Earlier, we wrote about the first set of “anti-sanctions” adopted with the aim of preserving and increasing Russia’s foreign currency fund. As we predicted, these were not the last of currency measures and restrictions.

The evening of March 1, 2022, Presidential Decree No.81 “On additional economic measures for ensuring financial stability of the Russian Federation” (the “Decree”) was published, which adopted new prohibitions and made some adjustments to the measures adopted earlier.

Under the Decree, starting March 2, 2022, Russian residents are allowed to perform the following transactions only after obtaining a permit from the Government Commission for control over foreign investments in the Russian Federation:

• Transactions on granting loans in rubles and foreign currency to entities of non-friendly foreign states (which announced restrictions against Russia);
• Transactions on transfer of ownership title to securities and real estate with entities of non-friendly foreign states (both sale and purchase of such property to/from such entities), as well as with entities who acquired such property from entities of non-friendly foreign states on or after February 22, 2022.
• Operations on Russian residents transferring foreign currency to their foreign accounts/deposits, as well as on money transfers without a bank account being opened using foreign e-pay system services. Please note that the original set of anti-sanctions completely banned such operations; however, under the new Decree they are allowed, subject to obtaining a permit.

Please note that these restrictions also extend to transactions between Russian entities and entities controlled by entities of non-friendly foreign states, irrespective of their registration or residency. At the same time, it is unclear whether two Russian entities being under control of entities of non-friendly foreign states can make a transaction among themselves without the said permit. It seems that this would not be within the purposes for which the Decree was issued, though we cannot rule this out completely. We recommend thoroughly assessing the risks before undertaking such operations.

Also, starting March 2, 2022 there is a ban on taking out of the country cash foreign currency or monetary instruments in the amount exceeding USD 10,000 as per the Russian Central Bank’s official exchange rate as of the travel date date.

In addition, the evening of March 1, 2022, the Central Bank announced new Instructions which place a ban on the following operations from March 1 to March 31, 2022:

• Transfers in any currency from credit organization accounts of residents (individuals and companies) of countries that have announced restrictions against Russia to any accounts opened abroad, as well as money transfers abroad without opening bank accounts, including electronic money.
• Non-resident individuals (foreign residents) transferring abroad over USD 5,000 or equivalent per month (amount determined as per Central Bank exchange rate as of the transfer date).

Given the restrictions, foreigners being residents of non-friendly countries can receive money on their Russian accounts, but cannot take it out of the country.

At the same time, please note that neither the Central Bank nor the Presidential Decree gives an official list of non-friendly states. According to public sources, they include the following states: Austria, Australia, Albania, Anguilla, Belgium, Bulgaria, BVI, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Japan, Jersey, Latvia, Lithuania, Luxembourg, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Taiwan, USA, UK.

We additionally note that today, March 3, is the last day for resident companies doing foreign trade to sell 80% of their foreign currency income, about which we wrote here. Please note that yesterday, information was posted on the Central Bank web site as to official explanations on the procedure of applying the relevant Presidential Decree No.79 dated 28.02.2022, where the Central Bank clarifies that this rule applies not only to transit accounts, but also to current accounts, as well as clarifies a number of important provisions. We are currently analyzing these explanations and will get back to you with our comments in the near future.

We will be happy to keep you informed of events and to send you the latest news. Should you have any questions regarding the above, please contact us as convenient.