Exporters were obliged to sell at least 90% of the repatriated currency

The Russian government has established that, in accordance with the presidential decree on the mandatory sale of foreign currency by individual Russian exporters, companies will be required to sell at least 90% of foreign currency earnings credited to their accounts in Russian banks.

As the government staff explained, from October 16, individual Russian exporters will have to credit their accounts in domestic banks with at least 80% of all foreign currency received under their export contracts.

“They are also obliged, within two weeks, to sell on the domestic market of the country at least 90% of the foreign exchange earnings credited to their accounts in Russian banks, but not less than 50% of the funds received in accordance with each export contract, within a period of no more than 30 days from the moment they are received,” the Cabinet Office emphasized.

The signing of a decree by Russian President Vladimir Putin on the mandatory sale of proceeds in foreign currency received by individual Russian exporters under foreign trade agreements became known on October 11. The goals of the innovation are to create long-term conditions for increasing the transparency and predictability of the foreign exchange market and reduce the possibility of currency speculation.

The decree defines a specific list of 43 groups of companies – the largest exporters, related to the sectors of the fuel and energy complex, ferrous and non-ferrous metallurgy, chemical and forestry industries, grain farming, which will be affected by these measures. According to the document, mandatory repatriation and sale of foreign currency earnings on the Russian market is introduced for these companies for six months.

In addition, individual companies will be required to submit indicative plans and schedules for the purchase and sale of foreign currency on the domestic market to the Bank of Russia and Rosfinmonitoring. Another measure will be monitoring compliance with currency regulation rules by authorized representatives of Rosfinmonitoring.

Presidential press secretary Dmitry Peskov said on October 12 that the decree of the head of state, as well as the list of exporters obliged to sell foreign currency, will not publish.

As Vedomosti sources noted, the decision to resume the mandatory sale of export earnings is due to the fact that the business did not comply with informal agreements on the return of foreign currency earnings. Formally, the agreements were respected, but in practice, due to the lack of transparency of operations, most of the exporters’ income still ended up in foreign currency. This categorically did not suit the authorities, and the exchange rate confidently went above 100 rubles/$.