On December 06, 2011 Federal Law No.406-FZ “On introducing amendments to the Federal Law ‘On currency regulation and currency control’ (hereinafter the “Law”) as pertaining to simplification of currency control procedures” was signed by the President of the Russian Federation.

Amendments introduced to the Law stipulate, in particular, the following:

1. For purposes of simplifying payments in foreign currency (including salary) non-residents will also include citizens of the Russian Federation who:

• have a residence permit in a foreign country;

• have a business or study visa (or a complex of such visas) with a validity period of no less than one year.

2. For purposes of avoiding reissuance of a transaction passport in case of a change in agreement/contract conditions, residents are now obliged to provide the authorized banks with the following information when carrying out foreign economic activities:

• estimated maximum timeframes for receiving foreign or Russian currency from non-residents to the residents’ accounts at authorized banks for performing obligations under agreements/contracts;

• estimated timeframes for non-residents to perform their obligations under agreements/contracts, based on the conditions of the agreements/contracts maximum.

The procedure of residents providing the above specified information and further reflection of this information in bank control records by authorized banks is stipulated by the Bank of Russia (Central Bank of the Russian Federation).

3. Requirements for issuing transaction passports have been clarified, in particular:

• authorized banks send electronic versions of executed transaction passports to currency control authorities and agents under the procedure set forth by the Bank of Russia (Central Bank of the Russian Federation);

• the timeframe for the transferring the executed transaction passport may not exceed three business days from the date the transaction passport is issued at an authorized bank.

4. The Law stipulates that the same documents are to be provided by residents and non-residents to the currency control authority or agent which require such documents, only once. Repeat provision of the said documents is possible only in case of their loss due to occurrence of force majeure circumstances or change of information specified in the documents provided.

5. In the event of information regarding a resident legal entity violating requirements for repatriation of foreign and Russian currency, authorized banks and Bank for Development and Foreign Economic Affairs (Vnesheconombank), a state corporation, as currency control agents are from now on entitled to transfer the said information to the currency control authority in order to impose sanctions on the offender.

Federal Law No.406-FZ “On introducing amendments to the Federal Law ‘On currency regulation and currency control’ as pertaining to simplification of currency control procedures” will come into effect on June 05, 2012.

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Pavel Karpunin, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.