10 May 2024

Russian Currency Control: Current Rules & Compliance

May 10, 2024

BRACE Law Firm ©

Accounting for currency transactions has become one of the most critical components of state economic activity. First and foremost, currency transactions and their accurate reporting play a key role in generating reliable information on the state's foreign trade activities, which, in turn, influences economic decision-making at various levels. In the current environment of sanction restrictions, businesses face numerous challenges regarding currency transactions.

The government bodies responsible for currency regulation monitor the circulation and use of foreign currency within the country. This includes the control and regulation of currency operations, such as the purchase, sale, and movement of foreign currency, as well as control over the cross-border movement of currency.

Concept of Currency Control

Currency control applies across various sectors of the economy where currency operations are conducted. However, it holds a particularly significant place in the foreign economic sphere and its primary component — foreign trade — which is impossible without currency control. This provides the basis for distinguishing between broad and narrow meanings of currency control.

In the broad sense, currency control refers to state activities directed at the aggregate branches and spheres of the national economy whose functioning involves currency operations and the application of currency restrictions. In the narrow sense, currency control is limited to its implementation regarding foreign trade. The objective of currency control is to ensure compliance with currency legislation when conducting currency operations. [1]

Currency control in the Russian Federation is carried out based on Federal Law No. 173-FZ dated December 10, 2003, On Currency Regulation and Currency Control (the "Federal Law No. 173-FZ" or the "Currency Control Law"). This law establishes the foundations of legal regulation and the complex of measures aimed at the uninterrupted functioning of state currency regulation authorities.

Execution of Currency Operations

The currency operations of a resident organization include the following actions (Subparagraph 9, Paragraph 1, Article 1 of Federal Law No. 173-FZ):

acquisition of foreign currency and external securities from a resident or their alienation in favor of a resident on legal grounds, as well as their use for payment;
acquisition from a non-resident or alienation in favor of a non-resident of Russian and foreign currency, external and internal securities, digital rights, as well as their use for payment;
import into the RF and export from the RF of Russian and foreign currency, internal and external securities;
transfer of Russian and foreign currency, internal and external securities from a resident organization's account in Russia to its own account abroad and vice-versa;
transfer of Russian currency by a resident to the account of another resident from Russia abroad and vice-versa;
transfer of Russian currency from account to account, whether to one's own or to another resident's account, outside of Russia.

Currency operations between residents are prohibited. The list of exceptions to this rule is contained in Article 9 of Federal Law No. 173-FZ. These include, for example, operations under freight forwarding, transportation, and chartering agreements when the forwarder, carrier, or charterer provides services related to the transport of cargo exported from or imported into the Russian Federation, the transit of cargo through the territory of the Russian Federation, as well as under insurance contracts for said cargo.

Currency operations between resident organizations and non-residents are conducted without restrictions. Regarding digital rights, they may be used as a means of payment for transferred goods (performed works, rendered services), information, and results of intellectual activity, including exclusive rights thereto, only under foreign trade agreements (contracts) that provide for the transfer of goods, performance of works, rendering of services, or transfer of information and intellectual property (Article 6 of Federal Law No. 173-FZ).

Russian organizations may settle currency operations (Article 14 of the Currency Control Law):

through accounts in authorized banks;
through accounts in banks and other financial market organizations located outside the territory of the RF;
via electronic money transfers;
in cash foreign currency and rubles in established cases.

To conduct currency operations, resident organizations must possess (Article 23 of Federal Law No. 173-FZ):

documents serving as the basis for the currency operation (e.g., agreements, arrangements, contracts);
documents confirming the transfer of goods (performance of works, rendering of services);
documents confirming facts of spoilage, damage, or loss of goods, their natural loss during transportation, as well as evidence of the seller's (supplier's) acceptance and consideration of a claim filed in connection with a violation of terms regarding quantity and/or quality of delivered goods, and documents on the parties' settlement of the payment issue taking into account the price reduction resulting from such circumstances;
invoices;
bills of exchange (if any);
other documents.

Accounting for a Currency Contract and Submission of Transaction Documents

To conduct a currency operation, documents related to the transactions must be submitted to an authorized bank. This may include not only the underlying document (e.g., a foreign trade contract) but also registration, customs, and other documents. If, for instance, settlements are made using a transferable letter of credit, agreements between residents related to the conclusion and execution of foreign trade contracts, as well as documents defining the terms of the letter of credit, must be submitted (Paragraph 4, Article 23 of Federal Law No. 173-FZ).

