Status under IMF Articles of Agreement - International ...russia.elibrary.imf.org/staticfiles/misc/AREAER_2013...Security Council Resolution No. 1874 of June 12, 2009; Bank of Russia

RUSSIA(Position as of March 31, 2013)

Status under IMF Articles of Agreement

Date of membership Yes. June 1, 1992.

Article VIII Yes. Date of acceptance: June 1, 1996.

Article XIV

Exchange Measures

Restrictions and/or multiplecurrency practices

No. No restrictions reported in the latest IMF staff report as of December31, 2012.

Exchange measures imposed forsecurity reasons

Yes.

In accordance with IMF ExecutiveBoard Decision No. 144-(52/51)

Yes. Pursuant to UNSC Resolution No. 1373 of 2001, a procedure hasbeen established for extrajudicial suspension of operations withfunds and other property, with the exception of transactionsinvolving the crediting of incoming funds to an account held by anindividual or legal entity, if at least one of the parties is anorganization or individual known to be involved in terrorist activity,a legal entity directly or indirectly under the ownership or controlof such organizations or individuals, or an individual or legal entityacting on behalf of or at the direction of such organizations orindividuals. In accordance with UNSC resolutions and Russianlegislative acts, restrictions have been imposed on currentinternational transactions for reasons of national and internationalsecurity against the following: (1) A1-Qaida and the Talibanmovement (freezing of financial assets of organization members,prohibition against all operations, ban on transit through or entryinto the territory of member countries by individuals connected withthese organizations and ban on shipments of arms); (2) DemocraticRepublic of the Congo (ban on direct and indirect deliveries of armsand on provision of technical assistance and consultation, freezingof financial assets, and ban on entry into member countries ofindividuals listed in UNSC resolutions); (3) Côte d’Ivoire (ban onthe sale and delivery of arms and military technical assistance andban on entry into member countries of individuals listed in theappropriate UN resolutions and freezing of financial assets/operations thereof); (4) Liberia (ban on the sale and delivery of armsand military technical assistance, ban on entry of individuals listedin the appropriate UN resolutions and freezing of financial assetsand operations); and (5) Somalia (ban on the sale and delivery ofarms and of military technical and financial assistance).

Other security restrictions Yes. Certain commercial and financial transactions with the IslamicRepublic of Iran, the Democratic People’s Republic of Korea, theDemocratic Republic of the Congo, Côte d’Ivoire, Eritrea, andLibya are prohibited.

References to legal instruments andhyperlinks

Yes. Federal Law No. 115-FZ of August 7, 2001, on combating MoneyLaundering and the Financing of Terrorism as amended; Decree No.665 of the Russian President of May 27, 2007, on Measures to

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implement UN Security Council Resolution No. 1718 of October14, 2006, as amended; Decree No. 1593 of the Russian FederationPresident of November 28, 2007, on Measures to implement UNSecurity Council Resolution No. 1737 of December 23, 2006, andNo. 1747 of March 24, 2007, as amended; Bank of Russia LetterNo. 105-T notifying Lending Institutions of the need to comply withProvisions of Decree No. 665 of the Russian Federation Presidentof May 27, 2007, on Measures to implement UN Security CouncilResolution No. 1718 of October 14, 2006; Decree No. 786 of theRussian Federation President of May 5, 2000, on Measures toimplement UN Security Council Resolution No. 1267 of October15, 1999, as amended; Decree No. 266 of the Russian FederationPresident of March 6, 2001, on Measures to implement UN SecurityCouncil Resolution No. 1333 of December 19, 2000, as amended;Decree No. 6 of the Russian Federation President of January 10,2002, on Measures to implement UN Security Council ResolutionNo. 1373 of September 28, 2001; Decree No. 117 of the RussianFederation President of February 2, 2005, on Measures toimplement UN Security Council Resolution No. 1572 of November15, 2004; Decree No. 720 of the Russian Federation President ofJune 24, 2005, on Measures to implement UN Security CouncilResolution No. 1596 of April 18, 2005, as amended; Decree No.227 of the Russian Federation President of March 18, 2006, onMeasures to implement UN Security Council Resolution No. 1643of December 15, 2005; Decree No. 1572 of the Russian FederationPresident of November 23, 2007, on Measures to implement UNSecurity Council Resolution No. 1753 of April 27, 2007; FederalLaw No. 281-FZ of December 30, 2006, on Special EconomicMeasures; Decree No. 682 of the Russian Federation President ofMay 5, 2008, on Measures to implement UN Security CouncilResolution No. 1803 of March 3, 2008, as amended; Decree No.381 of the Russian Federation President of March 27, 2010, onMeasures to implement UN Security Council Resolution No. 1874of June 12, 2009; Decree No. 516 of the Russian FederationPresident of April 24, 2010, on Measures to implement UN SecurityCouncil Resolution No. 1844 of November 20, 2008; Decree No.933 of the Russian Federation President of July 22, 2010, onMeasures to implement UN Security Council Resolution No. 1907of December 23, 2009; Decree No. 1154 of the Russian FederationPresident of September 22, 2010, on Measures to implement UNSecurity Council Resolution No. 1929 of June 9, 2010; Decree No.1490 of the Russian Federation President of October 17, 2008, onMeasures connected with passing UN Security Council ResolutionNo. 1807 of March 31, 2008; Bank of Russia Letter No. 74-T ofMay 26, 2010, on Decree No. 381 of the Russian FederationPresident of March 27, 2010, on Measures to implement UNSecurity Council Resolution No. 1874 of June 12, 2009; Bank ofRussia Letter No. 86-T of June 22, 2010, on Decree No. 516 of theRussian Federation President of April 24, 2010, on Measures toimplement UN Security Council Resolution No. 1844 of November20, 2008; Bank of Russia Letter No. 117-T of August 18, 2010, onMeasures to implement the UN Security Council Resolutionconcerning the Democratic People’s Republic of Korea (DPRK);Bank of Russia Letter No. 146-T of November 3, 2010, on Decree

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No. 933 of the Russian Federation President of July 22, 2010, onMeasures to implement UN Security Council Resolution No. 1907of December 23, 2009; Decree No. 1051 of the Russian FederationPresident of August 23, 2010, on Measures to implement UNSecurity Council Resolution No. 1903 of December 17, 2009; Bankof Russia Letter No. 147-T of November 3, 2010, on Decree No.1154 of the Russian Federation President of September 22, 2010,on Measures to implement UN Security Council Resolution No.1929 of June 9, 2010; Decree No. 286 of the Russian FederationPresident of March 9, 2011, on Measures to implement UN SecurityCouncil Resolution No. 1970 of February 26, 2011 (as amended);Decree No. 1092 of the Russian Federation President of August 12,2001, on Measures to implement UN Security Council ResolutionNo. 1973 of March 17, 2011 (as amended); Bank of Russia LetterNo. 44-T of April 4, 2011, on Decree No. 286 of the RussianFederation President of March 9, 2011, on Measures to implementUN Security Council Resolution No. 1970 of February 26, 2011;Bank of Russia Letter No. 69-T of May 12, 2011, on Measures toimplement UN Security Council Resolutions Regarding theDemocratic Republic of the Congo; Bank of Russia Letter No. 86-T on Measures to implement the UN Security Council ResolutionRegarding Côte d’Ivoire; Bank of Russia Letter No. 148T ofOctober 18, 2011, on Decree No. 1092 of the Russian FederationPresident of August 12, 2001, on Measures to implement UNSecurity Council Resolution No. 1973 of March 17, 2011; DecreeNo. 589 of the Russian Federation President of May 6, 2012 onMeasures to implement UN Security Council Resolutions No. 2009of September 16, 2011, and No. 2016 of October 27, 2011; Bank ofRussia Letter No. 102-T of July 13, 2012, on Decree No. 589 of theRussian Federation President of May 6, 2012 on Measures toimplement UN Security Council Resolutions No. 2009 ofSeptember 16, 2011, and No. 2016 of October 27, 2011.

Exchange Arrangement

Currency Yes. The currency of Russia is the Russian ruble.

Other legal tender No.

Exchange rate structure

Unitary Yes.

