🇷🇺 New lightening of currency control measures
 
Russian residents (natural persons) are now allowed:

1️⃣ To provide a loan in foreign currency to non-residents under the following conditions:
✔️ Non-residents are under the control of residents
 ✔️ The control is disclosed to the tax authorities
 ✔️ Funds under the contract are provided for the purpose of maintenance of property located in foreign countries
 
2️⃣ To transfer foreign currency to their foreign accounts for the purpose of maintaining assets located outside Russia
 
3️⃣ To transfer currency to their foreign accounts to pay for educational or medical services for themselves or their close relatives
 
‼️ The amount of transfer should not exceed the funding for the previous calendar year for the same purposes.
 

🇷🇺 Russian residents (natural persons) are allowed to repay loans in foreign currency
 
They can repay loans in foreign currency 💱 to the accounts of banks 🏦 located in the Eurasian Economic Union member states under the agreements concluded before 14 April 2018, except for the agreements whose essential terms were changed after this date.

🇯🇵🇷🇺🇧🇾 Japan expands Russia export and import bans and designations list
 
‼️ On 5 July, Japan extended its asset freeze to cover 57 more Russian individuals and 6 entities, i.a. Almaz-Antey, Rubin, Sukhoi,  Inforos, Newsfront and Southfront.
 
🔺 Another 25 Belarusian 🇧🇾 and 65 Russian 🇷🇺 entities were targeted by the export 🛃 ban 🚫, including several aircraft construction and testing plants, R&D, design facilities, radioelectronics, instrument-making, shipbuilding plants, research centres, etc.
 
🔺 Import of gold 🌟 from Russia was prohibited 🚫.
 
🔺The provision of trust services, accounting and auditing services, and management consulting services to the Russian Federation is subject to licensing as of 5 September 2022.
 

🇷🇺 Clarifications of the Russian Central Bank on the sale of foreign currency not sold at the moment when the mandatory currency sale requirement was lifted
 
🏦 The Central Bank of Russia clarified that the revenue received in foreign currency 💱 which was not sold at the time when the mandatory currency sale requirement was lifted (that is before 10 June 2022), is also not subject to compulsory sale.

🇷🇺 VAT on electronic B2B services – who can be the tax payer now?
 
🏛 The Russian State Duma Tax Committee adopted in the 3rd reading the law about numerous changes to the Russian Tax Code.
 
‼️ One of the important changes is the return to the norms effective before 2019 for paying ++VAT on electronic B2B services** provided by foreign companies -  a tax agent mechanism when organizations and individual entrepreneurs purchase electronic services from foreign organizations.
 
ℹ️ With the regard to electronic services provided to individuals, foreign organizations will continue to calculate and pay Russian VAT independently.
 
We are preparing the detailed review and will keep you updated on the new provisions of the law.

🇬🇧 UK tightens sanctions 🚫against Belarus 🇧🇾

📆 On 5 July 2022, the United Kingdom 🇬🇧 adopted a new package of sanctions against several key sectors of the Belarussian 🇧🇾 economy 📊, which is similar to those previously imposed on Russia 🇷🇺.

❌ The Republic of Belarus (Sanctions) (EU Exit) (Amendment) Regulations 2022 prohibit in particular ❌:
🔸 exports of oil 🛢 refining goods
🔸 exports of advanced technology components, such as those used in quantum computing
🔸 exports of luxury goods 🌟
🔸 imports of Belarusian iron and steel ⚒️
🔸 provision of financial services relating to foreign exchange reserve and asset management to the National Bank 🏦 of the Republic of Belarus, Ministry of Finance and its controlled entities.

