Settlements under a foreign economic contract in the context of sanctions

The main challenges for imports 2025 under sanctions are:

• Inability to actually pay for the goods;
• Complex international logistics;
• Serious delays in the delivery of goods;
• Mistakes in customs declaration;
• Adjustment of the customs value.

Business suffers – all of this leads to multi-million-dollar fines for violations of currency and customs laws.

What should be taken into account when calculating FEA in 2025?

Sanctions status of the imported goods.

Before signing a Foreign Trade Contract, we recommend checking whether the imported goods are sanctioned and dual-use items.

More information on how to do this can be found here.

Payments to China, Turkey and Europe in practice only go through agents from third countries. We recommend you to include a contract clause on the possibility of payment for the goods by another person engaged by the importer for this purpose.

Sanction status of an authorized bank.

We recommend you to check whether the authorized bank is on the sanctions list.

This information should be checked at least once every six months, since, as a rule, Russian banks do not inform clients about the sanctions regime imposed on them. If the bank is under sanctions, your payment may be suspended by the foreign correspondent until the sanctions are fully lifted.

Accounting of Foreign Trade Contract in the bank.

The following contracts shall be subject to accounting in the bank:

• Import contracts with the amount of liabilities of 3 (three) million rubles and more;
• Export contracts with the amount of liabilities of 10 (ten) million rubles and more.

The authorized bank shall accept the contract and assign a unique number to it.

Subsequently, the unique number shall be taken into account by the banks when performing currency transactions for the purpose of forming the bank control statement under this contract.

When registering a Foreign Trade Contract with the bank, a clear understanding of its specifics is required, as failure to provide the necessary documents and missing the deadlines for their submission is the ground for imposing fines of up to 100% of the amount of an illegal currency transaction with the possibility of being prosecuted.

An importer shall submit a variation application to the bank control record within 15 working days from the date of variation, otherwise a Foreign Trade Contract participant will be held administratively liable.

If you cannot deal with the peculiarities of currency legislation on accounting of your Foreign Trade Contract in the bank, we are available to offer prompt advice.

Payments through any banks with non-residents.

Since 2024 an importer is able to carry out transactions with a non-resident under the Foreign Trade Contract through its accounts opened with any authorized bank. In this case, the importer is obliged to submit to the authorized bank, where the contract is registered, the documents confirming the operations within the terms specifically established by the instruction of the Central Bank of the Russian Federation.

Now an importer is able only report the code of the type of currency transaction when crediting or debiting foreign currency without submitting documents on transactions with non-residents to the bank, if the volume of the transaction does not exceed 1 million roubles.

Similarly, now, even if the contract amount is up to 1 million roubles, only the settlement document for the transaction must be presented to an authorized bank in order for funds to be debited from a rouble settlement account.

Cash payments under the Foreign Trade Contract are permitted and the procedure for dealing with authorized banks in cash payments to non-residents is established.

When transferring cash to a non-resident under the contract that do not subject to accounting in the RF’s bank, the importer must provide the authorized bank with documents in accordance with paragraph 4 of the Rules of Settlement between residents and non-residents for cash settlements.

At the same time, if the contract is subject to registration in the bank of the Russian Federation, it is necessary to submit additional information on:

• A unique contract number;
• The digital currency code;
• The transaction code (based on its economic content);
• The transaction amount.

In this case, the deadline for submission of such information and documents is limited to 45 working days after the day of transfer of cash funds to a non-resident (without accounting for the contract in the bank) and after the day of cash settlements with a non-resident (when accounting for the contract in the bank).

It is no longer necessary to submit to an authorized bank documents confirming the movement of goods within the EAEU.

What should be taken into account when settling accounts with non-residents from unfriendly countries

The unstable economic situation makes it even more difficult to deal with currency legislation.

Board of Directors of the Central Bank of the Russian Federation may limit the size of certain transfer funds operations of non-residents.

Until and including September 30, 2024, non-residents from unfriendly countries are prohibited from transferring funds abroad.

It does not apply to foreign companies controlled by Russian legal entities or individuals. Banks from unfriendly countries may transfer funds in roubles through correspondent accounts opened with Russian credit organizations if the payer’s and recipient’s accounts are opened with foreign banks.

Until October 1, 2024, non-residents from unfriendly countries are prohibited from transferring funds abroad from accounts opened with Russian brokers and trust managers.

The restrictions apply to transfers from accounts of both individuals and legal entities opened with Russian brokers and trust managers.

Banking controls on non-residents have been tightened.

In particular, the bank control statement will reflect information on:

• A non-resident bank;
• The third party by whom (in favor of whom) the payment or other fulfillment of obligations under the loan contract was made;
• The country code of the non-resident’s state registration (location).

Despite the many legal nuances of currency legislation and the imposition of sanctions, courts tend to side with the regulatory authorities.

In order to challenge the decision of the state authorities, the injured party needs to prove the absence of its fault due to the occurrence of force majeure.

Occurrence of these circumstances is officially confirmed by the Chamber of Commerce and Industry, in the light of the particular circumstances of the case.

Opportunities for lawyers in the Foreign Trade practice of  ETALON Group

Preparation in Russian and English of trilateral Foreign trade Contracts with the participation of an agent – payer of goods, preparation of agency contracts, contracts of assignment for payment of goods for the Russian importer to a foreign supplier on the basis of the legislation of the Russian Federation;

Substitution of a party to a contract: substitution of a creditor (cession), substitution of a debtor (transfer of debt), netting;

Legal advice on Russian currency legislation, including issues related to registration of a currency contract with the bank, making currency payments under sanctions, and closing a currency transaction with the bank;

Legal review of transactions to identify risks of non-compliance with the currency legislation of the Russian Federation;

Conducting correspondence, claim pre-trial work in Russian and English with a foreign supplier on the basis of the rules of RF legislation;

Check for sanctions imposed on the goods by unfriendly states (for importers) or for restrictions on the export of the goods (for exporters);

Legal defense in disputes arising out of foreign trade activities in state arbitration courts and ICAC at the Chamber of Commerce and Industry of the Russian Federation;

Legal support in applying to the CCI of the Russian Federation for confirmation of force majeure circumstances.

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