New law on the legal status of foreigners in Russia 2

The new law, which comes into force on 31 October 2002, is designed to regulate the legal status of foreign citizens and their stay, residency, employment and entrepreneurial activities in the Russian Federation. By and large, the new law intends to make the existing requirements for foreign citizens working and carrying out business activities in Russia stricter.

The law imposes a number of penalties for non-compliance such as, for example, the annulment of an employer's right to recruit and employ foreign citizens and even the deportation of foreign employees from the Russian Federation.

Details regarding the enforcement of the new law will be set out in secondary legislation that is expected to be passed shortly.

New visa requirements

The law changes the procedure for the issue of visas to foreigners. Invitations can no longer be sent to Russian Consulates by telex. The original invitation must now, instead, be hand-delivered by the invitee to the relevant Russian Consulate. This makes the process of obtaining a visa much lengthier and far less convenient.

The Territorial Department of the Ministry of Internal Affairs will issue invitations on receipt of an application from Russia-resident companies; Russian citizens; and foreign individuals with permanent leave to remain in the Russian Federation. The Ministry of Foreign Affairs will issue invitations on receipt of an application from: governmental bodies; consulates; international organisations; and local authorities. Previously, it was possible for companies to apply for invitations and arrange for telexes to be sent through both the Ministry of Foreign Affairs and the Ministry of Internal Affairs.

The new law also stipulates that those foreign citizens who enjoy visa-free entry into the Russian Federation will now also be required to obtain invitations to enter the country.

The fee for processing an invitation will be 200 roubles (approximately 6 US dollars). The conditions for obtaining an invitation and the list of supporting documents required will be set out in further subordinate legislation.

With the coming into force of the new law, every employer will be allocated a limited quota of invitations for the hire of foreign workers in the Russian Federation. This quota will be set by the Government of the Russian Federation on the basis of information received from the regions as to the number of foreign workers required there.

Requirements for the employment of foreign citizens in Russia

The law provides that both employers and customers who use the work and services of foreign workers under civil law contracts (a "Customer") and who hire foreign workers to work in Russia, must obtain a Permit to Hire and Employ Foreign Citizens. Customers who signed civil law contracts with foreign workers were not previously required to obtain such Permits.

There are no exceptions to the need to obtain a Permit. The status of foreign representative offices and branches is not clear, but it is likely that they will be subject to the law and will therefore need to obtain Permits.

The fee for issuing a Permit is 3,000 roubles per foreign employee (approximately 95 US dollars).

Upon the receipt of a Permit, an employer or customer must then obtain a work permit for each foreign citizen that he/she is intending to hire (or, in the case of a Customer, to use).

There are, however, exceptions. Certain categories of foreign workers do not need to obtain Work Permits: for example, those engaged in assembly works, consumer guarantee services or the post-guarantee servicing of imported technological equipment.

The fee for issuing a Work Permit is 1,000 roubles (approximately 30 US dollars). The list of documents to be submitted with the application for a Work Permit is expected to be approved shortly by the Government.

As of 31 October 2002, therefore, companies or individuals hiring foreign citizens, with the exception of those mentioned earlier, will be obliged to apply for Permits and Work Permits.

To summarise, an employer or Customer must obtain the following documents to be able to hire or use foreign citizens in the Russian Federation:

• a Permit
• an invitation (to obtain a visa)
• a Work Permit.

The law specifies that, after obtaining a Permit, employers and Customers should submit their documents in support of applications for invitations and Work Permits at the same time to the relevant government body. This has raised concerns, as it is still not clear whether the same government body will issue both the Permits and the Work Permits. It is likely that Permits and Work Permits for Moscow will continue to be issued by the Migration Department of the GUVD in Moscow.

Employer's and Customer's obligations

The law imposes various obligations on employers and Customers, which raises concerns about the law's conformity with current legislation. These obligations are, inter alia, as follows:

• to notify local tax authorities about the hire and employment of foreign employees
• to notify the body issuing Permits and Work Permits about the breach by foreign workers of the conditions of their employment contracts or the terms of work and services contracts
• to facilitate the departure of foreign employees from the Russian Federation upon the termination of their employment contract or the civil law contracts for works and services. This includes meeting the costs of departure
• to notify the Federal Security Service of the Russian Federation about the unauthorised absence of any foreign employees from the workplace.

Registration and control

The law has retained the provision on the mandatory registration of foreign citizens within three business days of their entry into the Russian Federation. Mandatory registration does not, however, apply to visiting heads of state, members of official government delegations nor members of international organisations visiting Russia on the invitation of the federal government. Foreign diplomats, journalists and officials representing international organisations must register with the Ministry of Foreign Affairs of the Russian Federation.

One of the controversial new developments in the law is the formation of the Central Information Database, which is designed to monitor the arrival and departure of foreign citizens. Information regarding foreign workers in the Central Information Database will be passed to the body issuing Permits and Work Permits.

Another significant provision that has not yet been fully clarified in the new law is the introduction of so called "Migration Record Cards" which will be given to foreign visitors upon their arrival in the country and handed back on their departure. It is intended that Migration Cards be given to foreigners who enjoy visa-free entry into Russia as stated in Intergovernmental Agreements on visa-free entry to countries (for example, between Cyprus and Russia or Russia and some CIS countries).

Penalties

Non-compliance with the requirements of the law may lead to the suspension or annulment of an employer's Permit and/or an individual employee's Work Permit. The law does not specify whether, after the annulment of a Permit, an employer or a Customer may reapply for a new Permit. Any non-observance by foreign citizens of the terms of their stay and residence in Russia may lead to their deportation.

For further information please contact David Griston at david.griston@cms-cmck.com or on 00 7 095 2585000.