Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

RUSSIAN FEDERATION

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of January 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Measures
Restrictions and/or multiple currency practicesThe staff report for the 2006 Article IV consultation with Russia states that as of September 27, 2006, IMF staff was consulting with the authorities to determine whether the restriction on current account transactions identified at the time of the 2005 Article IV consultation has been removed as part of Russia’s full liberalization of capital account and exchange restrictions. (Country Report No. 06/429)
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Pursuant to UN Security Council Resolution No. 1373 of 2001, a procedure is in place for administrative (nonjudicial) suspension of operations with monetary resources or with other property when at least one of the parties is an organization or individual known to be a participant in extremist activities, or a legal entity directly or indirectly under the ownership or control of such organizations or individuals acting on behalf of or at the direction of such organizations or individuals. On October 11, 2006, the authorities notified the IMF of the restrictions in place in the Russian Federation on current international transactions for maintaining national and international security. In accordance with UN Security Council resolutions and legislative acts of the Russian Federation, these restrictions and sanctions are imposed against the following foreign states and organizations: (1) A1-Qaida and the Taliban movement (freezing of financial assets of organization members, prohibition of all kinds of operations, ban on entry of persons connected with these organizations into territory of member states or transit travel thereof, and ban on shipments of all kinds of arms); (2) the Democratic Republic of the Congo (ban on direct or indirect deliveries of arms and on provision of technical assistance and consultations, freezing of financial assets, and ban on entry of persons stated in UN Security Council resolutions into member states); (3) Iraq (freezing of financial assets of members of the former government of Iraq or its state bodies and ban on sale and delivery of arms to Iraq); (4) Côte d’Ivoire (ban on sale and delivery of arms and military technical assistance, ban on entry of persons stated in the appropriate UN resolutions into member states and freezing of financial assets/operations thereof); (5) Liberia (ban on sale and delivery of arms and military technical assistance, ban on entry of persons stated in the appropriate UN resolutions into member states and freezing of financial assets/operations thereof, and ban on import of diamonds in the rough by member states); (6) Sudan (ban on sale and delivery of arms and military technical assistance and ban on entry of persons stated in the appropriate UN resolutions into member states and freezing of financial assets/operations thereof); (7) Somalia (ban on sale and delivery of arms, and of military technical and financial assistance); and (8) Sierra Leone (ban on entry/transit travel of representatives of the military junta of Sierra Leone and members of the Revolutionary United Front on territory of member states).
Other security restrictionsCertain commercial and financial transactions with Iraq are prohibited.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of the Russian Federation is the Russian ruble.
Exchange rate structureUnitary.
Classification
Managed floating with no predetermined path for the exchange rateThe Central Bank of the Russian Federation (CBR) sets and announces the official exchange rates of foreign currencies against the ruble daily. These rates are based on ruble quotes against the dollar on the internal foreign exchange market and on quotes of other foreign currencies against the dollar on the global exchange market. The CBR intervenes in both interbank currency exchanges and the over-the-counter interbank market to limit fluctuations in the exchange rate of the ruble against a basket of the euro and dollar in the short run. The dollar is the main intervention currency.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward transactions are conducted by authorized banks. Trading in futures contracts is conducted on currency and stock exchanges, with the larger part of trading concentrated on the Moscow Interbank Currency Exchange.
References to legal instruments and hyperlinksFederal Law No. 86-FZ dated July 10, 2002, on the Central Bank of the Russian Federation (Bank of Russia); Statute of the Bank of Russia No. 286-P dated April 18, 2006, on the Establishment and Publication by the Central Bank of the Russian Federation of Official Exchange Rates for Foreign Currencies against the Ruble.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsSettlements between residents in foreign exchange are regulated by law.
Payments arrangements
Bilateral payments arrangements
OperativeThere are agreements with the CIS countries, Bulgaria, Mongolia, and Vietnam.
InoperativeAgreements with the Islamic Republic of Afghanistan, Cuba, Egypt, India, and the Syrian Arab Republic are inoperative.
