Q&A:

1) What will happen if a currency resident of the Russian Federation deposits amounts from the sale of securities, coupon payments from bonds or dividends on shares to a personal account in a Swiss bank before December 16, 2022?

Accounts (deposits) of individuals – currency residents of the Russian Federation opened in banks located outside the territory of the Russian Federation can be credited without restrictions, funds received from currency non-residents of the Russian Federation, provided that such banks are located on the territory of a foreign state (territory) with which the automatic exchange of financial information is carried out.

Until 23:59 on December 15, 2022, the List adopted by the Order of the Federal Tax Service of Russia dated 27.05.2022 N ED-7-17/449@, which includes Switzerland, is valid. In other words, until December 16, 2022, a procedure is in effect for Swiss bank accounts that allows crediting in the form of dividends, interest (coupons) on securities, as well as income from the sale of securities. At the same time, there is no obligation to repatriate or transfer funds to the Russian Federation.

Accordingly, operations for crediting funds by currency residents of the Russian Federation to accounts in Switzerland are not limited only until 23:59 on December 15, 2022.

2) What will happen if a currency resident of the Russian Federation transfers to a personal account in a Swiss bank the amounts from the sale of securities, coupon payments from bonds or dividends on shares on December 16, 2022 and after that date?

Currency residents staying in the territory of the Russian Federation for more than 183 calendar days are subject to the requirements of currency legislation on a limited number of transactions that a resident can perform on their accounts in jurisdictions not mentioned in the List.

The list of permitted currency operations that currency residents can carry out on their foreign accounts (without reference to the automatic exchange of financial information) is contained in Parts 4 and 5 of Article 12 of Law No. 173-FZ.

For example, operations such as crediting coupons and amounts from the redemption of bonds, crediting dividends on shares, crediting amounts from the sale of securities are not included in the specified "permitted" list. Consequently, for the purposes of currency legislation, they are recognized as "prohibited".

Thus, the crediting of these amounts will be recognized as prohibited currency operations after Switzerland is excluded from the List of countries that automatically exchange financial information with the Russian Federation (from 00:00 on December 16, 2022).

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3) Responsibility for the commission of prohibited currency operations and exemption from it

The fact of transactions involving the transfer of income in the form of dividends and interest (coupons) on securities, as well as income from the sale of securities to their own Swiss accounts from 00:00 on December 16, 2022 on a Swiss account may result in a fine of 20% to 40% of the amount of each transaction.

In other words, if a coupon in the amount of 10,000 US dollars is credited to a Swiss account at 00:01 on December 16, 2022, then such an operation will be considered "prohibited". Thus, the currency authority will be able to charge a fine in the amount of 20% to 40% (i.e. from 2,000 to 4,000 US dollars)

However, in accordance with Note 7 to Article 15.25 of the Code of the Russian Federation on Administrative Offenses (hereinafter referred to as CRFAO), a currency resident may be released from liability if he transfers funds received as part of a prohibited operation to the Russian bank account within 45 days after such transaction.

In accordance with Part 1 of Article 4.8 of CRFAO, the terms begin to be calculated on the day after the commission of the offense. Therefore, if the coupon income is credited to the Swiss account on December 17, 2022, then the 45-day period will begin to be calculated from December 18, 2022 and will end on January 31, 2023.

Thus, a currency resident can be released from the liability provided for in Part 1 of Article 15.25 CRFAO if he transfers funds received to a personal account in Switzerland from a prohibited currency operation to a Russian bank account within 45 days from the date of each illegal transaction.

Our services

We will be happy to provide you with services to analyze your personal situation of owning a Swiss personal account, namely:

- Analysis of account transactions for compliance with the currency legislation of the Russian Federation;

- Analysis of the currency consequences of certain transactions on Swiss accounts;

- Support of communication with currency control authorities;

- Support of preparation of documents for the purposes of using the 45-day grace period;

- Ongoing monitoring of accounts for illegal currency operations in order to use the 45-day grace period.