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The RF imposes new countermeasures

18 March 2022

The RF continues imposing counter-sanctions in response to measures imposed by Western states. RF President Vladimir Putin signed Presidential Decree No. 126 “On additional temporary economic measures to ensure the financial stability of the RF in the sphere of currency regulation” on March 18th 2022.

This new decree permits the Central Bank of Russia to limit the maximum value of several transactions. These transactions include 1. Purchase of foreign currency by legal entities that aren’t residents of the RF on the internal currency market of the RF 2. Transfer of funds by non-resident foreign legal entities incorporated in unfriendly countries from their Russian accounts, to accounts of non RF resident foreign legal entities that aren’t persons of unfriendly countries 3. Transfer of funds by foreign legal entities that aren’t residents of the RF and aren’t persons of unfriendly countries, from their Russian accounts, to accounts opened in unfriendly countries 4. Payment in advance or pre-payment by RF residents to non-resident foreign persons under particular contracts 5. Transfer of funds, as well as electronic funds, without opening an account, by persons of unfriendly countries to foreign non-resident legal entities that aren’t such persons of unfriendly countries 6. Transfer of funds, as well as electronic funds, without opening an account, by foreign legal entities that aren’t residents and aren’t persons of unfriendly countries to banks and/or other financial market institutions located in territories of unfriendly countries. Along with these limitations, the Government Commission received eligibility to exclude transactions from the aforementioned relevant amount limits determined by the CBR.

In addition, the new decree also determines a number of transactions that will require permission from the CBR until December 31st 2022. These transactions include 1. Contribution of RF residents to non RF residents in the shape of capital investment pursuant to a general partnership agreement and 2. Payment by residents of the RF for subscribed shares or a different type of equity of a legal entity that is a non RF resident (applies to residents other than VEB, credit institutions and individuals). Furthermore, under this decree, until September 1st 2022, a measure was introduced regarding obligations in denominated foreign currency. Under this instruction, obligations in such currency under deposit or bank account agreements between RF credit institutions which were designated, can be carried out in RUB at the official exchange rate of the CBR, if such obligations emerged prior to the imposition of relevant sanctions. More information on the measures imposed on March 18th 2022 can be found here (in Russian).