Siemens, BMW, and Lego products are included in the list of goods for parallel imports into Russia ‼️

🏛 3 June 2022, the Ministry of Industry and Trade of the Russian Federation 🇷🇺 issued Order "On amendments to the list of goods (product groups) in respect of which certain provisions of sp. 6, art. 1487 of the Civil Code of the Russian Federation will not apply, provided that the said products (product groups) are put into circulation outside the territory of the Russian Federation by right holders (patent holders), as well as with their consent, approved by the Ministry of Industry and Trade of the Russian Federation dated 19.04.2022 No. 1532" 📜.

ℹ️ Registered with the Ministry of Justice of the Russian Federation ⚖️🇷🇺 04.07.2022, 2022 No. 69129.

#import

❕ Law on negative rates on foreign currency deposits for legal entities approved ❕

🇷🇺 The Russian State Duma 🏛 has passed in its third reading ⚖️ a law allowing banks to set negative interest rates on foreign currency deposits for Russian legal entities.

ℹ️ The amendments to the law 📃 are aimed at reducing the volume of cash deposits 💰.

🇨🇦🇷🇺 Canada sanctions Russian media, gold imports
 
‼️ On 8 July 2022 Canada designated another 15 Russian entities and 29 individuals under its asset freeze/transaction ban.

📺 The list includes i.a. state agencies Roskomnadzor, Rossotrudnichestvo and major media TASS, NTV, VGTRK, Russia-1, Sputnik, Vesti, RT, Regnum, etc.

🌟 In addition, purchase of gold and gold articles from Russia or any person in Russia is prohibited. 🚫

✅ Unaffected by the ban remain gold in transit through Russia from a third country and personal belongings of private persons.

#sanctions

🇪🇺🇷🇺 Exemptions from EU import and export embargoes expire
 
📆 On 10 July 2022, EU temporary derogations authorizing the import from Russia / export to Russia of certain banned categories of products under previously concluded contracts came to an end, as envisaged by the 6th sanctions package.

It is now fully prohibited:
 
1️⃣ to purchase, import, or transfer, directly or indirectly, high-revenue goods, if they originate in Russia or are exported from Russia, namely: caviar, spirits & alcoho 🍷l, cement, potassium chloride, wood and wood products 🪵, glass products 🪟, silver 🪙, certain sea vessels 🚢 , etc.
 
🚫 No new contracts pertaining to such products are allowed except necessary for the import, purchase or transport to the EU of:
 
✅ 837 570 metric tonnes of potassium chloride of CN 3104 20 between 10 July of a given year and 9 July of the following year;
✅ 1 577 807 metric tonnes combined of the other products listed in Annex XXI under CN 3105 20, 3105 60 and 3105 90 between 10 July of a given year and 9 July of the following year.
 
2️⃣ to sell, supply, transfer or export, directly or indirectly, certain industrially important goods, to any natural or legal person, entity or body in Russia or for use in Russia.
The list includes raw materials, semi-processed goods, finished products, manufacturing equipment, machinery, tools, instruments and vehicles for use in different economy sectors.   
 
🚫 Related technical, financial assistance, brokering and other services are also banned.
 
‼️ No new contracts pertaining to such products are allowed except for humanitarian purposes with special authorizations of EU Member States.

🇷🇺 Russia is about to ban 🚫disclosure of "counter-sanction information"
 
📆 On July 6, the Russian State Duma passed a draft law restricting the dissemination of so-called "counter-sanctions information", i.e. commercial information whose publication could trigger foreign sanctions. ‼️
 
▫️ In particular, the norm prohibits the disclosure of details of foreign trade transactions involving Russian persons or entities.
▫️ Data that is subject to mandatory publication or constitutes a state or business secret is excluded.
▫️ Federal and local authorities, as well as the Chairman and Deputy Chairmen of the Bank of Russia, are not bound by the new standard.
 
ℹ️ In case of unauthorized disclosure, the parties involved in the transaction concerned are entitled to claim damages.

The draft law is now subject to adoption by the Federation Council 🏛🇷🇺.

