Cash Settlements with Non-Residents: Enforcement Landscape in Russia and International Trade Risks

 

 June 24, 2026

 Law Firm BRACE©

 

In the context of the globalization of economic processes and the tightening of the sanction’s regime against Russia, the issues of legal regulation of settlements with foreign counterparties are of particular importance. Cash settlements between residents and non-residents constitute one of the most strictly regulated areas of currency legislation, where the balance between the operational flexibility of businesses and the need to safeguard the state's financial sovereignty is calibrated through detailed legal rules.

Federal Law No. 173-FZ dated December 10, 2003, On Currency Regulation and Currency Control (the "Law No. 173-FZ" or the "Currency Regulation Law") and the Rules for Executing Cash Settlements Between Residents and Non-Residents, approved by Decree of the Government of Russia No. 2433 dated December 26, 2022 (the "Decree No. 2433"), collectively establish an exhaustive list of cases for the lawful use of cash funds (cash foreign currency and/or Russian currency) in settlements with non-residents.

This article aims to provide a comprehensive analysis of the legal framework, exceptions, potential pitfalls, and corporate matters related to executing cash settlements with non-residents within and outside the territory of the Russian Federation.

Legal Regulation of Cash Currency Settlements in Foreign Trade

Cash settlements are a type of payment operation involving cash funds. The parties execute transactions by transferring funds (coins, banknotes) from one party to another to fulfill an obligation. Both individuals and legal entities may act as parties to the transaction.

The fundamental rule established by Law No. 173-FZ requires resident legal entities to conduct settlements with non-residents through bank accounts in authorized banks (digital ruble accounts or electronic money transfers). Cash settlements between residents and non-residents are possible in cases explicitly provided for by the law. Cash settlements outside this exhaustive list qualify as an illegal currency operation in accordance with Part 1 of Article 15.25 of the Code of Administrative Offenses of the Russian Federation (the "CAO RF").

Currency residents are:

• Individuals who are Russian citizens;
• Foreign citizens and stateless persons permanently residing in Russia based on a residence permit;
• Legal entities established in accordance with the legislation of the Russian Federation, excluding foreign legal entities registered in accordance with Federal Law No. 290-FZ dated August 3, 2018, On International Companies and International Funds;
• Branches and representative offices located outside the Russian territory;
• Russian diplomatic missions, consular offices, permanent missions to international (interstate, intergovernmental) organizations, other official representations, and representative offices of federal executive bodies located outside the territory of the Russian Federation;
• The Russian Federation, its constituent entities, and municipalities acting in relations regulated by currency legislation.

We also note that currency non-residents, in turn, are:

• Individuals who are not Russian citizens and do not have a residence permit;
• Legal entities established in accordance with the legislation of foreign states and located outside the territory of Russia;
• Organizations that are not legal entities, established in accordance with the legislation of foreign states and located outside the territory of Russia;
• Diplomatic missions and consular offices of foreign states accredited in Russia, and permanent missions of these states to interstate or intergovernmental organizations;
• Interstate and intergovernmental organizations, their branches, and permanent missions;
• Branches, permanent missions, and other separate or independent structural divisions of non-residents located on the territory of Russia;
• Foreign legal entities registered in accordance with the Federal Law on International Companies.

According to Part 2 of Article 14 of Law No. 173-FZ, resident legal entities must make payments in currency operations through bank accounts in authorized banks, except in specific cases explicitly provided by the law. A violation of this rule qualifies as an illegal currency operation with all ensuing legal consequences.

Please note that in accordance with Subparagraph b of Paragraph 4 of the Decree of the President of Russia No. 529 dated August 8, 2022, until amendments are made to the Currency Regulation Law, the requirements of the first paragraph of Part 2 of Article 14 (regarding compliance with the requirement on the mandatory form of settlements) and Parts 1 and 2 of Article 19 of the specified Law shall not apply to Russian legal entities and individual entrepreneurs conducting foreign trade activities and/or granting and returning loans.[1]

Part 2 of Article 14 of Law No. 173-FZ establishes an exhaustive list of cases where resident legal entities have the right to conduct settlements with non-residents without using bank accounts in authorized banks (i.e., in cash):

