Home / Doing business in Russia 2020 / Currency control / Consequences of breach/Penalties
  1. Introduction
    1. Political and administrative structure
    2. Legal environment
  2. Common forms of business structures for foreign investors
    1. Main types of structure
    2. Registration, liquidation and reorganisation of business structures
    3. Shareholders’ and participants’ agreements
    4. Strategic industries
  3. Anti-monopoly issues
    1. General legal and regulatory framework
    2. Scope of application of the Competition Law
    3. Anti-competitive practices and restriction of competition
    4. Liability
  4. Tax system
    1. General approach
    2. Corporate taxation
    3. Incentives
    4. Special tax regimes
    5. Taxation of individuals
    6. Double taxation treaties
  5. Customs regulations
    1. General approach
    2. Trade between EEU and non-EEU countries
    3. Mutual trade between the EEU members
  6. Currency control
    1. Foreign currency transactions
    2. Consequences of breach/Penalties
  7. Lending in Russia
    1. Lending documents and governing law
    2. Jurisdiction
    3. International finance transactions and repatriation requirements
    4. Security interests
    5. Recognition of security trusts
    6. Syndicated loans
    7. Enforcement
    8. Suretyships and guarantees
    9. Bankruptcy considerations
    10. Other lending related issues
  8. Employment and migration
    1. Formalising the employment relationship
    2. Managing employment relationships
    3. Terminating an employment agreement
    4. Specifics of employing foreign nationals
  9. Personal data protection
    1. General approach
    2. Scope of the Data Protection Law
    3. Liability
    4. Right to be forgotten
  10. Intellectual property
    1. General approach
    2. Contractual aspects of intellectual property rights
    3. Rights over the results of intellectual activity
    4. Company names, trade names, trademarks and appellations of origin
    5. Intellectual property rights infringements
    6. IP Court
  11. Advertising issues
    1. General approach
    2. Scope of application of the Advertising Law
    3. Violations of the Advertising Law
    4. Liability
  12. Anti-corruption and compliance
    1. General approach
    2. Legal framework
    3. Compliance requirements for companies
    4. Concept of corruption in Russian law
    5. Possible targets of bribery
    6. Liability and penalties for corruption
    7. Example of sector-specific anti-corruption measures
  13. Real estate and construction
    1. Rights to real estate
    2. Real estate transactions
    3. Resolution of real estate disputes
    4. Planning and construction issues
  14. Corporate bankruptcy
    1. Insolvency criteria
    2. Stages of bankruptcy proceedings
  15. Import substitution and production localisation in Russia
    1. Measures affecting goods importation and current import substitution legislation
    2. Localisation incentives
    3. Sector-specific impact of import restrictions and localisation requirements
  16. Banking sector
    1. Legislative and regulatory framework
    2. Licensing and operations
    3. Deposit insurance
    4. The anti-money laundering law
    5. Bank secrecy
    6. FATCA and CRS
  17. Environment, energy efficiency and renewables
    1. Environment
    2. Energy efficiency
    3. Renewables
  18. Infrastructure and public private partnerships
    1. General approach
    2. Key PPP legislation
    3. Russian PPP environment
    4. Financing
    5. Legal issues
    6. Prospects for infrastructure projects
  19. Oil & gas
    1. Legislative framework
    2. Ownership and licensing
    3. Restrictions on foreign investors
    4. Licences
    5. PSAs

Currency control

General approach

Most currency restrictions in Russia were removed in January 2007, following amendments to Federal Law No. 173-FZ “On Currency Regulation and Currency Control” dated 10 December 2003 (the “Currency Control Law”), which regulates currency transactions. Consequently, most currency transactions can be conducted without limitation.

However, the Currency Control Law, and related regulations, still contain a number of restrictions which should be taken into consideration (i) when dealing with transactions between residents and non-residents (in particular when importing and exporting goods and capital); and (ii) when importing and exporting foreign currency in cash.

Key contacts

Contact
Baranov Konstantin
Konstantin Baranov
Partner
Head of Banking & Finance
Tchoubykina Elena
Elena Tchoubykina
Counsel
Banking & Finance

Consequences of breach/Penalties

Generally, as currency control agents, Russian authorised banks are under a duty to monitor compliance with currency control rules as far as transactions involving their accounts are concerned.

Breaching the currency control rules can result in administrative and criminal sanctions.

The Russian Code on Administrative Offences provides for administrative fines for illegal currency transactions that can range from 75% to 100% of the value of the relevant transaction and up to RUB 30,000 (EUR 429) for company officials.

In addition, this Code prescribes fines for failing to:

  • notify the tax authorities when opening or changing details of accounts held with banks located outside Russia;
  • comply with the time periods and/or form of notification required when opening or changing details of accounts in banks located outside Russia;
  • repatriate funds to accounts held in Russia in due time where required by law;
  • comply with the requirement to ensure that a designated portion of export proceeds has been received by Russian companies in roubles1; and
  • comply with rules for providing information or documents in relation to currency operations.

Breaches of these rules can result in penalties of up to RUB 20,000 (EUR 286) for individuals, up to RUB 50,000 (EUR 715) for company officials, up to RUB 1m (EUR 14,300) for legal entities and, in certain cases, fines ranging from 75% to 100% of the value of the relevant transaction. Repeated violation of the rules by company officials may result in disqualification from holding office in the management body or the board of directors (supervisory board) of a legal entity and otherwise managing a legal entity for up to three years.

More serious criminal sanctions may apply under the Russian Criminal Code. In particular, it stipulates that persons failing to repatriate foreign currency over RUB 45m (EUR 643,500) to accounts in Russia, where required by law, may face imprisonment for a term of up to five years with a fine up to RUB 1m (EUR 14,300) or without it.


“Russian authorised banks are under a duty to monitor compliance with currency control rules as far as transactions involving their accounts are concerned.”


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Key contacts

Tchoubykina Elena
Elena Tchoubykina
Counsel
Banking & Finance
Baranov Konstantin
Konstantin Baranov
Partner
Head of Banking & Finance