Clearing agreementsYes.
Administration of controlThe CBR enforces foreign exchange control regulations, supervises and monitors transactions of authorized banks and the authorized exchanges, and regulates banks’ open foreign exchange positions. In addition to the CBR, the federal executive authorities (authorized by the government and within the limits of their jurisdiction) have the power to control foreign exchange transactions, with the exception of transactions by credit institutions and currency exchanges.
Payments arrears
OfficialYes.
PrivateYes.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeTransactions with precious metals and precious stones subject to obligatory control in accordance with anti–money laundering and terrorism financing legislation must be reported to the Federal Financial Monitoring Service.
On external tradeResidents (including banks) must have a license from the Ministry of Economic Development and Trade (MEDT) to export gold. Banks also must have a license from the CBR to conduct transactions in precious metals in order to export gold.
Controls on exports and imports of banknotesForeign and domestic banknotes may be exported and imported by residents and nonresidents in accordance with procedures established by law. The procedure for the export and import of domestic and foreign currency is uniform.
On exportsResident and nonresident natural persons may not export foreign and domestic banknotes exceeding the equivalent of $10,000, and exports exceeding $3,000 require a customs declaration. Amounts exceeding the equivalent of $10,000 may be exported only if previously imported, as indicated on the customs declaration.
Domestic currencyYes.
Foreign currencyYes.
On importsResidents and nonresidents may import any amount of foreign and domestic currency into the Russian Federation, provided customs regulations are observed.
Domestic currencyYes.
Foreign currencyYes.
References to legal instruments and hyperlinksArticle 15 of Federal Law No. 173-FZ, December 10, 2003, “On Foreign Exchange Regulation and Foreign Exchange Control.”
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResidents may open foreign exchange accounts with authorized banks without restriction.



Effective July 1, 2006, the mandatory use of special accounts and the related reserve requirement were eliminated. Previously, residents were required to open the following special accounts with authorized banks for certain foreign exchange transactions with nonresidents: (1) F accounts, which were used for foreign currency loans (with a maturity of less than three years) and for purchases from and sales to nonresidents by resident individuals of foreign currency securities; (2) R1 accounts, which were used by residents (individual sole proprietors and legal persons) for settlements and transfers of proceeds of foreign exchange loans and credits from nonresidents, for the receipt of proceeds from primary placements to nonresidents of shares and bonds defined as external securities, and for the receipt of proceeds from sales of external securities that were not recorded on the special deposit accounts of nonresidents; and (3) R2 accounts, which were used by resident legal persons for settlements and transfers related to the granting of foreign exchange loans and credits to nonresidents, for the purchase of external securities from nonresidents, and for the receipt of the proceeds from sales of external securities that were recorded on the deposit accounts to nonresidents. Credit and loans of more than three years’ maturity and external securities transactions between resident individuals and nonresidents of up to $150,000 a year could be made without the use of special accounts. A reserve requirement of 2% for 365 calendar days applied on R1 accounts, and a reserve requirement of 25% for 15 calendar days was applicable on R2 accounts.
Held abroadEffective January 1, 2007, residents may open foreign currency accounts abroad with banks of any country with subsequent notification of tax authorities of the opening of the accounts. Previously, residents were allowed to open foreign currency accounts abroad (1) with banks in OECD and FATF member countries, provided they notified the tax authorities at their place of record and (2) with banks in any country after advance registration with the tax authorities. Resident authorized banks licensed to engage in ruble and foreign exchange transactions may maintain correspondent accounts with nonresident banks. They may also open accounts in nonresident banks to service the activities of their representative offices abroad, subject to notification requirements. If regulations of the parent authorized banks permit, their foreign branches may freely maintain accounts with nonresident banks.