• Under retail sale and purchase agreements, payments in cash Russian currency to non-resident individuals to compensate the VAT amount in accordance with Article 169.1 of the Tax Code of the Russian Federation (the "Tax Code");
• Settlements in cash Russian currency when providing transport, hotel, and other services rendered to the public to non-resident individuals;
• For servicing aircraft of foreign states at airports, vessels of foreign states at river and seaports, and when non-residents pay air navigation, airport, and port charges on the Russian territory;
• For servicing aircraft of legal entities at foreign airports, vessels of such legal entities at foreign river and seaports, and other transport vehicles of such legal entities while they are on the territories of foreign states, as well as when such legal entities pay air navigation, airport, port charges, and other mandatory fees on the territories of foreign states related to ensuring the activities of such legal entities;
• Settlements in foreign currency and Russian currency with resident individuals located outside the Russian Federation, as well as branches, representative offices, and non-resident individuals under passenger transportation agreements, and settlements with residents and non-residents located outside the territory of the Russian Federation under agreements for the carriage of goods transported by individuals for personal, family, household, and other needs not related to entrepreneurial activities;
• Diplomatic missions, consular offices of the Russian Federation, permanent missions of the Russian Federation to international (interstate, intergovernmental) organizations, other official representations of the Russian Federation, and representative offices of federal executive bodies located outside the territory of the Russian Federation may conduct settlements in cash foreign currency with representatives or employees of the missions without using bank accounts in authorized banks;
• Russian state higher educational institutions and their branches located outside Russia may conduct settlements in foreign currency and Russian currency without using bank accounts in authorized banks with non-resident individuals, as well as with residents whose total period of stay outside the territory of the Russian Federation during a calendar year will exceed 183 days, under education agreements concluded between these persons providing for educational services outside the territory of the Russian Federation;
• When paying and/or reimbursing the expenses of individuals in cash foreign currency related to business trips outside the Russian territory, as well as when repaying unspent advances issued by such resident legal entities in connection with business trips abroad;
• Residents acting as participants in the budget process at the federal level, federal state budgetary (autonomous) institutions, and federal state unitary enterprises with personal accounts opened with the federal executive body authorized to perform functions for ensuring the execution of the federal budget and treasury servicing of the execution of budgets of the Russian budgetary system may perform operations related to the deposit (receipt) of cash foreign currency into (from) the accounts of such federal executive body opened in authorized banks;
• Residents participating in international exhibitions held in a state or territory that is a member of the Organization for Economic Cooperation and Development (OECD) or the Financial Action Task Force (FATF) may conduct cash settlements for purchased jewelry exhibition samples at the venue of the international exhibition if the specified sold exhibition samples are classified under headings 7113, 7114, 7116 – 7118 of the unified Commodity Nomenclature of Foreign Economic Activity of the EAEU. The cash funds are subject to import upon completion of the international exhibition, but no later than 30 business days from the payment date for the relevant jewelry exhibition sample, and subsequent crediting to a bank account in an authorized bank no later than 7 business days from the cash import date. Upon crediting cash funds to their bank account, participants in such international exhibitions shall provide the authorized bank with information on goods declarations filed regarding jewelry exhibition samples when placed under the customs procedure of temporary export or the customs procedure of export (if sold at the international exhibition), as well as information on goods declarations filed regarding cash funds received from sales at the international exhibition;
• Branches of Russian state medical organizations of the healthcare system located abroad and providing healthcare services may conduct cash settlements with non-resident individuals and legal entities, as well as with resident individuals and legal entities, under healthcare service agreements concluded by these branches of such organizations with the specified persons.

Furthermore, stringent requirements apply to legal entities concerning operations with non-residents:

• Settlements must pass through the organization's accounts in an authorized bank, digital ruble accounts opened by the digital ruble platform operator, or its accounts in banks located outside the territory of the Russian Federation, opened in accordance with Article 12 of the Law No. 173-FZ, as well as via electronic money transfers;
• The organization is obligated to submit documents related to the currency operation to the authorized bank;
• When conducting settlements with non-residents in cases prescribed by currency legislation, the organization must repatriate currency earnings (return funds to an account in an authorized bank).

