Change |
The Supreme Arbitrazh Court’s latest position is that a foreign purchaser of Russian real estate (e. g. an offshore company) will have to disclose information on beneficiaries in the case of court disputes to prove good faith and to prevent the seizure of property.
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Benefits |
This position will prevent the practice of fictitious transfer of unlawfully purchased real estate in favour of an offshore company held by the same beneficiaries as the previous unlawful buyer. The position may be the reason for review of already agreed court decisions if they were based on similar facts.
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Risks |
It should be taken into account that:
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Recommen-dations |
This judicial practice emphasises the importance of thorough due diligence before any real estate acquisition. We do not recommend making a foreign (offshore) company a holder of a disputable real estate in case it’s undesirable to disclose its beneficiaries. Besides, it is now possible to re-open the case and recover the property if a party lost its property due to fictitious alienation in favour of so called bona fide offshore purchaser. |
Author
Anton Alekseev, Associate EPAM