Currency control fines: what is penalized and how to avoid them

Fines for violations of currency legislation are set by Article 15.25 of the Code of Administrative Offenses (KoAP). Most cases arise not from schemes but from paperwork: a document was not submitted on time, an amendment was not passed to the bank, proceeds arrived later than the contract deadline. Below: what fines are imposed for and how to organize the work so that it does not come to that.

We do not give exact amounts. They depend on the type of violation, the transaction amount, the length of the delay and the version of the law in force on the date of the violation.

Who detects violations

The chain is usually this. The bank, as a currency control agent, sees a discrepancy in the records for a contract. For example, the delivery deadline has passed, but there are no supporting documents. Or the payment deadline has passed, but there are no proceeds. The bank reports this to the tax service. The tax service, as a currency control authority, checks the information and, if it sees a violation, opens a case. For some transactions, customs asks the questions.

Hence a practical conclusion. Almost everything that can end in a fine is visible in advance in the bank control statement for the contract. A company that reconciles it regularly learns about a problem before the tax service does.

A typical scenario looks mundane. A company registered its contract and shipped goods to a buyer in an EAEU country, where there is no customs declaration. The accountant was waiting for the original waybills and did not submit the certificate of supporting documents. A few months later, the statement shows a delivery without documents, the bank reports it, and the tax service sends a notice. There was no scheme, but there is a violation.

What fines are imposed for

The main groups of violations under Article 15.25 of KoAP:

• Unlawful currency transaction. A transaction that the law prohibits, or permits on conditions that were not met. For example, a foreign currency settlement between two Russian companies where the law does not allow it. The fine is calculated from the transaction amount.
• Breach of the contract registration procedure. A contract above the threshold was not registered on time, or was not deregistered when moving to another bank.
• Late submission of documents. The certificate of supporting documents, completion certificates or amendments were submitted late or not at all. The size of the fine depends on the length of the delay.
• Failure to credit proceeds. The exporter did not ensure that the money under the contract arrived on time. The fine is calculated from the uncredited amount, taking the delay into account.
• Failure to return an advance. The importer paid an advance, the goods did not arrive, and the money did not come back on time.
• Accounts abroad. The tax service was not notified that an account had been opened, or no report on the movement of funds in it was filed.

A fine may be imposed on both the company and an officer: the director or the chief accountant.

When a case becomes criminal

There is also criminal liability for currency violations, but it concerns large amounts and deliberate actions. Article 193 of the Russian Criminal Code covers the deliberate failure to meet repatriation obligations, and Article 193.1 covers transfers of money abroad using knowingly false documents.

For a company that works under real contracts and keeps its documents in order, this is not a typical scenario. But that is exactly why schemes with fabricated invoices and fictitious deliveries are dangerous. They move the matter from the Code of Administrative Offenses to the Criminal Code.

What the bank can do

It is not the bank that imposes the fine. But the bank has its own tools, and for a business they are sometimes more unpleasant than a fine:

• a request for documents and suspension of the transaction until the answer;
• refusal to carry out the transaction;
• raising the client’s risk level under financial monitoring rules (Federal Law No. 115-FZ). The risk rating assigned by the Bank of Russia platform is visible to other banks too.

So bank requests are answered quickly and to the point: with documents, not with letters saying “everything is in order”.

How to stay clear: working habits

• A deadline calendar for each contract: payment, delivery, submission of documents.
• Every amendment goes to the bank straight away. A new amount, a new deadline, a new beneficiary.
• Reconciling the bank control statement for registered contracts: regularly, not only when there is an audit.
• Realistic deadlines in the contract. If the supplier takes longer to ship than written, a delay will appear by itself.
• A margin on the proceeds deadline, especially if the buyer pays through intermediaries.
• Correspondence in case of delay. If the buyer does not pay, claims and letters show that the company took measures. KoAP takes fault into account: if the company did everything within its control, this is a weighty argument.

For small businesses, KoAP in some cases allows a fine for a first violation to be replaced with a warning. Do not count on this as a rule.

If a violation has already occurred

Do not wait for a letter from the tax service. First, request the statement for the contract from the bank and reconcile it with your own data: this shows which discrepancies the bank sees. Submit the missing documents. If the payment or delivery deadline has not yet expired and the parties have agreed a new one, formalize an amendment and pass it to the bank. If the deadline has already expired, collect evidence of the measures taken: correspondence, claims, payment attempts. If the amount is significant, bring in a lawyer before responding to the tax service, not after.

If the payment goes through an agent from the VEDmost network, you will have the documents your bank expects: the agency agreement with the agent, a payment order with the rate and fee, the transfer confirmation, and the agent’s report and completion certificate. We put the package together so that it is easier for the currency control officer to link the payment to your contract. More on the Currency control and Contract support pages. This is a general overview, not legal advice. We will give you an answer on your deal after reviewing the documents and before the roubles are transferred.