Procedure for Cash Currency Settlements in Foreign Trade Activities

According to Paragraph 7 of the Decree of the President of Russia No. 737 dated October 15, 2022,[2] the procedure for cash settlements between residents and non-residents is established by the Government of Russia in coordination with the Bank of Russia.

In accordance with the Decree No. 2433, residents have the right to receive cash foreign currency and/or cash Russian currency from non-residents in an amount due under the terms of foreign trade contracts (agreements) providing for the transfer of goods, performance of works, rendering of services, transfer of information and intellectual property results, including exclusive rights to them, to non-residents. This also applies to funds due under the terms of foreign trade contracts (agreements) as a refund of an advance payment for goods not imported into the territory of the Russian Federation, unperformed works, unrendered services, untransferred information and intellectual property results, including exclusive rights to them, and/or funds due under loan agreements when residents grant loans to non-residents.

The resident has the right to use the cash funds received to:

• Execute settlements with a non-resident under foreign trade contracts (agreements) providing for the import of goods into the territory of the Russian Federation, performance of works, rendering of services, transfer of information and intellectual property results, including exclusive rights to them, by the non-resident, without crediting the funds to accounts opened in banks located outside the territory of the Russian Federation and/or to its accounts opened in an authorized bank;
• Credit the funds to accounts opened in banks located outside the territory of the Russian Federation;
• Import the funds into the territory of the Russian Federation in compliance with the requirements of Eurasian Economic Union law and Russian Federation legislation on customs regulation, no later than the 30th business day from the date of their import into the territory of the Russian Federation, or no later than the 30th business day from the date of their receipt from the non-resident on the territory of the Russian Federation;
• Sell the foreign currency to an authorized bank with subsequent crediting of the corresponding currency received from such sale to its account in the authorized bank;
• Credit the funds to its account in the corresponding currency in an authorized bank;
• Deposit the funds into its cash desk in the prescribed manner.
• Such operations are carried out without sum restrictions.

Residents must submit to the authorized bank where the foreign trade contract (agreement) and/or loan agreement is registered (serviced), or, for foreign trade contracts (agreements) and/or loan agreements not subject to registration in an authorized bank, to any authorized bank where the resident holds accounts, no later than the 45th business day after the day of cash settlement with the non-resident in foreign currency and/or Russian currency:

• Documents and information confirming cash settlements;
• Documents confirming the transfer of goods, performance of works by the non-resident, rendering of services by the non-resident, transfer of information and intellectual property results, including exclusive rights to them, by the non-resident (if the foreign trade contract (agreement) provides for advance payments and the delivery term for goods, performance of works by the non-resident, rendering of services by the non-resident, transfer of information and intellectual property results, including exclusive rights to them, by the non-resident under the terms of the specified contracts (agreements) exceeds 45 business days after the cash settlement date, the period specified in the first paragraph of this clause is calculated from the date of execution of the corresponding supporting documents);
• Information (if available) on goods declarations filed regarding cash funds imported into the Russian Federation.

During the customs declaration of cash funds, a separate declaration is filed for each type of currency, the form and completion procedure of which are approved by Decision of the Customs Union Commission No. 257 dated May 20, 2010.[3]

The goods declaration is filed considering the following:[4]

• In Box 9, "Person responsible for financial settlement", the details of the person importing the cash currency into the EAEU customs territory are specified;
• In the first subsection of Box 22, "Currency and total amount invoiced", the alphabetic currency code is specified in accordance with the currency classifier;[5]
• In the first subsection of Box 24, "Nature of transaction", a three-digit transaction nature code is specified in accordance with the transaction nature classifier.[6] When declaring cash funds, the three-digit code 060 (Movement of cash currency by legal entities, including currency in the form of loose coins/banknotes or sales revenue on board aircraft, railway, and other transport modes, and/or securities) is used;
• In Box 42, "Item price", the amount of the transferred currency is specified;
• In Box 44, "Additional information/Documents produced", the following are specified under the corresponding code: the number and date of the document confirming the transaction, or other documents confirming the right to own, use, and/or dispose of goods outside a transaction in accordance with the classifier of document and information types.[7] In the event a person transfers cash funds received from foreign economic activity, the contract (agreement) concluded for the transaction under which the cash funds were received as payment for goods or as a refund of an advance payment for goods not imported (not received) into the Russian Federation is indicated under code 03011. Code 03012 is used for modifying and/or supplementing the document listed under code 03011 (an addendum to the contract). If the relevant foreign economic contract (agreement) is subject to registration with an authorized bank, the unique number of the contract registered by the authorized bank is indicated under code "03031".

