On 14 March, a decision of the governmental commission for monitoring foreign investments (the ‘Governmental Commission’) was published on the website of the Russian Ministry of Finance providing for certain exceptions to the previously introduced prohibition on residents crediting foreign currency to foreign accounts.
According to the new rules, foreign currency can be credited to foreign accounts provided that certain conditions have been met:
- Russian residents will be able to transfer monetary funds in foreign currency to their accounts opened with foreign banks and other institutions of the financial market to finance the day-to-day business operations of branches and representative offices. This is subject to a restriction, namely: the volume of such monetary funds should not exceed the volume of financing for the previous year.
- It is allowed for foreign currency received from non-residents in the form of salaries and wages, rental payments, coupons and dividends on securities and other interest payments to be credited to individuals’ accounts with foreign banks.
- Russian nationals are permitted to transfer foreign currency between their foreign accounts opened before 1 March 2022. Information regarding such accounts must be disclosed to Russian tax authorities.
Please note that previously a Decree of the Russian President [1] introduced a permission-based procedure for consummating transactions involving crediting foreign currency to accounts and deposits abroad. Such transactions can be consummated with the permission of the Government Commission.
It is still unclear whether another Presidential Decree should be expected in the near future to establish the above currency-related exceptions. It remains an open question whether the decision of the Government Commission has any legal force, since, according to the Regulations approved by the Government [2], the Commission does not have any rule-making competency and was established for the specific purposes of coordinating transactions which result in control being established of a foreign investor or of a group of persons to which the foreign investor belongs.
[1] The Russian President’s Decree No. 81 “On additional temporary measures of an economic nature to secure the financial stability of the Russian Federation” dated 1 March 2022.
[2] The Russian Government’s Resolution No. 510 “On the governmental commission for monitoring foreign investments” dated 6 July 2008.