
Conceptual
They have different stages of readiness
List of Concepts and Bills
Type
Concept
Bill
Inside the
Ministry
1
1
In the
Government
1
10
In the State
Duma
-
5
Stage
Priorities of the bankruptcy
legislation in Russia
1.
2.
3.
4.
5.
6.
Preservation of jobs, reconstruction of industry debtor
Minimization of risks and decreasing the possibility of
social and economic crises
Forming the profession of trustees as effective and
independent managers, performing public functions
Further development of self-regulation mechanism in
the sphere of anti-crisis management
Ensuring the settlement of creditors’ claims duly
Ensuring the imminence of civil, administrative and
criminal liability
Updating the bankruptcy legislation
in Russia
The main amendments are as follows:
Complex amendments

Delegation of most control functions to SROs
 introduction of the Federal Standards
regulating trustees activity
 Trustees should be members of one of the
SRO
Updating the bankruptcy legislation
in Russia
The main amendments are as follows:


Complex amendments
Improve the effectiveness of control function by
delegating it from State to public
Government sets the rules of play and doesn’t
interfere in the activity of trustees
This concludes the first stage of the
bankruptcy reform
Latest developments
Among conceptual amendments are:
Including confirmation of creditor’s claim in
official bankruptcy procedure
Updating the procedure of closing the
bankruptcy case when the employer has no
assets
Clarifying the type and process of financial
analysis of the insolvent
Consumer bankruptcy
Consumer bankruptcies are regulated “de jure”
by Civil Code and Bankruptcy act 2002
Provisions of consumers bankruptcies “De facto”
are not in effect until complex amendments are
made (in particular executive proceedings)
There is a boom in mortgage lending and
consumer lending in Russia (30 % growth per
year)
Consumer bankruptcy
“Fresh start” system
Settlement of debts according to a
rehabilitation plan approved by a creditor
New terms for rehabilitation (from 2 years
long)
Writing off a part of a debt and penalties
Bankruptcy of financial institutions
Financial institutions – insurance companies,
professional participants of securities market and credit
institutions
Credit Institutions Bankruptcy act 1999
amendments:
Introduction of new mechanisms for prevention of
financial institutions bankruptcies
Outside management procedure for insurance
companies (out of judicial procedures)
New list of financial institutions: investment funds,
special depositaries, consumer cooperatives and
management companies
Transfer of portfolio of insurer from insolvent to other
one; business of insolvent insurer sale;
Electronic Database
The following information online resources are
available today in Russia based on free access:
Register of SRO (internet site of Russian Registration
Service www.rosregistr.ru)
Register of trustees (internet site of Russian Registration
Service www.rosregistr.ru)
Lists of SRO, chosen by Tax Service for the purposes of
bankruptcy procedures
(http://www.nalog.ru/index.php?topic=upr_nz)
Future amendments in bankruptcy legislation (internet
site of Ministry of Economic Development and Trade of
the Russian Federation www.economy.gov.ru)
Information on bankruptcies is published in official
Russian Newspaper
Developments of Electronic
Database
The following information resources are planned
for development and introduction in Russia:
Information base on bankruptcies in Russia
This system should consist of several components with
different access levels:
- one part of information will be available only for
governmental bodies
- another part will be placed in Internet with free access
Second half of 2007 – launching this system
Guarantee Fund System
Protection of the employees’ rights in case
of employer’s insolvency (bankruptcy)
 There are a number of ways to create this Fund. The
social security system in Russia differs a lot from those
from abroad
 We are studying closely the experience of other
countries in issues of financing, foundation and
management.
Ministry of Economic Development
and Trade of the Russian
Federation
Terentiev Alexei
Bankruptcy division
Deputy head