The procedure for submitting supporting documents is established in Instruction No. 181-I dated August 16, 2017, On the Procedure for the Submission of Supporting Documents and Information by Residents and Non-residents to Authorized Banks during Currency Operations, on Uniform Forms of Accounting and Reporting for Currency Operations, and the Procedure and Deadlines for their Submission (the "Instruction No. 181-I").

Instruction No. 181-I stipulates that for a contract to be registered with an authorized bank, the amount of obligations must be equal to or exceed the equivalent of:

3 million rubles for import contracts;
10 million rubles for export contracts.

For import contracts ranging from 600,000 rubles to 3,000,000 rubles, and for export contracts from 600,000 rubles to 10,000,000 rubles, registration with the bank is not required. In this case, it is sufficient to send the bank any document allowing the bank to process the payment. This could be a contract, an addendum to the contract, an invoice, an act, or other transaction documents.

Foreign trade contract registration is discussed in further detail in the article Contract Accounting in International Trade for Currency Control Purposes dated March 26, 2024. [2]

Pursuant to Article 19 of Federal Law No. 173-FZ, a resident organization is obligated to ensure:

receipt of payment in foreign currency from non-residents for goods transferred to them (works performed, services rendered, information and intellectual property results transferred). This requirement does not apply to a range of goods or to the foreign trade contracts of certain residents;
return (repatriation) of foreign currency paid to non-residents for goods not imported into the RF (works not performed, services not rendered, information and intellectual property results not transferred);
return of loans issued to non-residents.

Counter-sanction Restrictions on Currency Operations

To ensure Russia's economic sovereignty and economic security, the President of Russia is entitled to establish a special procedure for currency regulation and currency control, including regarding the execution of currency operations by residents and non-residents, the repatriation of foreign currency and rubles by residents, and the opening and maintenance of accounts (deposits) in Russia by residents and non-residents. Under Federal Law No. 127-FZ dated June 4, 2018, On Measures of Influence (Counteraction) Against Unfriendly Actions of the United States of America and Other Foreign States, the President of Russia may delegate these powers to the Russian Government and/or the Bank of Russia.

To ensure economic sovereignty and security, measures such as prohibitions and/or restrictions on currency operations or requirements to obtain special permits for such operations may be introduced.

The following transactions (operations) are conducted under the special procedure:

transactions (operations) of residents with persons from unfriendly foreign states.[3] These include transactions (operations) for providing such persons with loans and credits in rubles (if not otherwise prohibited by law), as well as transactions (operations) with said persons that result in the emergence of ownership rights to securities and real estate;
transactions (operations) of residents with foreign persons who are not from unfriendly states if the subject of such transactions (operations) involves securities and real estate acquired after February 22, 2022, by said foreign persons from persons of unfriendly states;
currency operations related to the provision of foreign currency by residents to non-residents under loan agreements;
the crediting of foreign currency by residents to their accounts (deposits) opened in banks and other financial market organizations located outside Russia if it involves the transfer of funds in the form of dividends (profit distribution) from Russian JSCs, LLCs, business partnerships, and production cooperatives;
money transfers without opening a bank account using electronic means of payment provided by foreign payment service providers if the transfers involve dividends (profit distribution) from Russian JSCs, LLCs, business partnerships, and production cooperatives;
transactions (operations) performed by certain persons that result in the establishment, change, or termination of ownership, use, and/or disposal rights for more than 1% of the shares or stakes constituting the authorized capital of a Russian credit organization, insurance organization, non-state pension fund, microfinance company, or management company of an investment fund, or more than 1% of the votes associated with such shares or stakes, as well as stakes in the authorized capitals of LLCs (excluding credit and non-credit financial organizations). The same applies to transactions resulting in the establishment, change, or termination of other rights allowing the determination of management terms or business activity terms for such companies;
operations provided for in Paragraph 1 of Decree of the President of Russia No. 126 dated March 18, 2022, the amount of which exceeds the limit determined by the Board of Directors of the Bank of Russia;
transfers to the accounts of rightholders (including in foreign banks) of funds transferred to a Type O special account.[4]