🇷🇺  The law to transform branches of foreign companies into OOOs passes the Russian State Duma
 
📆 On 6 July the Russian State Duma 🏛approved legislative amendments authorizing conversion of branches and representative offices of foreign mining and gas transporting companies into Russian-domiciled LLCs (OOOs) with the same ownership.
 
ℹ️ The conversion may take place in case an owner from an “unfriendly country” undertakes to block or discontinue operation, prevent the normal use of its assets, lay off more than one third of its employees or comply with foreign sanctions.
The norm applies to private companies not traded publicly, having up to 50 owners with at least 25 per cent of the ownership belonging to Russian persons.
 
‼️ Russian owners can seek a relevant ruling from the Moscow Arbitrage who will have 30 days to consider the claim.
In the interim the Arbitrage ⚖️ is entitled to block the affiliate’s assets and deals with its property, and suspend layoffs.

Foreign owners may contest the conversion by presenting convincing evidence of their plans to address the grounds for the claim.

The affiliate’s transformation can also be avoided/annulled in case relevant foreign countries cease their unfriendly activity towards Russia.
 
Should foreign owners holding over 25 per cent of the converted company continue to interfere with its activity, they may face suspension of their rights to a share in the company’s dividends/net profit, a voice in the shareholders’ assembly and disposal of the owned equity.

🗓 The restrictions may be imposed for a period not superior to 31 December 2023.
 
✅ The new rules do not apply to foreign affiliates involved in LNG projects under production sharing agreements, e.g. "Sakhalin-2" operated by the Sakhalin Energy company.

The law is subject to approval by the Federation Council.

🇱🇹🇷🇺 Lithuania expands ban on Kaliningrad transit in line with the EU sanctions
 
‼️ On 11 July 2022, Lithuanian Customs Department announced its plans to block 🚫 more Russian imports and exports, following the expiry of related EU temporary authorizations on 10 July.
 
From now on several categories of industrially important and high-revenue products will not be allowed to cross Lithuania en route between the Kaliningrad Region and mainland Russia, confirm the customs authorities.

🇪🇺🇷🇺 Agreement reportedly reached between the EU and Russia on Kaliningrad transit

❕According to media reports 📰, Russia and the EU have reached a compromise 🤝 on the transit of goods between Kaliningrad and the Russian mainland.

Moscow found Brussels‘ proposals to exempt affected goods from existing sanctions acceptable. If all EU member states, including Lithuania 🇱🇹, agree to the exemption, it could become part of the next restriction package being drafted by the EU at this stage.

⚠️ Currently, Lithuania blocks ❌ the transit of all products banned by the EU through its territory.

🇪🇺 EU clarifies norms regulating Kaliningrad transit 🛤🚧
 
📆 On 13 July EU published an updated guidance 📑 explaining the application of its trade sanctions to goods in transit to and from Kaliningrad 🇷🇺. The document confirms that the transport of goods by Russian road carriers will not be restricted, provided that they do not fall under various EU export or import embargoes. ‼️
 
🚝 Rail traffic between the Russian mainland and the Kaliningrad region remains mostly unaffected by the sanctions. ✅
Only bans on military and dual-use goods and technologies apply here. 🚫
 
⚠️ EU Member States are reminded of the obligation to prevent possible circumvention of EU sanctions and exercise targeted, proportionate and effective controls on two-way flows of goods.

In relevant cases Member States 🇪🇺 may refuse ❌ the transit or hold the goods in question.

🇷🇺 Russia waives liability for foreign sanctions-caused breach of currency laws 💱⚖️
 
ℹ️ Legislative amendments 📄 published on 14 July 2022 lower or cancel administrative penalties for violations of certain foreign currency regulations 💱.

⚠️ In particular, fines for illicit dealing with foreign currency 💱 are now down to 20-40 % from 75-100 % of the deal size previously, for non-repatriation of ruble-denominated revenues into Russia to 3-5 % (3-10 % before) of the outstanding amount.