Dual

Multiple

Classification

No separate legal tender

Currency board

Conventional peg

Stabilized arrangement

Crawling peg

Crawl-like arrangement

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Pegged exchange rate within horizontalbands

Other managed arrangement Yes. The de jure exchange rate arrangement is other managedarrangement—namely a controlled floating exchange ratearrangement. The ruble value of a dual-currency basket is used asthe operating benchmark for transactions in the domestic foreignexchange market. The dual-currency basket, including the U.S.dollar and the euro, has been used by the Bank of Russia (BR) asan operating benchmark for currency interventions since 2005.Initially, the composition of the basket was €0.10 and US$0.90, butas the participants of the domestic foreign exchange market adaptedto the new conditions, the BR revised its composition, increasingthe euro share. The basket now is composed of €0.45 andUS$0.55. The BR establishes an operational floating range of itsallowable levels with automatic revisions of the boundariesdepending on the volume of currency interventions. The value ofthe dual-currency basket is determined both by market factors andby BR interventions. Since the suspension on October 13, 2010, ofthe fixed exchange rate corridor for the value of the dual-currencybasket (Rub 26–Rub 41 since January 2009), no target values orfixed limitations on the BR exchange rate have been established.Interventions take place both on boundaries and within bands. Theoperating interval also includes the range in which currencyinterventions are not made. Revision of the boundaries of theoperating interval occurs automatically when the established valueis reached by the cumulative volume of BR operations. In order tooffset a systematic imbalance between supply and demand forforeign exchange in the domestic market, the volume of targetedinterventions is not included in the calculation of that amount.

Effective July 24, 2012, the BR widened the band of allowablefluctuation of the ruble from Rub 6 to Rub 7 and reduced thecumulative amount of unplanned interventions triggering anautomatic adjustment of the exchange rate band by 5 kopeks fromUS$500 million to US$450 million. Due to the role of the BR inexchange rate determination, the de facto exchange ratearrangement is also classified as other managed arrangement.

The BR intervenes both in interbank currency exchanges and in theOTC interbank market to smooth out daily fluctuations.

Since August 2008, the BR has published its volume ofinterventions both in euros and U.S. dollars by sale and purchaseamounts monthly. These data are presented within seven days ofthe end of the reporting period. Effective May 1, 2012, the BRreports daily foreign exchange interventions data with a two-daylag, with historical data available from January 1, 2011. Previously,since June 2011, the BR published weekly foreign exchangeintervention data with a one-week lag.

Floating

Free floating

Official exchange rate Yes. The BR establishes official rates for a number of foreign currenciesagainst the ruble. These rates may be used in calculating state budgetrevenues and expenditures for payments and settlements by state

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administrative agencies with enterprises, organizations, andindividuals and for taxation and accounting. Regulation of the useof the official exchange rates of foreign currencies against the rublefor various purposes, including determination of the areas of theirmandatory use, is not within the BR’s purview. Official rates areset every business day and take effect the next calendar day.Information on official rates is published on the BR website the daythey are set and in the next edition of the Bank of Russia Bulletin.The official rate for each currency applies until the next officialexchange rate becomes effective.

The official U.S. dollar–ruble exchange rate is calculated on thebasis of quotes for this currency pair in the domestic interbankforeign exchange market. The calculation of official rates for otherforeign currencies against the ruble is based on quotes of thesecurrencies against the U.S. dollar in the global market and theofficial exchange rate of the U.S. dollar and the ruble.

Monetary policy framework

Exchange rate anchor

Monetary aggregate target

Inflation-targeting framework

Other monetary framework Yes. The BR develops and conducts monetary policy on the basis of abroad spectrum of macroeconomic and monetary indicators.

By 2015, the BR plans to complete the transition to inflationtargeting based on target inflation parameters. Within theframework of the activities in that area, the BR will continue tosystematically increase the flexibility of exchange rate formation,creating the conditions for the transition to a free float and willimplement measures to improve the system of interest rateinstruments, increase the transparency of the monetary policy, andsupport the development of the banking sector and domesticfinancial markets.

Exchange tax No.

Exchange subsidy No.

Foreign exchange market Yes.

Spot exchange market Yes. Pursuant to Federal Law No. 86-FZ of July 10, 2002, on the CentralBank of the Russian Federation, the BR issues licenses to creditinstitutions to handle banking transactions (Paragraph 8 of Article4). Based on information in the State Registration Ledger for CreditInstitutions, all foreign exchange bureaus have been closed orconverted to other internal structural subdivisions of creditinstitutions. Previously, foreign exchange bureaus could be openedby credit institutions that handled banking operations based onbanking licenses or subsidiaries to which the credit institutionsdelegated authority for all or some banking operations stipulated intheir license (BR Instruction No. 109-I of January 14, 2004, on theProcedure for the Adoption of a Decision by the BR on the StateRegistration of Credit Institutions and Issuing a Banking Licensewas superseded by BR Instruction No. 135-I of April 2, 2010).

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Internal structural subdivisions of credit institutions (branches)carry out transactions as established by BR regulations. They mayhandle all or some banking transactions under the banking licenseof the credit institution and delegated to them. Branches thatpurchase and sell foreign currency cash must also handle othertransactions delegated to them by the credit institution.

Transactions with foreign currency cash currently take placeaccording to BR Instruction No. 136-I of September 16, 2010, onthe Procedure for Authorized Banks (Branches) to carry out certaintypes of Banking Transactions with Foreign Currency in Cash Formand Transactions with Checks (including Traveler’s Checks)Whose Nominal Value Is Indicated in Foreign Currency, with theParticipation of Individuals and BR Directive No. 2054-U ofAugust 14, 2008, on the Procedure for Conducting CashTransactions with Foreign Currency in the Form of Cash atAuthorized Banks in Russia (as amended).

As of January 1, 2013, the number of credit institutions (other thanbranches) licensed by the BR to perform banking transactions inforeign exchange was 918.

Operated by the central bank Yes.

Foreign exchange standing facility No.

Allocation No.

Auction No.

Fixing No.

Interbank market Yes. The interbank market operates on the exchange and over thecounter. As of December 31, 2012, there were 903 participants inthe interbank market. There are no restrictions on the spreadbetween the exchange rates of buyers and sellers or on thecommissions of market participants.

The U.S. dollar is the main intervention currency.

Over the counter Yes.

Brokerage Yes.

Market making Yes. There were nine market-making credit institutions in the MoscowExchange OJSC exchange section as of March 1, 2013.

Forward exchange market Yes. Forward transactions are concluded by authorized banks. Tradingin futures contracts is conducted in currency exchanges, with mosttrading concentrated in the Moscow Exchange OJSC.

The BR does not participate in the domestic currency derivativesmarket, but it does use swap transactions to provide liquidity. UnderRussian securities market laws, one-day currency swap transactionsby the BR are not considered financial derivatives.

Official cover of forward operations No.


Yes. Federal Law No. 86-FZ of July 10, 2002, on the Central Bank ofthe Russian Federation (Bank of Russia) (with amendments andaddenda); BR Regulation No. 286-P of April 18, 2006, on the settingand publishing by the Central Bank of the Russian Federation of

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Official Foreign Currency Exchange Rates to the Ruble; BRDirective No. 2423-U of April 2, 2010, on Closing All ForeignExchange Bureaus; BR Instruction No. 135-I of April 2, 2010, onthe Procedure for the Bank of Russia to approve a Decision on theState Registration of Credit Institutions and the Issuance of BankingLicenses (as amended); BR Instruction No. 136-I of September 16,2010, on the Procedure for Authorized Banks (Branches) to carryout Certain Types of Banking Transactions with Foreign Currencyin Cash Form and Transactions with Checks (including Traveler’sChecks), the Nominal Value of which is indicated in ForeignCurrency, with the Participation of Individuals; BR Directive No.2054-U of August 14, 2008, on the Procedure for conducting CashTransactions with Foreign Currency in the Form of Cash atAuthorized Banks in the Russia (as amended); www.cbr.ru/eng/currency_base; www.micex.com/markets/currency/members/list;monthly Foreign Exchange Intervention Data: www.cbr.ru/eng/hd_base/VALINT.asp); daily Foreign Exchange Intervention Data:www.cbr.ru/eng/statistics/default.aspx?prtid=flikvid.

Arrangements for Payments and Receipts

Prescription of currencyrequirements

Yes.

Controls on the use of domesticcurrency

No.

For current transactions andpayments

No.

For capital transactions No.

Transactions in capital and money marketinstruments

No.

Transactions in derivatives and otherinstruments

No.

Credit operations No.

Use of foreign exchange amongresidents

Yes. Settlements between residents in foreign exchange are regulated bylaw.

Payments arrangements Yes.

Bilateral payments arrangements Yes.

Operative Yes. There are agreements with the CIS countries, Bulgaria, China,Mongolia, and Vietnam.

Inoperative n.a.

Regional arrangements No.

Clearing agreements No.

Barter agreements and open accounts No.

Administration of control Yes. The BR enforces foreign exchange control regulations, supervisesand monitors transactions of authorized banks and the authorizedexchanges, and regulates banks’ open foreign exchange positions.

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In addition to the BR, the federal executive authorities (asauthorized by the government and within the limits of theirjurisdiction) exercise control over foreign exchange transactions,except those by credit institutions and currency exchanges.