Salary Payments to Non-Residents in Foreign Currency

Currency legislation does not provide for the execution of a currency operation such as the payment of a salary by a resident to a non-resident individual in cash Russian currency.

The requirements established by Part 2 of Article 14 of Law No. 173-FZ to conduct settlements through accounts in authorized banks are driven by the necessity to ensure proper oversight of currency operations conducted by residents, including preventing uncontrolled capital outflow abroad and mitigating illegal and suspicious financial operations.

The currency legislation requirement to execute settlements during currency operations by resident legal entities through bank accounts in authorized banks, including the procedure for paying salaries to non-residents, does not conflict with the Labor Code of the Russian Federation (the "Labor Code").[8]

Article 131 of the Labor Code establishes that, pursuant to a collective or employment contract and upon the employee's written request, remuneration may be paid in other forms that do not contradict Russian Federation legislation and international treaties of the Russian Federation.

In accordance with Paragraph 5 of Article 11 of the Labor Code, the rules established by labor legislation and other acts containing labor law norms apply on the territory of Russia to labor relations involving foreign citizens, stateless persons, organizations created or founded by foreign citizens, stateless persons, or with their participation, international organizations, and foreign legal entities, unless otherwise provided by the Labor Code, other federal laws, or an international treaty of the Russian Federation.

Because the relations concerning the payment of funds in Russian currency to non-residents, including salary payments, are regulated by the Law No. 173-FZ, the norms of specific legislation must apply to the rules under consideration.

The rules established by labor legislation and other acts containing labor law norms apply to labor relations involving foreign citizens unless a federal law or an international treaty of the Russian Federation provides otherwise. The employer's local normative acts (orders, agreements, contracts) must not contradict the provisions of Law No. 173-FZ.

Consequently, a resident employer is obligated to pay a salary to a non-resident employee exclusively in cashless form, namely through bank accounts opened in authorized banks.

In Select Engagement No. A40-3242/2024, the violation of currency legislation involved the company paying salaries in cash from the cash desk to foreign citizens (non-residents) under employment contracts. The date of committing the administrative offense under Part 1 of Article 15.25 of the CAO RF is the date of the salary payment. The date of salary payment to a foreign citizen is the specific date of the cash disbursement voucher, the specific date of the payroll, or the specific date of another document verifying the payment (receipt) of the salary.

The appellate court noted that the inspectorate substantiates the commission of the administrative offense by the company with FTS of Russia information resources (2-NDFL) and the company's bank statements for 2021 (cash withdrawal for salary distribution). These documents lack a specific salary payment date. Therefore, there is no specific date for the commission of the imputed administrative offense by the company. The imputed offense is not continuing in nature.[9]

In the specified matter, the claim to cancel the penalty resolution was satisfied because it was impossible to establish the exact date the company committed the administrative offense. It is crucial to note that the offense is considered completed at the moment the resident pays cash funds to the non-resident.

The cassation court, agreeing with the reasoning of the lower courts, also indicated that irremovable doubts about the guilt of the person brought to administrative responsibility are interpreted in favor of that person. [10]

In Select Engagement No. A40-289826/2021, the company also executed currency operations using Russian currency as a means of payment, which involved issuing cash funds to foreign citizens.

