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The law increases the number of cases when funds may be credited to the foreign accounts of Russian residents. The relevant amendments have been made to article 12(1)(2) of Federal Law No. 173-FZ "On currency regulation and currency control" dated 10 December 2003.
Alongside the instances that were previously permitted, the following cases have been added in which the following amounts of funds may be credited:
For all Russian residents:
For individuals who are Russian residents:
For individuals who are Russian residents and whose accounts have been opened in banks located in the OECD and FATF member states:
PG's comments. Thus, if the above amounts are credited to foreign accounts (deposits), there will be no risk of the resident facing administrative liability under article 15.25(1) of the Russian Code of Administrative Offences (a fine of between three quarters of and the full amount of the transaction value) for carrying out unlawful currency operations. Moreover, there will be no grounds for liability to be imposed for instances where these amounts have previously been credited, since under article 17(2) of the Code of Administrative Offences, a law has retroactive effect if it reduces or abolishes administrative liability or otherwise improves the position of a person who has committed an administrative offence.
Obligation to provide reports concerning operations on foreign accounts
In addition to this, individuals who are Russian residents face an obligation to provide to the tax authorities at the place where they are registered reports on the movement of funds on their foreign accounts (deposits), along with supporting bank documents. Previously, such an obligation had been established only for companies and individual entrepreneurs, who were on the same footing as companies.
This obligation will not apply only in relation to accounts (deposits) of Russian residents, both companies and individuals, if those accounts (deposits) have been opened in the foreign branches of Russian authorised banks. The special requirements of the regime for foreign accounts (deposits) of Russian residents will be lifted in relation to accounts (deposits) of this nature, including the requirements as to the procedure for opening accounts (deposits) and the rules for operations concerning them.
The amendments obliging individuals who are Russian residents to file reports concerning the movement of funds on foreign accounts will come into force from 1 January 2015. All remaining amendments will take effect ten days after the date on which the Law is officially published, i.e. on 2 August 2014.
Help from your adviser
Pepeliaev Group's lawyers are ready to assist you with issues arising when currency legislation is applied, taking account of the above new developments.
For further information, please contact:
in Moscow – Ivan Khamenushko, Senior Partner, at (495) 967-00-07 or by i.khamenushko@pgplaw.ru;
Elena Ovcharova, Head of Administrative Defense for Business Group, at (495) 967-00-07 or by e-mail;
in St. Petersburg - S. Sosnovsky, Head of Practice (St Petersburg) "Tax law and tax disputes", on +7 (812) 640-60-10 (phone) or by e-mail;
in Krasnoyarsk - Egor Lysenko, Head of Siberian office in Krasnoyarsk, tel. +7 (391) 277-73-00, or email: e-mail.
