Federal Law No. 173-FZ on Currency Regulation
The federal law on currency regulation and currency control: rules for currency transactions of residents and non-residents and how they are checked.
Full title: Federal Law No. 173-FZ of December 10, 2003 “On Currency Regulation and Currency Control”. It is the main law for any company that pays abroad or receives money from abroad.
What it regulates
- Who is a resident and who is a non-resident. A Russian company is a resident; its foreign partner is a non-resident.
- Which currency transactions are permitted and on what terms.
- Residents’ obligations under foreign trade contracts.
- Recording and reporting procedures, accounts abroad.
- The currency control system.
Main obligations in foreign trade
Under a foreign trade contract, a resident must ensure repatriation: receive the proceeds for goods sold, or get an advance back if the goods paid for have not been imported. The deadlines come from the contract. In addition, the resident submits documents and information about its transactions to the bank. How to do this is described in Bank of Russia Instruction No. 181-I. The repatriation requirements have changed several times in recent years, so check the rules in force on the date of the deal.
Who checks
Currency control authorities: the Bank of Russia and authorized federal agencies. Currency control agents: primarily the authorized banks through which payments go, as well as the tax and customs authorities. The bank checks the documents for a transaction and may refuse to carry it out.
Liability
Violations carry fines under the Code of Administrative Offenses for the company and its officers. The amount often depends on the transaction amount. Typical violations: missing deadlines for submitting documents, failing to receive proceeds or to get an advance back on time, transactions the law does not permit.
How it looks through a broker
When you pay through an agent, the contract with the foreign supplier remains yours, and so do the obligations under it. That is why in every deal we put together a currency control package: the agency agreement, the payment order, the payment confirmation, the agent’s report and completion certificate. More details: Currency control.
This is a general overview. We decide on your deal after reviewing the documents.
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