Currency control: New developments from March 01, 2018

By Elena Rybnikova, Head of Internal Audit, Expertise and Methodology Department

The Russian Ministry of Justice has registered a new directive on currency control issued by the Central Bank of Russia. Below you will find a description of the main changes introduced by this new directive together with our recommendations.

The thresholds for application of currency control procedures have been raised (expressed in ruble equivalent at the date of contract and/or additional agreement):

  • RUB 3 million (USD 50,000) for import contracts (including “incoming” services, work, loans, etc.)
  • RUB 6 million (USD 100,000) for export contracts (including “outgoing” services, work, loans, etc.)

New development – Banks will no longer issue transaction certificates. They will register contracts instead. Authorized banks will set out their own procedure for contract registration/de-registration.

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What needs to be done?

Banks will automatically close all valid transaction certificates on March 01, 2018 and transfer data to a register of valid contracts.

To monitor data transfer, it is necessary to:

  • Liaise with your bank to find out how they have planned to carry out this transfer. This should be done in January-February 2018;
  • Request a bank control record. This should be done in February 2018;
  • Request another bank control record in March-April 2018;
  • Submit to your bank an application for adjustments if any discrepancies have arisen following the transfer of data from transaction certificates to the register of contracts (for the transactions completed during the relevant period).

Currency transfers

When currency is transferred, an order for cash transfer and/or documents related to such transaction are submitted to the bank making the transfer. No currency transaction report needs to be issued.

Payments will be documented by specifying in payment orders not the transaction certificate number, but the contract number instead.

Transaction type code

When currency greater than or equal to RUB 200,000 is credited to a transit account or debited from a current account, residents must provide their bank with a transaction type code. This code replaces currency transaction report and is indicated as Purpose of Payment: {VO transaction type code}, for example, {VO11100}.

When non-residents withdraw currency from their bank accounts, they will also need to submit to their bank payment documents with transaction type code.

Item 2.19 of Directive 181-I sets out that banks may themselves draw up payment documents with transaction type code.

If the wrong transaction type code is specified, it will be possible to submit a document to the bank to correct this error. For example, when the code “Prepayment” is erroneously specified instead of “Payment”.

Date of document

Directive 181-I provides that the latest date of signature – or entry into force if no date of signature is available – is deemed the date of document.

Procedure and deadlines for documentation submission

The procedure and deadlines for submitting documentation to banks for registration of contracts for currency payments (instead of transaction certificates previously) and supporting document list have not changed.