Repatriation

Millions of people already know the word Repatriation. It is the return to one's homeland. The term is usually used with regard to POWs, displaced persons and refugees, emigrants, etc. But the term also is also applicable to money. Repatriation of funds is the return of money from other states to Russia.

According to the currency legislation, there are three situations in which a resident is obliged to ensure funds return to his or her accounts in a Russian bank:

  1. Realization of goods, works and services to non-residents.
  2. Payments in advance to non-residents for goods (services) if they have not actually been imported (rendered).
  3. Loans to non-residents in foreign currency or in roubles.

Until recently, only the first two items were subject to thorough currency controls. Entering into foreign economic transactions, residents were obliged to create transaction certificates (contracts), and authorised banks monitored compliance with supply deadlines and payments. Failure to pay for goods and services on time could lead to penalties. But the deadlines on loan agreements with non-residents were not controlled by the bank, and there were no penalties for breaching them.

Since April 2018, there are new requirements for the repatriation of funds that have been transferred to non-residents in terms of loan agreements.
Below are the key changes:

  1. The repayment deadline must be mentioned in the loan agreement with a non-resident. If there is no deadline, the bank will not accept the service contract and will not carry out the transaction.
  2. A non-resident borrower must repay the money by the due date. The banks now check this. If the money is not returned on time, the bank will be informed and will have to notify the Central Bank.
  3. The currency of the loan agreement does not matter. The loan may be in dollars or roubles.

Violation of currency legislation is fined under Article 15.25 of the Code of Administrative Offences.

If a resident lends money to a non-resident and the non-resident fails to return the money on time, the lender may be charged with the following penalties:

  1. 1/150 of the Central Bank key rate for each day of delay.
  2. ¾-1 size of the sum unpaid.

There may be one fine or there may be both at the same time. Penalties are not imposed by the bank. It has nothing to do with customer penalties and receives nothing in its favour. The duty of the bank is to make sure It is the bank's responsibility to make sure that the client meets the legal requirements and to help to prepare the documents correctly.

Since May 2018, new fines for company officials who violate currency laws have appeared: a minimum of 20,000 roubles.

The head of the organisation or other person in charge may also be subject to criminal prosecution.

The sanctions for evading the repatriation of funds are provided by Article 193 of the Criminal Code of Russia. The punishment depends on the transaction sum.

If it's equivalent to an amount between 9 and 45 million roubles (a large amount), the punishment ranges from a fine of up to 500,000 roubles to imprisonment for up to 3 years.

If the amount unpaid is extremely high (over 45 million roubles), the fine can increase to 1 million roubles and the imprisonment term can be up to 5 years. The same punishment can be imposed for committing an act as part of an organised group, using false documents or using a "fictitious" legal entity.

For ordinary citizens, there are no penalties for breaching the loan repayment deadline. But they also have to indicate the deadline in the contract, otherwise the bank will not authorise the payment.

Be careful, repatriation of foreign currency earnings is the obligation of all Russian entities engaged in foreign economic activities. This measure is used to combat capital outflow and its and its violation is subject to both administrative and criminal liability.