Foreign Trade Barter Transactions in Russia: Legal Guide

 

December 6, 2025

BRACE Law Firm ©

 

International trade continues to evolve as participants in foreign economic activity utilize a wide range of trade instruments. Alongside direct exports and imports, intermediary services and new methods for concluding and executing transactions are becoming increasingly common. One effective tool for developing international trade under conditions of trade and economic sanctions is the foreign trade barter transaction, which involves the exchange of goods and/or services without the transfer of funds.

The parties settle deliveries under foreign trade barter transactions at market prices, applying accepted delivery terms.

The use of barter schemes in international trade is gradually expanding. Estimates suggest that the total volume of barter transactions in the global economy exceeded $130 billion in 2020. According to the International Reciprocal Trade Association (IRTA), approximately 65% to 80% of the world’s largest companies conduct commercial operations in some form of barter, and 65% of corporations listed on the New York Stock Exchange (NYSE) participate in barter operations.[1]

The Federal Customs Service of Russia (the "FTS Russia") notes that the number of barter transactions in Russia's foreign trade remains insignificant compared to the total volume of foreign trade contracts.[2]

Foreign Trade Barter Transaction Navigator

Specialists from the Ministry of Economic Development of Russia have developed the Foreign Trade Barter Transaction Navigator (the "Navigator") for Russian participants in foreign economic activity. According to the developers, exchanging goods and services with foreign companies without the need for international transactions will help resolve issues in the sphere of transfers.[3]

The Navigator includes descriptions of the types of foreign trade barter transactions and their advantages, as well as reference information on the regulatory legal acts governing them.

The document provides step-by-step instructions for organizing a foreign trade barter transaction, the procedure for determining the equal value of exchanged goods or services, and standard forms for foreign trade barter contracts.

Concept and Types of Barter Transactions

Federal Law No. 164-FZ dated December 8, 2003, On the Fundamentals of State Regulation of Foreign Trade Activity (the "Law No. 164-FZ" or the "Law on Foreign Trade Activity") defines a foreign trade barter transaction as a transaction performed in the course of foreign trade activity that provides for the exchange of goods, services, works, or intellectual property, including a transaction that, along with such exchange, provides for the use of monetary and (or) other payment instruments during its execution.

Since barter transactions do not involve monetary or other payment instruments, the parties evaluate the equivalence of the goods to be exchanged. This evaluation serves the following purposes:

• To ensure the equivalence of the exchange;
• To determine the insurance amount.

In terms of structure and content, a barter agreement represents a dual purchase and sale contract, in which each party acts simultaneously as both seller and buyer.

A distinction is made between a closed barter transaction, which is an exchange of goods or services between two companies.

Such a barter transaction may be carried out:

• By means of a counter-purchase, which does not involve a direct exchange of goods and services. In this case, one company receives goods from another company and sells them. The proceeds are then used to purchase goods in which the other company is interested;
• By means of a counter-delivery. In this case, an exchange of goods of equal value occurs. Each party provides the goods or services needed by the other party.[4]

An open barter transaction involves more than two companies exchanging goods in established proportions. In open barter transactions, Company A may provide its goods or services to Company B, while Company B may offer its goods or services to Company C. Thus, all three companies receive what they need without using money.[5]

Additionally, tolling is identified as a type of barter transaction, which we will examine in a separate chapter.

The advantages of foreign trade barter transactions include:

• Market expansion – Barter transactions allow companies to expand their presence in global markets, especially when traditional payment methods may be restricted or difficult;
• Resource optimization – Barter transactions allow companies to use their resources effectively. For example, if a company has excess production capacity or unused resources, it can offer them to another company in exchange for necessary goods or services. This helps avoid equipment downtime or inefficient resource use;
• Diversity of payment methods – Barter transactions offer various payment methods different from traditional monetary funds. Instead of financial transactions, companies can use their products or services as a medium of exchange. This is particularly useful in conditions of exchange rate volatility or restrictions on international payments;
• Establishment of long-term partnerships – Barter transactions facilitate the establishment of long-term partnerships between companies. Through the barter process, companies have the opportunity to understand each other better, test their cooperation, and strengthen mutual trust. This can lead to the development of long-term partnerships and repeat transactions in the future;
• Increased competitiveness – Barter transactions can help companies increase their competitiveness in the market. They can offer clients additional services or goods obtained through barter, making their offer more attractive. Also, thanks to barter, companies can reduce their costs for acquiring necessary goods or services, allowing them to offer more competitive prices.[6]

