The authorities will expand foreign exchange controls to foreign subsidiaries of exporters

The Ministry of Finance proposed obliging exporters to submit consolidated reports to the Central Bank on foreign currency assets and liabilities, taking into account all subsidiaries, including foreign ones. The draft changes of the Ministry of Finance are presented “Vedomosti”. The press service of the Ministry of Finance confirmed that this document was approved by the legal commission today, October 16.

Changes are proposed to be made to the law on currency control. The new rules should not take effect immediately, but from January 1, 2024, so that residents can adapt. The bill has been agreed upon with other departments that oversee currency control issues, and it has already been submitted to the government.

Now the largest exporters must provide the Bank of Russia with information about their receipt of funds under foreign trade contracts in foreign currency with payment in favor of non-residents. However, if the current legislation deals only with a legal entity that is a party to the agreement, the Ministry of Finance proposes to expand the measures to the entire group.

To do this, the Central Bank will compile a non-public list of exporters who will be required to transmit such information. Now this list is public, it includes companies with amounts in accounts in foreign banks or with debt to non-residents exceeding $2 billion.

The explanatory note states that the amendments will make it possible to more effectively assess the uniformity of inflows and outflows of foreign currency and timely identify potential imbalances. From October 16, the largest exporters (43 groups of companies) obliged repatriate and sell foreign exchange earnings. At least 80% must be credited to the account (of this amount, exporters must sell 90% of foreign exchange earnings on the market within two weeks). Companies must sell more than 50% of the export contract within 30 days.

More details in the material “A percentage was assigned to the revenue”.

Anastasia Larina