The Bank Requested Documents and Explanations
The company needs to demonstrate genuine business activity, the economic rationale of transactions, relationships with counterparties, the source of funds and the nature of its expenses.
BANK • 115-FZ • ZSK • MVK
Legal Support under Federal Law No. 115-FZ
We help businesses respond to bank information requests, transaction refusals, restrictions on remote banking services and high-risk classifications. We analyze transactions, reconstruct their economic rationale, prepare the supporting evidence package and assist with review of the bank’s decision.
We first determine exactly what restriction has been applied and on what legal basis. The next steps depend on that distinction.
WHEN LEGAL SUPPORT IS NEEDED
What Happened?
The Bank Refused to Process a Transaction
There is a formal decision or notice of refusal, and its legal basis needs to be identified before documents are prepared for review.
Online Banking or Other Remote Services Were Restricted
Payments or account management through remote channels have been restricted, and the legal and contractual basis for the measure needs to be identified.
The Bank Refused to Open an Account
The bank’s notice and the circumstances of the refusal need to be reviewed to determine the applicable procedure for providing documents and further challenge.
The Business Received a High-Risk Classification
It is necessary to identify who assigned the classification, what restrictive measures have been applied and which review procedure applies to the specific situation.
The Same Problems Have Arisen with Several Banks
The overall transaction history, counterparties and recurring reasons for concern need to be analyzed rather than preparing unrelated explanations for each bank.
The Bank Did Not Change Its Decision After Receiving Explanations
The first review stage has been completed, but the bank considers the grounds for the restriction unresolved, and it is necessary to determine whether a further application to the Interagency Commission or court proceedings are available.
You Are Not Sure Whether the Problem Is Actually Related to 115-FZ
The bank has restricted payments, cards or online banking, but the notice does not make clear whether the measure is based on Federal Law No. 115-FZ, the anti-fraud mechanism under Federal Law No. 161-FZ, or another legal basis.
Nikolay NemkovManaging Partner, Konsultant Law Firm
Managing Partner’s Commentary
Nikolay Nemkov on Bank Restrictions under 115-FZ
Why a response to the bank should explain not only an individual payment, but the company’s business model as a whole: where the money comes from, what counterparties are paid for, and which documents confirm genuine business activity.
Key Points
- 01What type of restriction has been applied
- 02Which transactions raised questions
- 03Which documents demonstrate their economic rationale
APPROACH
First Identify the Restriction. Then Choose the Legal Response.
The phrase “the bank blocked the account” can describe very different situations. A refusal of a specific transaction, a restriction on remote banking services, a high-risk classification and suspension of an electronic payment instrument may have different legal grounds and different review procedures. An error at the first stage can result in applying to the wrong body and losing time.
01
Bank Decision
We review notices, information requests, refusals, messages in online banking and the terms of the banking relationship.
02
Transactions
We analyze cash flows, counterparties, payment descriptions, tax burden, cash operations and other circumstances that may have affected the bank’s assessment.
03
Genuine Business Activity
We connect the transactions with contracts, supplies, services, employees, premises, equipment and other evidence of actual business operations.
04
Review Procedure
We determine the correct sequence: explanations to the bank, review of a refusal, an application to the Bank of Russia, the Interagency Commission, or court proceedings — depending on the specific decision.
WHAT WE DO
What Our Work under 115-FZ Includes
Identify the Type of Restriction
We review requests, notices, refusals, risk level, remote banking restrictions and other bank actions so that different legal procedures are not confused.
Analyze the Transactions
We review cash flows, contracts, counterparties, tax burden, payroll, mandatory expenses, cash transactions and the economic logic of payments.
Build the Evidence Package
We collect contracts, acceptance certificates, delivery documents, invoices, correspondence, tax and accounting records and other materials confirming actual business activity.
Prepare Explanations for the Bank
We do not simply send a folder of documents; we connect them into a coherent explanation of the business model and the economic rationale of the transactions questioned by the bank.
