STARTING JULY 1, 2021 NON-RESOURCE EXPORTERS WILL BE EXEMPT FROM REPATRIATION OF FOREIGN CURRENCY EARNINGS

On June 15, the Russian State Duma passed a corresponding law. It provides for the complete abolition of repatriation of export earnings and the removal of restrictions on its crediting to exporters' foreign accounts:

- for goods transferred to non-residents;
- for work performed for non-residents;
- for services provided to non-residents;
- for the information and results of intellectual activity, including the exclusive rights to them, transferred to non-residents.

The requirement to repatriate will not apply to foreign currency loan contracts, as well as contracts, under the terms of which foreign currency advances were transferred to non-residents. In addition, the possibility of crediting export currency proceeds to exporters' accounts opened in banks outside Russia is provided.

 The document amends the law "On Currency Regulation and Currency Control" and will come into force on July 1, 2021.

"For several years we have been advocating the abolition of this requirement and were supported by the Ministry of Finance, the Ministry of Economic Development and the Central Bank. Procedures for repatriation of foreign currency earnings create significant administrative barriers and burdens for exporters. 

For many businessmen, these procedures and the risk of liability became a decisive factor for them not to export. With the new law in place, exporters of non-resource products will be able to simply deposit money into an account abroad and use it as they see fit. This is especially important for exporters-small and medium-sized businesses, where every ruble counts, and for development of export through electronic commerce channels, since all market places pay for goods through foreign payment systems," said Veronika Nikishina, CEO of the REC.

 The bill was developed in execution of provisions of the Russian President's message to the Federal Assembly of April 21, 2021, in which he noted that it is necessary to remove all unnecessary restrictions on currency control for non-resource exporters from July 2021.