On 28 February 2022, the Russian President signed a decree  that puts in place a series of currency restrictions in response to the economic sanctions imposed by the European Union, the United States and other countries in connection with the escalation of the situation in Ukraine (the “Decree”).
The currency countermeasures include:
- the requirement that participants in foreign economic activity sell 80% of their foreign currency.
When the foreign currency needs to be sold depends on the date it was credited to the Russian bank account. Currency received since 1 January 2022 must be sold within three business days of the effective date of the Decree. Currency received after 28 February 2022 must be sold within three business days of when it was credited. Russia’s Finance Ministry had already made this suggestion after Russia’s Central Bank introduced a ban on Russian brokers selling securities on foreign clients’ instructions. The requirement to sell foreign currency applies to participants in foreign economic activity whether or not the contracts have been registered with the banks;
- a ban on currency residents crediting foreign currency to their own accounts (deposits) opened with banks outside of Russia and other foreign financial institutions (for example, crediting dividends to foreign brokerage accounts);
- a ban on transferring money via foreign payment service providers without opening a bank account (e.g., PayPal, Cardpay, Alipay).
Considering that this provision of the Decree uses the term “monetary funds” rather than “foreign currency”, it is possible that the ban also applies to the transfer of Russian roubles;
- a ban on currency transactions involving residents providing non-residents with foreign currency under loan agreements (for example, a Russian parent company extending a loan to a foreign “daughter”).
The currency restrictions that have been introduced are not the only economic countermeasures being imposed by Russia. Following the ban on selling securities on the instruction of foreign persons, Russia’s Central Bank imposed a moratorium on paying dividends and interest to them . In addition, on 1 March 2022 the President of Russia issued a new decree  that, effective 2 March 2022, bans the export of more than USD 10,000 in cash foreign currency and/or monetary instruments (e.g., checks, promissory notes and other certificated securities) in foreign currency, as calculated at the Russian Central Bank’s official exchange rate on the date of export. It seems that most of these limits are targeted at stopping the outflow of Russian persons’ capital abroad, including to stabilise the rouble exchange rate against the dollar and euro.
Notably, many provisions of the Decree are quite broadly worded and make it possible to say that it restricts a number of what at first glance appear to be “harmless” currency transactions. For example, Russian currency residents transferring foreign currency from a Russian bank to their own foreign bank account to make mandatory payments or pay for utilities for foreign real estate. Further, although the term “participant in foreign economic activity” is not defined in either the federal law “On Currency Regulation and Currency Control” or in the federal law “On the Fundamentals of State Regulation of Foreign Trade Activity”, the latter law uses a similar term, “participants in foreign trade activity”, which encompasses a wide range of persons, including natural persons, which means that the requirement to sell currency proceeds under civil-law contracts could also apply to them.
The question of whether it will be possible to extend a loan in the form of securities denominated in foreign currency to non-residents also remains open. It would seem that, at a minimum, bond offerings, which Russia’s Civil Code implies are one of the ways of making a loan agreement , is banned by the Decree.
We note that the countermeasures have not affected the ability to make settlements in foreign currency with foreign counterparties for goods, work and services. They have also not affected the use of bank cards to make such transfers. It is also still possible to credit Russian roubles to accounts with banks outside of Russia and to provide rouble loans to foreign subsidiaries.
We remind you that individuals, sole traders, and legal entities engaging in illegal currency transactions face a fine of between 75 and 100 per cent of the amount of the illegal currency transaction or the amount of funds transferred without opening a bank account using e-payment methods provided by foreign payment services providers .
 Russian Federation President’s Decree No. 79 of 28 February 2022 “On the Application of Special Economic Measures in Connection with the Unfriendly Actions of the United States of America, Other Foreign States and International Organisations That Have Joined Them”.
 Bank of Russia Instruction No. 018-34-3/1202 of 28 February 2022.
 Russian Federation President’s Decree No. 81 of 1 March 2022 “On Additional Temporary Measures of an Economic Nature to Ensure the Financial Stability of the Russian Federation”.
 Article 807(4) of the Russian Federation Civil Code.
 Article 15.25(1) of the Russian Federation Code of Administrative Offences.