In brief

Starting from 13 July 2021, Russian credit institutions and other payment service providers are prohibited from interacting with illegal gambling and lotteries operators and foreign payment service providers who accept and transfer payments to illegal gambling and lottery operators. The restrictions are adopted by the Amendments to the Gambling Law (“Law“). 

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Restrictions on credit institutions and payment service providers

The Law prohibits credit institutions and payment agents, telecom operators, postal operators the following:

• to accept and transfer funds in favor of persons included into: 

1. the List of illegal gambling and / or lottery operators in favor of whom money transfers are prohibited (“Prohibited List“),
2. the List of foreign payment service providers who accept payments and transfer funds in favor of persons included into the Prohibited List and/ or not included into the list of legal gambling and lotteries operators (“List of foreign payment service providers“);

• to conclude agreements with the persons:

1. included into the Prohibited List,
2. included into the List of foreign payment service providers,
3. not included into the List of legal gambling and lotteries operators (“Authorized List“).

The concluded agreements shall be terminated.

The lists of persons with whom Russian credit institutions and other payment service providers are not entitled to interact are maintained by the Federal Tax Service of Russia (FTS).

The FTS also compiles a list of foreign banks that accept payments in favor of persons included into the Prohibited List and the List of foreign payment service providers (“List of foreign banks”).

If the FTS reveals that a foreign payment service provider or a foreign bank provides services for accepting payments and transferring funds in favor of persons included into the Prohibited List and/or not included into the Authorized List, the FTS sends a notification to the foreign payment service provider or the foreign bank informing that such actions violate the Russian law.

If the fact is re-identified, the FTS will include the foreign payment service provider or the foreign bank into the List of foreign payment service providers or the List of foreign banks, respectively.

The restrictions are aimed at combating organization and conducting of illegal gambling and lotteries, incl. online gambling, on the territory of the Russian Federation. The Law has clarified for this purpose that the place for lotteries and gambling activities is the Russian Federation, when:

• the place of residence of a participant of gambling and/or lottery is the Russian Federation;
• the place of location of the bank/ the electronic payment operator where the participant of a lottery and/ or gambling has opened account for payment of bets, that accepts bets in favor of gambling and/or lottery organizers, is the Russian Federation;
• the network address of a participant of gambling and/or lottery used for transfer of bets, interactive bets to the gambling organizer is registered in the Russian Federation;
• the international state code of the subscriber number used by a participant of gambling and/or lottery for the transferring of bets to the gambling and/or lottery organizer belongs to the Russian Federation. 

At this stage, no administrative liability has been established for credit institutions and payment agents, telecom operators, postal operators for violation of the prohibitions established by the Law. A draft law establishing administrative responsibility for these violations has been submitted to the State Duma.

Recommended actions

We recommend :

• to check the addressee of the payment for its presence/absence in the Prohibited List and the List of foreign payment service providers, as well as the counterparty under the agreement additionally for its presence/absence in the Prohibited List, the List of foreign service providers and the Authorized List;
• to track amendments to the legislation regarding imposing administrative responsibility for violation of the restrictions imposed by the Law;
• foreign banks and foreign payment service providers shall – if an entity is included into the List of foreign payment service providers or the List of foreign banks- terminate activities prohibited by the Law and send an application on exclusion from the said list to the FTS.

Click here to access the Russian version: Запрещены платежи в адрес нелегальных организаторов азартных игр и лотерей