Assist with Review of the Bank’s Decision
We prepare documents showing that the grounds for the earlier refusal are absent and work with any additional questions from the financial institution.
Work with the Bank of Russia and the Interagency Commission
Where the law provides a basis for further review, we select the appropriate procedure based on the type of decision, the risk assessment and the result of the previous application to the bank.
Prepare Court Proceedings
If the out-of-court procedure has not resolved the issue and there are legal grounds for a claim, we analyze possible claims against the bank, the evidence, losses or disputed fees and prepare the court position.
EVIDENCE
What Demonstrates Genuine Business Activity
Transactions and Counterparties
Contracts, schedules, specifications, invoices, delivery notes, acceptance certificates and universal transfer documents. Correspondence, applications, commercial offers, shipping documents and evidence of actual performance.
Resources
Employees, premises, machinery, vehicles, equipment and other resources necessary for the declared business activity.
Finances
Tax and accounting reports, payroll, mandatory expenses and documents explaining the movement of funds.
Business Model
An explanation of who the company’s customers are, how it earns revenue, why it selects particular counterparties and the economic rationale of its transactions.
ZSK PLATFORM
The “Know Your Customer” Platform Is a Risk Assessment, Not a Final Judgment
The Bank of Russia’s “Know Your Customer” Platform provides credit institutions with information on the risk that their clients — legal entities and individual entrepreneurs — may be involved in suspicious transactions. The ZSK Platform does not assess natural persons.
The Bank of Russia classifies businesses into three risk groups: low, medium and high. At the same time, information from the ZSK Platform is auxiliary for the credit institution: the bank independently determines the client’s risk level under its internal control rules.
The special restrictive measures under Article 7.7 of Federal Law No. 115-FZ apply only where the statutory conditions are met, including where the client has been assigned a high-risk level both by the Bank of Russia and by the credit institution. A high-risk indication by itself therefore requires first determining who assigned it and what measures have actually been applied.
REVIEW
There Is No Single Universal “115-FZ Application”
Bank Refusal of a Transaction
First — Apply to the Bank
The client may provide the financial institution with documents and information showing that there were no grounds for the earlier refusal. The financial institution must review them and communicate the result no later than seven business days after submission.
If the bank states that the grounds for the refusal cannot be eliminated based on the documents provided, the client may, where the statutory conditions are met, proceed to the procedure for applying to the Interagency Commission at the Bank of Russia.
High ZSK Risk
First Identify the Source of the Assessment and the Measure Applied
If the client disagrees with a high-risk level assigned by the ZSK Platform, there is a procedure for applying to the Bank of Russia for review.
If the high-risk classification is the same at the Bank of Russia and the credit institution and the restrictive measures provided by Article 7.7 have been applied, the protection procedure includes the special mechanisms for challenging those measures, including an application to the Interagency Commission where provided by law.
The procedure depends on the specific decision. We do not send a client to the Interagency Commission merely because the bank’s message mentions 115-FZ.
DEADLINES
Deadlines for Certain Procedures
7 business days
the period for the bank to review the client’s documents when reviewing a refusal under the procedure provided by law
up to 20 business days
the general maximum period for the Interagency Commission to consider an application covered by the statutory procedure
5 business days
the period within which, when the specified ZSK restrictive measures apply, the bank informs the client about those measures and the Bank of Russia’s high-risk assessment
These are deadlines for specific procedures, not an overall timeframe for all legal work.
WHAT GETS IN THE WAY
Why a Large Set of Documents May Not Solve the Problem
01
Documents Without an Explanation
The bank receives dozens of files but cannot see how they relate to the transactions in question or to the client’s business model.
02
An Explanation Limited to One Payment
The response ignores the company’s overall structure of incoming funds, expenses, counterparties and tax burden.
03
Documents and Transactions Do Not Match
Payment descriptions, contracts, acceptance documents and the actual movement of money do not form a clear sequence.
