MOSCOW, December 12 (RAPSI) – Roman Khudyakov of the Liberal Democratic Party suggests prohibiting offshore businesses from registering legal entities in Russia, including non-governmental organizations, Izvestia newspaper reported on Friday.

“We propose amending the Civil Code to prohibit foreign offshore companies from founding legal entities in Russia,” Khudyakov said as quoted by the newspaper.

This propasal would increase corporate legal liability and tax and legal transparency, according to Khudyakov. He added that the use of offshore schemes by Russian companies hindered the work of Russian law enforcement agencies.

“Many owners of these companies are Russian citizens who don’t want to comply with Russian tax law and are using foreign jurisdiction to avoid taxes,” he said. “Moreover, it is extremely difficult for our law enforcement agencies to find the real violators when investigating suspected fraud at these companies.”

The MP also said that Russian legal entities using the advantages of offshore jurisdictions are now risking their businesses more because of anti-Russian sanctions than if they had worked exclusively within the Russian legal system.

In December 2013, President Vladimir Putin called for a crackdown on Russian companies that dodge taxes by registering in offshore jurisdictions.

After a joint development by the Finance Ministry along with the Economic Development Ministry, the bill was passed through both houses of parliament and signed into law by president Putin on November 25.