The liability for non-repatriation of foreign currency revenue has been significantly reduced

06.08.2020

On 20.07.2020 the President of the Russian Federation signed Federal Law No. 218-FZ on amendments to the Code of Administrative Offenses of the Russian Federation, according to which the liability for non-repatriation of foreign currency revenue is significantly reduced.

The law has changed both the amount of fines and provides for a grace period for fulfilling the obligation to repatriate foreign currency revenue. The overview of the major changes is given in the table below.

We remind that the previously established amount of the fine ranged from 75% to 100% of the unapplied in time sum.

Violation	New amount of liability
Non-repatriation of foreign currency revenue	under foreign trade agreements in roubles – a warning or a fine in the amount from 3% to 10% of the revenue; under foreign trade agreements in foreign currency – a warning or a fine in the amount from 5% to 30% of the revenue; under loan agreements – a warning or a fine in the amount from 5% to 30% of the loan amount;
Non-repatriation of foreign currency revenue by a professional participant of economic activity[2]	a warning or a fine in the amount from 5% to 30% of the revenue
Non-repatriation, if the amount of foreign currency revenue does not exceed 200 thousand rubles or the equivalent of this amount in foreign currency	Liability does not apply
Untimely repatriation of foreign currency revenue, if the period of non-repatriation did not exceed 45 days
Untimely repatriation not later than 45 days from the date the funds were credited to the resident’s foreign account

The adopted law entered into force on 31.07.2020. The new amounts of liability will be applied retrospectively as they mitigate liability. That is, the new provisions of the Code of Administrative Offenses of the Russian Federation will also apply to those legal entities (persons) who committed an administrative offense before the specified date, but in respect of whom the decision on the imposition of an administrative penalty has not yet been executed.

____________

[1] We remind that the requirement for repatriation provides for compliance with three requirements:

the requirement to receive foreign currency revenue from a non-resident to the accounts in authorized banks,
the requirement for the obligatory return of advances, if the non-resident counterparty has not fulfilled its obligation to supply goods, works, services,
demand for the return of loans issued to a non-resident.

[2] The procedure for approving the List of professional participants in foreign economic activity will be approved by the Government of the Russian Federation, currently there is a draft of this document
https://regulation.gov.ru/projects#npa=93751.

How we can help

SCHNEIDER GROUP tax experts can analyze the existing contracts in order to identify tax risks and risks of violation of currency legislation and, as a result, suggest alternative business options that meet legal requirements.