Questions and answers on payments, banks and transaction documentation

Bank compliance may examine the parties and beneficial ownership, jurisdictions, consistency with the customer's business, the route and economic purpose, payment description and supporting contract, invoice, acceptance or logistics records. The exact information requested depends on the bank and transaction.

Banks have obligations under Federal Law No. 115-FZ to identify and respond to suspicious transactions under the current AML/CFT framework. Do not rely on Bank of Russia Regulation No. 375-P as a current universal source without checking whether it remains in force and which current Bank of Russia acts govern the relevant indicator or measure.

Factors that may trigger additional review include a new counterparty, an unusually large or novel transaction, a route inconsistent with the customer's usual business, higher-risk jurisdictions under applicable policy, sanctions issues and inconsistencies between documents. None is an automatic finding of wrongdoing.

A compliance request is a request for verification, not an accusation. Respond promptly with a coherent package and an explanation of the transaction. There is no reliable rule that a well-prepared request will be closed within one to three days.

Check who pays whom and whether sanctions screening raises issues; what goods or services are involved and whether permits are required; why the parties, jurisdictions and banks make commercial sense; whether the amount matches the contract and invoice; and whether the payment purpose accurately identifies the transaction.

If the documents are coherent, give the bank a complete explanation. If there is a genuine documentary error, correct it lawfully and provide the missing evidence. If the problem is fundamental—such as an unlawful sanctions structure or unexplained source of funds—redesign or abandon the transaction rather than papering over it.

Do not try to pressure compliance staff, split a payment merely to avoid review, ignore lawful document requests or provide incomplete or misleading information. None of those actions guarantees an account restriction, but each can create additional compliance concern.

A prompt, complete response usually reduces avoidable delay. The actual review time depends on the bank and issue, so do not promise immediate resolution.

Banks operate under Federal Law No. 115-FZ, Bank of Russia requirements and their internal compliance procedures. They face regulatory consequences for failures, but it is too broad to say every document concern exposes the bank to licence revocation or that staff have no discretion within the legal framework.

What a dispute with the bank cannot fix if the transaction documents are weak: it cannot establish that everything is in order without addressing the documents; a complaint to management does not by itself unblock a transaction; workload or confidentiality does not automatically justify refusing a document request; and the bank's review timetable is governed by the applicable procedure, not by the client's preferred schedule.

Lawful steps can still clarify the specific reason for the restriction, obtain a workable period for supplying missing material where the bank allows it, challenge requirements that are not relevant to the transaction, and contest an unlawful restriction before the Bank of Russia or a Russian commercial court where the facts and procedure support that route.

A workable sequence is: correct genuine gaps in the transaction documents → assemble one coherent file → tell the bank what can be provided → submit the documents with a concise explanation → obtain and record the bank's decision. Keep a written record at each stage in case the matter later becomes a formal dispute.

A formal dispute may be justified if the bank requests information unrelated to the transaction, fails to follow an applicable procedure, gives an unsupported refusal, or applies a restriction that has no proper legal or contractual basis. Depending on the measure, the available routes may include a complaint to the Bank of Russia and a claim in a Russian commercial court; the correct route should be checked against the particular restriction.

A coherent transaction file should answer: who is selling and who stands behind the seller; what is being sold; what the payment is for; how the goods or services move from origin to destination and through which intermediaries; why the chosen commercial, logistics and banking structure makes economic sense; and which documents prove shipment, acceptance and payment.

The file commonly includes the contract and amendments; invoices for each shipment or transaction; specifications; transport documents such as bills of lading and CMR consignment notes; insurance documents where relevant; payment orders, bank confirmations and SWIFT messages; acceptance records; customs declarations and release documents; and applicable conformity or permit documents.

The documents are coherent when the parties are the same throughout, or any difference is clearly explained; the dates form a logical chronology; the amounts reconcile after documented adjustments and bank charges; product or service descriptions match or can be clearly reconciled; and the logistics route is described consistently.

A strong file might contain a contract between Company A, the Russian importer, and Company B, the Chinese supplier, for specified equipment; B's invoice to A using the same item descriptions and bank details; A's payment order to the account shown on the invoice with a clear reference to the contract and invoice; a bill of lading showing the agreed shipment route; and a customs declaration describing the same goods. Consistency does not guarantee bank approval, but unexplained discrepancies give compliance teams reasons to ask further questions.

The transaction file should be built before the deal, not after the first bank query. A trade lawyer can review the structure from a compliance perspective and identify documentary gaps before the payment is submitted.

Before opening an account, prepare the current corporate and financial documents the bank asks for: for example, an up-to-date Unified State Register of Legal Entities extract, charter, director appointment documents, tax returns and recent financial statements. Also prepare a concise description of the business, main counterparties, typical transaction volumes and the commercial reason for opening the account. The exact package depends on the bank and customer profile.