According to the company, the employment contracts stipulated the transfer of salaries to a bank account; however, the employees categorically refused to open accounts in Russian banking institutions and expressed their intent to receive their salaries in cash. An employer cannot compel a non-resident employee to open a bank account. The Company believes that paying salaries in cash does not constitute an administrative offense under Part 1 of Article 15.25 of the CAO RF because the employer's actions, while constituting a currency operation, are primarily governed by labor legislation provisions that mandate the payment of salaries.[11]

However, the courts established that the Company was obligated to establish contractual terms that would prevent violations of currency legislation. The mere issuance of an order requiring non-resident employees to provide bank account details and supplementary agreements to employment contracts obligating the employee to open an account for salary receipt, without the actual opening of an account by the non-resident individual, does not prove that the Company took all necessary measures to comply with currency legislation requirements. That is, contrary to the requirements of currency legislation, the Company knowingly committed the imputed offense, for which the Code of Administrative Offenses provides liability, a fact the Company could not have ignored. The Company's mere desire to pay salaries to non-residents in cash in violation of currency legislation is not grounds for exemption from liability but merely demonstrates the Company's disregard for its public legal duties. [12]

The Presidium of the Supreme Court of the Russian Federation supported this approach in the Review of Judicial Practice on Certain Issues of Applying Article 15.25 of the Code of Administrative Offenses of the Russian Federation, approved on June 26, 2024 (the "Review of the Supreme Court of the Russian Federation dated June 26, 2024"). According to the Review of the Supreme Court of the Russian Federation dated June 26, 2024, settlements involving a resident employer paying a non-resident employee a salary in cash do not fall within the exhaustive list of currency operations permitted without using bank accounts in authorized banks and are qualified as an illegal currency operation, liability for the commission of which is provided by Part 1 of Article 15.25 of the CAO RF. The Supreme Court of the Russian Federation also confirmed that the respective offense does not constitute a continuing offense: it is considered completed from the moment of payment, and the statute of limitations for liability is calculated from the day of its commission.[13]

The Letter of the FTS of Russia No. ShYu-4-17/4062@ dated April 21, 2025, On the Receipt of Income in Kind by Non-Residents is of particular interest. When navigating regulatory requirements regarding salary payments by residents to non-residents bypassing accounts in authorized banks, tax authorities identify instances where non-residents receive income in kind, including that related to the resident employer organizing meals, accommodation, medical services, securing patents for the labor activities of non-residents, and other services.

The FTS of Russia clarifies that because in-kind payments do not fall under the definition of currency operations established by the Law No. 173-FZ, such payments cannot be qualified as illegal currency operations, and the execution of such payments by a resident does not constitute an administrative offense under Part 1 of Article 15.25 of the CAO RF.

If resident payments of in-kind income to non-residents are part of the remuneration system, their execution is confirmed by:

• The presence of a collective or employment contract providing for the payment of income in kind, such as meal allowances for non-resident employees. The portion of the salary paid in non-monetary form must not exceed the permissible limit of 20 percent of the monthly salary accrued established by Article 131 of the Labor Code. However, a non-resident's receipt of in-kind income exceeding the established limit does not constitute a violation of currency legislation;
• The presence of written applications from employees for the payment of salary in kind. The employee's voluntary expression of intent for the payment of salary in a non-monetary form, confirmed by their written application, can be provided either for a specific payment or for a certain period (e.g., a quarter or a year). The absence of such a written application may serve as grounds for requesting explanations from employees regarding the fact of receiving a salary in kind;
• The inclusion of income type codes applicable to the non-monetary form of labor remuneration (2510, 2520, and 2530) in the Certificates of Income and Tax Amounts of an Individual.

If the specified payments are not part of the remuneration system, the legislative requirements for the documentary formalization of such payments do not apply. In this case, the fact of non-resident employees receiving income in kind can be confirmed by:

• The employer withholding personal income tax from such income, as well as reflecting such income in the Certificates of Income and Tax Amounts of an Individual using code 4800 (other income), which can, for example, be attributed to income related to the resident employer paying for non-resident employees' meals;
• The presence of the resident employer's contract with a third-party organization, for example, for catering services for non-resident employees;
• Other documents confirming the transfer of goods (performance of works, rendering of services) in favor of non-resident employees (certificates of completion, invoices, payment orders), etc.

The absence of any of the above evidence does not in itself indicate that the resident employer made monetary payments to non-resident employees in cash, bypassing accounts in authorized banks. The sufficiency of the specified evidence to confirm the fact of in-kind payments and the existence of grounds for holding a party liable for violating currency legislation are determined by the tax authority official based on their inner conviction, founded on a comprehensive, full, and objective examination of all circumstances of the case in their entirety.

