Russia amends its foreign exchange regulations

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In the end of 2017, the following amendments were made to the Russian laws on foreign exchange regulation and currency control.

  1. Bank of Russia's Instruction - Key Changes

    Instruction of the Bank of Russia No. 181-I "On the Procedure for Residents and Non-residents to Submit Documents and Information Confirming Foreign Exchange Transactions to Authorised Banks, on Single Accounting and Reporting Forms Related to Foreign Exchange Transactions, and the Procedure and Timeframes for Their Submission" dated 16 August 2017 ("New Instruction") will come into force on 1 March 2018. With effect from the date of the entry into force of the New Instruction, Instruction No. 138-I of the Bank of Russia dated 4 June 2012 ceases to have effect.

    The New Instruction covers:

    • Resident legal entities (except for credit institutions and Vnesheconombank)
    • Resident individuals that are private entrepreneurs or persons engaged in private practice in accordance with the laws of the Russian Federation
    • Non-residents, except for private individuals

    Below please find a comparison between the current rules and the upcoming rules under the New Instruction.

    Instruction No. 138-I dated 4 June 2012 New Instruction
    A resident being a party to a contract specified in chapter 5 of the Instruction is required to draw up transaction specifications with the authorised bank Cancels the requirement for residents to draw up transaction specifications at an authorised bank; it puts in place a new procedure to register contracts with banks and to assign unique contract numbers (UCNs) to such contracts
    At present, resident exporters do not have any procedural advantages when formalising foreign exchange transactions Resident exporters will operate under a simplified registration procedure for their contracts, with contracts to be registered by banks within one business day
    A resident performing foreign exchange transactions described in chapters 2 and 3 of the Instruction is required to provide the authorised bank with an information letter ('spravka') on foreign exchange transactions and documents relating to the transactions listed in such letter in relation to supporting documents in the cases envisaged by the Instruction Cancels the requirement for residents to submit certificates on FX transactions, which are accounting forms, while preserving their obligation to submit documents confirming their right to conduct FX transactions and certificates on supporting documents
    At present, the amount of obligations for which a resident is required to have transaction specifications drawn up by the authorised bank for the export/import contract is USD 50,000 Subject to registration are import contracts and credit facility agreements with the amount of liabilities equal to or more than RUB 3 million, and export contracts with the amount of liabilities equal to or more than an amount equivalent to RUB 6 million
    A resident, for the purposes of receiving a foreign exchange amount in its transit foreign exchange account, is required to provide the authorised bank with an information letter ('spravka') on foreign exchange transactions and documents relating to the transactions no later than 15 days after the date of its receipt specified in the authorised bank's notice of its credit into the transit foreign exchange account, except for certain cases provided by the Instruction Introduces a procedure which makes it unnecessary for residents to provide documents relating to the receipt of a foreign exchange amount in a transit foreign exchange account under agreements (contracts) made with non-residents, where the foreign exchange equivalent amount of liabilities is less than RUB 200,000, but the general requirement of a 15-day period is preserved

  2. Key amendments to the Federal Law "On Foreign Exchange Regulation and Foreign Exchange Control"

    On 14 May 2018, Federal Law No. 325-FZ "On making amendments to articles 19 and 23 of the Federal Law "On foreign exchange regulation and foreign exchange control" and the Administrative Offences Code of the Russian Federation" dated 14 November 2017 will come into force (Amended Law).

    Below please find a comparison between the current rules and the upcoming rules under the Amended Law.

    Current provisions New provisions effective 14 May 2018
    Residents are required to report to authorised banks the details of the anticipated deadlines for the receipt of payments in foreign exchange and the currency of the Russian Federation from non-residents in the residents' accounts with authorised banks, and the deadlines for the performance by non-residents of their obligations under such contracts Contracts/agreements concluded between residents and non-residents in the course of export/import operations shall specify the timing for the performance by the parties of their obligations under their contracts/agreements
    The authorised banks will refuse to perform a foreign exchange transaction if the person fails to provide the required documents or provides incorrect documents and will have the right to refuse to perform a transaction if, in the bank's view, the transaction is aimed at money laundering or terrorist financing Expands the list of grounds whose existence permits authorised banks to refuse to process a foreign exchange transaction (in particular, the performance of prohibited foreign exchange transactions between residents, and the breach of any foreign exchange laws of the Russian Federation); such decision on the refusal must be notified to the person concerned in writing no later than one business day after the decision is made
    The administrative liability established in relation to officers by parts 1, 4, 4.1 and 5 of article 15.25 of the Administrative Offences Code of the Russian Federation is only applied to individuals engaged in business activities without forming a legal entity Provides that the executives and other employees of organisations performing the organisational, managerial, administrative and commercial functions who commit administrative offences provided in article 15.25 of the Administrative Offences Code of the Russian Federation ("Violation of the foreign exchange legislation of the Russian Federation and the acts of foreign exchange regulators") shall be held administratively liable as officers
    Currently, this administrative offence is not envisaged Disqualification for six months to three years for officers previously subjected to an administrative punishment for similar offences in certain types of offences of foreign exchange laws provided in article 15.25 of the Administrative Offences Code of the Russian Federation
    Punishment for the violations provided in article 15.25 of the Administrative Offences Code of the Russian Federation in the form of an administrative fine may be expressed, inter alia, as an amount of money times the refinancing rate of the Bank of Russia of the amount of money credited late in accounts with authorised banks Changes the amounts of the administrative fine for a number of offences provided by article 15.25 of the Administrative Offences Code of the Russian Federation and provides that, for the purposes of determining the amount of fine under this article, the key rate (but not the refinancing rate of the Bank of Russia) shall be applied
    Cases on administrative offences provided in article 15.25 of the Administrative Offences Code of the Russian Federation are considered by the competent federal executive authority in the area of foreign exchange control The competence to consider cases on the offences provided in article 15.25 of the Administrative Offences Code of the Russian Federation is allocated among courts and the competent federal executive authority in the area of foreign exchange control