The special procedure does not apply:

to the replenishment by Russian credit organizations of their correspondent accounts opened in foreign banks, as well as to settlements based on the results of clearing operations conducted using national payment instruments carried out by Russian credit organizations using correspondent accounts opened in foreign banks or opened by foreign banks in Russian credit organizations;
to a range of transactions (operations) involving persons from unfriendly foreign states if such transactions (operations) are not accompanied by a transfer of funds (transfer of rights to funds). For example, upon the termination of a trust management agreement, the operation of transferring securities from the trustee's securities account to the founder's account does not involve a transfer of ownership rights. In such cases, restrictions established by Decree of the President of the RF No. 95 dated March 5, 2022, On the Temporary Procedure for Fulfilling Obligations to Certain Foreign Creditors, must be observed;
to a range of transactions provided for in Paragraph 5 of Decree of the President of the RF No. 254 dated May 4, 2022, On the Temporary Procedure for Fulfilling Financial Obligations in the Sphere of Corporate Relations to Certain Foreign Creditors. For example, transactions (operations) resulting in the ownership of real estate acquired by citizens of unfriendly foreign states.[5]

The aforementioned special transactions may be performed with the permission of the Government Commission on Monitoring Foreign Investment in the RF (the "Government Commission"). Permits may contain conditions for the execution of transactions (operations).[6] A resident, a person from an unfriendly foreign state, a person associated with an unfriendly foreign state, or a foreign person not associated with such a state submits an application for a permit to the Ministry of Finance of Russia. If a permit is requested for the transfer of funds from a Type O special account to a rightholder's account, the application must also be submitted to the federal executive body responsible for the sector or industry in which payments related to the exercise and protection of exclusive rights belonging to the rightholder were made. Certain documents and information must be attached to the application. The document package may be submitted in hard copy or electronic form, including electronic documents signed with an enhanced qualified electronic signature. The Ministry of Finance of Russia has provided a recommended form for the permit application. The decision of the Government Commission (or its refusal) is formalized by a subcommission decision. Subcommission decisions are made unanimously and formalized by the Ministry of Finance. Permits may be issued for a specific term to an indefinite circle of persons.[7]

Currency Control Authorities and Agents

The currency control authorities are (Paragraph 2, Article 22 of Federal Law No. 173-FZ and Subparagraph "b", Paragraph 2 of Decree of the President of Russia No. 41 dated February 2, 2016):

the Bank of Russia;
the Federal Customs Service (the "FCS");
the Federal Tax Service (the "FTS").

The FCS is tasked with monitoring residents' compliance with currency legislation requirements during currency operations related to the movement of goods across the customs border of the Eurasian Economic Union, and the import into and export from the Russian Federation of goods. This also includes monitoring compliance with repatriation requirements and the submission of supporting documents.

The FTS is tasked with monitoring compliance with currency legislation during currency operations (excluding operations monitored by the FCS), compliance with license and permit conditions, and monitoring the obligation of residents (other than authorized banks) to notify the tax authorities at their place of registration regarding the opening (closing or change of details) of accounts (deposits) in banks located outside the Russian Federation and to submit reports on the movement of funds in such accounts (deposits).

Currency control agents include (Paragraph 3, Article 22 of Federal Law No. 173-FZ):

authorized banks;
professional securities market participants that are not authorized banks;
the State Development Corporation VEB.RF.

Currency control authorities and agents are entitled to (Paragraph 1, Article 23 of Federal Law No. 173-FZ):

conduct audits of residents' and non-residents' compliance with currency legislation. Authorities, agents, and their officials may conduct audits based on submitted documents that directly relate to the currency operation being conducted. The procedure for submitting supporting documents and information is established in relevant regulations.[8] The currency control procedure is discussed below;
conduct audits of the completeness and accuracy of accounting and reporting for currency operations by residents and non-residents;
request and receive documents and information related to currency operations and the opening and maintenance of accounts.

