Let us remind you that repatriation of foreign currency and the currency of the Russian Federation is an obligation to return the resident's revenue received due to a foreign economic transaction, which previously extended to all types of activities (Article 19 of the Federal Law No. 173 "On Currency Regulation and Currency Control").
As part of the program to liberalize foreign exchange controls and regulation, in 2020, the threshold for criminal prosecution for violating foreign exchange legislation was lowered, and administrative fines were significantly reduced. In addition, from January 1, 2021, the requirement for the return of revenues for contracts in rubles was canceled.
The next step in this direction was the Government's submission to the State Duma of a bill that abolishes repatriation for non-resource products exporters (according to the EAEU classification).
So, what does it all mean?
When concluding contracts between Russian and foreign entities or individuals for the transfer of goods or information, intellectual property, including exclusive rights to them, performance of work, the provision of services abroad - Russian residents are not required to credit the revenue to accounts in special authorized banks, but may transfer all funds directly to their bank accounts abroad.
This rule applies only to non-resource non-energy exports. Specific TN VED codes that do not fall under the innovations will be indicated in the law (Federal Law No. 173 "On Currency Regulation and Currency Control"), such as: export of oil, gas, fish, salt, sulfur, graphite, asbestos, ores, waste scrap ferrous and basic non-ferrous metals, etc.
Keep in mind that the novations shall not be applied to:
- agreements on the provision of a loan in foreign currency
- agreements with the condition of transferring advance payments to non-residents in foreign currency.
The corresponding amendments to the Federal Law "On Currency Regulation and Currency Control" should enter into force on July 01, 2021. At the same time, they will be applicable to contracts concluded before the new rules’ effective date, if the obligations to pay in foreign currency have not yet been fulfilled.
It seems that these introductions should reduce companies’ costs and significantly simplify entry to foreign markets for Russian business.TEAM specializes in helping Russian businesses to enter foreign markets, and if you have any questions on this topic, make sure to contact TEAM for detailed explanations!