Payments arrears No.

Official No.

Private No.

Controls on trade in gold (coinsand/or bullion)

Yes.

On domestic ownership and/or trade No. Information on transactions with precious metals and preciousstones subject to obligatory control in accordance with anti-money-laundering and terrorism financing legislation must be reported tothe federal Financial Monitoring Service.

On external trade Yes. Residents (including banks) must have a license from the Ministryof Industry and Trade to export gold. Banks also must have a licensefrom the BR to conduct transactions in precious metals in order toexport gold. See also Decree No. 1137 of the Russian FederationPresident of September 20, 2010, on Approval of the Regulation onImportation into Russia from Non-Member Countries of theCustoms Union within the Framework of the Eurasian EconomicCommunity (EurAsEC), as well as Exportation from Russia to thoseCountries of Precious Metals, Precious Stones, and Raw MaterialGoods Containing Precious Metals (with amendments) andDecision No. 134 of the Board of the Eurasian EconomicCommission of August 16, 2012, on Legal and Regulatory Acts inthe Field of Nontariff Regulation (with amendments).

Controls on exports and imports ofbanknotes

Yes. Foreign and domestic banknotes may be exported and imported byresidents and nonresidents in accordance with proceduresestablished by law. A uniform procedure has been established forimports into and exports from Russia of both foreign and domesticcurrency by residents and nonresidents.

On exports No. All restrictions on imports and exports of foreign currency andrubles by individuals have been removed

Domestic currency No. Resident and nonresident individuals may export rubles from thecustoms territory of the customs union without limitation. For singleexports of domestic currency exceeding the equivalent ofUS$10,000, a written customs declaration is required indicating thetotal amount being exported.

Single exports of rubles by resident and nonresident legal entitiesmust be declared in writing to the customs authorities.

Foreign currency No. Resident and nonresident individuals may export foreign currencyfrom the customs territory of the customs union without limitation.For single exports of foreign currency exceeding the equivalent ofUS$10,000, a written customs declaration is required indicating thetotal amount being exported.

Single exports of foreign currency by resident and nonresident legalentities must be declared in writing to the customs authorities.

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On imports No.

Domestic currency No. Resident and nonresident individuals may import rubles to thecustoms territory of the customs union without limitation. For singleimports of domestic currency exceeding the equivalent ofUS$10,000, a written customs declaration is required indicating thetotal amount being imported.

Single imports of rubles by resident and nonresident legal entitiesmust be declared in writing to the customs authorities.

Foreign currency No. Resident and nonresident individuals may import foreign currencyto the customs territory of the customs union without limitation. Forsingle imports of foreign currency exceeding the equivalent ofUS$10,000, a written customs declaration is required indicating thetotal amount being exported.

Single imports of foreign currency by resident and nonresident legalentities must be declared in writing to the customs authorities.


Yes. Federal Law No. 173-FZ of December 10, 2003, on ForeignCurrency Regulation and Foreign Currency Control as amended;Decision No. 51 of the EurAsEC Interstate Council of July 5, 2010,on the Agreement on the Procedure for Individuals to move Cashand/or Cash Instruments across the Customs Border of the CustomsUnion.

Resident Accounts

Foreign exchange accountspermitted

Yes.

Held domestically Yes. Residents may open foreign exchange accounts with authorizedbanks without restriction.

Approval required No.

Held abroad Yes. Residents may open foreign currency accounts abroad with banksof any country with subsequent notification to the tax authorities.Resident authorized banks licensed to engage in ruble and foreignexchange transactions may maintain correspondent accounts withnonresident banks. They may also open accounts with nonresidentbanks to service the activities of their representative offices abroad,subject to notification requirements. Foreign branches of authorizedbanks may freely maintain accounts with nonresident banks subjectto the permission of the parent bank.

Residents may transfer to their accounts (deposits) with banksoutside Russia funds from their accounts (deposits) with authorizedbanks or from other accounts (deposits) with banks outside Russia.

Residents’ transfers of funds to their accounts (deposits) with banksoutside Russia from their accounts (deposits) with authorized banksrequire presentation at the time of the first transfer of notificationfrom the tax authority of the resident’s official place of residenceand acknowledgment of receipt of that notification, except fortransactions legally required by a foreign country and transactionsconnected with the conditions for opening the account.

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Funds from the following may be credited to residents’ accounts(deposits) with banks outside Russia: (1) transfers in connectionwith execution of the budgets of the Russian budgetary system; (2)transfers for activities of Russian diplomatic missions, consulates,and other official offices abroad and of permanent missions tointerstate or intergovernmental organizations; (3) transfers by aRussian resident payable to another resident’s account abroad thatdo not exceed in one business day through one authorized bank theequivalent of US$5,000 at the official BR exchange rate on the datethe funds are withdrawn; (4) transfers for settlements betweentransportation entities and individuals abroad, as well as withbranches, representative offices, and other subdivisions of legalentities, under passenger transportation agreements; (5) transfers byresidents from their accounts with authorized banks to accounts ofother related residents (spouse or close relative—direct forebear ordescendant: parent, child, brother, sister, grandparent, grandchild,full-blooded and half-blooded, with a common father or mother,adopted parent, adopted child) with authorized banks or with banksabroad; (6) transfers of foreign exchange from accounts withauthorized banks to the accounts of Russian diplomatic missions,consulates, and other official representative offices abroad and tothe accounts of permanent Russian missions to interstate orintergovernmental organizations by federal executive branchauthorities through their representatives or representative officesand by entities authorized to use those accounts for the payment ofwages and for other payments for maintenance of theirrepresentatives or personnel of their representative offices abroadand for payment of business travel expenses; and (7) settlementswith residents abroad and with the branches, representative offices,and other subdivisions of legal entities established under Russianlaw, with nonresident individuals, under contracts for thetransportation of passengers, and settlements in foreign exchangeand rubles with resident individuals abroad and with nonresidentindividuals, under contracts for the transportation of freight byindividuals for personal, family, household, and other nonbusinessactivity.

Funds may also be credited to accounts (deposits) with banks abroadas follows: (1) Foreign currency may be credited to accounts ofresident legal entities or third parties to fulfill their obligations undercredit facilities and loan agreements with nonresident agents offoreign governments and under credit facilities and loan agreementswith residents of OECD and FATF members for a period exceedingtwo years. (2) Nonresident contractors may pay the local expensesof residents in connection with construction of properties in foreigncountries; remaining funds must be transferred to residents’accounts with authorized banks. (3) Foreign currency obtained byresidents from exhibitions and sports, cultural, and other similarevents abroad must be used to cover expenses of such events, forthe duration of the event. (4) Foreign currency proceeds must becredited to the accounts of resident transportation entities withbanks abroad for payment of aerial navigation, airport, and port feesand other fees in foreign countries; expenses associated with theservicing of air, river, and sea craft and other vehicles of suchtransportation entities and their passengers abroad; and expenses

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for the activities of branches, representative offices, and otheroffices of such transportation entities located abroad.

The foreign currency from (1) and (3) above credited to the accountsof residents or third parties with banks abroad must be used to meetthe residents’ obligations as specified or transferred to accountswith authorized banks.


Accounts in domestic currency heldabroad

Yes. Residents may open accounts in rubles abroad with banks of anycountry, with subsequent notification to the tax authorities.

Accounts in domestic currencyconvertible into foreign currency

Yes.


Yes. Federal Law No. 173-FZ of December 10, 2003, on ForeignExchange Regulation and Foreign Exchange Control as amended;Bank of Russia Directive No. 1688-U of May 29, 2006, on theLifting of Requirements Regarding the Mandatory Use of SpecialAccounts in the Performance of Foreign Exchange Transactions andon the Recognition of Certain Regulatory Acts of the Bank of Russiaas no longer in force; Bank of Russia Directive No. 1689-U of May29, 2006, on the Recognition of Certain Regulatory Acts of the Bankof Russia as no longer in force; Bank of Russia Instruction No. 28-I of September 14, 2006, on the Opening and Closing of BankAccounts and Deposit Accounts (Deposits) (as amended).

Nonresident Accounts

Foreign exchange accountspermitted

Yes.


Domestic currency accounts Yes.

Convertible into foreign currency Yes.


Blocked accounts No.


Yes. Federal Law No. 173-FZ of December 10, 2003, on ForeignExchange Regulation and Foreign Exchange Control as amended;Bank of Russia Directive No. 1688-U of May 29, 2006, on theLifting of Requirements Regarding the Mandatory Use of SpecialAccounts in the Performance of Foreign Exchange Transactions andon the Recognition of Certain Regulatory Acts of the Bank of Russiaas no longer in force; Bank of Russia Directive No. 1689-U of May29, 2006, on the Recognition of Certain Regulatory Acts of the Bankof Russia as no longer in force; Bank of Russia Instruction No. 28-I of September 14, 2006, on the Opening and Closing of BankAccounts and Deposit Accounts (Deposits) (as amended).