Regulation of Barter Transactions

In accordance with Clause 2 of Article 567 of the Civil Code, the relevant rules on purchase and sale apply to a contract of exchange (barter) unless this contradicts the rules of Chapter 30 of the Civil Code or the essence of the exchange. Unless otherwise follows from the exchange contract, the goods to be exchanged are presumed to be of equal value, and the costs of their transfer and acceptance are borne in each case by the party performing the corresponding obligations.

When exchanged goods are recognized as unequal in value under the exchange contract, the party obligated to transfer the goods with a lower price must pay the difference in price immediately before or after performing its obligation to transfer the goods, unless a different payment procedure is provided for by the contract.

The execution of foreign trade barter transactions by residents of the Russian Federation is provided for by the Law on Foreign Trade Activity.

In accordance with Clause 1 of Article 44 of Law No. 164-FZ, foreign trade in goods, services, and intellectual property using foreign trade barter transactions may be carried out only on the condition that such transactions provide for the exchange of goods, services, works, or intellectual property of equal value, as well as the obligation of the respective party to pay the difference in their value if the transaction provides for the exchange of unequal goods, services, works, or intellectual property.

Foreign trade in goods, services, and intellectual property using foreign trade barter transactions may be carried out across the entire Unified Commodity Nomenclature of Foreign Economic Activity of the Eurasian Economic Union, which consists of 97 groups.

If currency operations are carried out within the framework of foreign trade barter transactions between a resident and a non-resident—specifically in the case of a barter transaction providing for the exchange of goods, services, works, or intellectual property of unequal value with payment of the price difference—the resident is subject to the requirements of the currency legislation of the Russian Federation, including the provisions of Bank of Russia Instruction No. 181-I dated August 16, 2017. Such a barter contract involving partial monetary settlements must be registered with an authorized bank if the amount of monetary obligations fixed in the barter agreement is equal to or exceeds the equivalent of 3 million rubles for imports and 10 million rubles for exports.

Accounting and Control of Barter Transactions in Foreign Trade

Government Decree of the Russian Federation No. 1207 dated November 22, 2012, approved the Rules for the Control and Accounting of Foreign Trade Barter Transactions (the "Rules").

The Rules establish the procedure for the control and accounting of transactions performed in the course of foreign trade activity that involve the exchange of goods, services, works, and intellectual property, the terms of which provide for the export of goods from the Russian Federation, including those resulting from services rendered or works performed, as well as those involving the transfer of exclusive rights to intellectual property objects.

Control and accounting of such transactions are assigned to the Federal Customs Service of Russia. According to Order No. 92-r dated March 26, 2013, the authorized customs authority accounts for foreign trade barter transactions by independently generating a foreign trade barter transaction accounting document based on information including data specified in goods declarations.

The Rules provide that the FTS Russia, within 3 business days from the date of release of the 1st batch of goods exported under a foreign trade barter transaction in accordance with the declared customs procedure, shall send the corresponding goods declaration in electronic form via telecommunication channels to the authorized customs authority.

Within 1 business day from the day following the day of receipt of the electronic goods declaration from the FTS Russia, the authorized customs authority requests the following documents from Russian legal entities and individuals, as provided for by Clause 5 of the Rules:

• The state registration document of the individual as an individual entrepreneur or the state registration document of the legal entity;
• The certificate of registration with the tax authority;
• Documents serving as the basis for performing foreign trade barter transactions (including contracts (agreements, contracts) and supplements and (or) amendments thereto, powers of attorney, extracts from the minutes of a general meeting or other management body of the legal entity), as well as documents containing information on the results of tenders (if held), and acts of state bodies;
• Documents confirming the fulfillment of obligations under the foreign trade barter transaction (transfer or import of goods, performance of works, rendering of services, transfer of information and results of intellectual activity, including exclusive rights to them).

