“Escrow accounts in Russia” — Tatiana Tereshchenko for a special project “RBC Industries”
Escrow accounts, which all construction companies in the country are now learning to work with, before the reform were used to evade taxes, withdraw assets and manipulate state property.
Comment of Tatiana Tereshchenko, head of the analytical division of "Prime Advice", about case of "Agency on insurance of contributions", which bankrupt bank "Express-credit":
There is still a dispute about whether article 855 of the civil code applies to the escrow account with respect to the priority of debiting funds in case of their insufficiency to meet the creditors' claims, as well as what happens to the deposited property in case of bankruptcy and whether it is possible to arrest it. Art. 926.7 of the civil code on escrow says that "foreclosure on the deposited property, arrest of such property or adoption of interim measures in respect of the debts of the escrow agent or the depositor is not allowed. However, bankruptcy practice is known for the tendency to prevail over the civil bankruptcy legislation.
Regarding the case of JSC "Avangard" who took out a loan in 2006 of 160 million rubles from Ak Bars Bank on the security of the production complex of JSC "Passenger road transport plant" in Naberezhnye Chelny:
The Russian regulation of escrow does not address the agent's actions in the event of a change in the beneficiary — client relationship, such as a change in arrangements or an assignment. The agent formally acts only in accordance with the prescribed instructions. Consequently, in order not to stall the transaction and to discourage escrow, it is necessary to include in the escrow contract specific references to this effect.