What’s new for Russians in March: mortgages, MTPL, VPN

Tightening requirements for mortgage loans

From March 1, the Bank of Russia is increasing premiums on risk ratios for mortgage loans. This is being done to reduce the risks of citizens’ debt, improve lending standards and balanced mortgage growth. In recent years, the share of loans with a high debt ratio (DLR) and a low down payment has increased significantly. Specifically, premiums on risk coefficients will be increased for loans issued to citizens with a high personal income tax. However, if the situation stabilizes and banks again apply more conservative standards, the surcharges could be relaxed.

Alexey Krichevsky, financial analyst, real estate market expert, comments:

“In fact, the essence of these changes is as simple as possible – the Central Bank wants to avoid massive loan defaults. Although, in my opinion, it is extremely unlikely that they can actually be avoided, since the debt burden of borrowers due to rising real estate prices is already prohibitive – in some regions it has long exceeded 100% of household income. For banks, specifically speaking, these changes mean the following. The higher the borrower’s level of debt, the tougher the conditions will be for him and the more money the bank will have to put aside in reserve. The same applies to the down payment – the lower it is, the more funds banks will have to withdraw for reserve. Accordingly, the number of loans issued will decrease – it will be too expensive for banks to issue mortgages to borrowers with a large credit load.”

Recovering money from a bankrupt bank

Starting March 19, changes will be introduced that will allow you to request compensation online for accounts and deposits after the bank’s license has been revoked. The applicant will be able to leave a corresponding request on the website of the Deposit Insurance Agency (DIA) or on the State Services portal. Payment will be made to the specified account. The maximum amount of compensation is up to 1.4 million rubles for each person from all bank accounts and deposits without a license.

Obtaining a larger amount is possible in the process of liquidation and sale of bank property. Another way to receive insurance compensation is to apply in person with your passport to a branch of agent banks authorized to accept applications and pay compensation in case of bank bankruptcy.

In addition, from March 25, the deposit insurance system will apply to deposits of small and medium-sized businesses, as well as professional deposits of lawyers and notaries.

Ivan Samoilenko, managing partner of B&C Agency, comments:

“The transition to remote request for compensation for deposits after the revocation of the license is another step forward in the digitalization of the economy. This kind of innovation is being made for the comfort of investors so that they do not have to contact the DIA personally. This will significantly simplify not only the payment procedure, but will also save time – both for clients and the DIA. Deposit insurance for small and medium-sized businesses is being introduced because, when a bank went bankrupt, these clients were last in line for payments. Now it will be easier for those entrepreneurs whose deposits are insured to receive compensation. No decisions have been made regarding the return of funds from electronic wallets, but the recent situation with the revocation of Qiwi Bank’s license will certainly make it necessary to spell out certain clauses in the legislation.”

Ban on advertising VPN services

From March 2024, a ban on the popularization of VPN services in Russia comes into force. VPN is a virtual private network, a generic name for technologies that allow you to provide one or more network connections over someone else’s network. Roskomnadzor has notified a ban on the use of means of bypassing blocking of access to illegal content, which includes VPN services. The ban is also related to the need to protect users’ personal data, since using a VPN can lead to the risk of leaking personal information.

Andrey Loboda, economist, director of communications at BitRiver, comments:

“A ban on advertising VPN services can only partially reduce the use of such programs by the population, so the measure will not be an effective way to completely eliminate their use.

There are other, more effective ways to combat the spread of VPNs. For example, legislative regulation. At the legislative level, it is possible to impose restrictions on the use of VPN services or even make them illegal. Some countries are already taking such measures.

Campaigning and educating the public about the risks and negative consequences of using VPN services can help create awareness of the technology. We can talk about educational programs, advertising campaigns and the creation of specialized information resources.

Providers may use technical methods to block or restrict the use of VPN services. However, this can be quite costly.”

Licensing of production and sale of cigarettes

On March 1, the law introducing state regulation of the production and circulation of tobacco and nicotine-containing products comes into force. According to it, the production, storage and supply of tobacco and nicotine-containing products and raw materials for their production, the import and export of such products and raw materials, as well as the purchase for sale in duty-free stores will be licensed. This is expected to help combat illicit tobacco products, which currently account for up to 15% of the market and cause significant economic damage. Control over the industry will be carried out by Rosalkogoltabakcontrol, similar to the control of alcoholic products that has long been practiced.

