Repatriation of proceeds: rules and what to do if money hasn't arrived

Repatriation is a resident’s obligation to bring money under a foreign trade contract back to Russia. For an exporter, this is the proceeds for goods delivered or services provided. For an importer, it is an advance for which the goods were never delivered. Below: what the law requires, how the bank checks it and what to do if the money is stuck.

What the law requires

The requirement is set out in Article 19 of Federal Law No. 173-FZ. A resident must:

• for exports, ensure that the money due to it under the contract is received in its accounts with authorized banks;
• for imports, ensure that an advance is returned if the goods were not imported, the work was not performed or the services were not provided.

The idea behind the requirement is simple: money from a foreign trade deal must not stay abroad outside state control. So the law looks not at whether the company received the money at all, but at whether it arrived in its account with a Russian bank.

The deadline is set by the contract itself: the payment and delivery dates written in it and in the amendments. The law also lists cases where the obligation is considered fulfilled other than by receipt of money. Since 2022, exemptions and special rules have applied to certain transactions. All these exceptions are narrow and they change, so they are checked for the specific deal, not from memory.

How the bank checks repatriation

If the contract is registered, the bank sees both deliveries and payments in the bank control statement. If the payment deadline has passed and there is no money, the bank records the discrepancy and reports it to the tax service. If the contract is not registered, the violation can still come to light: through customs data on the export of the goods or during an audit.

Hence two rules:

• the deadlines in the contract must be realistic, with a margin for the money’s journey;
• any change of deadlines is formalized in an amendment before the old deadline expires and passed to the bank straight away.

An amendment signed after the deadline has already passed does not cancel the delay.

For an importer, the logic is the same. The supplier took an advance and did not ship. As long as the delivery deadline under the contract has not expired, there is no violation. Once it has, the bank expects either import documents or the return of the advance. If the parties have agreed a new delivery date, the amendment is formalized in advance.

Consequences of non-repatriation

The fine under Article 15.25 of the Code of Administrative Offenses (KoAP) is calculated from the uncredited amount, taking the delay into account. The company is liable, and an officer of the company may be liable too. For large amounts and a deliberate failure to repatriate, criminal liability is possible under Article 193 of the Russian Criminal Code.

KoAP takes fault into account. If the company proves that it took all the measures within its control (claims, negotiations, a lawsuit, a search for another payment method), this is a weighty argument when the case is considered. So all recovery actions are documented from the first day of delay, not assembled after the fact.

Proceeds stuck abroad: lawful instruments

A common situation in recent years. The buyer is ready to pay, but its bank will not send money to Russia. Or the payment comes back from a correspondent bank. Or the money has already left and is stuck in the chain.

First, find out exactly where the money is. Ask the buyer for confirmation from its bank that the payment was sent, with the payment reference. Sometimes the payment is simply held for a check at the correspondent bank, and the matter is resolved by an inquiry through the bank, without a new structure. If the money has gone back to the buyer or the payment does not go out at all, there are several options, and all of them are lawful:

• Another agent and another route. The buyer pays to the account of an agent in a jurisdiction from which the payment goes through. The agent credits roubles to your account with a Russian bank. A clause on payment through an agent is added to the contract.
• Change of payer under an agreement of the parties. If the buyer cannot pay itself, a third party pays on its behalf. This is formalized by an agreement of the parties, and the link between the payment and the contract must be clear to the bank.
• Assignment of claim (cession). The exporter assigns its claim against the buyer to another party and receives payment for the assignment. Such a deal has specific features under currency legislation: it matters to whom the claim is assigned and how payment for it is received.
• Extending the payment deadline by an amendment while the original deadline has not yet expired, if the money will arrive later but will arrive.

Which instrument fits depends on the contract, the amount, the buyer’s country and the stage at which the money got stuck. The structure is reviewed by a lawyer before the deal. Fictitious documents and transactions outside currency control are not on this list. They do not solve the problem: they move it from the Code of Administrative Offenses to the Criminal Code.

What to prepare before the review starts

• the contract and all amendments;
• shipping documents: declaration, transport documents, completion certificates;
• invoices and the bank control statement for the contract;
• correspondence with the buyer, and claims;
• evidence of payment attempts: copies of the buyer’s payment orders, SWIFT messages, return notices;
• information about the buyer’s bank and the countries from which it can pay.

The more complete the package, the sooner it is clear which instrument will fit and how much time is left before the deadline expires.

Complex cases where proceeds do not reach Russia are covered on the Complex payments page. We select an agent from our pool to match the buyer’s country, a lawyer confirms the structure before the deal, and we put together the package for the bank. If proceeds arrive regularly and the only problem is the route, see the Repatriation of export proceeds page. This is a general overview, not legal advice. We will give you an answer on your deal after reviewing the documents and before the buyer pays.