Accounts in domestic currency held abroadEffective January 1, 2007, residents may open accounts in the currency of the Russian Federation abroad with banks of any country with subsequent notification of tax authorities of the opening of the accounts. Previously, advance registration of the accounts with the tax authorities was required.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksFederal Law No. 173-2, Instruction 116-I, Bank of Russia Directive No. 1465-U, June 29, 2004, “On Establishing Reserve Requirements for Entry of Monetary Resources in Special Bank Accounts and for Withdrawal of Monetary Resources from Special Bank Accounts,” hereinafter Directive 1465-U; Directive of the Bank of Russia No. 1688-U dated May 29, 2006, on Abolishing the Requirement for Mandatory Use of Special Accounts in the Performance of Foreign Exchange Transactions and on Considering No Longer in Force Certain Regulatory Acts of the Bank of Russia; Directive of the Bank of Russia No. 1689-U dated May 29, 2006, on Considering No Longer in Force Certain Regulatory Acts of the Bank of Russia; Federal Law No. 173-FZ, effective January 1, 2007.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsEffective July 1, 2006, the mandatory use of special accounts for certain transactions and the related reserve requirement was eliminated. Previously, nonresidents were allowed to open and maintain five types of accounts: (1) S accounts for transactions by nonresidents with residents relating to ruble-denominated federal government securities; (2) A accounts for transactions by nonresidents with residents relating to ruble-denominated stocks or shares in mutual funds; (3) O accounts for transactions by nonresidents with residents relating to internal securities issued by residents, except federal government securities; (4) V1 accounts for ruble-denominated loans from residents or for primary placement of stocks, bonds, or promissory notes classified as internal securities; and (5) V2 accounts for ruble-denominated loans to residents and purchases or sales by nonresidents of internal securities (except promissory notes) that were not publicly issued.



In addition, the following reserve requirements applied: 15% for 365 calendar days for S accounts; 2% for 365 calendar days for O accounts; 25% for 15 calendar days for V1 accounts; and 2% for 365 calendar days for V2 accounts.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksDirective of the Bank of Russia No. 1688-U dated May 29, 2006, on Abolishing the Requirement for Mandatory Use of Special Accounts in the Performance of Foreign Exchange Transactions and on Considering No Longer in Force Certain Regulatory Acts of the Bank of Russia; Directive of the Bank of Russia No. 1689-U dated May 29, 2006, on Considering No Longer in Force Certain Regulatory Acts of the Bank of Russia.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsEffective June 1, 2006, residents may make advance payments for imports without restrictions for a period up to 180 days. Previously, advance payments exceeding 180 days or if the contract was not secured by an irrevocable LC, a bank guarantee, a property insurance agreement, or a bill backed by a nonresident bank were subject to provisioning requirements.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementn.a.
Preshipment inspectionn.a.
Import licenses and other nontariff measuresPrivate imports of ethyl alcohol are prohibited. Licenses are required for imports of various alcoholic products, as well as dual-use items, military equipment, medicine, industrial waste, and ozone-depleting substances.
Negative listYes.
Import taxes and/or tariffsMost customs duties range from 5% to 15%, but duties of 25% to 30% are levied on certain sensitive goods. The following products are exempt from duties: insulin and some other pharmaceuticals, printed materials, cotton and cotton wastes, some animal species, raw diamonds, wheelchairs, works of art, collectibles, and antiques. Imports of goods on the approved list from developing countries are subject to a customs duty that is 75% of the applicable rate.
State import monopolyNo.
References to legal instruments and hyperlinksFederal Law No. 173-FZ dated December 10, 2003, on Foreign Exchange Regulation and Foreign Exchange Control (incorporating amendments introduced by Federal Law No. 131-FZ dated July 26, 2006, on Amendments to the Federal Law on Foreign Exchange Regulation and Foreign Exchange Control); Directive of the Bank of Russia No. 1688-U dated May 29, 2006, on Abolishing the Requirement for Mandatory Use of Special Accounts in the Performance of Foreign Exchange Transactions and on Considering No Longer in Force Certain Regulatory Acts of the Bank of Russia; Directive of the Bank of Russia No. 1689-U dated May 29, 2006, on Considering No Longer in Force Certain Regulatory Acts of the Bank of Russia; Resolution of the Government of the Russian Federation No. 400 dated June 29, 2006, on Considering No Longer in Force Resolution of the Government of the Russian Federation No. 302 dated May 16, 2005; Federal Law No. 246-FZ dated December 29, 2006, on Amending Articles 11 and 18 of the Federal Law on Banks and Banking Activity and Article 61 of the Federal Law on the Central Bank of the Russian Federation (Bank of Russia); Federal Law No. 86-FZ dated July 10, 2002, on the Central Bank of the Russian Federation (Bank of Russia).