The Bank of Russia is also entitled to form a list of residents who are obligated to provide the following information (Paragraph 6, Article 22; Paragraph 5, Article 24 of Federal Law No. 173-FZ):

on the receipt by such residents and/or their subsidiary business companies from non-residents of funds and/or digital rights, and on other performance or termination of non-resident obligations under contracts that provide for the transfer of goods, performance of works, rendering of services, or transfer of information and intellectual property to non-residents, to which these residents and/or companies are a party and which are registered in accordance with Instruction No. 181-I;
on assets and obligations denominated in foreign currency and/or subject to payment by such residents and/or companies in rubles and/or foreign currency in favor of non-residents, and on the latter's obligations to them, including obligations to transfer digital rights, for an amount exceeding $1 billion;
on digital currencies and digital rights held by said residents and/or their subsidiaries and/or issued (received) by them, as well as on their obligations to transfer digital rights in favor of non-residents.

The Bank of Russia establishes the criteria, the procedure for notifying residents of their inclusion in said list, and the composition, form, deadlines, and procedure for preparing and submitting information.[9]

The Bank of Russia is also entitled to establish:

in coordination with the federal executive body authorized by the Russian Government, prohibitions on certain types of currency operations related to the acquisition and alienation of digital rights, and the conditions for their execution (Part 4.2, Article 5 of the Currency Control Law);
specifics for the submission of supporting documents by residents and the exchange of information and data during currency operations involving digital rights (Part 18, Article 23 of the Currency Control Law).

Currency control authorities additionally have the right to:

issue prescriptions to remedy identified violations of currency legislation and acts of currency regulation authorities (Subparagraph 1, Paragraph 2, Article 23 of Federal Law No. 173-FZ);
apply enforcement measures established by administrative and criminal legislation for violations of currency legislation and acts of currency regulation authorities (Subparagraph 2, Paragraph 2, Article 23 of Federal Law No. 173-FZ).

Currency control agents additionally have the right to:

request and receive from residents and non-residents documents (copies of documents) related to currency operations and the opening and maintenance of accounts (Paragraph 4, Article 23 of Federal Law No. 173-FZ);
refuse to conduct a currency operation if the required documents are not submitted or if false information is provided (Paragraph 4, Clause 5, Article 23 of Federal Law No. 173-FZ).

Interaction between currency control authorities in the Russian Federation is vital for ensuring effective control and regulation. The following aspects highlight the importance of such interaction:

Financial Stability: Interaction helps ensure the country's financial stability. Control and regulation affect the stability of the currency market, prevent significant fluctuations in the national currency's exchange rate, and minimize risks to the financial system.
Combating Illegal Operations: Interaction helps prevent and suppress illegal operations, money laundering, and terrorist financing. Information exchange and coordination allow for the detection of suspicious operations and the identification of illegal schemes.
Protection of State Interests: Authorities work together to protect state interests by developing and implementing rules aimed at economic security and the protection of the financial system.
Efficient Resource Use: Interaction allows for the efficient use of resources and improved coordination. Sharing information and experience helps avoid duplication of functions.
Increased Transparency and Trust: Effective interaction promotes transparency and trust in the currency system. Synchronized efforts create a predictable environment for market participants, which encourages investment and economic development.
Consolidated Approach and Effective Measures: Interaction allows for a unified approach to regulation. Authorities can jointly analyze market trends, discuss new risks, and develop effective policies to ensure the safety of the currency system.[10]

Violations of currency legislation carry administrative liability under Article 15.25 of the Code of Administrative Offenses of the RF (the "CAO RF"), as well as criminal liability under Articles 193 and 193.1 of the Criminal Code of the RF (the "CC RF").

How is Currency Control Conducted?

Monitoring currency operations falls within the powers of the authorities mentioned above and is conducted in accordance with Federal Law No. 173-FZ (Article 23) and currency control instructions (regulations).[11] Each of these acts regulates currency control within a specific sphere.

The purpose of an audit is the prevention, detection, and suppression of violations of currency legislation and acts of currency regulation authorities. The subject of the audit is compliance by residents and non-residents with currency legislation and the requirements of currency regulation and control authorities, as well as the conformity of currency operations with legal conditions.

As noted above, only documents directly related to the currency operation being conducted are submitted to currency control authorities and agents. All documents must be valid on the date of submission. Upon request, duly certified translations into Russian of documents executed in a foreign language must be provided. Documents from foreign government bodies confirming the status of non-resident legal entities must be legalized in the established manner.

