The document describes in some detail violations relating to illegal cash settlements between residents and non-residents. Thus, the document considers the case of a sham interest-free loan agreement, when a Russian legal entity transferred cash to a foreign citizen, who, in turn, was a representative of a foreign company – a shareholder of the Russian lender. Subsequently, these persons entered into tripartite netting protocols under which the lender's debt under the lease agreement concluded with the foreign shareholder was reduced by the amount of cash transferred to the foreign citizen as an interest-free loan. At the same time, the cash received by the foreign citizen was offset against the resident's debt to the foreign lessor. The courts concluded that, in fact, the Russian company was settling the lease agreement with its foreign shareholder. The foreign citizen's participation was only intended to circumvent the currency legislation clauses on the use of a bank account in a Russian bank for such settlements.
Quite important are the clarifications of the Russian Supreme Court on the necessity for Russian companies to pay wages to non-residents using bank accounts rather than cash. The need to comply with currency legislation also arises if an employee refuses to write an application to open an account. In this case, it is recommended to include information on the foreign employee's bank account in the labor contract or to request this information before signing the contract.
The clarifications regarding the necessity to comply with the procedure of accounting in the Russian bank of the contract, in pursuance of which currency transactions are carried out, should also be taken into account. In particular, the court pointed out that a contract that was de-registered with one bank due to its termination cannot be re-registered with another bank and assigned a new identification number.
The review also considers cases of impossibility to bring a person to administrative responsibility, in particular in the absence of guilt. Thus, a legal entity is not liable if the opening of bank accounts for settlements with non-residents in foreign currency was not carried out due to the refusal of Russian banks. Similarly, if a Russian entity has taken all possible measures to return funds paid to a non-resident for undelivered goods, but the advance payment has not been returned due to the fault of the foreign counterparty, the Russian entity is not subject to administrative liability. There is no offense even if the resident has not fulfilled the obligation to repatriate the funds paid to the non-resident as an advance payment, if the latter has fulfilled the obligations under the contract in the part paid by the advance payment. However, the resident's failure to repatriate to the Russian Federation the funds paid by it to a non-resident for non-imported goods in connection with the resident's forgiveness of the debt to the non-resident will already be an administrative offense.
In addition, Russian Supreme Court clarified several procedural aspects related to the statute of limitations for bringing to responsibility for non-repatriation of currency, calculation of an administrative fine, and enforcement of punishment in case of entry into force of a law mitigating administrative responsibility
Source: "Review of judicial practice on certain issues of application of Article 15.25 of the Code of the Russian Federation on Administrative Offenses" (approved by the Presidium of the Supreme Court of the Russian Federation on 26.06.2024).
Quite important are the clarifications of the Russian Supreme Court on the necessity for Russian companies to pay wages to non-residents using bank accounts rather than cash. The need to comply with currency legislation also arises if an employee refuses to write an application to open an account. In this case, it is recommended to include information on the foreign employee's bank account in the labor contract or to request this information before signing the contract.
The clarifications regarding the necessity to comply with the procedure of accounting in the Russian bank of the contract, in pursuance of which currency transactions are carried out, should also be taken into account. In particular, the court pointed out that a contract that was de-registered with one bank due to its termination cannot be re-registered with another bank and assigned a new identification number.
The review also considers cases of impossibility to bring a person to administrative responsibility, in particular in the absence of guilt. Thus, a legal entity is not liable if the opening of bank accounts for settlements with non-residents in foreign currency was not carried out due to the refusal of Russian banks. Similarly, if a Russian entity has taken all possible measures to return funds paid to a non-resident for undelivered goods, but the advance payment has not been returned due to the fault of the foreign counterparty, the Russian entity is not subject to administrative liability. There is no offense even if the resident has not fulfilled the obligation to repatriate the funds paid to the non-resident as an advance payment, if the latter has fulfilled the obligations under the contract in the part paid by the advance payment. However, the resident's failure to repatriate to the Russian Federation the funds paid by it to a non-resident for non-imported goods in connection with the resident's forgiveness of the debt to the non-resident will already be an administrative offense.
In addition, Russian Supreme Court clarified several procedural aspects related to the statute of limitations for bringing to responsibility for non-repatriation of currency, calculation of an administrative fine, and enforcement of punishment in case of entry into force of a law mitigating administrative responsibility
Source: "Review of judicial practice on certain issues of application of Article 15.25 of the Code of the Russian Federation on Administrative Offenses" (approved by the Presidium of the Supreme Court of the Russian Federation on 26.06.2024).