Exports and Export Proceeds
Repatriation requirementsAll proceeds from exports received by residents must be credited in full to their foreign exchange accounts opened with authorized banks. Foreign exchange proceeds may remain in the accounts of residents or third parties with banks outside the Russian Federation if they are received (1) from the export of goods, work, services, or intellectual property up to the amount necessary for execution of the obligations of residents under credit agreements with nonresidents who are agents of governments of foreign states, and under credit agreements with residents of OECD or FATF member states for a period exceeding two years; (2) for construction costs abroad covered by nonresidents; (3) for exhibitions abroad covered by nonresidents; (4) for the netting of counterclaims under obligations between residents and nonresidents for rendering services for fishing abroad to these residents under agency agreements and between resident and nonresident transportation organizations rendering services abroad to these residents under contracts (agreements) or if settlements between them are made via specialized settlement organizations established by international institutions in the international conveyance sector whose members are such resident transportation organizations; (5) for the netting of counterclaims under obligations ensuing from reinsurance agreements or agreements to render services connected with executing and performing reinsurance agreements between a nonresident and a resident who are insurance organizations or insurance brokers; and (6) as payment against expenses incurred by resident transportation organizations outside the Russian Federation associated with aerial navigation, airport, and port fees and other mandatory fees on the territory of foreign states; expenses associated with the servicing of air, river, and sea craft and other vehicles of such transport organizations and their passengers located outside the Russian Federation; and expenses to provide for the activities of branches, representative offices, and other offices of such transportation organizations located outside the Russian Federation. Effective January 1, 2007, certain foreign exchange proceeds of residents are exempt from the repatriation requirement.
Surrender requirementsEffective January 1, 2007, the mandatory surrender requirement of foreign exchange proceeds was eliminated. Previously, a surrender requirement of 10% applied on proceeds from exports of goods, services, and intellectual property of residents. Residents were required to surrender the 10% portion of their foreign exchange proceeds from exports of goods within seven days on the interbank foreign exchange market. The following were exempt from the surrender requirement: (1) receipts from transactions of the government, authorized federal authorities, the CBR, and entities acting on their behalf; (2) receipts by authorized banks from operations and transactions stipulated in the Federal Law on Banks and Banking; (3) proceeds of residents up to the amounts necessary to discharge obligations under credit agreements with nonresident organizations that are agents of foreign governments or with residents of OECD or FATF member countries, for a period of more than two years; and (4) foreign exchange received in transactions involving the transfer of publicly issued external securities or of rights thereto.
Financing requirementsNo.
Documentation requirements
Preshipment inspectionn.a.
Export licensesExport licensing is limited to goods on a list approved by the government, including military equipment and arms, precious metals and stones, rare animals and plants, dual-use items, ethyl alcohol and alcoholic products, and goods and services exported in accordance with international obligations. Licenses are issued by the MEDT in accordance with established procedures.
With quotasYes.
Export taxes
Other export taxesExport taxes are levied on 141 items, and the rate for most of them is 6.5%, with a maximum rate of 50% for nonferrous scrap. A number of goods, including crude oil and petroleum products, are subject to specific duties. Certain goods are subject to combined duties.