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Imports and Import Payments

Foreign exchange budget No.

Financing requirements for imports No.

Minimum financing requirements No.

Advance payment requirements No.

Advance import deposits No.

Documentation requirements forrelease of foreign exchange forimports

Yes. Residents (excluding individuals) are required to set up atransaction passport in an authorized bank for recording, reporting,and foreign exchange control purposes in connection with foreignexchange transactions between residents and nonresidents (Article20 of Federal Law No. 173-FZ of December 10, 2003, on ForeignExchange Regulation and Foreign Exchange Control (hereinafter,Federal Law No. 173-FZ).

The passport must include the following: information on theresident and its foreign counterparty, general information on thetransaction, including contract date, contract number (if any), totalfor the transaction (if available), and currency of the transaction;completion date of the obligations associated with the transaction;and information on the authorized bank in which the deal passportis formalized and the settlement accounts.

A transaction passport must be set up for foreign trade contracts(agreements) between residents (excluding individuals) andnonresidents that stipulates foreign exchange operations in the formof settlements and transfers through the accounts of the resident inauthorized banks and/or through accounts in a nonresident bank asfollows:

(1) involving goods exported from or imported into Russia, workdone, services rendered, and information and intellectual property,including the exclusive rights to it, transferred under the foreigntrade agreement (contract);

(2) involving the transfer of real estate on the basis of a rentalagreement or a financial rental (leasing) agreement;

(3) involving loans by residents in foreign exchange and rubles tononresidents and loans to residents in foreign exchange and rublesfrom nonresidents under a credit agreement (loan agreement).

A transaction passport is required for each contract (creditagreement) equal to or exceeding US$50,000 at the official BRexchange rate.

To set up a transaction passport in an authorized bank, the residentmust submit a completed form and supporting documentation. Theauthorized bank must set up the passport electronically and maintainit until the contract (credit agreement) is completed. The passportis used by foreign exchange control authorities and agents forforeign exchange control under Federal Law No. 173-FZ.

Domiciliation requirements No.

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Preshipment inspection Yes. Residents (excluding individuals) must set up a transaction passportin an authorized bank for each contract (credit agreement) equal toor exceeding US$50,000 at the official BR exchange rate.

Letters of credit No.

Import licenses used as exchangelicenses

No.

Other No.

Import licenses and other nontariffmeasures

Yes.

Positive list No.

Negative list Yes. Private imports of ethyl alcohol are prohibited. Licenses arerequired for imports of various alcoholic products, as well as dual-purpose items, military equipment, medicine, industrial waste, andozone-depleting substances.

Open general licenses No.

Licenses with quotas No.

Other nontariff measures No.

Import taxes and/or tariffs Yes. Most customs duties range from 5% to 25%, but duties up to 80%are levied on certain sensitive goods. The following products areexempt from duties: insulin and some other pharmaceuticals,printed materials, cotton and cotton waste, some animal species,raw diamonds, wheelchairs, works of art, collectibles, and antiques.Imports of goods on the approved list from developing countriesare subject to a customs duty that is 75% of the applicable rate.

Taxes collected through the exchangesystem

No.

State import monopoly No.


Yes. Federal Law No. 173-FZ of December 10, 2003, on ForeignExchange Regulation and Foreign Exchange Control as amended;Russian Federation Government Resolution No. 400 of June 29,2006, on the Recognition of Russian Federation GovernmentResolution No. 302 of May 16, 2005, as no longer in force; FederalLaw No. 246-FZ of December 29, 2006, on Amendments to Articles11 and 18 of the Federal Law on Banks and Banking and Article 61of the Federal Law on the Central Bank of the Russian Federation(Bank of Russia); Federal Law No. 86-FZ of July 10, 2002, on theCentral Bank of the Russian Federation (Bank of Russia) asamended; Bank of Russia Instruction No. 1380I of June 4, 2012 onthe Rules for Residents and Nonresidents in submitting toAuthorized Banks Documents and Information Associated withForeign Exchange Operations and the Rules for setting up DealPassports, as well as the Rules for Authorized Banks in RecordingForeign Exchange Operations and Maintaining Such Records.

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Exports and Export Proceeds

Repatriation requirements Yes. All proceeds from exports received by residents must be creditedin full to their accounts opened with authorized banks except asindicated below.

Residents are not required to credit foreign currency or rubles totheir bank accounts at authorized banks if (1) Foreign currency iscredited to accounts of resident legal entities or third parties withbanks abroad to fulfill the obligations of resident legal entities undercredit facilities and loan agreements with nonresident entities thatare agents of foreign governments, and under credit facilities andloan agreements entered into with residents of OECD or FATFmembers for a period exceeding two years. (2) Nonresidentcontractors pay the local expenses of residents in connection withresidents’ construction of properties in foreign countries, afterwhich any remaining funds must be transferred to residents’accounts with authorized banks. (3) Foreign currency obtained byresidents from exhibitions and sports, cultural, and other similarevents abroad is used to cover expenses of such events, for theduration of the event. (4) Foreign currency is used to offsetcounterclaims for obligations between (a) resident and nonresidententities that conduct fishing operations outside Russia and thatprovide services outside Russia to the residents under agencyagreements with them; (b) resident and nonresident transportationentities performing services outside Russia for the residents underagreements with them; or (c) resident and nonresidenttransportation entities if the settlements between them are madethrough specialized settlement entities established by internationalorganizations in the area of international transportation and ofwhich such resident transportation entities are members. (5) Foreigncurrency is used to offset counterclaims for obligations resultingfrom reinsurance agreements or service agreements connected withreinsurance agreements between nonresidents and residentinsurance entities or insurance brokers. (6) Foreign currencyproceeds are credited to the accounts of resident transportationentities with banks abroad to pay for the expenses of suchtransportation entities abroad in connection with the payment ofaerial navigation, airport and port fees, and other mandatory fees inforeign countries; expenses associated with the servicing of air,river, and sea craft and other vehicles and their passengers abroad;and expenses connected with branches, representative offices, andother offices abroad.

The foreign currency credited, in accordance with (1) and (3) above,to the accounts of residents or third parties with banks abroad mustbe used to meet the residents’ obligations as specified or transferredto accounts with authorized banks.

Residents have fulfilled the repatriation requirement if they havearranged for receipt in their bank account of payment under acontract insuring against a nonresident’s failure to fulfill obligationsunder a foreign trade contract as specified in Federal Law No. 82-FZ of May 17, 2007, on the Development Bank, for activities relatedto insuring export loans and investments against business and/orpolitical risks, provided the ratio in the insurance contract between

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the insurance amount and the insurance value (level ofindemnification) equals or exceeds the value established by law.

Surrender requirements No.

Surrender to the central bank No.

Surrender to authorized dealers No.

Financing requirements No.

Documentation requirements Yes. Residents (excluding individuals) must set up a transaction passportin an authorized bank for recording, reporting, and foreign exchangecontrol purposes on foreign exchange transactions betweenresidents and nonresidents (Article 20 of Federal Law No. 173-FZof December 10, 2003, on Foreign Exchange Regulation andForeign Exchange Control (hereinafter, Federal Law No. 173-FZ).

The passport must include the following: information on theresident and its foreign counterparty, general information on thetransaction, including contract date, contract number (if any), totalfor the transaction (if available), and currency of the transaction;completion date of the obligations associated with the transaction;and information on the authorized bank in which the passport isformalized and the settlement accounts.

A transaction passport must be set up for foreign trade contracts(agreements) between residents (excluding individuals) andnonresidents that stipulates foreign exchange operations in the formof settlements and transfers through the accounts of the resident inauthorized banks and/or through accounts in a nonresident bank asfollows:

(1) involving goods exported from or imported into Russia, workdone, services rendered, and information and intellectual property,including the exclusive rights to it, transferred under the foreigntrade agreement (contract);

(2) involving the transfer of real estate on the basis of a rentalagreement or a financial rental (leasing) agreement;

(3) involving loans by residents in foreign exchange and rubles tononresidents and loans to residents in foreign exchange and rublesfrom nonresidents under a credit agreement (loan agreement).

A transaction passport is required for each contract (creditagreement) equal to or exceeding US$50,000 at the official BRexchange rate.

To set up a transaction passport in an authorized bank, the residentmust submit a completed form and supporting documentation. Theauthorized bank must set up the passport electronically and maintainit until the contract (credit agreement) is completed. The passportis used by foreign exchange control authorities and agents forforeign exchange control under Federal Law No. 173-FZ.

