Currency Control in Russia

What is it?

Currency control is the activity of the State aimed at ensuring currency legislation. Currency transactions are regulated by Federal law No.173- FZ "On currency regulation and currency control," Federal law No.86- FZ "On the Central Bank of the Russian Federation" and state authorities' regulatory acts.

The main structures that carry out currency control are currency control authorities and currency control agents. Central Bank and Government of the Russian Federation are currency control authorities.

The functions of currency control authorities include:

publication of regulations;
control over the implementation of the laws;
the supervision of foreign exchange transactions;
conducting the checks.

Authorized banks, brokers, dealers, and fiscal authorities are currency control agents. They perform current monitoring and transmit data to the currency control authorities.

Currency control subject

The following transactions are subject to currency regulation:

Transfers of funds or securities across the state border.
Any transactions between non-residents and residents.
Transactions between non-residents in rubles.
Transactions between residents in foreign currency (transfers in foreign currency between residents of the Russian Federation are prohibited except for a few cases stipulated by law).

Documents for Currency Control

Requirements for accompanying documents depend on the size of the transaction amount:

if the transaction amount does not exceed 200 thousand rubles, it is sufficient to inform the bank of the transaction code.
if the transaction amount is between 200 thousand and 3 million rubles, then the bank must submit an agreement, invoice, or report.
for import operations from 3 to 6 million rubles, a contract is required for registration.
If the amount exceeds 6 million, the contract must be registered for both import and export operations.

Registration of the agreement replaced the transaction passport, which was necessary before.
If the contract amount is more than 200,000 rubles, you have to send a whole package of documents to the bank or register the contract. During this process, the bank opens an individual bank control statement, registers a contract in it, assigns it a unique number, and sends this number to the client. The contract’s registration must be carried out by the bank within one working day. All these procedures are usually performed electronically.

After the transaction is assigned a number and after its execution, the company must provide the bank with a certificate of supporting documents and the package of supporting documents within a certain time:

not later than 15 workdays after the last day of the month, which is shown in a Customs Declaration as the date of goods' release;
not later than 15 workdays after the last day of the month in which the supporting documents were issued.

Usually, such a certificate is also submitted electronically, and the bank checks it within three business days, and after that sends it back to the client. If changes to the supporting documents were made, you have to fill out the certificate again and send it to the bank within 15 days with all the necessary adjustments.

The final step is to prepare reports and record information about the transaction in the accounting documents.

Fines

The law provides administrative liability for violations of the rules for conducting currency transactions, and in some cases, criminal prosecution is also possible.

For failure to ensure timely receipt of foreign currency earnings to the current account, if the equivalent of non-returned funds does not exceed 9 million rubles, the penalty for organizations and entrepreneurs is:

1/150 of the Central Bank’s key rate from the amount of violation for each day of delay;
from 75% to 100% of the transaction amount.

The employee who is responsible for this currency operation will be also fined in the amount of 20 to 30 thousand rubles in case of violation.
If you exceed the limit of 9 million rubles, article No.193 of the Criminal Code of the Russian Federation begins to work. The strictness of the fine depends on the amount and the presence of aggravating circumstances.

How to avoid violations

To avoid violations and fines, you should prepare documentation properly, comply with the deadlines required, conduct transactions according to currency control requirements, and remember to follow some basic rules:

Use the appropriate account in an authorized bank for currency transactions.
Exclude settlements in foreign currency between residents.
carrying out foreign economic activity, provide the authorized bank with information about the terms of the agreement and currency receipt.
working with non-residents, it is necessary to provide a refund for non-fulfilled obligations by the other party, as well as to ensure that funds are received in foreign currency for services provided or goods delivered.
To transfer funds to accounts opened abroad, you must provide a notification to the tax service about opening an account.

To make this procedure easier, the company can sign an agreement with the bank serving the organization, and then the obligation to issue a certificate will be assigned to this bank. In this case, it is sufficient to send only the necessary documents and the corresponding application.

And don’t forget that the legislation also allows currency control agents to request additional documents from the company regarding currency transactions. However, in accordance with Federal law No. 173-FZ of December 10, 2003, currency control agents have the right to request only the documents directly related to the transaction. They are not mandatory for each transaction and are sent to the bank only under the particular request.

If your company often conducts transactions in foreign currency, it makes sense to enter into a service agreement with a bank or work with independent experts in currency control to avoid legislation violations in this area.

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