Changes relating to violations of repatriation requirements
Differentiation of liability for violations of repatriation requirements
Under the current version of the Code of Administrative Offenses of the Russian Federation, a resident's failure to repatriate export proceeds / an advance payment under an import contract to Russia entails a single fine range — from 75% to 100% of the unrepatriated amount. The Law now introduces differentiated liability depending on the amount not repatriated and a number of other circumstances:
The new version does not provide for sanctions for failure to repatriate if the amount of obligations under a foreign trade contract is less than RUB 200,000 (or the equivalent amount in foreign currency),
If the unrepatriated amount exceeds RUB 200,000 (or the equivalent amount in foreign currency), the procedure for determining liability applies depending on the currency of the obligation:
if the amount of obligations under the contract is denominated in the currency of the Russian Federation and payment is also to be made in the currency of the Russian Federation, the fine will be from 3% to 10% of the unrepatriated amount;
if the concluded foreign trade contract provides for payment in foreign currency / a loan agreement is concluded with a non-resident (regardless of the currency), the fine will be from 5% to 30% of the unrepatriated amount.
Separate liability has been introduced for violations of repatriation requirements applicable to professional participants in foreign economic activity (parts 4.2 and 5.3 of Article 15.25 of the Code of Administrative Offenses) – the fine for them will be from 3% to 5% of the funds not received, provided that the amount is less than RUB 100 million per year (however, the procedure for including residents in the list of professional participants in foreign economic activity has not yet been established).
Introduction of liability for individuals for failure to repatriate loan proceeds
Under the current wording of the Article, liability for failure to repatriate applies only to legal entities, officers and individuals engaged in entrepreneurial activity. The amendments introduce liability for individuals as well for failure to repatriate loan proceeds, in the form of a fine ranging from 5% to 30% of the amount not received.
If the loan repayment deadlines are missed, a resident may be fined at a rate of 1/150 of the key rate of the Bank of Russia on the amount of funds for each day of delay.
Liability after a certain period has elapsed
Under part 9 of Article 15.25 of the Code, liability for failure to repatriate will apply only after 45 days have elapsed from the expiration of the deadline established for fulfilling the relevant obligation; thus, if an offense is committed, the person will have 45 days to remedy it without risking the imposition of a fine.
Changes relating to illegal foreign exchange transactions
Liability for carrying out foreign exchange transactions now applies to accounts not only in banks but also in other financial market organizations (brokerage accounts, custody accounts, etc.).
However, we note that at present there are no restrictions with respect to crediting funds to foreign accounts opened with other financial market organizations.
A minor easing is also introduced (part 7 of Article 15.25 of the Code of Administrative Offenses of the Russian Federation), under which liability for administrative offenses related to foreign exchange transactions under foreign trade contracts, settlement under which was made bypassing accounts in authorized banks, will not apply if, within 45 days after funds are credited to a foreign account, the resident ensures that the funds are returned to their account in a Russian bank. If the funds are returned to Russia only in part, fines will not apply only to the returned amount. This relates more to repatriation
Changes relating to liability for violation of the procedure for submitting reporting documents on foreign accounts
As expected, the article dealing with liability for failure to provide or improper provision of information on foreign bank accounts has been supplemented to cover other financial market organizations as well. The introduced liability is similar to the liability applicable to accounts (deposits) opened in banks:
A fine in the amount of (parts 2–2.1 of Article 15.25 of the Code of Administrative Offenses of the Russian Federation):
from RUB 1,000 to RUB 1,500 for late submission of notifications;
from RUB 4,000 to RUB 5,000 for failure to submit notifications.
A fine in the amount of (parts 6, 6.1–6.3 of Article 15.25 of the Code of Administrative Offenses of the Russian Federation):
from RUB 2,000 to RUB 3,000 for failure to comply with the procedure for submitting the report;
from RUB 300 to RUB 3,000 (depending on the period of delay) for missing the deadline for submitting the report;
RUB 20,000 for a repeated violation of the procedure for submitting the report.
All of the above amendments enter into force on 31 July 2020.
The review can be downloaded here