In this case, documents confirming the fulfillment of obligations under a foreign trade barter transaction are requested only regarding obligations that, according to the terms of the transaction, should have been fulfilled by the date the request was sent.

Requested documents are submitted by Russian legal entities and individuals to the authorized customs authority in the form of originals or certified copies. Upon completion of the review of the requested documents, the authorized customs authority must return the originals of the submitted documents to the Russian legal entities and individuals upon their request.

In the event of changes to the information specified in the submitted documents, Russian legal entities and individuals must notify the corresponding authorized customs authority and submit the necessary documents confirming the changes no later than 10 business days from the day following the day of execution of the documents confirming the changes. The date of execution of the document confirming the changes is considered the latest date of its signing, its effective date, or its preparation date (if any).

In the event of failure to submit the requested documents in the established manner, or failure to import goods of equal value into the Russian Federation, perform equal works by foreign persons, or transfer equal exclusive rights to intellectual property objects or grant rights to use intellectual property objects within the established timeframes, Russian legal entities and individuals shall be liable in accordance with the legislation of the Russian Federation.

Article 14.50 of the Code of Administrative Offenses provides for liability in the form of an administrative fine on officials in the amount of 10,000 to 20,000 rubles; on legal entities, the fine ranges from 1/2 to the full value of the goods that were the subjects of the administrative offense.

Under Part 1 of Article 4.5 of the CAO RF, a decree in an administrative offense case for which liability is provided under Article 14.50 of the CAO RF cannot be issued after 60 calendar days (or 90 calendar days for cases considered by a judge) from the date the administrative offense was committed. The expiration of the statute of limitations may serve as grounds for release from administrative liability.[7]

If currency operations are carried out within foreign trade barter transactions between a resident and a non-resident, the resident is also subject to the requirements of the currency legislation of the Russian Federation, including the requirement to register the agreement (contract) with an authorized bank in accordance with Bank of Russia Instruction No. 181-I dated August 16, 2017 (if the export amount exceeds 10 million rubles and/or the import amount exceeds 3 million rubles).

When the amount of the concluded agreement (contract) falls under this requirement, the customs authority reflects the information on its registration with an authorized bank in Section 6 of the foreign trade barter transaction accounting document.

Clause 5 of Article 45 of Law No. 164-FZ provides that during the execution of foreign trade barter transactions, goods received by Russian persons under such transactions outside the territory of the Russian Federation may be sold by Russian persons without importing these goods into the Russian Federation, provided that:

• The actual receipt of the goods is confirmed by documents provided for by the terms of the foreign trade barter transaction;
• Russian persons, no later than one year from the date of actual receipt of the goods, must ensure their sale and, within the period provided by the terms of the sales transaction, ensure the credit of all funds received from their sale, or the receipt of payment instruments, to their accounts in authorized banks.

In accordance with Clause 22 of the Rules, the FTS Russia ensures the generation of consolidated statistical information on the results of the execution of foreign trade barter transactions based on the accounting documents received from the authorized customs authorities.

Determining Equal Value of Exchanged Goods or Services

When determining the value of specific types of goods exported from the territory of Russia in foreign trade barter transactions, it is recommended to be guided by the prices of Russian commodity exchanges.[8]

To determine the equal value of exchanged goods or services, it is necessary to select one item as the base product, relative to which the value of other goods will be determined. This choice may be based on its significance or prior agreements between the parties. The market value of the base product is assessed based on information about market prices to determine its actual value.[9]

Each other product must be compared with the base product to determine their relative value coefficient. For this purpose, the following formula may be used: Relative Coefficient = Price of other product / Price of base product.

For example, if the base product is priced at $100 and another product is priced at $75, the relative coefficient will be 0.75.

