June 18, 2004 came into force a new Federal Law «On Currency Regulation and Currency Control». Its impact on the banking system reported a correspondent of «Sun» Executive Vice President of the Association of Russian banks on legal matters, AV Emelin.«Currency speculator»: What are the main differences between the new Federal Law «On Currency Regulation and Currency Control» old?
Andrei Emelin: First of all, the substantial liberalization of cross-border payments. Since June 18, 2004, in the case of open accounts (deposits) in banks located in the territories of foreign countries that are members of OECD or FATF, for individuals - residents of the duty for a month to notify the tax authorities of the place of its accounting for the opening ( closing) of accounts (2 of Art. 12). In the case of legal entities - residents of the requested order will come into force on 18 June 2005 (2 Part 1, Art. 26). In respect of opening accounts in other cases, ie when you open a bank account located in the territory of a State not a member of OECD or FATF, or when opening an account in the currency of the Russian Federation in a foreign bank the Bank of Russia may require pre-registration account (part 3 of v. 12). Moreover, these requirements can not be installed at the opening of the deposits. It also may be subject to pre-registration entry and send to the Russian Federation, export and transfer from the Russian currency, the Russian Federation and the domestic securities by residents and nonresidents in the form of a documentary (part 5 of Art. 15). The new law fixed the total refusal of the previous permission of the commission of the exchange transactions of capital flows and direct prohibition on the establishment of the requirement for individual permits (part 3 of art. 5). Establishes only two permissible types of foreign exchange restrictions - claims to order the commission of the foreign currency operations between residents and nonresidents. This requires the use of special accounts (1) and the requirement to reserve (2). In doing so, none of these restrictions does not work automatically, but each must be specifically identified regulatory authority of currency regulation. The main requirement for the execution of most foreign exchange transactions would be to use a special account (para. 10 am 1 st. 1), ie bank account in an authorized bank or a special section of the account department, or open register in the register of holders of securities the special section of personal accounts to incorporate the rights to securities. In the course of finalizing the draft of the Act by the Association of Russian Banks avoided guidance as a requirement for foreign exchange transactions «opening a special account», which could give rise to the view of the need to open a separate special account for the commission of each currency transaction.
«AC»: The new law differs special and ordinary currency accounts?
AE: Formally, the law distinguishes between ordinary and special foreign currency accounts. From paragraph 10 of Part 1, Art. 1 shows that not all foreign currency account will receive a special status, but only one of which will be provided for the regulatory bodies of foreign currency regulations, in accordance with law. All other accounts, as used for unregulated foreign exchange transactions, and used to carry out the controlled operations in the absence of the establishment of appropriate requirements, special accounts for the law is not. However, it is important to pay attention to the rule of Art. 14 (paragraph 1 and 2 of paragraph 1 hour 3), which states that unless otherwise provided by this Act, the calculations in the implementation of foreign exchange transactions made by residents (legal entities and individuals) through bank accounts in authorized banks, the opening and reference which sets the Bank of Russia. This situation is further confirmed by the Bank of Russia the right to regulate the opening and use of not only special, but ordinary currency accounts, he realized, in accordance with Art. 4 of the Federal Law of 10 July 2002 ? 86 Federal Law «On the Central Bank of the Russian Federation (Bank of Russia)». Thus, the Bank of Russia given the opportunity to create a unified system of bank accounts, which account for one type could take place as regulated or unregulated foreign exchange transactions.
«AC»: What are the basic models of reserve, under the new Federal Law «On Currency Regulation and Currency Control»?
AE: The main three models of reserve, under the new law are:
- Up to 100% of the total amount of transactions for up to 60 calendar days (5 hours Art. 8);
- Up to 20% of the total amount of transactions for up to 1 year (part 6 Art. 8);
- Up to 50% of the total amount of transactions for up to 2 years (1-5 pm art. 7).
The first model is applied in cases of pre-redundancy, ie before the operation, and it aims to create artificial lag between the emergence of commitment and performance. At the same time before the expiry of the reservation of such operation is prohibited (paragraph 2 of Article 7 pm. 16).
The second model is used when you reserve for the purpose of reducing the attractiveness of certain types of operations by reducing their profitability.
The third model is used in the commission of foreign trade in long-term performance only after the statutory preferential period (from 180 days to 5 years), during which the restrictions for such operations do not apply. In doing so, it is clear that for the longest back-up operations is only a temporary measure because the limited 2-year period beyond the duration of the operation and, more significantly, from the performance of its obligations under the non-resident fees. Thus, the legislator refused the opportunity to promote the execution of foreign trade contracts by maintaining the reservation until the conclusion of the parties settlement of the transaction.
«AC»: What you see improvement in the foreign exchange regime, as compared with the old law, but that seems questionable to you?
AE: With regard to improvements, point to a doubling of the amount of operations (from $ 75000 to $ 150000), committed without restriction between individuals - residents and nonresidents in foreign securities during the calendar year (Article 9 pm. 8). The most controversial provision of the law is presumed to the introduction of 18 Jun, 2005 opening of the right to free legal entities - residents of accounts with foreign banks and the disposition of funds credited to them (3 hours and 6 tablespoons. 12, Clause 2 of Part 1, Art. 26 ).
