Money transfers from Russia to foreign countries – current restrictions imposed by the Russian Federation
1. Restrictions on the transfer of funds abroad from bank accounts of non-residents
1.1 «Unfriendly» non-residents
The ban on the transfer of funds abroad for non-resident legal entities and individuals from “unfriendly” states from their accounts in Russian banks remains in place.
As for legal entities, on March 29, 2024 the Bank of Russia has extended this ban which is valid from April 01 to September 30, 2024 inclusive..
Exemptions:
➢For legal entities:
–“Unfriendly” foreign entities controlled by the Russian legal entities or individuals.
➢For individuals:
–In case of employment activity or rendering services in Russia, may transfer abroad funds in the amount of salary or remuneration under a service contract (within the limits of amounts received under a labour agreement or civil law contract).
1.2 Russian citizens and “friendly” non-residents
Preserve the right:
–to transfer to any accounts opened in foreign banks no more than USD 1 million or the equivalent in other foreign currency per month;
–to transfer via money transfer systems no more than USD 10 thousand or the equivalent in other foreign currency per month.
Individuals who are ‘friendly’ non-residents working or rendering services in Russia may also transfer abroad funds in the amount of salary or remuneration received under a service contract (within the limits of amounts received under a labour agreement or civil law contract).
Amounts of transfers shall be determined at the official exchange rate of foreign currencies to the rouble on the date of receipt of the transaction order by the bank.
2. Amendment of the regime of special account type “C”
Starting from December 08, 2023, the regime of special account “C” opened for a resident has been changed: a bank account of type ‘C’ opened for a resident may not be used by the resident to pay mandatory payments to the budget (Decision of the Board of Directors of the Bank of Russia on Amendments to the Decision of the Board of Directors of the Bank of Russia dated on November 21, 2022.
3. Investments of residents outside the Russian Federation
➢Until December 31, 2024 inclusively, investments in a foreign company (such as payment for shares, making contributions, stakes, etc.) are prohibited without the permission of the Bank of Russia (clause 2 of the Presidential Decree of the Russian Federation dated on March 18, 2022 No. 126 (edited on 18.12.2023) “On additional temporary measures of economic nature to ensure financial stability of the Russian Federation in the sphere of currency regulation”):
Until December 31, 2024 inclusively, a resident of the Russian Federation may perform the following transactions only subject to obtaining an individual permit from the Bank of Russia:
–to pay for a share, contribution, stake in the property (authorized or share capital, share fund of a cooperative) of a non-resident legal entity;
–to pay a contribution to a non-resident under a simple partnership agreement with investment in the form of capital investments (joint activity agreement).
From April 01, 2024, the Bank of Russia has established new exceptions to this rule (Decision of the Working group of the Bank of Russia dated on March 06, 2024 No. PRG-12-3/534 “On Consideration of matters of issuing permits to carry out (execute) operations (transactions), in respect of which prohibitions (restrictions) on their execution are established in connection with unfriendly actions of foreign states”)):
Residents are not required to obtain such individual permits if the following conditions are simultaneously met:
–transaction is made in any currency (roubles or foreign currency) regardless of the location of the recipient of funds for a total amount not exceeding the equivalent of 15 million roubles at the official exchange rate of the Bank of Russia on the date of payment;
–the cumulative volume of a resident’s transactions in favour of one non-resident legal entity does not exceed 15 million roubles (or the equivalent in another currency).
4. Rules for granting loans by Russian residents to foreign persons
➢NOT extended the previously valid (up to September 30, 2023) authorization to grant loans in foreign currency to “friendly” non-residents.
➢As of today granting loans in currency by Russian residents in favour of both “friendly” and “unfriendly” foreign persons, as well as loans in roubles to “unfriendly” persons, are only permitted with the approval of the Governmental Commission (subpar. a) of par. 3 of the Presidential Decree of the Russian Federation No. 79 dated on February 28, 2022, subpar. a) of par.1 of the Presidential Decree of the Russian Federation No. 81 dated on March 01, 2022).
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Please note that the present Newsletter is drafted exclusively for information purposes and does not constitute legal advice.
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