Documents are submitted as originals or as duly certified copies. If only part of a document is relevant to a currency operation or account opening, a certified extract may be provided. Original documents are accepted for review and returned. In such cases, copies certified by the authority or agent are placed in the currency control file.

Customs authorities electronically transmit information on registered goods declarations to the Central Bank of the Russian Federation and authorized banks no later than 3 business days following the date the goods were released.

Currency control authorities, agents, and their officials are obligated to maintain commercial, banking, tax, and other legally protected secrets, and to protect other confidential information learned during their duties. However, the submission and transfer of documents and information between agents and customs/tax authorities does not constitute a violation of such secrets or confidentiality requirements.

When currency control authorities and agents have information regarding a violation of Russian currency legislation, they must transmit information identifying the entity (name, INN, registration details) and the specifics of the violation (date, amount, and the legal act violated) to the authority entitled to apply sanctions. For individuals, this includes their full name, identity document details, address, and violation specifics.

Administrative Liability for Currency Control Violations

The object of offenses under Article 15.25 of the CAO RF is the public legal relationship regarding the implementation of unified state currency policy and the stability of the Russian currency and domestic currency market.

Liability in the form of a fine is provided for the execution of illegal currency operations — meaning operations prohibited by Russian legislation or conducted in violation of it, including the purchase/sale of foreign currency and checks bypassing authorized banks, or settlements made bypassing accounts in authorized banks or foreign financial organizations in cases not provided for by law, or transfers without a bank account using foreign electronic payment means in unauthorized cases (Part 1, Article 15.25 of the CAO RF):

for citizens, individual entrepreneurs, and legal entities: 20% to 40% of the amount of the illegal operation or the transferred funds;
for officials: 20% to 40% of the amount, but not exceeding 30,000 rubles.

Note that until the Currency Control Law is amended, in accordance with Decree of the President of Russia No. 529 dated August 8, 2022, On the Temporary Procedure for Fulfilling Obligations under Bank Account (Deposit) Agreements Expressed in Foreign Currency and Obligations under Bonds Issued by Foreign Organizations:

requirements of Article 14 of the Currency Control Law regarding the mandatory form of settlements do not apply to foreign trade activities and/or the provision and return of loans by Russian legal entities and individual entrepreneurs;
cash settlements are possible without amount restrictions in any currency for export payments, returns of advances for failed imports, and loan amounts where the resident is the creditor.[12]

A resident may use received cash for settlements with a non-resident for foreign trade contracts involving the import of goods, performance of works, or rendering of services without crediting the funds to accounts in foreign or authorized banks.

A resident may also credit funds to foreign accounts or import them into Russia (compliance with EAEU and customs law required) and, no later than the 30th business day following import or receipt in Russia, must:

sell the foreign currency to an authorized bank and credit the resulting currency to its account;
credit the corresponding currency to its account in an authorized bank;
deposit it into its cash desk in the established manner.

When settling in cash, no later than the 45th business day after the settlement, the resident must submit to the authorized bank where the contract is registered (or where the resident has accounts if registration is not required):

documents and information confirming the cash settlements;
documents confirming the transfer of goods, performance of works, or rendering of services. If a contract provides for advances and the delivery period exceeds 45 business days, the 45-day period for submitting documents starts from the date the supporting documents are issued;
information (if available) on goods declarations filed for the imported cash.

Thus, the requirement for legal entities and individual entrepreneurs to settle currency operations exclusively through authorized bank accounts or electronic transfers does not apply. Violations of such requirements do not constitute an administrative offense under Part 1, Article 15.25 of the CAO RF. Consequently, proceedings cannot be initiated, and ongoing proceedings must be terminated for lack of an offense.

The Constitutional Court of the RF has ruled that Part 1, Article 15.25 of the CAO RF and Article 12 of Federal Law No. 173-FZ do not contradict the Constitution, as they do not imply liability for a resident when an illegal operation was necessitated by a real risk of losing currency values or control over them due to foreign restrictive measures (sanctions) against the RF, provided the actions do not distort the essence of the original legal operation or are aimed at restoring the prior position.[13]

Failure of a resident to submit a report to the tax authority on money transfers using foreign electronic payment means, when mandatory, carries a fine for citizens, officials, and legal entities of 20% to 40% of the amount credited during the reporting period (Part 1.1, Article 15.25 of the CAO RF).

