A number of positive changes in the court practice with regard to the submission of Russian currency (RUB) transfer receipts for several currency operations during one month

Pepeliaev Group hereby announces a number of positive changes in the court practice with regard to the submission of Russian currency (RUB) transfer receipts for several currency operations during one month: the receipt may reflect several operations of the transfer of funds to the bank account. If there were several currency transfer operations in a month, the resident may be held liable for the failure to submit a receipt only once, rather than several times for each operation.

When Russian currency (RUB) is credited to a resident’s account in an authorised bank within the scope of currency operations, the resident shall present a currency transfer receipt [1] to the authorised bank.  The currency (RUB) transfer receipt is one of accounting and reporting documents on currency operations [2].  Violation of the compilation procedure or late submission of such accounting and reporting documents on currency operations result in administrative liability (fine) [3].

The practice of construction and application of those provisions by the courts of Moscow Circuit (primarily, by the Ninth Arbitration Court of Appeal) used to be against residents. The courts pointed out that a separate receipt should be issued for each specific transfer of Russian roubles to a resident.

In its Resolution No. 17039/09 dated 6 April 2010 the Presidium of the RF Supreme Arbitration Court, referring to clauses 2.6 and 2.7 of Regulations No. 258-P of the Bank of Russia dated 1 June 2004 and Appendix 2 to said Regulations, expressed its legal position that a Russian currency (RUB) transfer receipt filed by a resident with an authorised bank may legally register several operations of the transfer of Russian roubles within the scope of different transactions (and may contain reference to several transaction passports) which took place on different days and for which different payment documents were issued.

There is only one requirement with regard to the Russian roubles transfer receipts - they shall specify operations for one reporting month within one bank account of the resident in an authorised bank where Russian roubles were transferred.

Failure of the resident to observe the procedure and terms of submission of the currency transfer receipt and supporting documents on several funds transfer operations performed in one reporting month within one bank account in an authorised bank constitutes one violation of the law. Accordingly, the resident may be held liable only one time for failure to comply with the procedure and terms of submission of the receipt and supporting documents for several currency transfer operations within one bank account in one reporting month. A person may not be held liable a second time for late submission of the funds transfer receipt and supporting documents with regard to another amount transferred to the same bank account in the same reporting month.

The Resolution specifies that the above legal position is binding for courts examining cases with similar circumstances.

In the case under review, the resident had already been held liable under an earlier resolution for another operation involving the transfer of Russian roubles to the same account in the same reporting month. Considering this, the Presidium quashed the ruling against the resident issued by the court of appeal (the case was not reviewed by the court of cassation), overruled the judgment of the trial court which had been issued on other grounds (that were subsequently dismissed) and finally invalidated the resolution to hold the resident liable.

The conclusions drawn by the Presidium of the RF Supreme Arbitration Court in its Resolution cover only Russian currency transfer receipts and do not explicitly apply to other forms of accounting and reporting on currency operations – the supporting documents receipt [4] and currency operations receipt [5].

The procedure for and terms of the issue and submission of receipts are different, but a unified similar approach could have been applied under specific circumstances for all types of receipts.

However, the practice of the RF Supreme Arbitration Court on other issues of currency regulation shows that despite the uniform approach developed by the Presidium, the administrative practice of Rosfinnadzor and lower-instance courts will not immediately change in favour of the parties subject to verification [6].

Consequently, we cannot rule out that the positive transformation of the court practice of Moscow Region will take quite a long time and that the applicable legislation may undergo considerable changes along the way.

[1] Sub-clause 2.3.2 of Instruction No. 117-I of the Bank of Russia dated 15 June 2004 and clause 2.6 of Regulations No. 258-P of the Bank of Russia dated 1 June 2004.

[2] Part 4 of article 5 and clause 2, part 2 of article 24 of Federal Law No. 173-FZ dated 10 December 2003 “On Currency Regulation and Currency Control”, Instruction No. 1950-U of the Bank of Russia dated 10 December 2007.

[3] The fine is set at RUB 40,000 to RUB 50,000 for legal entities and RUB 4,000 to RUB 5,000 for officials on the basis of part 6 of article 15.25 of the RF Code of Administrative Offences (“RF Administrative Code”).

[4] Clause 2.2 of Regulations No. 258-P dated 1 June 2004

[5] Clause 1.2 of Instruction No. 117-I of the Bank of Russia dated 15 July 2004

[6] For example, we know about 6 resolutions passed by the Presidium of the RF Supreme Arbitration Court over more than three years with regard to the concept of currency operations prohibited by Russian legislation: Resolutions of the Presidium of the RF Supreme Arbitration Court No. 12933/05 and No. 12938/05 dated 27 March 2006, No. 1644/06 dated 6 June 2006, No. 15693/07 dated 18 March 2008, No. 12089/08 dated 17 February 2009, and No. 4140/09 dated 1 September 2009.

For further information, please contact:

in Moscow – Ivan Khamenushko, Senior Partner, at: (495) 967-0007 or by i.khamenushko@pgplaw.ru; Peter Popov, Senior Associate, at: (495) 967-0007 or by p.popov@pgplaw.ru 

in St Petersburg - Sergey Spasennov, Partner, Head of St. Petersburg office, on tel.: (812) 333-07-17 or by s.spasennov@pgplaw.ru