Travel and Entertainment Expenses in Foreign Currency

Under Article 168 of the Labor Code, when sending an employee on a business trip, the employer is obliged to reimburse the employee for: travel expenses; accommodation expenses; additional expenses related to living away from the permanent place of residence (per diem); and other expenses incurred by the employee with the permission or knowledge of the employer.

Resident legal entities have the right to conduct operations with cash foreign currency without using bank accounts when paying and/or reimbursing the expenses of individuals related to such business trips outside the Russian territory, as well as when repaying unspent advances issued in connection with them. This signifies the legality of issuing cash currency to an employee on an accountable basis to cover expenses during a business trip abroad and the subsequent receipt of unused funds from the employee (paragraph ten of Part 2 and clause 10 of Part 3 of Article 14 of Law No. 173-FZ).

Navigating regulatory requirements dictates considering the restrictions on cash foreign currency withdrawals established by the Bank of Russia. For non-resident legal entities, cash withdrawals in US dollars, euros, pounds sterling, and Japanese yen are not conducted until September 9, 2026; there are no restrictions for other currencies. Resident legal entities have the right to withdraw cash US dollars, euros, pounds sterling, and Japanese yen only for travel expenses based on the established standards. This restriction is valid until September 9, 2026.[14]

Article 264 of the Tax Code (Clause 2) categorizes the following as entertainment expenses:

• The taxpayers’ expenses for the official reception and/or servicing of representatives of other organizations participating in negotiations to establish and/or maintain cooperation, as well as participants arriving for meetings of the board of directors (management board) or another governing body of the taxpayer, regardless of the venue of the specified events;
• Expenses for holding an official reception (breakfast, lunch, or other similar event) for the specified persons, as well as official representatives of the taxpayer organization participating in the negotiations, transport provision for delivering these persons to the venue of the entertainment event and/or governing body meeting and back, buffet services during negotiations, and payment for the services of translators not employed by the taxpayer to provide translation during the holding of entertainment events.

Entertainment expenses do not include expenses for organizing entertainment, recreation, prevention, or treatment of diseases.

However, unlike travel expenses, incurring entertainment expenses abroad in cash foreign currency is associated with high compliance risks. The Law No. 173-FZ does not contain a special provision permitting such operations, so issuing currency on an accountable basis for these purposes may be qualified as an illegal currency operation. To mitigate hidden liabilities, the following alternatives are used in practice:

• Paying for entertainment events abroad using a resident's corporate bank card (restaurants, transport, translator services, meeting room rentals) such operations are carried out in cashless form and do not constitute the offense provided by Part 1 of Article 15.25 of the CAO RF;
• Structuring direct cashless settlements by a resident with a non-resident service provider under an independent contract, with the payment processed through an authorized bank;
• Engaging the services of a local event agency or DMC (Destination Management Company) under a contract concluded by the resident, with payment in cashless form.

The accountable issuance of cash foreign currency under entertainment expenses is the most high-risk model and should only be applied when it is impossible to use the specified alternatives, provided there is proper documentary formalization, and the parties understand the potential risk under Part 1 of Article 15.25 of the CAO RF.

Liability for Violation of Currency Legislation

In accordance with Part 1 of Article 15.25 of the CAO RF, the execution of illegal currency operations, i.e., currency operations prohibited by currency legislation or executed in violation of currency legislation, entails the imposition of an administrative fine on citizens, persons engaged in entrepreneurial activities without forming a legal entity, and legal entities in the amount from 20 to 40% of the illegal currency operation amount; on officials – from 20 to 40% of the illegal currency operation amount, but not more than thirty thousand rubles.

The statute of limitations for bringing a party to administrative liability under Part 1 of Article 15.25 of the CAO RF, pursuant to Parts 1 and 1.1 of Article 4.5 of the CAO RF, is 2 years and is calculated from the day of the respective currency operation's commission, not from the moment of its discovery by an authorized official. This is driven by the fact that a currency legislation violation is not a continuing offense: it is considered completed at the moment the resident pays cash funds to the non-resident (the corresponding clarification is contained in the Review of the Supreme Court of the Russian Federation dated June 26, 2024).