Late submission of a notice regarding the opening (closing) of an account or changes in account details in a foreign bank, or submission in the incorrect form, carries liability under Part 2, Article 15.25 of the CAO RF:

for citizens: 1,000 to 1,500 rubles;
for officials: 5,000 to 10,000 rubles;
for legal entities: 50,000 to 100,000 rubles.

Information regarding the opening (closing) or change of account details must be submitted to tax authorities no later than one month from the date of the event, using the form approved by the federal tax authority (Paragraph 2, Article 12 of Federal Law No. 173-FZ).

Non-submission of the notice regarding foreign account details carries liability under Part 2.1, Article 15.25 of the CAO RF:

for citizens: 4,000 to 5,000 rubles;
for officials: 40,000 to 50,000 rubles;
for legal entities: 800,000 to 1,000,000 rubles.

Liability is also established for a resident's failure to fulfill the obligation to receive foreign currency and/or rubles due for goods, works, services, or intellectual property results into its authorized bank accounts, or failure to receive loan repayments from a non-resident, in the form of a warning or fine (Part 4, Article 15.25 of the CAO RF).

For citizens, individual entrepreneurs, and legal entities, the fine is 1/150 of the Bank of Russia Key Rate of the amount credited late for each day of delay, and/or:

3% to 5% of the amount not credited on time for ruble-denominated foreign trade contracts (excluding certain timber products under TN VED codes 4401 - 4403 99 000 9 and 4407);
3% to 10% for timber products under said TN VED codes for ruble contracts;
5% to 30% of the amount not credited on time for foreign currency contracts;
5% to 30% for loan agreements.

For officials, the fine is 1/150 of the Bank of Russia Key Rate for each day of delay, and/or:

3% to 5% for foreign trade contracts;
5% to 30% for loan agreements, but not exceeding 30,000 rubles.

This obligation and the timeframe for its fulfillment are established in Paragraph 1, Article 19 of Federal Law No. 173-FZ. An exhaustive list of cases where residents may forgo crediting funds to authorized bank accounts is provided in Paragraph 2, Article 19.

It should be noted that as part of special economic measures, since March 1, 2022, providing foreign currency loans to non-residents has generally been prohibited (with relaxations for individuals since July 1, 2022). Since March 2, 2022, ruble loans to persons from unfriendly states require a special procedure. Furthermore, since July 5, 2022, repatriation requirements for foreign trade contracts are tied to the amount of mandatory currency sale (which has been 0% since June 10, 2022).[14]

Liability under Parts 1 and 4, Article 15.25 of the CAO RF does not apply to a resident who credits funds to its foreign account and subsequently transfers them in full to an authorized bank account no later than 45 days from the date of foreign crediting (Note 7 to Article 15.25 of the CAO RF).

Liability under Part 4, Article 15.25 of the CAO RF does not apply if the contract amount is equal to or does not exceed 200,000 rubles or its equivalent (Note 8 to Article 15.25 of the CAO RF).

Part 4.1, Article 15.25 of the CAO RF provides liability for the late receipt of rubles in the proportion determined by the Government for foreign trade contracts. This carries a warning or fine:

for individual entrepreneurs and legal entities: 40,000 to 50,000 rubles;
for officials: 20,000 to 30,000 rubles.

Late fulfillment or termination of obligations under a foreign trade contract by methods allowed by law (excluding cases in Parts 4 and 4.1) carries liability under Part 4.3, Article 15.25 of the CAO RF:

for individual entrepreneurs and legal entities: 5% to 30% of the amount due;
for officials: 3% to 5% of the amount due, but not exceeding 30,000 rubles.

Generally, residents must ensure the return to Russia of funds paid to non-residents for goods not imported, works not performed, or services not rendered (Clause 2, Part 1, Article 19 of Federal Law No. 173-FZ). Failure to do so carries a warning or fine under Part 5, Article 15.25 of the CAO RF:

for individual entrepreneurs and legal entities: 1/150 of the Bank of Russia Key Rate for each day of delay, and/or 3% to 10% for ruble contracts, and/or 5% to 30% for foreign currency contracts;
for officials: 1/150 of the Bank of Russia Key Rate for each day of delay, and/or 3% to 10% for ruble contracts, and/or 5% to 30% for foreign currency contracts, but not exceeding 30,000 rubles.

