The rule on 80% mandatory sale of foreign currency proceeds was introduced by Presidential decree No. 79 dated 28 February 2022 and was one of the anti-crisis measures taken to stimulate the economic situation in the country.
Since 9 June 2022, by Presidential decree No. 360, the right to establish the amount of foreign currency proceeds mandatory for sale was delegated to the Government Commission for Control over Foreign Investments in the Russian Federation (the “Government Commission”). On 10 June 2022, the Government Commission set the mandatory sale of foreign currency proceeds at 0%1, and a few days later the Bank of Russia clarified that the mandatory sale of foreign currency (including foreign currency credited to the accounts of residents – participants of foreign economic activity in the period from 28 February to 9 June 2022 and not sold) is no longer carried out. Thus, the requirement for mandatory sale of foreign currency introduced at the end of February by Presidential decree No. 79 was cancelled.
Nevertheless, on 11 October 2023, the Russian President signed a decree that requires a list of Russian exporters to sell foreign currency again. According to this decree, exporters from the approved list will have to transfer earned foreign currency to their accounts in authorized banks and make a mandatory sale of this currency on the domestic market. The Russian Government will have to determine the amount of foreign currency to be sold, as well as the date from which it will be carried out. According to the press, this decree is “for official use” only and will not be published2.
The new decree of the Russian President names 43 groups of companies belonging to the sectors of fuel and energy complex, ferrous and non-ferrous metallurgy, chemical and timber industry, grain farming, to which these measures will be extended3. In addition, the decree:
- introduces an obligation for certain companies to submit to the Bank of Russia and Rosfinmonitoring indicative plans-schedules for the purchase and sale of foreign currency on the domestic market;
- stipulates that authorized representatives of Rosfinmonitoring will monitor and ensure compliance with currency regulation rules in certain companies.
According to the press with a reference to the Russian Government, from 16 October 2023, certain Russian exporters are obliged to transfer to their accounts in Russian banks no less than 80% of all foreign currency received in accordance with the terms of their export contracts within 60 days of receiving the funds. These companies are also obliged to sell on the domestic market within two weeks at least 90% of foreign currency proceeds credited to their accounts in Russian banks, but not less than 50% of the funds received under each export contract within 30 days of receiving funds4.
This measure will help to “equalize the balance between supply and demand, and will contribute to increasing the predictability of trade,” said Mikhail Mishustin, Chairman of the Russian Government5.
1 Extract from the minutes of the meeting of the subcommittee of the Government Commission on Control over Foreign Investments in the Russian Federation No. 61 dated 9 June 2022.