Let me say that before this time, such accounts are opened and used in the current order by paragraph 1, paragraph 2, Article. 5 and Art. 6 'Act of October 9, 1992 Unfortunately, the new law is based on the concept of selective liberalization of foreign economic relations, in particular, the removal of restrictions on cross-border provision of banking services, without adequate liberalize the domestic financial market. Obviously, this can further reduce the resource base of the domestic economy, reduce the credit capacity of banks, retard the development of small and medium-sized businesses, and worsen the investment climate in the country. According to the banking community, «one-sided» liberalization of currency legislation, while maintaining the set of administrative barriers to economic entities within the country would further strengthen the dollarization of the Russian economy, and complicate the transition to full convertibility of the ruble.
«AC»: There Is something new in the import and export from Russia of currency values, the Russian currency and domestic securities?
AE: On the whole, maintained in effect prior removal order of foreign currency by individuals: free (up to $ 3000) and declarative (from $ 3000 to $ 10000). It is not required to provide to the customs authority of documents confirming the previous import, forwarding, transfer or purchase of currency (paragraph 3, v. 1 5). Amounts over $ 10 thousand at a time can be exported only if they have previously imported, sent or transferred to Russia and subject to the requirements of the customs legislation within the limits specified in the customs declaration or other document confirming their import, transmission or translation of the Russian Federation (Part 2 Art. 15). Radically reduced order transfer foreign currency abroad. Since June 18, 2004 physical persons - residents gained the right to transfer funds to their accounts (deposits) that are open to foreign banks, in the order determined by the Bank of Russia. CBR can provide only a requirement to reserve the resident up to 100% of the transaction. This term is defined up to 60 calendar days before the implementation of monetary transactions (part 4 art. 12). At the same time, funds in foreign accounts can be used by residents without restrictions, except for foreign currency operations between residents (for legal entities) and foreign currency transactions related to transfer of property and services in the territory of the Russian Federation - for natural persons (Article 6 pm. 12). The same law (with specified restrictions) will be legal entities - residents of 18 June 2005 (Clause 2 Part 1, Art. 26).
«AC»: What the law says about the return and sale of foreign exchange earnings?
AE: The new law retained the existing requirement for mandatory repatriation of foreign exchange earnings (Article 19) and the subsequent partial binding sales (Art. 21). Additionally, the requirement imposed on the compulsory repatriation of ruble proceeds (art. 19). These measures are designed to ensure the stability of the national currency by providing foreign currency to domestic foreign exchange market. The object of compulsory sales increased significantly. If the old law it was only on the export of foreign exchange earnings, it is now selling foreign exchange earnings to be residents (legal entities and natural persons - individual entrepreneurs), which includes foreign exchange earnings due to the specified non-residents from residents of prisoners or on behalf of the transactions providing for the transfer of goods, works, services, information and results of intellectual activities, including exclusive rights to them, in favor of non-resident (part 3 of art. 21), regardless of the availability of exports. Ratio of compulsory sale of secured directly to the law and is 30%. In doing so, the Bank of Russia given the right to reduce the specified standard (Part 1, Art. 21). Under the law, the mandatory sale of foreign currency proceeds in a manner determined by the Bank of Russia, through authorized banks. In the case of Bank of Russia a special order of compulsory sale of foreign exchange earnings may be carried out directly by the authorized banks and (or) in the currency markets through authorized banks (Part 6 of Art. 21).
«AC»: As now will be foreign exchange controls?
AE: The Act strictly regulates the powers and agents of foreign exchange controls: secured an exhaustive list of documents that may be requested from the subjects of foreign currency transactions (part 4 art. 23) and the provision of which shall be given not less than 7 working days (p . 3 Part 1, Art. 23). In addition, if the agents of foreign exchange controls provided that they are entitled to require the submission of only those documents that directly relate to the ongoing monetary transactions (paragraph 1 of Article 5 pm. 23), in respect of exchange control is no restriction, but a more abstract rule of the possibility to request and receive documents and information that relate to foreign exchange, opening and maintaining accounts (paragraph 1 of Article 3. 23). The most important right granted by the authorized banks as agents of foreign exchange controls, should recognize the right of refusal in the implementation of monetary transactions and opening accounts in the event of non-entity transaction documents previously requested by the agent, or in case of submission of false documents (paragraph 4 of Article 5 pm. 23 ).
«AC»: And what is responsible for violations of currency legislation?AE: In contrast to the previous law, the new no specific currency offenses (Art. 25). Thus, responsibility for foreign exchange law in most cases will be based on the formulations set forth in Art. 16.17 Administrative Code 15.25 and the Russian Federation. It should be noted that the new law created a strong liberal-economic foundations for a radical restructuring of currency regulation and currency control in the Russian Federation. What we hope now is that world energy prices and potential reform of public authorities will allow to realize such a progressive and ambitious plan.
Interview prepared
Max Colors
Max Colors
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