If an official commits an offense under Parts 1, 4, 4.1, 4.3, or 5 after previously being fined for a similar offense, they face disqualification for 6 months to 3 years (Part 5.1, Article 15.25 of the CAO RF).

If the amount of funds involved in violations under Parts 4, 4.1, 4.3, or 5 (whether single or multiple transactions within one year) exceeds 100,000,000 rubles and does not constitute a criminal offense, Part 5.2, Article 15.25 of the CAO RF applies:

for individual entrepreneurs and legal entities: 1/150 of the Bank of Russia Key Rate for each day of delay, and/or 75% to 100% of the amount not credited;
for officials: 40,000 to 50,000 rubles or disqualification for 6 months to 3 years.

Liability under Parts 4, 4.1, 4.3, 5, and 5.2 applies after 45 days have passed following the deadline for the corresponding obligation (Note 9 to Article 15.25 of the CAO RF).

Administrative liability under Parts 1, 4, 4.1, 4.3, 5, and 5.2 does not apply to a resident for legal relationships arising from February 23, 2022, to December 31, 2023, if the failure to comply was due to foreign restrictive measures (sanctions) against Russian citizens or legal entities (Note 10 to Article 15.25 of the CAO RF).

Furthermore, non-compliance with repatriation requirements under Article 19 of the Currency Control Law currently does not constitute an administrative offense under Parts 4, 4.1, 4.3, and 5 of Article 15.25 of the CAO RF. Proceedings must be terminated for lack of an offense (Clause 1, Part 1, Article 24.5 of the CAO RF).

Part 6, Article 15.25 of the CAO RF provides liability for:

non-compliance with the procedure for submitting reports on the movement of funds in foreign accounts or foreign electronic payment means and/or supporting documents;
violation of established retention periods for currency accounting and reporting documents;
failure of a resident financial agent (factor) to notify a resident exporter of a non-resident's performance/non-performance of obligations.

These violations carry a fine:

for citizens: 2,000 to 3,000 rubles;
for officials: 4,000 to 5,000 rubles;
for legal entities: 40,000 to 50,000 rubles.

Liability is also provided for violating deadlines for submitting accounting/reporting forms and foreign account reports (Parts 6.1 – 6.3-1, Article 15.25 of the CAO RF). The fines under these sections increase based on the length of the delay in business days.[15]

Repeat violations of Part 6 (excluding foreign account reporting) carry liability under Part 6.4:

for citizens: 10,000 rubles;
for officials: 12,000 to 15,000 rubles;
for legal entities: 120,000 to 150,000 rubles.

Repeat violations regarding foreign account reports are separated into Part 6.5, carrying fines of 20,000 rubles for citizens, 30,000 to 40,000 rubles for officials, and 400,000 to 600,000 rubles for legal entities.

Criminal Liability for Currency Legislation Violations

Criminal liability is provided for evasion of repatriation obligations in a large scale, if committed by a person previously subject to administrative punishment under Part 5.2, Article 15.25 of the CAO RF (Article 193 of the CC RF).

Acts are committed on a large scale if the amount of non-credited or unreturned funds (single or multiple transactions within 1 year) exceeds 100 million rubles, and on an extra-large scale if it exceeds 150 million rubles.

This crime is punishable by a fine of 200,000 to 500,000 rubles (or 1 to 3 years' income), or forced labor for up to 3 years, or imprisonment for up to 3 years.

Violations of crediting or return requirements on a large scale committed:

on an extra-large scale;
by a group of persons by prior agreement or an organized group;
using a knowingly forged document;
using a legal entity created for committing financial crimes, are punishable by imprisonment for up to 5 years with a fine of up to 1,000,000 rubles (Part 2, Article 193 of the CC RF).

Because Article 19 requirements currently do not apply to certain foreign trade and loan activities (Presidential Decree No. 529), their non-fulfillment does not constitute a crime under Article 193. Criminal cases cannot be initiated, or must be terminated (Clause 1, Part 1, Article 24 of the Criminal Procedure Code of the RF).

Article 193.1 of the CC RF provides liability for currency operations involving the transfer of funds to non-resident accounts using forged documents.

