Currency control under Federal Law No. 173-FZ: defence in violation cases

Registration of a contract with an authorised bank replaced the former transaction-passport regime and is governed by Bank of Russia Instruction No. 181-I dated 16 August 2017. Registration thresholds, valuation of the contract amount, timing and required information must be determined under the current Instruction for the specific contract type. Registration timing can differ depending on whether funds are debited or credited and whether a goods declaration is filed. The bank may require the contract or contract details and information needed for currency-control records. Breaches of the registration and reporting rules may fall under Article 15.25 of the Russian Code of Administrative Offences. Liability depends on the specific offence and delay. The precise sanction and applicable paragraph of Article 15.25 of the Russian Code of Administrative Offences should be checked against the facts and current wording of the provision.

Repatriation rules can require a Russian resident to secure receipt of funds due under a foreign-trade contract or the return of an advance where the corresponding goods, work or services are not received. The applicable rule is set out in Article 19 of Federal Law No. 173-FZ 'On Currency Regulation and Currency Control'. For export transactions, the contractual payment terms and the rules applicable to the particular transaction must be checked. For import advances, the resident may need to secure return of funds where the agreed counter-performance is not provided. If performance is delayed, amendments, claims against the non-resident, litigation and other documented recovery measures can be relevant, but their legal effect depends on timing and the applicable rule. A breach of Article 19 may be dealt with under Part 4 of Article 15.25 of the Russian Code of Administrative Offences. Sanctions under Article 15.25 depend on the exact offence, currency, period and current statutory wording. Do not assume a maximum penalty applies without checking the specific case. Certain circumstances and documented measures taken by the resident may affect liability under the applicable provisions. Article 15.25 of the Russian Code of Administrative Offences). Evidence of the measures actually taken can be central to the defence in a non-repatriation case.

A bank looks at whether the documents fit together and whether the transaction is consistent with its compliance requirements. It may examine the parties and jurisdictions, beneficial ownership, the commercial logic of the route, whether the goods fit the stated business activity, the payment purpose and the supporting documents. Russian banks apply anti-money-laundering controls under Federal Law No. 115-FZ and current Bank of Russia requirements. A new counterparty, an unusual transaction pattern, a route that lacks an obvious commercial explanation or inconsistencies between documents may trigger questions. The response should explain the transaction with a coherent document set; no fixed 1–3 day resolution period should be promised.

Review the transaction documents layer by layer. Calls from management do not replace the bank’s compliance process. Start with who pays whom and whether any participant is subject to sanctions; what the goods are, whether restrictions or permits apply; the legal and commercial logic of the parties, jurisdictions and banks; whether the amount matches the invoice, contract and earlier payments; and whether the payment purpose matches the transaction documents. Possible outcomes include a coherent file that needs a clearer explanation to the bank; a documentary inconsistency that can be corrected with missing records or a revised submission; or a fundamental issue, such as sanctions exposure or an unsupported source of funds, requiring the transaction structure to be reconsidered. The source advises against trying to pressure the bank, splitting a payment into smaller amounts to avoid scrutiny, refusing compliance requests, or providing incomplete information. Those propositions should be treated as source guidance rather than universal legal conclusions. The practical point is to respond promptly and consistently, because delay may affect the supplier relationship, storage costs and the bank’s review.