Letters of credit No.

Guarantees No.

Domiciliation No.

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Preshipment inspection Yes. Residents (excluding individuals) must set up a transaction passportin an authorized bank for each contract (credit agreement) equal toor exceeding US$50,000 at the official BR exchange rate.

Other No.

Export licenses Yes.

Without quotas No.

With quotas Yes.

Export taxes Yes.

Collected through the exchange system No.

Other export taxes Yes. Export taxes are levied on 141 items, and the rate for most of themis 6.5%, with a maximum rate of 50% for nonferrous scrap. Anumber of goods, including crude oil and petroleum products, aresubject to specific duties. Certain goods are subject to combinedduties.


Yes. Federal Law No. 173-FZ of December 10, 2003, on ForeignExchange Regulation and Foreign Exchange Control, as amended;Federal Law No. 82-FZ of May 17, 2007, on the DevelopmentBank, as amended; Bank of Russia Instruction No. 1380I of June 4,2012 on the Rules for Residents and Nonresidents in submitting toAuthorized Banks Documents and Information Associated withForeign Exchange Operations and the Rules for setting up DealPassports, as well as the Rules for Authorized Banks in recordingForeign Exchange Transactions and maintaining Such Records.

Payments for Invisible Transactions and Current Transfers

Controls on these transfers No.

Trade-related payments No.

Prior approval No.

Quantitative limits No.

Indicative limits/bona fide test No.

Investment-related payments No.

Prior approval No.



Payments for travel No.

Prior approval No.



Personal payments No.

Prior approval No.

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Foreign workers’ wages No.

Prior approval No.



Credit card use abroad No.

Prior approval No.



Other payments No.

Prior approval No.




n.a.

Proceeds from Invisible Transactions and Current Transfers

Repatriation requirements Yes. All proceeds from exports received by residents must be creditedin full to their accounts opened with authorized banks except asindicated below.

Residents are not required to credit foreign currency or rubles totheir bank accounts at authorized banks if (1) Foreign currency iscredited to accounts of resident legal entities or third parties withbanks abroad to fulfill the obligations of resident legal entities undercredit facilities and loan agreements with nonresident entities thatare agents of foreign governments, and under credit facilities andloan agreements entered into with residents of OECD or FATFmembers for a period exceeding two years. (2) Nonresidentcontractors pay the local expenses of residents in connection withresidents’ construction of properties in foreign countries after whichany remaining funds must be transferred to residents’ accounts withauthorized banks. (3) Foreign currency obtained by residents fromexhibitions and sports, cultural, and other similar events abroad isused to cover expenses of such events, for the duration of the event.(4) Foreign currency is used to offset counterclaims for obligationsbetween (a) resident and nonresident entities that conduct fishingoperations outside Russia and that provide services outside Russiato the residents under agency agreements with them; (b) residentand nonresident transportation entities performing services outsideRussia for the residents under agreements with them; or (c) residentand nonresident transportation entities if the settlements betweenthem are made through specialized settlement entities establishedby international organizations in the area of international

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transportation and of which such resident transportation entities aremembers. (5) Foreign currency is used to offset counterclaims forobligations resulting from reinsurance agreements or serviceagreements connected with reinsurance agreements betweennonresidents and resident insurance entities or insurance brokers.(6) Foreign currency proceeds are credited to the accounts ofresident transportation entities with banks abroad to pay for theirexpenses abroad in connection with the payment of aerialnavigation, airport and port fees, and other mandatory fees inforeign countries; expenses associated with the servicing of air,river, and sea craft and other vehicles of such transportation entitiesand their passengers abroad; and expenses in connection with theactivities of branches, representative offices, and other offices ofsuch transportation entities abroad.

The foreign currency credited, in accordance with Paragraphs (1)and (3) above, to the accounts of residents or third parties with banksabroad must be used to meet the residents’ obligations as specifiedor transferred to accounts opened with authorized banks.

Residents have fulfilled the repatriation requirement if they havearranged for receipt in their bank account of payment under acontract insuring against a nonresident’s failure to fulfill obligationsunder a foreign trade contract as specified in Federal Law No. 82-FZ of May 17, 2007, on the Development Bank, for activities relatedto insuring export loans and investments against business and/orpolitical risks, provided the ratio in the insurance contract betweenthe insurance amount and the insurance value (level ofindemnification) equals or exceeds the value established by law.




Restrictions on use of funds No.


Yes. Federal Law No. 173-FZ of December 10, 2003, on ForeignExchange Regulation and Foreign Exchange Control, as amended;Federal Law No. 82-FZ of May 17, 2007, on the DevelopmentBank, as amended.

Capital Transactions

Controls on capital transactions Yes.

Repatriation requirements No.




Controls on capital and moneymarket instruments

Yes.

On capital market securities Yes.

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Shares or other securities of aparticipating nature

Yes.

Purchase locally by nonresidents Yes. The Federal Law on Foreign Exchange Regulation and ForeignExchange Control does not restrict the purchase of shares or otherunit-type securities by nonresidents (either from nonresidents orresidents).

Special restrictions are in place for the banking sector.

Transactions between nonresidents with domestic securities inRussia are performed under requirements set out in theantimonopoly and the securities market law. Pursuant to FederalLaw No. 57-FZ of April 29, 2008, on the Procedure for makingForeign Investments in Business Entities that are of StrategicSignificance in providing for the National Defense and StateSecurity, as amended, transactions resulting in control by a foreigninvestor or group of persons over business entities that are ofstrategic significance are subject to the approval by the federalexecutive body authorized to carry out control functions overforeign investments in Russia.

Sale or issue locally by nonresidents Yes. Under the foreign exchange law, there are no restrictions on the saleor issuance of shares or other unit-type securities by nonresidents.

Placement and trade of securities of foreign issuers are governed bythe law on the securities market. According to Article 51.1 ofFederal Law No. 39-FZ of April 22, 1996, on the Securities Market,as amended:

(1) Foreign financial instruments may be traded in Russia assecurities of foreign issuers, provided all the following conditionsare met: (a) Foreign financial instruments are assigned aninternational securities identification code (number) and aninternational financial instrument classification code. (b) Foreignfinancial instruments are classified as securities as defined byrelevant federal agency.

(2) Securities of the following that meet the requirements ofParagraph (1) may be placed and/or publicly traded: (a) foreignentities in OECD countries, FATF members or observers, membersof the committee of experts of the Council of Europe assessingmeasures to combat money laundering and financing of terrorism(MONEYVAL), and/or members of the Common Economic Space;(b) foreign entities in countries with agencies (relevantorganizations) with which the federal executive agency responsiblefor the securities market has an agreement; (c) internationalfinancial entities approved by Russian Government; (d) the foreigngovernments indicated in (a) and (b) and those countries’autonomous CBs and administrative-territorial units; and (e)foreign organizations whose securities are listed on an approvedexchange under Paragraph 4 of Article 51.1.

(3) Foreign issuers’ securities may be placed in Russia withauthorization by decision by the relevant executive agency, with aregistered prospectus.

(4) Foreign issuers’ securities that meet the requirements ofParagraphs 1 and 2 of Article 51.1 may be traded publicly with

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permission of a Russian exchange. Permission may be granted ifthe securities, except securities of international financial entities,are listed on a foreign exchange approved by the relevant federalexecutive agency and neither Russian law nor international law hasplaced any restrictions on the securities.

(5) International financial entities’ securities may be publicly placedand/or traded if they may not be traded freely among an unrestrictedgroup of persons and/or offered to an unrestricted group of persons.

Purchase abroad by residents No. The foreign exchange law does not prohibit the purchase abroad ofshares or other unit-type securities by residents.

Sale or issue abroad by residents Yes. The foreign exchange law does not prohibit the sale or issuanceabroad of shares or other unit-type securities by residents. Underthe securities law, the placement and trading of securities of Russianissuers abroad require authorization by the federal executive bodyin charge of the securities market.

Bonds or other debt securities Yes. Rules similar to the rules governing transactions with shares or otherunit-type securities apply.

Purchase locally by nonresidents No. There are no restrictions on purchases of bonds or other debtsecurities by nonresidents from nonresidents or residents.Transactions between nonresidents with domestic securities mustadhere to the requirements of the antimonopoly and the securitiesmarket law.

Sale or issue locally by nonresidents No. Under the foreign exchange law, there are no restrictions on the saleor issuance of bonds or other debt securities by nonresidents.