References to legal instruments and hyperlinksCBR Instruction No. 111-I, of March 30, 2004, on Surrender of Part of Foreign Exchange Proceeds on the Internal Currency Exchange of the Russian Federation; Federal Law No. 173-FZ dated December 10, 2003, on Foreign Exchange Regulation and Foreign Exchange Control (incorporating amendments introduced by Federal Law No. 131-FZ dated July 26, 2006, on Amendments to the Federal Law on Foreign Exchange Regulation and Foreign Exchange Control).
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsReceipts of dividends, interest, and profit by residents from nonresidents abroad must be credited to foreign exchange accounts of residents opened with authorized banks. Residents may freely credit to accounts of nonresident banks foreign exchange proceeds received (1) from exports of services and intellectual property in amounts necessary to discharge obligations under credit agreements with nonresidents who are agents of foreign states, and under credit agreements with residents from OECD or FATF member countries, for a period exceeding two years; (2) for construction costs abroad covered by nonresidents; (3) for exhibitions abroad covered by nonresidents; (4) for the netting of counterclaims under obligations between residents and nonresidents for rendering services for fishing abroad to these residents under agency agreements and between resident and nonresident transportation organizations rendering services abroad to these residents under contracts (agreements) or if settlements between them are made via specialized settlement organizations established by international institutions in the international conveyance sector whose members are such resident transportation organizations; (5) for the netting of counterclaims under obligations ensuing from reinsurance agreements or agreements to render services connected with executing and performing reinsurance agreements between a nonresident and a resident who are insurance organizations or insurance brokers; and (6) as payment against expenses incurred by resident transportation organizations outside the Russian Federation associated with aerial navigation, airport, and port fees and other mandatory fees on the territory of foreign states; expenses associated with the servicing of air, river, and sea craft and other vehicles of such transport organizations and their passengers located outside the Russian Federation; and expenses to provide for the activities of branches, representative offices, and other offices of such transportation organizations located outside the Russian Federation. Authorized banks participating in the authorized capital of nonresident credit institutions must credit dividends due to them to their correspondent accounts, with the exception of the portion used to replenish the authorized capital of the nonresident credit institution.
Surrender requirementsEffective January 1, 2007, the mandatory surrender requirement of foreign exchange proceeds of residents was eliminated. Previously, 10% of proceeds from exports of services and intellectual property were subject to surrender in the internal exchange market.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksCBR Instruction No. 111-I, of March 30, 2004, on Surrender of Part of Foreign Exchange Proceeds on the Internal Currency Exchange of the Russian Federations; Federal Law No. 173-FZ dated December 10, 2003, on Foreign Exchange Regulation and Foreign Exchange Control (incorporating amendments introduced by Federal Law No. 131-FZ dated July 26, 2006, on Amendments to the Federal Law on Foreign Exchange Regulation and Foreign Exchange Control).
Capital Transactions
Controls on capital transactionsEffective July 1, 2006, the mandatory use of special accounts for certain capital transactions and the related reserve requirements were eliminated. Previously, special accounts were to be used for capital transactions, and a reserve requirement applied to certain transactions requiring the use of special accounts. These requirements did not apply to (1) settlements and transfers of resident individuals with nonresidents connected with the acquisition and alienation of external securities (or rights certified by external securities) in an amount up to $150,000 a calendar year or (2) settlements and transfers connected with (a) foreign currency credits and loans with a maturity exceeding three years between residents and nonresidents or (b) ruble currency credits and loans with a maturity exceeding three years between residents and nonresidents. Effective July 1, 2006, the ability of the foreign exchange authorities (the CBR and the government of the Russian Federation) to establish reserve requirements on capital transactions, and effective January 1, 2007, the right of the CBR to establish requirements on the use of special accounts, were eliminated.
Repatriation requirementsYes.
Surrender requirementsEffective January 1, 2007, the mandatory surrender requirement of foreign exchange proceeds was eliminated.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating natureEffective December 29, 2006, the requirement that the acquisition of stocks of resident credit institutions by nonresidents be approved by the CBR was eliminated. Resident juridical persons that are not credit institutions may freely credit to their foreign exchange accounts maintained with authorized banks foreign currency received from nonresidents as shares in their authorized capital.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsInitial placement or trading of securities issued by nonresidents on the domestic market is allowed after their prospectus is registered with the Financial Markets Service (FSFR).