Transferring funds to non-residents by submitting documents to an authorized bank containing knowingly false information regarding the grounds, purposes, and destination of the transfer is punishable by a fine of 200,000 to 500,000 rubles, forced labor for up to 3 years, or imprisonment for up to 3 years (Part 1, Article 193.1 of the CC RF).

If such acts are committed:

on a large scale;
by a group of persons by prior agreement;
using a legal entity created for such crimes,

the punishment is imprisonment for up to 5 years with a fine of up to 1,000,000 rubles (Part 2, Article 193.1 of the CC RF).

If committed:

on an extra-large scale;
by an organized group,

the punishment is imprisonment for 5 to 10 years with a fine of up to 1,000,000 rubles (Part 3, Article 193.1 of the CC RF).

Under Article 193.1, a large scale is defined as exceeding 13,500,000 rubles, and an extra-large scale as exceeding 65,000,000 rubles.

The statute of limitations for Part 1 of Articles 193 and 193.1 is 2 years; for Part 2 of both articles, it is 6 years; and for Part 3 of Article 193.1, it is 10 years.

In conclusion, currency control characteristics are inherently linked to currency restrictions. They are conditioned by the application of currency restrictions and directed at ensuring the effectiveness of such application. Only in tandem do these administrative tools realize their regulatory potential, preventing the illegal drain of currency from the country and maintaining the stability of the domestic currency market and national currency system.

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References

[1] Gorbova Yu.A. Theoretical Foundations of the Organization and Implementation of Currency Control over Export-Import Operations Carried out by Customs Authorities. Economics and Society Journal, 2022, No. 5(96)-1.

[2] Contract Accounting in International Trade for Currency Control Purposes. March 26, 2024. See: https://brace-lf.com/en/analytics/international-trade-and-customs-law/russian-currency-control-guide-foreign-trade-contract-registration.

[3] Australia, Albania, Andorra, Bahamas, Great Britain (including Crown Dependencies and British Overseas Territories), European Union Member States, Iceland, Canada, Liechtenstein, Micronesia, Monaco, New Zealand, Norway, Republic of Korea, San Marino, North Macedonia, Singapore, United States of America, Taiwan (China), Ukraine, Montenegro, Switzerland, Japan.

[4] Decree of the President of the RF No. 81 dated March 1, 2022; Decree No. 79 dated February 28, 2022; Decree No. 430 dated July 5, 2022; Decree No. 618 dated September 8, 2022; Decree No. 737 dated October 15, 2022; Decree No. 126 dated March 18, 2022; Decree No. 322 dated May 27, 2022.

[5] Official Clarification of the Bank of Russia No. 2-OR dated March 18, 2022; Letter of the Bank of Russia No. 38-1-4/3085 dated October 6, 2023.

[6] Resolution of the Government of Russia No. 510 dated July 6, 2008, On the Government Commission on Monitoring Foreign Investment in the Russian Federation.

[7] Resolution of the Government of Russia No. 295 dated March 6, 2022.

[8] Resolution of the Government of the RF No. 1365 dated December 12, 2015; Resolution No. 98 dated February 17, 2007; Instruction No. 181-I.

[9] Regulation of the Bank of Russia No. 6678-U dated February 5, 2024.

[10] Lukina V.D., Gorlova Ya.K. Analysis of the Interaction of Currency Control Authorities of the Russian Federation. Stolypin Bulletin Journal, 2023, No. 5.

[11] Administrative Regulation (FTS Order No. MMV-7-17/418@ dated August 26, 2019); Administrative Regulation (FCS Order No. 117 dated July 17, 2019).

[12] Resolution of the Government of Russia No. 2433 dated December 26, 2022.

[13] Ruling of the Constitutional Court of the RF No. 34-P dated July 9, 2021.

[14] Presidential Decrees No. 79, 81, 430; Bank of Russia Information dated March 2, 2022; Bank of Russia Official Clarifications No. 2-OR, 4-OR, 7-OR, 3-OR; Minutes of the Subcommission of the Government Commission No. 61 dated June 9, 2022 and No. 52/2 dated May 23, 2022.

[15] Letter of the FTS of Russia No. SA-4-7/6940 dated April 11, 2018.