Currency Control and Currency Transactions

Advising on currency control issues, legal support for currency transactions

legal support under the law of the eurasian economic union

Due to the fact that foreign economic activity implies settlements under international contracts in foreign currency, an important component in this case for the state is the implementation of currency control.

Currency control implies by itself the enforcement of currency legislation in the performance of foreign exchange transactions. Companies which carry out international activities must either independently implement the function of complying with currency legislation within the company or delegate it to qualified specialists who will ensure that a foreign economic transaction is carried out without violations in terms of drawing up an international contract and other documents, drawing up and sending the necessary documents to the bank, and as well as other issues of currency control.

In accordance with Article 22 of the Federal Law of December 10, 2003 No. 173-FZ “On Currency Regulation and Currency Control”, currency control bodies are:

  1. Central Bank of Russia.

  2. Federal Customs Service.

  3. Federal Tax Service.

  4. Authorized banks.

The main regulatory act regulating foreign exchange control is Instruction No. 181-I of the Bank of Russia dated August 16, 2017 “On the procedure for residents and non-residents to submit supporting documents and information to authorized banks when carrying out foreign exchange transactions, on uniform forms of accounting and reporting on foreign exchange transactions, the procedure and deadlines for their submission”. At the same time, regulations of the Russian Government and other acts, which are periodically updated with new ones, and which are regularly amended, also belong to the regulatory documents regulating currency control. Transactions related to currency control include:

  1. Transactions between non-residents and residents.

  2. Transactions between residents.

  3. Operations between non-residents, settlements for which are carried out in the currency of the Russian Federation.

  4. Movement of funds or securities across the Russian border.

As a general rule, settlements between residents in foreign currency are prohibited, however, there are conditionally permitted settlements, for example, when an employee is outside Russia and the employer sends him foreign currency as travel expenses. Settlements between residents and non-residents are not limited, but do not forget that the procedure for processing transactions is clearly reflected in the regulatory documents, along with the deadlines for submitting correctly executed documents to the bank, for violation of which liability may arise.

It should be noted that in accordance with Decree of the Government of the Russian Federation of May 28, 2022 No. 977 “On currency control measures in the face of external sanctions pressure”, the Government of Russia established that until December 31, 2022 inclusive, tax authorities will conduct audits of compliance with Russian currency legislation, for with the exception of cases when the inspections revealed violations, the statute of limitations for bringing to administrative responsibility for which expires before December 31, 2022. This temporary measure was introduced in the face of external sanctions pressure.

Despite the suspension of inspections by the tax authorities on compliance with currency legislation, one should not forget about the correct execution of all documents necessary for a foreign economic transaction.

A competent approach in the conduct of foreign economic activity will reduce the risks that arise, minimize the possible adverse effects associated with currency legislation. The main areas of legal support for currency control are:

  1. Assistance in carrying out foreign exchange transactions related to foreign economic activity, including consulting, preparation of a foreign economic contract, settlements, enforcement of the requirements of foreign exchange legislation in the course of a foreign economic transaction.

  2. Solving issues related to currency legislation in the event of claims from regulatory authorities.

    Violations of currency legislation are usually pided into two types:

  3. Failure to submit required documents.

  4. Violation of the deadline for the return of foreign currency.

Article 15.25 of the Administrative Code provides for administrative liability for violation of Russian currency legislation and acts of currency regulation bodies. In addition to administrative liability, in case of violation of currency legislation, criminal liability may also arise in accordance with Article 193 of the Criminal Code. The onset of administrative or criminal liability depends on the amount of foreign currency, the presence of mitigating or aggravating circumstances, as well as the commission of an offense for the first time. However, an important factor is also the situation where the entrepreneur has done everything possible to ensure compliance with currency laws.

In order to avoid violations of currency legislation, not to be subject to scrutiny by regulatory authorities, and to avoid fines, it is necessary to correctly draw up the documents of a foreign trade transaction, comply with the deadlines and adhere to the current currency legislation. In the context of constantly changing regulatory documents in the field of currency control, without the help of a qualified specialist, it can be quite difficult to carry out currency transactions without violations.

Legal services

  1. Advising (written and oral) clients on currency control issues

  2. Preparation of documents required for currency control and currency transactions

  3. Participation of a qualified specialist at all stages of currency control and currency transactions

  4. Verification of already executed documents for a foreign economic transaction in terms of currency control

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