Russia to Impose Notarization and Payment Requirements on ‘Foreign Agents’ Transferring Real Estate and IP Rights

The Russian government is advancing new legal restrictions targeting individuals and entities designated as “foreign agents” by the Justice Ministry. According to The Bell, Deputy Justice Minister Oleg Sviridenko announced plans to prohibit these “foreign agents” from transferring real estate and intellectual property rights without payment, including transactions that currently do not require notarization.

Sviridenko explained at the St. Petersburg Legal Forum that “foreign agents” have been exploiting loopholes by using gift deeds or prenuptial agreements to transfer rights fictitiously, thereby avoiding the requirement to deposit funds into special ruble accounts.

To address this, the Justice Ministry intends to mandate that all transactions involving “foreign agents” be conducted through a notary, ensuring proper documentation and financial accountability.

This initiative builds on legislation passed by the State Duma at the end of 2024, which requires that income earned by “foreign agents” be deposited into special ruble accounts. These accounts are designated to receive proceeds from creative work, sales or rentals of real estate and vehicles, interest on bank deposits, dividends, and other income derived from equity participation.

Funds held in these special accounts are inaccessible until the individual or entity’s “foreign agent” status is officially removed.

The responsibility to open these special accounts lies with the “foreign agents” themselves. However, if they fail to do so, the obligation shifts to the party making payments to them.

These measures reflect the Russian government’s broader strategy to increase oversight and control over the financial activities of those labeled as “foreign agents,” aiming to prevent circumvention of regulatory requirements.

The Justice Ministry’s approach underscores a tightening of compliance obligations, particularly concerning real estate and intellectual property transactions, which have been used to bypass financial controls.

This development is significant for legal practitioners and stakeholders involved in property and intellectual property rights in Russia, as it signals enhanced scrutiny and procedural formalities for transactions involving “foreign agents.”