Russian banks will accept foreigners

The Russian authorities plan to allow clients of foreign financial organizations to open accounts in Russian banks without passing identification in the country. According to market participants, this will allow foreign tourists to issue Mir cards in advance to pay for goods and services, and it will be easier for companies to carry out cross-border transactions. Experts confirm that the amendments will simplify the situation for foreigners, but they also note the risks that arise for them.

On March 24, a bill was submitted to the State Duma aimed at simplifying the procedure for opening accounts in Russian banks for foreign individuals and legal entities. The document allows a client of a foreign bank to become a client of a Russian credit institution remotely, that is, without mandatory identification, if he delegated these powers to a foreign legal entity that carried out his identification.

The explanatory note to the bill notes that the sanctions policy of “unfriendly” countries led to the cessation of the activities of the international payment systems Visa and MasterCard on the territory of the Russian Federation: “As a result, foreign citizens planning trips to Russia … were cut off from the Russian banking infrastructure.” The Bank of Russia told Kommersant that the regulator took part in the preparation of the bill and supports it.

As Alexei Voylukov, vice president of the Association of Banks of Russia (ADB), explained to Kommersant, the organization applied to the Central Bank with a request to allow easing the procedure for opening an account for clients of foreign banks. “It takes more than one day to open an account and issue a Mir card … to expand the attraction of foreign citizens to us, this is necessary,” Mr. Voylukov is sure.

Viktor Dostov, Chairman of the Association of Electronic Money Market Participants and Money Transfers, adds that opening accounts without personal presence and relying on third parties is quite common in the world, where these procedures are well developed. “Certain risks bear the cross-border nature of identification, here, in my opinion, additional elements of control should be used, for example, the collection of photographs of the client and his documents, video identification, and so on,” Mr. Dostov clarifies.

Meanwhile, lawyers point out that the bill concerns not only citizens of foreign states, but also compatriots living abroad, as well as foreign companies. According to Maria Lyubimova, head of the legal support practice for foreign economic activity at Regionservice, the changes may be useful in cases where foreign counterparties are ready to open accounts with a Russian bank to simplify cross-border settlements.

Ekaterina Makeeva, head of the sanctions practice at A-Pro, confirms that not only foreigners, but also Russian citizens abroad, including those who have already opened accounts, fall under the project’s norms, since banks periodically re-identify. The risks in this case, according to the lawyer, are associated with possible errors in identification.

Roman Prokhorov, head of the board of the Financial Innovations Association, believes that the amendments are aimed primarily at citizens from countries that “provide the main migration flows to the Russian Federation.” However, Alexander Linnikov, chairman of the board of the National Payment Council association, is confident that the adoption of the new law will make it easier for customers from so-called unfriendly countries, for whom it has become especially difficult, to open accounts in Russian banks.

At the same time, Roman Prokhorov notes that the mechanism prescribed in the law, taking into account the possibility of remote opening of accounts for legal entities, can be used to “form new mechanisms for cross-border settlements, when funds for foreign economic activity will be transferred between the accounts of Russian and foreign companies in Russian credit institutions” . True, according to him, given the attention of “unfriendly” countries to the mechanisms for circumventing sanctions, there are high risks of fear of secondary sanctions for foreign counterparties.

Maxim Builov, Ksenia Kulikova