The placing and trading of securities of foreign issuers in Russia aregoverned by the law on the securities market. According to Article51.1 of Federal Law No. 39-FZ of April 22, 1996, on the SecuritiesMarket, as amended:


(2) Securities of the following foreign issuers meeting therequirements of Paragraph (1) may be placed and/or publicly traded:(a) foreign entities established in countries that are members of theOECD, members or observers of the group involved in developingfinancial measures to combat money laundering (FATF), and/ormembers of the committee of experts of the Council of Europeassessing measures to combat money laundering and financing ofterrorism (MONEYVAL) and/or members of the CommonEconomic Space; (b) foreign entities established in countries, withthe relevant agencies (relevant organizations) of which the federalexecutive agency responsible for the securities market hasconcluded an agreement; (c) international financial entities on thelist approved by Russian Government; (d) the foreign governmentsindicated in (a) and (b), as well as CBs and administrative-territorial

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units of such foreign countries that have autonomous legalcompetency; (e) foreign organizations whose securities are listedon a foreign exchange that is on a list approved by the federalexecutive agency responsible for the securities market underParagraph 4 of Article 51.1.

(3) The securities of foreign issuers may be placed in Russia bydecision of the federal executive agency responsible for thesecurities market, provided it registers the prospectus for suchsecurities.

(4) The securities of foreign issuers meeting the requirements ofParagraphs 1 and 2 of Article 51.1 may be allowed to be tradedpublicly in Russia by a decision of a Russian exchange to admitthem to organized trading. Such a decision may be taken by aRussian exchange if the securities of the foreign issuers, with theexception of securities of international financial entities, are listedon a foreign exchange that is on a list approved by the federalexecutive agency responsible for the securities market and neitherRussian law nor international law has placed any restrictions on thesecurities that would disallow their being offered in Russia to anunrestricted group of persons.

(5) The securities of international financial entities may be publiclyplaced and/or publicly traded if the conditions for their issuance donot contain restrictions on trading such securities among anunrestricted group of persons and/or the offer of such securities toan unrestricted group of persons.

Purchase abroad by residents No. The foreign exchange law of Russia does not prohibit purchases ofbonds or other debt securities by residents outside of Russia.

Sale or issue abroad by residents Yes. The foreign exchange law of Russia does not prohibit the purchaseor issuance of bonds or other debt securities by residents outside ofRussia. Under the securities law, the placement and trading ofsecurities of Russian issuers outside of Russia require authorizationby the federal executive body in charge of the securities market.

On money market instruments Yes.

Purchase locally by nonresidents Yes. Under the foreign exchange law, there are no restrictions onpurchases of money market instruments by nonresidents (fromnonresidents or residents). Transactions between nonresidents withdomestic securities in Russia are performed under requirements setout in the antimonopoly and the securities market law. Pursuant toArticle 27.5-1 of the Federal Law on the Securities Market, bondsof the BR may be placed and traded among Russian lendinginstitutions only.

Sale or issue locally by nonresidents Yes. Under the foreign exchange law of Russia, there are no restrictionson the sale or issuance of money market instruments bynonresidents.


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(4) Foreign issuers’ securities that meet the requirements ofParagraphs 1 and 2 of Article 51.1 may be traded publicly withpermission of a Russian exchange. Permission may be granted ifthe securities, except securities of international financial entities,are listed on a foreign exchange approved by the relevant federalexecutive agency and neither Russian law nor international law hasplaced any restrictions on the securities.


Purchase abroad by residents No. There are no prohibitions in the legislation against the purchase ofmoney market instruments by residents outside of Russia.

Sale or issue abroad by residents Yes. The foreign exchange law of Russia does not prohibit the sale orissuance of money market instruments by residents outside ofRussia. Under the securities law, the placement and trading ofsecurities of Russian issuers outside of Russia require authorizationby the federal executive body in charge of the securities market.

On collective investment securities Yes. Rules similar to the rules governing transactions with shares or otherunit-type securities apply.

Purchase locally by nonresidents No. There are no restrictions on purchases of collective investmentsecurities by nonresidents from nonresidents or residents (FederalLaw No. 173-FZ of December 10, 2003, on Foreign ExchangeRegulation and Foreign Exchange Control). Transactions betweennonresidents with domestic securities in the territory of Russia areperformed under requirements set out in the antimonopoly and thesecurities market law.

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Sale or issue locally by nonresidents Yes. Under the foreign exchange law, there are no restrictions on the saleor issuance of collective investment securities by nonresidents.





(4) Foreign issuers’ securities that meet the requirements ofParagraphs 1 and 2 of Article 51.1 may be traded publicly withpermission of a Russian exchange. Permission may be granted ifthe securities, except securities of international financial entities,are listed on a foreign exchange approved by the relevant federalexecutive agency and neither Russian law nor international law hasplaced any restrictions on the securities.


Purchase abroad by residents No. There are no prohibitions against the purchase of collectiveinvestment securities by residents outside of Russia.

Sale or issue abroad by residents Yes. The foreign exchange law of Russia does not prohibit the sale orissuance of collective investment securities outside of Russia.

Placement and trading of securities of Russian issuers outside ofRussia require authorization by the federal executive body in chargeof the securities market.

Controls on derivatives and otherinstruments

No.

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Purchase locally by nonresidents No.

Sale or issue locally by nonresidents No.

Purchase abroad by residents No.

Sale or issue abroad by residents No.

Controls on credit operations No.

Commercial credits No.

By residents to nonresidents No.

To residents from nonresidents No.

Financial credits No.



Guarantees, sureties, and financialbackup facilities

No.



Controls on direct investment Yes.

Outward direct investment Yes. Direct investments by resident individuals and resident legalentities that are not credit institutions are permitted, provided therequirements of the foreign currency law of Russia are met.

There are no restrictions on direct investment by resident creditinstitutions associated with the acquisition of stocks (stakes) offoreign entities, provided it does not lead to the establishment ofsubsidiaries abroad.

A credit institution with a general license may have subsidiariesabroad subject to authorization and in accordance with BRrequirements.

The BR does not issue authorization to establish subsidiaries incountries (in areas) that are included, in the manner specified by thelaws of Russia, among those governments (areas) that do notparticipate in international cooperation in the area of combatingmoney laundering and financing of terrorism.

In the event of the sale of shares in a Russian credit institutionacquired in a public offer (trading) abroad on the basis of BRapproval (including in cases in which the percentage of theacquirer’s shares in the credit institution’s authorized capital willbe below the lower limit approved by the BR—including below theamount for which the BR’s approval is required—or if the sharesin the credit institution will be sold in full by the acquirer), theacquirer is entitled, based on the same BR approval, to carry outtransactions to acquire a credit institution’s shares that are tradedabroad, including through the placement and trading of foreignsecurities, in compliance with the requirements in Paragraph 1.4,Subparagraphs 1.4.1 and 1.4.2, of BR Instruction No. 130-I ofFebruary 21, 2007,.

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Inward direct investment Yes. The law has established special restrictions for the banking sector.Direct investments are subject to certain limitations: (1) Exceptionshave been established for foreign investors and groups of personsthat include a foreign investor, for their investment in the authorizedcapital of business entities that are of strategic significance inproviding for the national defense and state security and/or for thecompletion of transactions resulting in the establishment of controlover such business entities. In this connection, transactions carriedout by foreign governments or international organizations ororganizations under their control that result in acquisition of theright directly or indirectly to control more than 25% of the totalnumber of votes attached to voting shares (interest stakes)constituting the authorized capital of a Russian business entity, orsome other ability to block decisions of such a business entity’sgoverning authorities, are subject to approval in accordance withthe procedures specified in Articles 9–12 of the Federal Law on theProcedure for making Foreign Investments in Business Entities thatare of Strategic Significance in providing for the National Defenseand State Security, except transactions in which the participants areinternational financial organizations established under internationaltreaties to which Russia is a party or international financialorganizations with which Russia has entered into internationaltreaties. The list of those international financial organizations isapproved by the Russian government (at present, the Order No. 119-r of the Russian Federation Government of February 3, 2012, is ineffect).

(2) Restrictions have been established on the use of undergroundmineral resources by foreign investors and by legal entities in whichforeign investors hold a stake.

(3) Restrictions have been introduced on certain types of activitiesof insurance companies that are subsidiaries of foreign investors orhave a foreign ownership stake in their authorized capital of over49%, other than insurance companies that were subsidiaries offoreign investors on the date Federal Law No. 204-FZ of November20, 1999, went into effect, if they were previously authorized forsuch activity. A quota of 25% was set on foreign capital in theauthorized capital of insurance companies. If this percentage isexceeded, the insurance supervisory authority stops issuing licensesfor the performance of insurance activities to insurance companiesthat are subsidiaries of foreign investors or have a foreign ownershipstake in their authorized capital over 49%.

