On 23 July 2025, President of Russia signed a new law expanding the powers of Russia’s Federal Tax Service (FTS) to formally assess the financial standing of legal entities and individual entrepreneurs. The law takes effect on 1 January 2026 and aims to improve business transparency and risk management.
What Changes?
The FTS will conduct automated financial and business analysis using existing data such as tax filings and financial statements. Reports will be issued through the Legal Entity Assessment Service, piloted since March 2023, and may be requested not only by the assessed company but also by third parties (e.g., potential business partners).
Key Takeaways
- Assessment criteria and procedures will be defined by FTS regulations within six months of the law’s adoption.
- By default, the assessment is confidential, but can be disclosed to third parties if requested.
- Before third-party disclosure, the company will receive the report and may accept it, or file a correction request within five working days.
- FTS must respond — with a revision or reasoned refusal — within five working days
- The system does not replace traditional due diligence and the legal status of the FTS report in court disputes remains uncertain.
Implications for Businesses
- Pre-Contract Risk Screening: Companies will gain access to a government-issued evaluation of counterparties — especially useful for small companies without access to premium evaluation tools.
- Potential Evidentiary Use: Could help demonstrate due care in contractor selection during tax disputes.
- Risk of Overreliance: Experts warn the reports may become de facto “labels” of reliability. Negative ratings may harm creditworthiness, limit access to tenders, or cause contract losses — even where independent audits suggest otherwise.
- Unclear Remedies: The law does not establish a clear path for judicial appeal if a company disagrees with the FTS assessment and receives a refusal to revise it.