Next, the relative coefficients are applied to the remaining goods. Multiply the relative coefficients of each product by the market value of the base product to determine their equivalent value in accordance with the base product using the formula: Equivalent Value = Relative Coefficient * Price of base product.

For example, if the relative coefficient is 0.75 and the price of the base product is $100, the equivalent value of the other product will be $75.[10]

This process should be applied to all goods participating in the barter transaction, allowing the determination of the equivalent value of each product relative to the base product.

Regarding barter operations, current customs legislation contains no prohibition on applying the primary method for determining the customs value of goods, i.e., determining the customs value by the transaction price method.

Importantly, a risk exists that participants in a barter transaction may undervalue the exchanged goods to reduce the customs value and the amount of customs payments. This increases the risks of facing a customs value adjustment and an administrative fine if customs authorities identify signs of undervaluance.

In one case considered by a court, it was stated that if the customs value of goods determined by the applicant turned out to be lower than the price information of the customs office, this in itself does not entail an adjustment of the customs value, since it is not named in the law as a ground for adjustment.[11]

Decision of the Collegium of the Eurasian Economic Commission No. 283 dated December 20, 2012, On the Application of the Method for Determining the Customs Value of Goods based on the Transaction Price with Imported Goods (Method 1), does not exclude the possibility of using the transaction price method for imported goods when using barter settlements, since such settlements indicate the consideration-based nature of the transaction and the transfer of ownership of the goods to another person.[12]

Taxation and Accounting for Foreign Trade Barter Transactions

The sale of goods, works, and services on the territory of the Russian Federation under a barter transaction (barter operation) is subject to VAT in accordance with Article 166 of the Tax Code of the Russian Federation (the "Tax Code").

The sale of goods, works, and services outside the territory of the Russian Federation, when the goods, services, or works are classified as categories exempt from VAT, is not subject to VAT (Articles 147–149 of the Tax Code). Revenue is recognized in accounting in an amount calculated in monetary terms, equal to the magnitude of the receipt of funds and other property and (or) the magnitude of accounts receivable (Clause 6 of Accounting Regulation "Income of the Organization" PBU 9/99[13] (the "PBU 9/99")).

The magnitude of the receipt/accounts receivable under barter transactions is recognized in accounting at the value of the goods (values) to be received by the organization (Clause 6.3 of PBU 9/99). The value is established based on the price at which the organization usually determines the value of similar goods (values) in comparable circumstances.

In the case of a barter transaction involving the exchange of goods, services, works, or intellectual property of unequal value with payment of the price difference, property receipts are recognized in accounting at the value of the goods according to Clause 6.3 of PBU 9/99, while monetary receipts related to the payment of the price difference are recognized based on the price established by the contract between the organization and the buyer (customer) or the user of the organization's assets (Clause 6.1 of PBU 9/99).

The following information regarding revenue received from a barter transaction must be disclosed (Clause 19 of PBU 9/99):

• The total number of organizations with which such contracts are performed, specifying the organizations that account for the bulk of such revenue;
• The share of revenue received under such contracts with associated organizations;
• The method of determining the value of products (goods) transferred by the organization.

In accordance with Article 40 of the Tax Code, regarding barter operations, tax authorities, when monitoring the completeness of tax calculation, have the right to verify the correctness of price application. If the prices of goods, works, or services applied by the parties to the transaction deviate upward or downward by more than 20 percent from the market price of identical (homogeneous) goods (works or services), the tax authority has the right to issue a reasoned decision on the additional assessment of tax, calculated as if the results of this transaction had been valued based on the application of market prices for the corresponding goods, works, or services.

International Tolling Transactions

One variation of a barter transaction is the tolling transaction. Its essence is that a foreign company imports raw materials into Russia, and a domestic processor produces finished products from these raw materials. After processing, the finished goods are exported from Russia back to the foreign counterparty. This scheme is called external tolling. There is also internal tolling, where a foreign counterparty purchases raw materials in Russia and transfers them to a domestic processor, after which it takes back the finished product. By its nature, tolling is the processing of raw materials. Tolling schemes are not taxed in the processing country.[14]

A tolling transaction is a type of construction (work) contract and is regulated by Chapter 37 "Contracting" of the Civil Code of the Russian Federation. The parties to the contract are the customer (owner of the raw materials transferred for processing) and the processor (contractor), and the raw materials transferred for such processing are called customer-furnished materials.