Insurance companies must obtain authorization for the following:(1) an increase in their authorized capital from funds of foreigninvestors and/or their subsidiaries and (2) transfers of shares (stakesin authorized capital) to a foreign investor (including for sale toforeign investors). Russian shareholders must obtain authorizationto transfer their shares to foreign investors and/or their subsidiaries.Authorization may not be denied to insurance companies that aresubsidiaries of foreign investors or that have a foreign ownershipin their authorized capital exceeding 49% that attain this status as aresult of the transactions indicated if the established quota is notexceeded when completing such transactions.

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Effective February 3, 2012, rules for foreign investment byinternational financial organizations in strategic sectors have beenrelaxed. Order No. 119-r of February 3, 2012, approved a list ofinternational financial organizations that do not require approvalunder the Federal Law on the Procedure for making ForeignInvestments in Business Entities That Are of Strategic Significancein Providing for the National Defense and State Security and theFederal Law on Foreign Investments in Russia.

Controls on liquidation of directinvestment

No.

Controls on real estate transactions No.

Purchase abroad by residents No.

Purchase locally by nonresidents No. Foreign citizens, foreign legal entities, persons without citizenship,and legal entities in whose authorized (share) capital the stake offoreign citizens, foreign legal entities, or persons withoutcitizenship is over 50% may only hold land parcels for agriculturaluse in the form of a lease.

Sale locally by nonresidents No.

Controls on personal capitaltransactions

No.

Loans No. The law places no restrictions on transactions connected withprovision or receipt of financial credits by residents andnonresidents.



Gifts, endowments, inheritances, andlegacies

No.



Settlement of debts abroad byimmigrants

No.

Transfer of assets No.

Transfer abroad by emigrants No.

Transfer into the country byimmigrants

No.

Transfer of gambling and prizeearnings

No.


Yes. Federal Law No. 39-FZ of April 22, 1996, on the Securities Marketas amended; Federal Law No. 282-FZ of December 29, 2012, onAmendments to Individual Legislative Enactments of Russia andon the Declaration that Individual Provisions of LegislativeEnactments of Russia are no longer in force; Federal Law No. 173-FZ of December 10, 2003, on Foreign Exchange Regulation andForeign Exchange Control as amended; Bank of Russia DirectiveNo. 1688-U of May 29, 2006, on abolishing the Requirement forMandatory Use of Special Accounts in the Performance of Foreign

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Exchange Transactions and on the Recognition of CertainRegulatory Acts of the Bank of Russia as no longer in force; Bankof Russia Directive No. 1689-U of May 29, 2006, on theRecognition of Certain Regulatory Acts of the Bank of Russia asno longer in force; Resolution of the Government of the RussianFederation No. 400 of June 29, 2006, on the Recognition of RussianFederation Government Resolution No. 302 of May 16, 2006, as nolonger in force; Federal Law No. 86-FZ of July 10, 2002, on theCentral Bank of the Russian Federation (Bank of Russia) asamended; Resolution of the Government of the Russian FederationNo. 399 of June 29, 2006, on the Recognition of Russian FederationGovernment Resolution No. 204 of April 11, 2005, as no longer inforce; Federal Law No. 395-1 of December 2, 1990, on Banks andBanking as amended; Federal Law No. 246-FZ of December 29,2006, on Amending Articles 11 and 18 of the Federal Law on Banksand Banking and Article 61 of the Federal Law on the Central Bankof the Russian Federation (Bank of Russia); Bank of RussiaRegulation No. 290-P of July 4, 2006 on the Procedure for the Bankof Russia to issue Authorizations to Credit Institutions allowingthem to have Subsidiaries in Foreign Countries, as amended; Bankof Russia Instruction No. 135-I of April 2, 2010, on the Procedurefor the Bank of Russia to make decisions concerning theGovernment Registration of Credit Institutions and Issuance ofBanking Licenses as amended; Bank of Russia Instruction No. 130-I of February 21, 2007, on the Procedure for obtaining Prior Consentfrom the Bank of Russia for the Purchase and/or Receipt of theFiduciary Management of Stocks (Shares) in a Credit Institution asamended; Bank of Russia Regulation No. 437 of April 23, 1997, onSpecial Considerations in the Registration of Credit Institutionswith Foreign Investments (as amended); Bank of Russia DirectiveNo. 1868-U of July 20, 2007, on the Submission of Documentsconnected with Individual Foreign Exchange Operations byResident Individuals to Authorized Banks; Federal Law No. 160-FZ of July 9, 1999, on Foreign Investments in Russia as amended;Federal Law No. 57-FZ of April 29, 2008, on the Procedure formaking Foreign Investments in Business Entities that are ofStrategic Significance in providing for the National Defense andState Security (as revised); Federal Law No. 58-FZ of April 29,2008, on making Revisions to Certain Legislative Acts of Russiaand Recognition of Certain Provisions of Legislative Acts of Russiaas no longer in force in connection with the passing of the FederalLaw on the Procedure for making Foreign Investments in BusinessEntities that are of Strategic Significance in providing for theNational Defense and State Security; Order No. 119-r of the RussianFederation Government of February 3, 2012, as amended; RussianFederation Law No. 2395-1 of February 21, 1992, on UndergroundMineral Resources; Federal Law No. 14-FZ of February 8, 1998,on Limited Liability Companies as amended; Federal Law No. 208-FZ of December 26, 1995, on Joint-Stock Companies as amended;Federal Law No. 126-FZ of July 7, 2003, on Communications asamended; Law No. 4015-1 of November 27, 1992, on theOrganization of the Insurance Business in Russia as amended;Federal Law No. 204-FZ of November 20, 1999, on Revisions andAmendments to the Law of the Russian Federation on the

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Organization of the Insurance Business in Russia; Federal Law No.101-FZ of July 24, 2002, on Trading Land for Agricultural Purposesas amended; Order No. 12-46/pz-n of the Russian Federal FinancialMarkets Service of June 19, 2012, on Approval of the List ofForeign Stock Exchanges the Listing on which is a MandatoryCondition for the Decision by a Russian Stock Exchange to allowthe Securities of Foreign Issues to be traded without a Decision bythe Federal Executive Agency Responsible for the SecuritiesMarket as to whether they should be allowed to be publicly placedand/or publicly Traded in Russia; Order No. 11-63/pz-n of theRussian Federal Financial Markets Service of December 1, 2011(revised on June 19, 2012) on Approval of the Criteria and Rulesfor Including Foreign Stock Exchanges on the List of Foreign StockExchanges the Listing on which is a Mandatory Condition for theDecision by a Russian Stock Exchange to allow the Securities ofForeign Issues to be traded without a decision by the FederalExecutive Agency Responsible for the Securities Market as towhether they should be allowed to be publicly placed and/orpublicly traded in Russia.

Provisions Specific to the Financial Sector

Provisions specific to commercialbanks and other credit institutions

Yes. The term “credit institution” describes participants in the Russianbanking sector. Under Federal Law No. 395-1 of December 2, 1990,on Banks and Banking, credit institutions include banks andnonbank credit institutions that carry out certain types of bankingtransactions. The terms “nonresident bank” and “foreign bank” areused for nonresidents. All lending institutions that perform bankingoperations in Russia must be residents.

Borrowing abroad No.

Maintenance of accounts abroad Yes. Authorized banks may open correspondent accounts with banksabroad pursuant to the terms specified in the banking license issuedby the BR.

Lending to nonresidents (financial orcommercial credits)

No.

Lending locally in foreign exchange No.

Purchase of locally issued securitiesdenominated in foreign exchange

No.

Differential treatment of depositaccounts in foreign exchange

Yes.

Reserve requirements No. Different reserve requirement rates may be applied depending onthe currency of liabilities. Reserve requirements are imposed on (1)liabilities to nonresident legal entities (including nonresident banks)in rubles and/or in foreign currency; (2) liabilities to resident andnonresident individuals in rubles and/or in foreign currency; and (3)other liabilities in rubles and/or foreign currency.

Credit institutions’ long-term liabilities, which include liabilitieswith terms of at least three years, are excluded from the calculationof reserve requirements. The required reserves for ruble liabilities

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are reduced by the amount of the cash balance in rubles that thecredit institution maintains in its cash department, not to exceed25% of the required reserves for ruble liabilities.

Required reserves are deposited in correspondent accounts at theBR (when using the required reserve averaging mechanism) inrubles, regardless of the currency of the liabilities. Effective March1, 2013, a single reserve requirement of 4.25% was set for allcategories of liabilities subject to reserve requirements (liabilitiesto nonresident legal entities, to individuals, other liabilities).Previously, a 5.5% reserve requirement applied to nonresident legalentities, and a 4% requirement applied to nonresident individualsand other liabilities.

