New currency regulations in Russia

The Central Bank adopted new Regulations on 6 December 2001 dealing with the movement of capital outside of Russia. Included is a list of those foreign currency operations which can be carried out without the authorization of the Central Bank. This continues the ongoing process of exchange control liberalization.

The list includes the following:

• Crediting a resident's account with foreign currency amounts received from a non-resident by way of pre-payment regardless of the time between the payment and the receipt of the goods or services.
• Remittance by a resident of foreign currency amounts from the Russian Federation to a non-resident's account in payment for work or services done or provided earlier, again regardless of the time between fulfillment of the work and the day the corresponding account was debited.
• Crediting foreign currency funds to a resident's account for work done or services provided earlier (time difference not to exceed 90 days).
• Remittance by a resident of foreign currency amounts from the Russian Federation or to a non-resident's account within Russia as a prepayment provided that the gap between payment and the receipt of the goods or services does not exceed 90 days.

The Regulations prescribe penalties for non-compliance and emphasize the fact that any particular work or service that has been carried out and for which exemption is sought must be backed-up by appropriate documentation.

The Regulations are unusual in that it does not seem to matter whether the goods or services are actually provided on the territory of Russia. Rather, the determining factor is the nationality of each of the parties to a particular transaction i.e. whether they are residents or non-residents.

For further information please contact David Griston at [email protected] or on +7 095 2585000.