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Further measures are being imposed by Russia in response to economic impacts of foreign sanctions

5 March 2022

RF President Vladimir Putin continued imposing restrictive and other measures on March 5th 2022 following sanctions of foreign states being imposed on the RF. President Putin signed Decree No. 95 “On Temporary Procedure for Preforming Obligations to Certain Foreign Creditors” on March 5th. This decree introduces a procedure for repayment of debts to certain foreign individuals in Russian rubles, allowing RF resident to repay certain debts to foreign creditors in the local Russian ruble. This new decree institutes a temporary special procedure for the reimbursement of debts under loans, credit facilities and other financial instruments in an amount exceeding 10,000,000 RUB per month (or the equivalent to this sum in foreign currency at the exchange rate determined by the CBR on the first day of each month) by: the RF, Russian constituencies and municipalities, or residents of the RF, to: foreign persons and entities associated with countries that engaged in “unfriendly actions” against the RF (as of March 5th, these countries are the US, EU member states, Japan, the UK, and others [according to Government Resolution No. 430-p]), or, any entities and individuals that are controlled by Persons from Unfriendly Countries (as mentioned).

According to this decree (along with further clarifications from the CBR) the debtors may submit an application to a bank or any other credit organization for the purpose of opening a bank account in the name of the foreign nominee holder or creditor, and repay the debt to such creditors by transferring the relevant amount in RUB to said bank account. This procedure also applies to debts assigned by individuals form unfriendly countries to other foreign person of residents of the RF after March 1st 2022. Considering debt owed to other foreign creditors that aren’t qualified as Persons from unfriendly countries, such debt would be seen as repaid properly if the Debtor was to transfer funds in RUB in the equivalent amount to the sum in foreign currency at the official exchange rate fixed by the CBR. Both Russian Ministry of Finance and the CBR are entitled to issue individual permits permitting a certain party to be exempt from the above procedure, and, to provide a different procedure for the reimbursement of the aforementioned debts. More information on the measures adopted by the RF Government on March 5th 2022 can be found here (in Russian).

Another major restriction involves the limitation of transfers. According to the CBR letter from this day, the CBR limited transfers abroad to the amount of 5,000 USD$ per month. The CBR instructed authorized banks to limit monthly transfers of residents abroad to 5,000$, in favor of other individuals, including their spouses or close relatives (among these, are: parents, children, grandparents and grandchildren). The restriction also applies to full and half sisters and brothers, adoptive parents and adopted children. More information on this restriction can be found here (in Russian).