When applying Part 1 of Article 15.25 of the CAO RF, it is necessary to consider the constitutional and legal interpretation of this provision. In Resolution No. 34-P dated July 9, 2021, the Constitutional Court of the Russian Federation interpreted the interrelated provisions of Part 1 of Article 15.25 of the CAO RF and Parts 4 and 5 of Article 12 of the Law No. 173-FZ, limiting the application of administrative liability to residents in situations where the corresponding currency operations do not involve the intentional use of accounts in foreign banks to bypass currency legislation requirements. In Resolution No. 14-P dated April 2, 2024, the Constitutional Court of the Russian Federation additionally addressed the constitutional and legal meaning of Part 1 of Article 15.25 of the CAO RF concerning the individualization of punishment and the limits of administrative discretion. The specified legal positions must be taken into account by law enforcement agencies and arbitration courts when qualifying a resident's actions and determining the size of the administrative sanction.

Regarding the situation under review (cash settlements with non-residents outside the permitted exceptions), criminal law qualification under Articles 193 and 193.1 of the Criminal Code of the Russian Federation does not directly apply, because the dispositions of these norms are linked to the evasion of funds repatriation and to transfers using forged documents, rather than the cash form of settlements itself. However, if systematic cash settlements are accompanied by fictitious document flow, the use of forged documents, schemes to withdraw funds abroad, or signs of laundering proceeds from crime (Article 174.1 of the Criminal Code of the Russian Federation), the corresponding actions may receive an independent criminal legal assessment.

It should be noted that the threshold values for large and particularly large scales in these offenses differ and are established separately for each article:

• For Article 193 of the Criminal Code of the Russian Federation – over 100 million rubles (large scale) and over 150 million rubles (particularly large scale) relative to the amount of uncredited (unreturned) funds for a single or multiple currency operations conducted within one year (Note to Article 193 of the Criminal Code of the Russian Federation);
• For Article 193.1 of the Criminal Code of the Russian Federation – over 13.5 million rubles (large scale) and over 65 million rubles (particularly large scale) (Note to Article 193.1 of the Criminal Code of the Russian Federation as amended by Federal Law No. 79-FZ dated April 6, 2024);
• For Articles 174 and 174.1 of the Criminal Code of the Russian Federation – over 1.5 million rubles (large scale) and over 6 million rubles (particularly large scale) (Note to Article 174 of the Criminal Code of the Russian Federation).

Thus, the thresholds of 100 and 150 million rubles apply to the offense under Article 193 of the Criminal Code of the Russian Federation (evasion of duties to repatriate funds), and not to the money laundering offense (Articles 174, 174.1 of the Criminal Code of the Russian Federation), for which significantly lower threshold values are established.

Mitigating Legal and Financial Exposure in Currency Operations

Based on the analysis conducted, the following recommendations can be formulated for economic entities:

• Adhering to the principle of prioritizing cashless settlements. In relations with non-residents, maximum use should be made of settlements through bank accounts. Any operations with cash should only be conducted with absolute certainty of their compliance with the exceptions provided by Article 14 of Law No. 173-FZ;
• Strictly observing the procedure for issuing accountable funds and their return, formalizing all operations with primary documents (cash disbursement voucher, advance report with attached supporting receipts, and other documents);
• Considering the current restrictions of the Central Bank of the Russian Federation on the amount of cash currency withdrawn;
• Ensuring the timely submission of all required documents and information on currency operations to authorized banks, as well as the regular filing of reports on the movement of funds in foreign accounts to tax authorities;
• Conducting proper due diligence (KYC) of the non-resident counterparty, including verifying their affiliation with persons from unfriendly foreign states (determined in accordance with acts of the President of the Russian Federation and the Government of the Russian Federation), as well as checking against applicable sanctions lists;
• Ensuring the registration of foreign trade contracts (agreements) and loan agreements with non-residents at an authorized bank in accordance with the Bank of Russia Instruction No. 181-I dated August 16, 2017, upon reaching the threshold values. Thus, in accordance with Chapter 2.1 of the specified instruction, when a resident deposits cash funds received from a non-resident in foreign trade activities and/or received from a non-resident in granting and returning loans into an account at an authorized bank, the resident must submit the documents specified in Paragraph 4 of the Rules for Executing Cash Settlements Between Residents and Non-Residents, approved by Decree of the Government of the Russian Federation No. 2433 dated December 26, 2022 (documents and information confirming cash settlements, documents confirming the transfer of goods, performance of works, (rendering of services), and information (if available) on goods declarations filed regarding cash imported into Russia), no later than 45 business days after receiving the cash funds;
• Correctly applying, when settling in cash under foreign trade contracts (agreements) and loan agreements, the additional indicators provided by Appendix 2 to Instruction No. 181-I (in particular, "NS" – when a resident deposits cash funds received from a non-resident into its account at an authorized bank; "NK" – when receiving/transferring cash funds without crediting them to an account), which are reflected in the certificate of supporting documents and the bank control statement;
• Avoiding cash settlements whenever possible for entertainment expenses abroad: use corporate bank cards, direct cashless payments to service providers (restaurants, translators, transport), or contracts with local agencies;
• Establishing contractual terms in advance within employment relations with non-resident employees that preclude the cash payment of salaries: facilitating the opening of an account in a Russian bank as the employee's obligation, paying salaries exclusively in a cashless form; formally sending the employee a demand to open an account without actual assistance and control is insufficient for exemption from liability according to established court practice.