Viktor Zykov, member of the Coordination Council for Tobacco Control under the Ministry of Health of the Russian Federation, comments:

“The introduction of licensing will improve the administration of the market. These measures are unlikely to have any impact on the price of products. It is affected by an increase in the excise tax, which must increase annually at a rate exceeding inflation – products that lead to the premature death of half of their consumers should not be cheap. It should be noted that the law does not provide for a measure for licensing retail outlets selling tobacco and nicotine-containing products, but this approach is considered one of the most effective, allowing to significantly reduce the level of illegal trade. In our country, retail licensing is used for alcohol products; it is advisable to use this approach for products with nicotine.”

Appearance of labels on wine bottles

From March 1, the labels or back labels of bottles of wine must contain information about the variety, place of origin, year of grape harvest and manufacturer. The font size for information about the place of origin and year of harvest must contain at least 12 points, and for information about grape varieties – at least 8 points. Products with the previous labels can be sold until the expiration date set by the manufacturer.

Anastasia Chumak, co-head of the Intercession investor rights practice, comments:

“The change in the appearance of wine labels from March 1 may be due to improved consumer awareness of the origin and characteristics of wine. New labeling requirements make it possible to provide consumers with more complete information about the wine variety, place of origin, grape harvest year and producer. The innovation could help consumers make more informed choices and improve the quality of the wine market. However, the direct impact on the prices of these products has not yet been determined and can only be assessed based on further analysis of market dynamics.”

Terms of the MTPL agreement

From March 2, a law comes into force that allows you to conclude a compulsory motor liability insurance agreement for a period from one day to three months and from three months to a year. Currently, work is being carried out to improve information systems for the sale of short-term MTPL contracts. The short-term MTPL contract is a new product for the market. Now it is possible to conclude a compulsory motor liability insurance agreement for a period of less than a year only in strictly defined cases. The size of the coefficient for short-term policies will be determined by insurers, but specific values ​​are not yet known.

Andrey Loboda, economist, director of communications at BitRiver, comments:

“The introduction of the opportunity to conclude MTPL contracts for a period from one day to three months and from three months to a year will improve the flexibility and accessibility of the motor vehicle license. Short-term contracts will allow drivers to choose more flexible insurance options, especially in cases where they do not plan to drive long distances or only need temporary coverage. This will improve the possibilities of using MTPL policies and make them more accessible. Short-term contracts can reduce the number of abuses of MTPL insurance policies. For example, in some cases, drivers took out policies for a year, actually using the car only a few days a month. Now car owners will be able to choose the policy period that is more suitable for them. The opportunity to enter into contracts for a shorter period may encourage drivers to take a more responsible approach to compulsory motor liability insurance. After all, failure to issue a policy can entail not only fines, but in some cases, criminal liability.”

Changing requirements for pet stores

Starting March 1, there are new requirements for pet stores regarding keeping animals. These requirements include cleanliness, lighting, temperature, humidity and enclosure size. In addition, separate requirements apply to each type of animal, including the presence of a device for grinding claws in enclosures for cats and teethers for puppies and kittens.

Anastasia Chumak, co-head of the Intercession investor rights practice, comments:

“The introduction of new animal welfare requirements may require pet stores to change and upgrade their infrastructure. These changes are aimed at increasing the level of care for animals and creating more comfortable living conditions for them. It is possible that for some pet stores these new requirements may entail additional financial costs associated with re-equipment and creation of the necessary conditions for animals. It will take time to assess how these changes will affect the operation of pet stores, the number of such points of sale and how effective the penalties will be for violators of the new requirements.”

And:

Rules for children leaving Russia. On March 1, a law comes into force that prescribes the rules for traveling abroad for children under 14 years of age. In order for them to be released, their birth certificate must contain a note indicating Russian citizenship—a special red stamp. This departure procedure applies to those children who will cross the Russian border only with a birth certificate in hand. Moreover, so far only five countries are ready to accept young Russian tourists with only this single document: Abkhazia, Belarus, Kazakhstan, Kyrgyzstan, North Ossetia.

Labeling of farm animals. From March 1, farm animals will have to be marked. Each animal or group of animals will be assigned a unique alphanumeric identification number and entered into a single database. Cows, pigs, poultry, goats and sheep, deer, camels, bees, farmed fish and others will be identified. Pets will not be marked. Labeling is needed to prevent the spread of infectious animal diseases, as well as to identify the sources and routes of spread of pathogens. Rosselkhoznadzor will keep animal records free of charge. And their owners will have to mark the animals at their own expense.