The main feature of tolling operations is that the customer retains ownership of the materials transferred for processing, finalization, or treatment and the finished products or semi-finished products, while the contractor only provides the services necessary for the customer (processes the raw materials and transfers the finished items to the customer).

According to Article 702 of the Civil Code, under a contract of work, one party (the contractor) undertakes to perform certain work at the request of the other party (the customer), and the customer undertakes to accept the results of the performed work and pay for them.

In accordance with Article 713 of the Civil Code, the processor must use the materials provided by the customer economically and for their intended purpose, and after completion of the work, provide the customer with a report on the consumption of materials and return the remaining part of the unused material. The report must be drawn up in physical units and contain data on the quantity and assortment of the accepted materials, the quantity of unused raw materials, and the resulting waste (recoverable and non-recoverable).

After processing the raw materials and releasing the finished products, the contractor draws up an acceptance certificate for the performed processing work, which records the amount of production costs in rubles for each type of product. In accordance with Article 720 of the Civil Code, the customer, with the participation of the processor, performs an inspection and acceptance of the performed work within the timeframes specified in the contract. If inconsistencies with the terms of the contract that have worsened the expected result or other processing defects are identified, the customer must immediately notify the processor of them.

A tolling transaction is similar in structure to an international purchase and sale contract; however, it has certain features, particularly in settlements for mutual claims. If the supplier of raw materials violates obligations regarding delivery dates and quality, the contract may provide for a requirement for additional deliveries of raw materials, the value of which will cover the processor's losses. In the case of similar violations by the processor, the latter must compensate the supplier's losses through additional deliveries of finished products or in monetary form.[15]

There are several differences between a tolling contract and an international purchase and sale contract:

• Some clauses of the contract are recorded twice, since a tolling transaction involves an exchange of two goods with different characteristics, each of which is simultaneously a product and a means of payment;
• Since the use of tolling generally excludes a financial settlement mechanism, the terms of the transaction must provide for guarantees for the parties against losses that could arise due to non-performance or improper performance by one of the parties of its obligations under the contract.

In terms of legal formalization in relations with foreign counterparties, a tolling contract can be divided into tolling operations on a contract basis:

• Work – Money (performance of work with payment in monetary form). Under this scheme, the contractor undertakes to perform work using the customer's raw materials by creating a new item, and the customer, in turn, undertakes to provide the raw materials and pay for the contractor's work in monetary form;
• Work – Finished Products (performance of work in commodity form). In this scheme, the contractor undertakes to perform work using the customer's raw materials, and the customer undertakes to provide the raw materials and pay for the processor's services by transferring not a monetary equivalent, but a certain quantity of the products manufactured by the processor (resulting from the processing);
• Work – Raw Materials (performance of work with payment in commodity form). This type of transaction assumes that instead of products, the contractor receives an agreed-upon part of the raw materials transferred for processing as payment for its services, rather than the products obtained as a result of processing.[16]

Raw materials imported from abroad are placed under the customs procedure for processing (Chapter 24 of the Labor Code of the EAEU). Under the processing procedure, one can directly process products, treat them, replace components and spare parts, repair, assemble, and disassemble values received from a foreign partner. In such a case, they are exempt from duties. Note that a list of goods has been defined to which the customs procedure for processing on the customs territory does not apply.[17]

Goods placed under the customs procedure for processing on the customs territory retain the status of foreign goods, and goods obtained (formed) as a result of processing operations (processing products, waste, and residues) acquire the status of foreign goods.