The legal regime of cash settlements with non-residents in the Russian Federation is built on two core elements:

First, the general requirement of Part 2 of Article 14 of the Law No. 173-FZ obliges resident legal entities to conduct settlements with non-residents through bank accounts in authorized banks (digital ruble accounts or electronic money transfers); direct settlements in cash are permitted only within the exhaustive list of cases enumerated in the same provision.

Second, a temporary special regime is established for foreign trade activities and loan operations with non-residents (Subparagraph b of Paragraph 4 of the Decree of the President of the Russian Federation No. 529 dated August 8, 2022, and Decree of the Government of the Russian Federation No. 2433 dated December 26, 2022), under which restrictions on the form of settlements do not apply. Outside both regimes, cash settlements qualify as an illegal currency operation and entail administrative liability under Part 1 of Article 15.25 of the CAO RF.

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References

1. Decree of the President of Russia No. 529 dated August 8, 2022, On the Temporary Procedure for Fulfilling Obligations under Bank Account (Deposit) Agreements Denominated in Foreign Currency and Obligations under Bonds Issued by Foreign Organizations.
2. Decree of the President of Russia No. 737 dated October 15, 2022, On Certain Issues of Implementing (Fulfilling) Specific Types of Transactions (Operations).
3. Decision of the Customs Union Commission No. 257 dated May 20, 2010, On the Form of the Goods Declaration and the Procedure for Its Completion.
4. Information of the FTS of Russia, Specifics of Customs Declaration of Cash Imported into the Russian Federation within the Framework of Settlements under Foreign Economic Contracts (Infographics) as of March 21, 2023.
5. Decision of the Customs Union Commission No. 378 dated September 20, 2010, On Classifiers Used to Complete Customs Documents.
6. Order of the FTS of Russia No. 1003 dated August 21, 2007, On Classifiers and Lists of Regulatory and Reference Information Used for Customs Purposes.
7. Decision of the Customs Union Commission No. 378 dated September 20, 2010, On Classifiers Used to Complete Customs Documents.
8. Letter of the FTS of Russia No. KCh-19-9/122@ dated May 24, 2022.
9. Resolution of the Ninth Arbitration Appellate Court dated July 4, 2024, in case No. A40-3242/2024.
10. Resolution of the Arbitration Court of the Moscow District dated September 13, 2024, in case No. A40-3242/2024.
11. Resolution of the Ninth Arbitration Appellate Court dated June 28, 2022, in case No. A40-289826/2021.
12. Review of Judicial Practice on Certain Issues of Applying Article 15.25 of the Code of Administrative Offenses of the Russian Federation, approved by the Presidium of the Supreme Court of the Russian Federation on June 26, 2024.
13. Information of the Bank of Russia dated March 6, 2026, The Bank of Russia Has Retained Restrictions on Cash Foreign Currency Withdrawals for Another Six Months, Until September 9, 2026.
14. Information of the Bank of Russia dated March 6, 2026, The Bank of Russia Has Retained Restrictions on Cash Foreign Currency Withdrawals for Another Six Months, Until September 9, 2026.