Purchase abroad by residentsYes.
Sale or issue abroad by residentsFSFR authorization is required to issue or sell domestic securities abroad. Proceeds must be transferred to current foreign exchange accounts with authorized banks. Effective July 1, 2006, the prior approval requirement for resident natural persons to sell or issue foreign and domestic securities abroad exceeding $150,000 a year was eliminated.
Bonds or other debt securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsIssues and sales abroad of debt securities by residents require FSFR permission. Receipts in foreign currency from the sale abroad of debt securities by residents to nonresidents must be credited to foreign exchange accounts of residents with authorized banks.
On money market instrumentsRegulations similar to those governing shares or other securities of a participating nature apply.
On collective investment securitiesControls apply to all these transactions.
Controls on derivatives and other instrumentsThe transactions are controlled if the derivative instrument stipulates the delivery of the underlying asset.
Controls on credit operations
Financial creditsControls apply to all these transactions.
Controls on direct investment
Outward direct investmentDirect investments of resident credit institutions associated with the acquisition of stocks (stakes) of foreign organizations and not leading to the establishment of subsidiaries abroad may be effected without restriction. Investments of credit institutions to establish subsidiaries abroad may be effected only by banks having a general license and equity resources (capital) of at least €5 million, with permission from and in accordance with the requirements of the CBR. Subsequent investments of banks in the authorized capital of foreign subsidiaries may be effected following notification. In accordance with an international agreement concluded between the Russian Federation and the Republic of Belarus, Russian banks satisfying the aforementioned requirements with respect to having a general license and equity resources (capital) may invest in the authorized capital of subsidiary Belarusian banks following notification procedures. Direct investment in the CIS by resident juridical persons that are not credit institutions may take place freely. Other investments require CBR approval.
Inward direct investmentEffective December 29, 2006, direct investments of nonresidents individually or as part of a group of persons in the authorized capital of operating credit institutions, comprising more than 20% of the stocks (stakes in the authorized capital) of the credit institution, may be effected on the basis of preliminary consent of the CBR, and above 1% of the stocks (stakes) of the credit institution—with notification of the CBR. Direct investments of nonresidents in the authorized capital of credit institutions that are being established may be effected on the basis of prior permission from the CBR. Previously, all direct investments in the authorized capital of credit institutions required CBR authorization. For other direct investments, the rules governing shares or other securities of a participating nature applied.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactions
LoansControls apply to all these transactions.
References to legal instruments and hyperlinksFederal Law No. 173-FZ dated December 10, 2003, on Foreign Exchange Regulation and Foreign Exchange Control (incorporating amendments introduced by Federal Law No. 131-FZ dated July 26, 2006, on Amendments to the Federal Law on Foreign Exchange Regulation and Foreign Exchange Control); Directive of the Bank of Russia No. 1688-U dated May 29, 2006, on Abolishing the Requirement for Mandatory Use of Special Accounts in the Performance of Foreign Exchange Transactions and on Considering No Longer in Force Certain Regulatory Acts of the Bank of Russia; Directive of the Bank of Russia No. 1689-U dated May 29, 2006, on Considering No Longer in Force Certain Regulatory Acts of the Bank of Russia; Resolution of the Government of the Russian Federation No. 400 dated June 29, 2006, on Considering No Longer in Force Resolution of the Government of the Russian Federation No. 302 dated May 16, 2005; Federal Law No. 246-FZ dated December 29, 2006, on Amending Articles 11 and 18 of the Federal Law on Banks and Banking Activity and Article 61 of the Federal Law on the Central Bank of the Russian Federation (Bank of Russia); Federal Law No. 86-FZ dated July 10, 2002, on the Central Bank of the Russian Federation (Bank of Russia).
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsSanctions are imposed on authorized banks violating reporting requirements on foreign exchange transactions.
