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Inspectors may only request bank account details for the companies they are inspecting and banks have the right to refuse any requests for information on the company’s contractors. The Supreme Arbitration Court (SAC) explained this position on June 23, 2009. The decree has not yet been published.

The Court also expressed this same view last year on November 13, 2008, in Presidium Resolutions  #10407/08 and #10846/08. Yet even after Supreme Court issued the decision, tax specialists have continued to demand the records for contractors. They argue that Article 86 of the Tax Code specifies only which documents can be requested, but says nothing of being able to request them for only those companies under investigation.

Inspectors in Moscow recently requested that a bank send them the full account statements of the a contractor and copies of all signature cards within five days, citing Paragraph 2, Article 86 of the Tax Code. As justification, they stated that the contractor could not be found at their listed legal address.

The bank refused to provide this information, believing that the request was groundless. Paragraph 2, Article 86 of the Tax Code actually states that “credit institutions are obliged to provide information only in cases that are in relation to their clients being investigated.” Under Paragraph 1, Article 135.1 of the Tax Code, bank officials can be fined 10,000 rubles if they fail to provide data in the allotted time.

The Court’s Position

The Courts of First Instance and the Cassation Court upheld the fines and decisions of the Court of Appeals, stating that inspectors’ request was grounded in the fact that the contractor could not be found at the registered address.  Furthermore, even if a specific bank client is not under investingation,  tax specialists have the right to request information regarding their accounts, if the companies are not located where they are registered.

SAC’s Decision

However, the three–judge panel of the Supreme Arbitration Court (SAC) criticized their colleagues in their interpretation of Paragraph 2, Article 86 of the Tax Code. This paragraph now has a closed list of parameters under which a request may be made. Tax specialists may only inquire the bank for information on companies being audited. In this situation the request for information was not validated; therefore the bank refused to answer. The SAC thus overruled the decisions of the lower courts.

Alinga Consulting Group

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