Liquid asset requirements Yes. For the purpose of monitoring the liquidity of credit institutions, theBR has established liquidity ratios, which are determined as the ratioof assets to liabilities of credit institutions, taking into considerationmaturities, amounts, types of assets and liabilities, and other factors,as well as the ratio of liquid assets to total assets.

Interest rate controls No.

Credit controls No.

Differential treatment of depositaccounts held by nonresidents

No.

Reserve requirements No. Different reserve requirement rates may be applied depending onthe currency of liabilities. Reserve requirements are imposed on (1)liabilities to nonresident legal entities (including nonresident banks)in rubles and/or in foreign currency; (2) liabilities to resident andnonresident individuals in rubles and/or in foreign currency; and (3)other liabilities in rubles and/or foreign currency.

Credit institutions’ long-term liabilities, which include liabilitieswith terms of at least three years, are excluded from the calculationof reserve requirements. The required reserves for ruble liabilitiesare reduced by the amount of the cash balance in rubles that thecredit institution maintains in its cash department, not to exceed25% of the required reserves for ruble liabilities.

Required reserves are deposited in correspondent accounts at theBR (when using the required reserve averaging mechanism) inrubles, regardless of the currency of the liabilities. Effective March1, 2013, a single reserve requirement of 4.25% was set for allcategories of liabilities subject to reserve requirements (liabilitiesto nonresident legal entities, to individuals, other liabilities).Previously, a 5.5% reserve requirement applied to nonresident legalentities, and a 4% requirement applied to nonresident individualsand other liabilities.

Liquid asset requirements No.

Interest rate controls No.

Credit controls No.

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Investment regulations Yes.

Abroad by banks Yes. There are no restrictions on direct investment by resident creditinstitutions associated with their acquisition of stocks (stakes) offoreign entities except when leading to the establishment ofsubsidiaries abroad.

Establishment of subsidiaries abroad by a credit institution with ageneral license requires BR authorization. The BR does notauthorize subsidiaries in countries (areas) designated by law amongthose that do not cooperate with international efforts against moneylaundering and terrorism financing.

In the event of the sale of shares in a Russian credit institutionacquired in a public offer (trading) abroad on the basis of BRapproval (including in cases in which the percentage of theacquirer’s shares in the credit institution’s authorized capital willbe below the minimum approved by the BR—including below theamount for which the BR’s approval is required—or if the shareswill be sold in full by the acquirer), the acquirer may, based on thesame BR approval, carry out transactions to acquire a creditinstitution’s shares that are traded abroad, including through theplacement and trading of foreign securities, as established inParagraph 1.4, Subparagraphs 1.4.1 and 1.4.2, of the BR’s February21, 2007, Instruction No. 130-I, as amended.

Under the Treaty between Russia and Belarus concerning theestablishment of the Union State, fund transfers in rubles and inforeign currency for investment in the authorized capital ofBelarusian banks, and the purchase (sale) of shares issued byBelarusian banks and unit-based interests in the authorized capitalof Belarusian banks, must be made by authorized banks inaccordance with Russian law on banks and banking by givingproper notice. Authorized banks must notify the BR of investmentsin the authorized capital of Belarusian banks as established by BRregulations.

In banks by nonresidents Yes. The purchase and/or receipt in trust of more than 1% of the stock(stake) of a credit institution resulting from the completion of oneor more transactions by a single legal entity or individual (or groupof persons) must be reported to the BR. If an investor (group ofinvestors) in a credit institution owns more than 1% of the stock oris a person to whom the trust management of more than 1% of thestock has been transferred, the BR must be notified of any furtherpurchases of stock in the same credit institution. The purchase ofmore than 20% requires BR approval. Approval is also required forthe establishment by a legal entity or individual (or group ofpersons), as a result of one or more transactions, of direct or indirectcontrol (through third parties) of credit institution shareholders(participants) who own more than 20%. The BR may refuse toapprove a transaction for the purchase of more than 20% of sharesin a credit institution and/or the establishment of control ofshareholders in a credit institution, including in the case of a breachof antimonopoly regulations. The rules are the same as for residents.

Direct investment by nonresidents in the authorized capital of creditinstitutions that are being established requires BR approval.

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If shares in a Russian credit institution acquired in a public offer(trading) abroad with BR approval are sold (including in cases inwhich the percentage of the acquirer’s shares in the creditinstitution’s authorized capital will be below the minimumapproved by the BR—including below the amount for which BRapproval is required—or if the shares will be sold in full by theacquirer), the acquirer may, based on the same BR approval, carryout transactions to acquire shares traded abroad, including throughplacement and trading of foreign securities, as established inParagraph 1.4, Subparagraphs 1.4.1 and 1.4.2, of BR InstructionNo. 130-I of February 21, 2007, as amended.

Open foreign exchange position limits Yes.

On resident assets and liabilities Yes. The limits on open foreign exchange positions of lendinginstitutions are 20% of the internal funds (capital) for all foreignexchange and precious metals and 10% of the internal funds(capital) for any individual foreign currency and precious metal.Included in the calculation are balance-sheet and off-balance-sheetpositions denominated in, or dependent on the change in theexchange rate of, foreign exchange or the official prices for preciousmetals. The limits must be calculated daily.

On nonresident assets and liabilities n.a.

Provisions specific to institutionalinvestors

Insurance companies No.

Limits (max.) on securities issued bynonresidents

No.

Limits (max.) on investment portfolioheld abroad

No.

Limits (min.) on investment portfolioheld locally

No.

Currency-matching regulations onassets/liabilities composition

No.

Pension funds No.


No.


No.


No.


No.

Investment firms and collectiveinvestment funds

No.


No.


No.

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No.


No.


Yes. Federal Law No. 395-1 of December 2, 1990, on Banks and Banking(with amendments and addenda); Bank of Russia Instruction No.135-I of April 2, 2010, on the Procedure for Bank of Russia toapprove a decision on the State Registration of Credit Institutionsand the Issuance of Banking Licenses as amended; Bank of RussiaInstruction No. 130-I of February 21, 2007, on the Procedure forobtaining Prior Consent from the Bank of Russia for the Purchaseand/or Receipt for Fiduciary Management of Stock (Shares) in aCredit Institution as amended); Bank of Russia Regulation No. 437of April 23, 1997, on Special Considerations in the Registration ofCredit Institutions with Foreign Investments (as amended); Bank ofRussia Regulation No. 217-P of March 7, 2003, on the Participationof Russian Authorized Banks in the Authorized Capital of Banks ofthe Republic of Belarus; Bank of Russia Regulation No. 342-P ofAugust 7, 2009, on Reserve Requirements of Credit Institutions, asamended; Bank of Russia Directive No. 2970-U of February 12,2013, on the Establishment of Bank of Russia ReserveRequirements; Bank of Russia Instruction No. 124-I of July 15,2005 on the Establishment of the Size (Limits) of Open ForeignExchange Positions, the Methodology for calculating them, and theSpecial Features attending the Oversight of Compliance with themby lending Institutions, as amended; Federal Law No. 111-FZ ofJuly 24, 2002 on the Investment of Funds for financing the SavingsPortion of the Labor Pension in Russia, as amended; Federal LawNo. 156-FZ of November 29, 2001 on Investment Funds, asamended; Order of the Federal Financial Markets Service No.10-79/pz-n of December 28, 2010, on Approval of the Compositionand Structure of Assets of Joint-Stock Investment Funds and theAssets of Mutual Funds, as amended.

Changes during 2012

Exchange arrangement May 1 The Bank of Russia (BR) began reporting daily foreign exchangeintervention data with a two-day lag, with historical data back toJanuary 1, 2011. Previously, since June 2011, the BR publishedweekly foreign exchange intervention data with a one-week lag.

July 24 The Bank of Russia widened the band of allowable fluctuation ofthe ruble from Rub 6 to Rub 7 and reduced the cumulative amountof unplanned interventions triggering an automatic adjustment ofthe exchange rate band by 5 kopeks from US$500 million toUS$450 million.

Capital transactions

Controls on direct investment February 3 Order No. 119-r of February 3, 2012, approved a list of internationalfinancial organizations that do not require approval under theFederal Law on the Procedure for making Foreign Investments inBusiness Entities That Are of Strategic Significance in Providing

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for the National Defense and State Security and the Federal Law onForeign Investments in Russia.

Changes during 2013Provisions specific to the financialsector

Provisions specific to commercialbanks and other credit institutions

March 1 A single reserve requirement of 4.25% was set for all categories ofliabilities subject to reserve requirements (liabilities to nonresidentlegal entities, to individuals, other liabilities). Previously, a 5.5%reserve requirement applied to nonresident legal entities, and a 4%requirement applied to nonresident individuals and other liabilities.

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