Maintenance of accounts abroadAuthorized banks may open correspondent accounts with banks abroad pursuant to the terms specified in the banking license issued by the CBR.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThe reserve requirement ratio for ruble liabilities to legal entities and for foreign currency liabilities to legal entities and individuals is 3.5%. A provisioning requirement of 2% applies on ruble and foreign currency obligations of credit institutions to nonresident banks. Credit institutions have the right to fulfill a part of the reserve requirement by maintaining the appropriate balances in their correspondent accounts with the CBR. The required reserves for ruble currency obligations are reduced by the amount of ruble cash balances these credit institutions maintain in their cash departments within limits not exceeding 25% of the required reserves for ruble obligations.
Liquid asset requirementsFor the purpose of monitoring liquidity of credit institutions, the CBR has established liquidity ratios, which are determined as the ratio of assets and liabilities of credit institutions, taking into consideration maturities, amounts, and types of assets and liabilities and other factors, as well as the ratio of liquid assets to total assets of credit institutions.
Investment regulations
Abroad by banksAuthorized banks with general licenses from the CBR may transfer foreign exchange balances to banks in the FATF and OECD member countries and Belarus for purposes of participating in their authorized capital with CBR notification, and to other countries with CBR approval.
In banks by nonresidentsEffective December 29, 2006, the acquisition of shares in resident credit institutions no longer requires CBR approval.
Open foreign exchange position limitsThe open foreign exchange position of commercial banks is 20% of capital for all currencies and 10% of capital for an individual currency or precious metal. These limits are calculated based on the volume and date of transactions.
Provisions specific to institutional investors
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
Exchange measuresOctober 11. The authorities notified the IMF of the restrictions in place in the Russian Federation on current international transactions for the purpose of national and international security.
Resident accountsJuly 1. The mandatory use of special accounts for certain foreign exchange transactions and the related reserve requirement were eliminated.
Nonresident accountsJuly 1. The mandatory use of special accounts for certain foreign exchange transactions and the related reserve requirement were eliminated.
Imports and import paymentsJune 1. Residents were allowed to make advance payments for imports without restrictions for a period up to 180 days. Previously, advance payments exceeding 180 days or if the contract was not secured by an irrevocable LC, a bank guarantee, a property insurance agreement, or a bill backed by a nonresident bank were subject to provisioning requirements.
Capital transactionsJuly 1. The unremunerated reserve requirement and the mandatory use of special accounts to effect payment associated with capital transactions were eliminated.



July 1. The ability of the foreign exchange regulatory authorities to establish a reserve requirement on capital transactions was eliminated.
Controls on capital and money market instrumentsJuly 1. The prior approval requirement for resident natural persons selling or issuing securities abroad exceeding $150,000 was eliminated.



December 29. The acquisition of stocks in resident credit institutions by nonresidents no longer required CBR approval.
Controls on direct investmentDecember 29. Direct investments of nonresidents individually or as part of a group of persons in the authorized capital of operating credit institutions, comprising more than 20% of the stocks (stakes in the authorized capital) of the credit institution, could be effected on the basis of preliminary consent of the CBR, and above 1% of the stocks (stakes) of the credit institution—with notification of the CBR. Direct investments of nonresidents in the authorized capital of credit institutions that are being established could be effected on the basis of prior permission from the CBR.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsDecember 29. The acquisition of shares in resident credit institutions by nonresidents no longer required a CBR permit.
Changes during 2007
Resident accountsJanuary 1. The prior registration requirement for residents opening accounts abroad was eliminated.
Exports and export proceedsJanuary 1. The mandatory surrender requirement of foreign exchange proceeds was eliminated.



January 1. Certain foreign exchange proceeds of residents were exempted from the repatriation requirement.
Proceeds from invisible transactions and current transfersJanuary 1. The mandatory surrender requirement of foreign exchange proceeds was eliminated.
Capital transactionsJanuary 1. The mandatory surrender requirement of foreign exchange proceeds was eliminated.

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