The Federal Law N 72-FZ dated April 1, 2020 “On Amending Articles 15.25 and 23.1 of the Code of the Russian Federation on Administrative Offenses” (hereinafter – the Federal Law N 72-FZ) and Federal Law dated April 01, 2020 N 73- FZ “On Amendments to the Criminal Code of the Russian Federation and Article 28.1 of the Criminal Procedure Code of the Russian Federation” (hereinafter – the Federal Law N 73-FZ) entered into force on April 12, 2020.
In accordance with these laws, the conditions for bringing to administrative and criminal liability for actions related to the violation of the requirements of the currency legislation of the Russian Federation in cases of non-crediting or untimely crediting to accounts with an authorized bank and accounts opened with banks outside the territory of the Russian Federation within the time limits established by foreign trade contracts, export foreign currency earnings, repayment of advance payments on import contracts and repayment of funds under loan agreements.
Recall that in accordance with the requirements of Art. 19 of the Federal Law of December 10, 2003 N 173-FZ “On Currency Regulation and Currency Control” in carrying out foreign trade activities and (or) when residents provide foreign currency or the currency of the Russian Federation in the form of loans to non-residents, residents are obligated by the deadlines stipulated by foreign trade agreements (contracts) and (or) loan agreements, to ensure:
• receipt from non-residents in their bank accounts in authorized banks of foreign currency or the currency of the Russian Federation due in accordance with the terms of the said agreements (contracts);
• return to the Russian Federation of funds paid to non-residents for goods that were not imported into the Russian Federation (not received on the territory of the Russian Federation), work that was not completed, or services not rendered;
• receipt from non-residents in their bank accounts in authorized banks of foreign currency or the currency of the Russian Federation due in accordance with the terms of loan agreements.
The Federal Law N 72-FZ amended Article 15.25 of the Code of Administrative Offenses regarding the establishment of the possibility of applying a term for repatriation of funds by a resident of funds of this type of administrative punishment as a warning. Previously, for such acts only such type of punishment as an administrative fine was provided (for violations provided for by parts 4, 4.1, and part 5 of article 15.25 of the Code of Administrative Offenses).
Moreover, as noted by the Federal Tax Service of Russia in a letter dated April 17, 2020, N VD-4-17/6475 “On the Federal Laws dated April 1, 2020, N 72- FZ and N 73- FZ”, the disposition of Part 5.1 of Art. 15.25 of the Code of Administrative Offenses with regard to the indication that responsibility for the repeated commission of administrative offenses occurs if the official who committed such an offense was previously subjected to an administrative penalty in the form of an administrative fine.
Article 15.25 of the Code of Administrative Offenses is supplemented with a new part 5.2, which provides for administrative liability for violation by a resident of the obligation to repatriate funds (for once currency transactions or for repeated transactions during the year) in the amount of over 100 million rubles (committed in large amounts) if these the actions do not contain a criminal offense.
These actions entail the imposition of an administrative fine on individual entrepreneurs and legal entities in the amount of 1/150 of the key rate of the Central Bank of Russia on the amount of money credited to accounts with authorized banks and (or) to accounts opened with banks outside the territory of Russia, with violation of the established period, for each day of delay in crediting such funds. It is also possible to charge a fine of 3/4 to one amount of the number of funds not credited to the accounts. In addition, this article provides for the possibility of imposing liability on officials in the form of a fine in the amount of 40,000 to 50,000 rubles or disqualification for a period of 6 months to 3 years. Cases of these administrative offenses are attributed to the jurisdiction of judges.
Federal Law N 73-FZ makes the following changes to Article 193 of the Criminal Code of the Russian Federation (evasion of obligations to repatriate funds in foreign currency or the currency of the Russia):
• threshold for a size of the act is increased to bring the offender to criminal liability for non-repatriation of funds – from 9 to 100 million rubles for a large amount and from 45 to 150 million rubles for particularly large size;
• liability for violation of the requirements of the currency legislation on crediting or refunding money on a large scale is recognized as a criminal offense only if it is committed by a person previously subjected to administrative punishment for a similar offense under Article 15.25 of the Code of Administrative Offenses;
• equals increased criminal responsibility for evading the repatriation of proceeds committed both by a group of persons in a preliminary conspiracy and by an organized group (up to 5 years in prison).
Moreover, criminal liability under parts 1 and 2 of article 193 of the Criminal Code remains quite tough. So in the case of a large amount, a fine is applied in the amount of 200,000 to 500,000 rubles, or in the amount of the convicted person’s salary or other income for a period of 1 year to 3 years, or forced labor for up to 3 years, or imprisonment for up to 3 years old. In case of a particularly large amount, committed by a group of persons in a preliminary conspiracy or by an organized group, using a deliberately forged document or using a legal entity created to commit one or more crimes related to financial transactions and other transactions with cash or other property, a deprivation is assigned liberty for a term of up to 5 years with a fine in the amount of up to 1 million rubles or in the number of wages or other income of the convicted person for a period of up to 5 years or without it.
As noted in the letter of the Federal Tax Service of Russia, at the same time corresponding changes were made to Article 76.1 of the Criminal Code and Article 28.1 of the Code of Criminal Procedure.
Recall that, according to the indicated legal norms, a person who has committed a crime for the first time, provided for by Art. 193 of the Criminal Code, is exempted from criminal liability if it compensates for damage caused to a citizen, organization or state as a result of a crime, and transfers to the federal budget a monetary reimbursement in the amount of twice the amount of damage caused, or transfers to the federal budget the income received from the crime, and cash compensation in the amount of twice the amount of income received. In this case, the criminal prosecution is terminated.
Thus, the adopted amendments to the Code of Administrative Offenses and the Criminal Code are aimed at mitigating administrative responsibility and changing the conditions for criminal liability for non-fulfillment by residents of the obligation to repatriate funds in the framework of foreign trade.
However, the responsibility for the non-repatriation of foreign exchange earnings remains strict and therefore is a serious legal risk and a barrier to the development of the foreign economic activity. A significant part of experts cast doubt on the need to establish such responsibility conceptually.
June 14, 2020
Associate of BRACE Law Firm