Before the first material transaction, ask whether the bank offers advance review or another way to discuss the payment. Have the transaction documents ready when the payment is submitted, and give enough commercial context to explain why the transaction fits the company's business.

For ongoing banking resilience, consider maintaining more than one usable banking relationship, keep customer information current, and make sure significant changes in ownership, management or business activity are disclosed as required. A relationship manager may help present the facts, but does not override compliance controls.

Factors that can attract additional review include a first transaction with a new counterparty that is large relative to the company's usual turnover, a higher-risk jurisdiction or counterparty profile, a vague payment description, a transaction outside the company's normal business, or a payment chain involving several intermediaries. None of these factors alone necessarily means the transaction is unlawful.

A non-standard transaction can still be legitimate. The practical task is to document its commercial logic and discuss the structure with the bank where advance review is available.

At the outset, obtain the bank's written notice or request and identify the stated basis for the restriction, the documents requested and the response period. Assign responsibility internally, involve legal and accounting staff as needed, and identify urgent payments that may be affected. The bank's disclosure obligations depend on the particular AML measure and cannot be assumed to include every internal reason for its decision.

During the first working days, assemble a complete response to the bank's actual request, audit related transactions for the same documentary issue, and identify lawful alternatives for urgent payments if the company has other accounts. Do not route payments elsewhere merely to evade a compliance restriction; any alternative must have its own legitimate commercial basis.

If the restriction remains, check the bank's procedure and the statutory route applicable to that measure. A complaint to the Bank of Russia or a court challenge may be available in some cases. Operational continuity can be addressed in parallel through lawful banking arrangements, but opening or using another account should not be treated as a way to circumvent AML controls.

A restriction can affect the bank's internal risk assessment and may lead to additional scrutiny or, in some circumstances, termination of the banking relationship. Information may also be exchanged through legally established AML mechanisms. The consequences depend on the type of refusal or restriction and should not be assumed to be identical in every case.

Compliance work should start before the first restriction. Periodically review transactions for AML and sanctions risk, set internal rules for new counterparties and unusual transaction types, and train finance and legal staff to recognise issues that need escalation.

In simplified terms, the buyer arranges a letter of credit with the issuing bank. The bank undertakes to honour a complying presentation. The seller ships the goods and presents the stipulated documents, usually through a nominated or advising bank. The documents are examined against the letter of credit, and payment or another form of honour follows if the presentation complies with its terms.

For the seller, a properly structured letter of credit can reduce direct buyer-payment risk. For the buyer, payment is tied to presentation of specified documents rather than an unsupported payment request. Where the credit incorporates UCP 600, internationally used documentary rules provide a common framework. Banks examine documents, not the physical goods.

Common structures include an irrevocable documentary credit; a confirmed credit, where another bank adds its own undertaking; a standby letter of credit, generally used as a secondary payment undertaking; and revolving arrangements for repeated transactions. The legal and banking effect depends on the wording and incorporated rules.

A letter of credit can be useful with a new counterparty, a material one-off transaction, a longer production cycle, bespoke goods that are difficult to resell, or another deal in which documentary control of payment materially reduces risk. Sanctions, bank availability and cost must also be checked.

Documentary compliance is strict: discrepancies can delay or prevent honour unless waived or otherwise resolved. Presentation periods also matter. Bank charges may be significant, and a documentary credit does not prove that the physical goods are genuine, conforming or fraud-free. Inspection and contractual remedies remain separate safeguards.

Whether the cost of a letter of credit is justified depends on the transaction, banks, jurisdictions and risk allocation. The terms and document list should be agreed before the credit is issued, because poorly drafted documentary conditions can create their own payment risk.

Due diligence means taking reasonable, proportionate steps to understand the counterparty and transaction and keeping evidence of those steps. If questions arise later, the company can show what it checked, what information was available and why the transaction appeared legitimate. That evidence may be relevant to knowledge, intent, fault and commercial substance, but it does not automatically exclude liability.

Counterparty checks may include official corporate registers, licences and permits where required, available financial information, litigation and insolvency records, business reputation, relevant sanctions lists and ownership or control. The depth of the review should match the transaction and jurisdiction.

Transaction-level due diligence can address the commercial reason for the deal, price and payment structure, tax consequences, logistics, the relationship between the parties, and whether the transaction fits the company's actual business. The objective is to understand and document substance, not merely complete a checklist.

Keep the process documented: an internal counterparty-review policy, a proportionate checklist for material transactions, the actual search results or internal memorandum, and an archive linked to the transaction.

Documented due diligence can be relevant in bank AML reviews, tax disputes and investigations because it helps show what the company knew and what measures it took. Its legal weight depends on the particular statutory test and facts; it does not automatically prevent a restriction, tax adjustment or allegation of intent.

Due-diligence records are a practical part of business defence. Their value comes from documenting real checks made at the time, not from creating paperwork after a problem has arisen.