04
Wrong Review Procedure
The client applies to the Bank of Russia, the Interagency Commission or a court without first completing the prior stage required for the particular decision.
Konsultant Law Firm
The firm has been practicing since 2007. We handle litigation and complex legal matters for businesses in Krasnoyarsk, Moscow and other regions of Russia.
Since 2007
in legal practice
1,000+
court proceedings
Across Russia
Krasnoyarsk • Moscow • other regions
The Bank Needs an Explanation of the Business, Not an Archive of Documents
A large volume of documents does not by itself explain why the company received money, to whom and for what it made payments, or how the transactions relate to genuine business activity.
Contracts, acceptance documents, reports and bank transactions therefore need to be connected into one coherent explanation: what the company does, who its customers and suppliers are, what resources it uses and why particular payments make economic sense.
How We Start Working on the Matter
01We Obtain the Bank’s Decision
An information request, notice, refusal, high-risk message, remote banking restriction or another document showing the legal basis applied.
02We Reconstruct the Transactions
We identify the questioned payments, counterparties, relevant period, tax burden and the company’s overall financial model.
03We Assemble the Evidence
We connect bank transactions with contracts, performance of transactions, company resources and accounting documents.
04We Choose the Procedure
Explanations to the bank, review of a refusal, an application to the Bank of Russia, the Interagency Commission or court proceedings — depending on the actual legal basis of the restriction.
MANAGING PARTNER
Konsultant Law Firm Lawyers
Managing Partner, Konsultant Law Firm
Nikolay Nemkov
More than 20 years of practice in complex property and corporate disputes. Practicing insolvency practitioner.
Federal Law No. 115-FZ in Practice
Frequently Asked Questions About Bank Restrictions Under Federal Law No. 115-FZ
The first step is to identify exactly what decision the bank has made: a request for documents, refusal of a particular transaction, refusal to enter into a bank account agreement, or special measures applied to a high-risk client. Different situations require different procedures.
What does an “account block under Federal Law No. 115-FZ” actually mean?
The expression “blocked under Federal Law No. 115-FZ” is commonly used for several different situations, but legally they may involve different decisions.
A bank may request documents and explanations concerning transactions, refuse to carry out a particular transaction, refuse to enter into a bank account agreement in circumstances provided by law, or apply special restrictions to a Russian legal entity or individual entrepreneur classified as high risk under Article 7.7 of Federal Law No. 115-FZ.
Not every restriction on an account is necessarily based on Federal Law No. 115-FZ. Restrictions may also arise under other legal regimes.
Before preparing a challenge, it is therefore necessary to identify the exact legal basis stated in the bank’s notice and determine which review procedure applies to that particular decision.
Legal basis: Articles 7 and 7.7 of Federal Law No. 115-FZ.
Is the bank required to explain why it refused a transaction?
If a bank refuses to carry out a transaction on the grounds provided for in paragraph 11 of Article 7 of Federal Law No. 115-FZ, it must provide the client with information about the date and reasons for that decision.
The information must be provided in accordance with the procedure established by the agreement with the client or the bank’s public rules, no later than five business days after the refusal decision was made.
The requirement to state the reasons does not mean that the bank must disclose its internal monitoring algorithms, risk models or its complete internal anti-money-laundering methodology.
The bank’s notice should therefore be analysed carefully, because the reasons stated in it determine which documents and explanations should be submitted when requesting a review.
Legal basis: paragraph 13 of Article 7 of Federal Law No. 115-FZ.
What should a client do after a bank refuses a transaction under Federal Law No. 115-FZ?
The client may submit documents and information to the bank showing that there were no grounds for the earlier refusal decision.
The purpose of this stage is not simply to send the largest possible volume of documents. The client should explain the economic substance of the transaction and address the specific concerns that led to the bank’s decision.
The bank must review the documents and information submitted by the client and, no later than seven business days after receiving them, inform the client either that the grounds for the earlier refusal have been removed or that they cannot be removed on the basis of the materials provided.
