From today, any Russian politician or official found with a foreign bank account will face the sack or be forced to resign.
The law was passed in May and officials were given three months to close any accounts and repatriate assets from abroad.
The Russian government said it is necessary to crack down on corruption.
Kirill Kabanov, chairman of National Anti-Corruption Committee stated: “Russians who are focused on their well-being in the West are a threat to the state, and most of all they are a threat to the power of the president”.
Amongst those to be affected by the new law is billionaire Roman Abramovich, owner of British football club Chelsea. He has had to resign as chairman of the local parliament in the remote Russian region of Chukotka.
Several senators have stepped down already. There has also been a higher than usual number of divorces by officials, leading many to believe that foreign assets will remain with their divorced spouse.