Within the framework of customs control, the following methods may be used to identify foreign goods in their processing products:

• Affixing seals, stamps, and applying digital and other markings to foreign goods by the declarant, the person performing processing operations, or officials of customs authorities;
• Detailed description, photography, and scaled imaging of foreign goods;
• Comparison of previously selected samples and (or) specimens of foreign goods and their processing products;
• Use of existing markings on goods, including serial numbers;
• Other methods that may be applied based on the nature of the goods and the processing operations performed, including by examining submitted documents containing detailed information on the use of foreign goods in the technological process of processing operations, as well as on the production technology of processing products, or by conducting customs control during processing operations.

We note that the period for processing goods cannot exceed 3 years or a longer period determined by the Commission for specific categories of goods. Thus, the period for processing goods that are products of civil aviation and shipbuilding (aircraft, watercraft), military products, and engineering products, as well as goods intended for their manufacture, repair, and (or) modernization, cannot exceed 5 years.[18]

The customs procedure for processing ends with the placement of goods obtained (formed) as a result of processing operations (processing products, waste, and (or) residues) under the customs procedure for re-export. Processing products may be placed under customs procedures in one or several batches.

It should be borne in mind that upon expiration of the established period for the customs procedure for processing on the customs territory, this customs procedure terminates, and the period for this customs procedure cannot be extended. Accordingly, according to Clause 6 of Article 129 of the Labor Code of the EAEU, goods placed under the customs procedure for processing on the customs territory, the action of which has been terminated, as well as goods obtained (formed) or manufactured (obtained) within the framework of such a customs procedure, are subject to placement for temporary storage in accordance with Chapter 16 of the Labor Code of the EAEU.[19]

When exporting from Russia, raw materials for processing are placed under the procedure for processing outside the customs territory (Chapter 25 of the Labor Code of the EAEU). The customs procedure for processing outside the customs territory is a customs procedure applied to EAEU goods, according to which such goods are exported from the EAEU customs territory for the purpose of obtaining processing products as a result of processing operations intended for subsequent import into the EAEU customs territory, without paying export customs duties on such goods. The period for processing goods outside the customs territory of the Union cannot exceed 2 years.

Goods placed under the customs procedure for processing outside the customs territory and actually exported from the customs territory lose the status of EAEU goods. Regarding this procedure, a list of goods to which the customs procedure for processing outside the customs territory does not apply is also defined.[20]

Thus, Russian organizations participating in foreign economic activity can currently, under the conditions of sanction restrictions, actively use foreign trade barter transactions with foreign companies without the need for international transactions.

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References

[1] Savinov Yu.A. Barter Agreements in International Trade. Russian Foreign Economic Bulletin Journal, No. 8, 2022.

[2] RIA Novosti.

The number of barter transactions in RF foreign trade is insignificant – comment by Sergey Shklyayev, Head of the UTOVEK FTS Russia. Federal Customs Service website.

[3] Exporters are encouraged to switch to barter. March 1, 2024. Economics and Life website.

[4] Foreign Trade Barter Transaction Navigator. Ministry of Economic Development of Russia website.

[5] Ibid.

[6] Ibid.

[7] Resolution of the Thirteenth Arbitration Court of Appeal dated July 28, 2014, in Case No. A26-60/2014.

[8] Foreign Trade Barter Transaction Navigator. Ministry of Economic Development of Russia website.

[9] Ibid.

[10] Ibid.

[11] Resolution of the FAS of the Volga District dated February 6, 2014, in Case No. A06-2980/2013.

[12] Ibid.

[13] Order of the Ministry of Finance of Russia No. 32n dated May 6, 1999.

[14] Types of Foreign Trade Operations. Kontur.Extern website.

[15] Shirokov D.S. Tolling Contract. September 14, 2022. Company Lawyer website.

[16] Ibid.

[17] Decision of the Collegium of the Eurasian Economic Commission No. 203 dated December 11, 2018, On Certain Issues of the Application of Customs Procedures.

[18] Ibid.

[19] Expert Consultation, 2019. Material prepared for the ConsultantPlus system.

[20] Decision of the Collegium of the Eurasian Economic Commission No. 203 dated December 11, 2018, On Certain Issues of the Application of Customs Procedures.