The document package should therefore be prepared for the specific reason for refusal and the specific transactions concerned.
Legal basis: paragraph 13.4 of Article 7 of Federal Law No. 115-FZ.
What documents should be provided to the bank when requesting a review?
There is no single universal document package for every case. The required materials depend on the client’s transactions and the reasons stated by the bank.
The purpose of the documents and explanations is generally to demonstrate genuine business activity, the economic substance of the transactions, the relationship with counterparties, the source and purpose of funds and the connection between the payments and the actual business.
Depending on the circumstances, relevant materials may include contracts, invoices, acceptance documents, delivery documents, payment records, counterparty documents, tax documents and written explanations concerning particular transactions.
The package should respond to the substance of the bank’s concerns. A large volume of unrelated documents does not by itself address the reasons why a transaction was considered suspicious.
What can be done if the bank refuses to reverse its decision?
If, after reviewing the documents, the bank states that the grounds for its earlier refusal of a transaction, or in cases provided by law its refusal to enter into a bank account agreement, cannot be removed, the client may apply to the Interdepartmental Commission established at the Bank of Russia.
The application must be accompanied by the required documents. The procedure and requirements are governed by Federal Law No. 115-FZ and Bank of Russia Regulation No. 842-P.
The total period for consideration of the application and accompanying documents by the Interdepartmental Commission may not exceed twenty business days from the date of the application.
An application to the Commission is a separate review stage and should therefore address the original reasons for the bank’s decision, the documents previously submitted and the bank’s response to those documents.
Legal basis: paragraphs 13.5–13.6 of Article 7 of Federal Law No. 115-FZ and Bank of Russia Regulation No. 842-P.
What is the Bank of Russia’s Know Your Customer platform, and does a high-risk rating automatically block an account?
The Bank of Russia’s Know Your Customer platform provides credit institutions with information about the risk that their clients — Russian legal entities and individual entrepreneurs — may be involved in suspicious transactions.
The platform does not assess individuals.
Banks may use the Bank of Russia’s information in their anti-money-laundering controls, but each bank also assesses its clients independently under its own internal control rules.
A high-risk rating assigned by the Bank of Russia platform does not in every case automatically mean that the restrictive measures under paragraph 5 of Article 7.7 of Federal Law No. 115-FZ will apply.
The special measures under that provision apply through the mechanism established by law where the client is classified as high risk both by the servicing bank and by the Bank of Russia.
Legal basis: Articles 7.6–7.7 of Federal Law No. 115-FZ.
What should a company do if both its bank and the Bank of Russia classify it as high risk?
Where a Russian legal entity or individual entrepreneur is classified as high risk both by its servicing bank and by the Bank of Russia and the bank applies the measures provided for in paragraph 5 of Article 7.7 of Federal Law No. 115-FZ, a special review procedure applies.
The bank must notify the client that the measures have been applied, that the Bank of Russia has classified the client as high risk and that the client has the right to apply to the Interdepartmental Commission.
In this situation, an application seeking confirmation that there are no grounds for the restrictive measures is submitted to the Interdepartmental Commission at the Bank of Russia. According to the Bank of Russia’s official recommendations, the application should be made within six months after the client receives notice that the measures have been applied.
If the Interdepartmental Commission decides that there were no grounds for the restrictive measures, the servicing bank must change the client’s risk level and stop applying those measures no later than the business day following receipt of the Commission’s decision.
The law nevertheless permits certain categories of transactions expressly listed in paragraph 6 of Article 7.7 of Federal Law No. 115-FZ.
Legal basis: Articles 7.7–7.8 of Federal Law No. 115-FZ and Bank of Russia Regulation No. 842-P.
Let Us Determine What Decision the Bank Has Made
State the bank, what happened and the date of the latest notice. If you have an information request, transaction refusal, high-risk notice or the bank’s response after review, those documents will help identify the correct procedure.