Administrative liability is waived should a resident’s non-compliance result from restrictions ❌ imposed on Russian nationals/entities by foreign actors committing unfriendly actions against the Russian Federation 🇷🇺.

❗️ Ongoing court cases on such violations committed, must now be discontinued and the implementation of the relevant court rulings rescinded. ❗️

The amendments come into force starting 24 July and apply to legal relations in effect between 23 February and 31 December 2022. 🗓

🇪🇺🇷🇺🇧🇾 EU explains its Russia & Belarus road transport sanctions 🚛
 
‼️ On 13 July the European Commission published fresh FAQs clarifying:

1️⃣ criteria for the Member States 🇪🇺 to grant authorizations to Russian 🇷🇺 and Belarusian 🇧🇾 road transport operators on the EU territory
 
2️⃣ modalities for such authorisations ✅ and the scope of their application
 
3️⃣ rights and responsibilities of national authorities 🏛 issuing authorisations
 
4️⃣ sanctions’ application in the specific case of the Kaliningrad transit 🚉
 
5️⃣ applicability of the prohibitions to passenger traffic and personal belongings, goods for non-EU diplomatic missions, mail deliveries, etc.

#sanctionsfaq

🇷🇺 Russia waives mandatory revenue repatriation
 
📑 A new Presidential decree of 5 July requires Russian-domiciled exporters to repatriate enough of their foreign currency earnings to cover their mandatory sale quota.
 
ℹ️ In practice, the norm temporarily waives the repatriation obligation altogether, as the sale quota was abolished on 10 June through a ruling of the Government’s Investment Control Commission. Should this change in future, the traders will have to bring home a proportionate share of their foreign revenues.
 
🔹 The decree prohibits 🚫 residents from making foreign-currency payments to foreign accounts should such payments derive from dividends on Russian joint-stock company shares, or profits generated by Russian limited liability companies, economic partnerships and manufacturing cooperatives.
 
🔹 Obligations towards foreign Eurobond holders can now be honoured by replacing the Eurobonds with new internal Russian bonds with identical parameters or by purchasing the Eurobonds with rubles derived from placement of such local bonds.
 
🔹 Finally, the decree clarifies how to service syndicated loans organized by banks from unfriendly countries with Russian banks’ participation. From now on, Russian borrowers must honour their obligations to Russian institutions in the original loan currency or (subject to their agreement) rubles bypassing foreign lenders.

🇺🇸🇷🇺 New US Russia-related general licenses and delisting of the ex-Alfa Bank subsidiary
 
🪪 New general licenses adopted by the U.S. Treasury on 14 July authorize:
 
🔹 GL 6B: all previously prohibited transactions, related to
(1) 🌱🌾 the production, manufacturing, sale, or transport of agricultural commodities, agricultural equipment, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices;
(2) 💊 the prevention, diagnosis, or treatment of COVID[1]19 (including research or clinical studies relating to COVID-19); or
(3) ⚕️ ongoing clinical trials and other medical research activities
 
🔹 GL 25C: previously prohibited transactions (with certain exceptions) incident and necessary to the receipt or transmission of:
📡 telecommunications involving Russia;
💻 the exportation or reexportation, sale, or supply, directly or indirectly, to Russia of services, software, hardware, or technology incident to the exchange of communications over the internet, such as instant messaging, videoconferencing, chat and email, social networking, sharing of photos, movies, and documents, web browsing, blogging, web hosting, and domain name registration services
 
🔷 GL 30A: previously prohibited transactions involving SEFE Securing Energy for Europe GmbH (ex-Gazprom Germania GmbH) and its controlled entities until 16 December 2022
 
🔹 GL 44: all previously prohibited transactions incident and necessary to the exportation, reexportation, sale, or supply of tax preparation or filing services to any U.S. individual located in Russia
 
‼️ On the same say, the Treasury removed the Alfa-Bank’s Kazakh subsidiary from the SDN list.
The structure is reported to have changed ownership and name in May 2022.