The adopted amendments to the Law abolish a number of current requirements of currency legislation for both individuals and legal entities, including requirements whose breach currently (under the current version of the currency regulation law) entails an administrative fine ranging from 75% to 100% of the amount of the foreign currency transaction. Pursuant to the adopted amendments, the following key changes will come into force from January 1, 2020:

1. Extension of Federal Law “On Currency Regulation and Currency Control” to accounts opened with other financial market institutions
In accordance with the adopted amendments, in addition to accounts opened with foreign banks, the obligations provided for by the Law will also apply to accounts opened with other financial market institutions (credit, insurance, brokerage and other institutions), namely: notifications of the opening/closing of the above accounts must be filed and annual reports on cash flows must be submitted.

2. The list of permitted foreign currency transactions has been expanded
Russian currency residents will be able to freely conduct foreign currency transactions with non-residents, provided that the following two conditions are met simultaneously: the bank where the account is opened is located in a state that is a member of the OECD or FATF; the foreign state where the bank is located carries out automatic exchange of tax information with the Russian Federation.

3. Exemption from the obligation to file annual cash flow reports.
Russian currency residents will be exempt from the obligation to file cash flow reports provided that the following conditions are met simultaneously:

- The bank where the account is opened is located in a state that is a member of the OECD or FATF;
- The foreign state where the bank is located carries out automatic exchange of tax information with Russia;
- The total amount of funds credited for the reporting year does not exceed RUB 600,000 (or the equivalent amount in another currency), or the account balance at the end of the reporting year does not exceed RUB 600,000 (or the equivalent amount in another currency) and no funds were credited during the reporting year.

The amendments to the Law are significant steps within the process of liberalizing currency control in Russia; however, it is still too early to speak of the complete abolition of currency control.

Our specialists have extensive practical experience in providing services aimed at ensuring compliance with the current requirements and restrictions of the Law “On Currency Regulation and Currency Control” and will be pleased to advise you on any issues you may have.