Foreign currency transactions between residents and non-residents are also generally permitted subject to a few specific restrictions.
Registration of foreign trade contracts
Pursuant to Instruction No. 181-I of the Central Bank of Russia (the “Instruction”), since 1 March 2018, the requirement to open a transaction passport documenting any foreign currency transaction between a resident and a non-resident has been abolished. Instead, Russian authorised banks are now required to generate data on foreign trade transactions of residents (in any foreign currency or in roubles) and of non-residents (in roubles), by registering contracts in respect of such transactions. The list of such transactions is formalised in the Instruction and includes, among others, currency conversion operations of both residents and non-residents and cross-border transactions between residents and non-residents. Transaction passports in place as of 1 March 2018 are considered closed and are stored in a currency control file with the relevant bank.
Any contract must be registered if its value is equal to or exceeds the equivalent of:
- for import contracts or facility agreements – RUB 3m (EUR 42,900); and
- for export contracts – RUB 6m (EUR 85,800).
In order to register an export contract, the resident-exporter must submit to the Russian authorised bank:
- information on the export contract sufficient for its registration (including type, number, currency, date of the contract, value and date of performance of the obligations, as well as the details of the non-resident counterparty); or
- the export contract itself (or an extract from it containing sufficient information for its registration).
For the purposes of registration, a resident-importer or a resident who is a party to a facility agreement must provide the relevant import contract or facility agreement (or an extract from the relevant contract) to the Russian authorised bank.
The bank must register the foreign trade contract or facility agreement not later than the next business day after the submission of the specified documents and must assign a unique number to the relevant contract.
Repatriation of proceeds
As a general rule, residents must repatriate roubles and foreign currency received from international trade and commercial activities to their bank accounts held with Russian authorised banks. Among the exceptions are payments due to a non-resident lender. These payments may be directly transferred into the lender’s foreign bank account. The bank must also inform the resident of the number assigned to the contract.
However, when giving a loan to a non-resident, a resident lender must ensure that the non-resident borrower repays the amounts due under the loan agreement to the lender’s Russian bank account within the time limit specified in the loan agreement. This rule does not apply if the parties can set off their mutual claims provided that a counterclaim of the non-resident results from a loan agreement where the funds were credited to the resident’s Russian bank account.
In addition, amendments to the Currency Control Law adopted in August 2019 abolished the repatriation requirement in relation to contracts between residents and non-residents, provided that such contracts are denominated in roubles and also envisage payments in roubles. This means that rouble proceeds due to a resident under such contracts can be credited to that resident’s account opened in a foreign bank. The abolition of the repatriation requirement in respect of such contracts is effective from 1 January 20204, with the exception of supply contracts in relation to certain categories of goods5, to which the abolition of the repatriation requirement will be applied gradually6. However, this abolition does not affect (i) the repatriation in relation to proceeds under loan agreements between residents and non-residents; and (ii) the repatriation required when the pre-paid funds must be returned to a resident because the relevant goods, services or IP rights were not delivered or provided by a non-resident.
In May 2014, the Russian Government decided to implement a requirement that a portion of export proceeds must be received by Russian companies in roubles. The Currency Control Law was amended to provide that the Government may determine (i) the portion of the export proceeds that must be received by the residents in roubles; (ii) a list of goods and services to which such requirement applies; and (iii) a list of countries, with residents of which a Russian resident will be obliged to enter into an export operation with such mandatory rouble part payment. For the time being, there is no information indicating whether the Russian Government is intending to prepare these lists or when it expects to do so.