On the wrong course: a record number of cases for violation of currency legislation have been brought in Russia

A record number of cases for violation of currency legislation have been initiated in Russia - almost 100,000, according to a report by the Federal Tax Service (available from Izvestia). They mainly concern the untimely return of foreign currency proceeds and other difficulties with reporting for cross-border transfers, the business community explained. The problems arose due to the sanctions that were tightened last year - companies were technically unable to make transfers. However, businesses should hardly expect relaxation from the authorities - they cannot allow capital outflow, as it will weaken the ruble exchange rate and pressurize inflation. How exporters can work in such conditions - in the material of "Izvestia".

How currency legislation works in Russia

The number of currency violations is growing in Russia. From January to September 2024, 91 thousand such cases were initiated, follows from the most up-to-date report "Efficiency of the work of the Federal Tax Service" (Izvestia has it). This is a record at least since 2017 - earlier statistics are not given on the website of the tax service. For comparison, for the same period of 2023 such cases were almost half as many - 53 thousand.

The number of protocols on administrative offenses for non-compliance with currency legislation has indeed increased, confirmed "Izvestia" in the Federal Tax Service. A significant number of them is associated with the late submission to the tax authorities of notifications on the opening of foreign accounts by Russian legal entities and individuals, as well as reports on the movement of funds on them, specified in the FTS. However, in the press service of the tax authorities, as well as in its report, there is no data on how many cases were brought under specific articles.

Photo: Izvestia/Eduard Kornienko

The main violations in this area are related to the requirement to return foreign currency proceeds from abroad, Pavel Martynchenko, a lawyer on international and tax law, told Izvestia. These requirements were introduced in October 2023 to support the ruble exchange rate, but then the proportions were changed several times. Now business is obliged to return to the country 40% of foreign currency earnings and sell 90% of this volume. And the requirement to realize in the country 50% of the funds received from each contract has now been reduced to 25%.

The fine for such a violation - up to 100% of the amount, and if it is more than 100 million rubles, then criminal liability for the head of the company, said the lawyer.

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Other possible violations are payment under fictitious (forged) documents to a non-resident under a foreign trade contract (for this a fine of up to 40% or criminal liability), as well as transfer of salary to a non-resident in foreign currency in cash (a fine of up to 40%), added Pavel Martynchenko.

As for individuals - we are talking about taking abroad more than $10 thousand in cash - most often people just do not know that you can not do it, added Associate Professor of the Department of Taxes and Tax Administration of the Faculty of Taxes, Audit and Business Analysis of Finuniversity Anastasia Knyazeva. In addition, the restriction of Russians' access to their foreign accounts online for the timely submission of statements on the movement of funds to the tax authority has an impact, the expert said.

Problems with the return of foreign currency earnings

For Russian business, sanctions, especially with regard to currency transfers, have become a serious test, confirmed Irina Myslivchik, general director of CargoSert and a member of the Moscow-based Delovaya Rossiya (Business Russia).

Photo: IZVESTIA/Sergey Lantyukhov

Since the beginning of 2024, entrepreneurs have been experiencing more difficulties in transferring funds. In addition to disconnecting the largest players from SWIFT (as early as 2022), the West threatened secondary sanctions against foreigners who help Russians make payments. As a result, there were difficulties with transactions to, from, and through Kazakhstan, Kyrgyzstan, and the UAE. That is, businesses were technically unable to make transfers, especially on time.

- Some Russian companies were unable to track and fulfill their obligations in terms of reporting deadlines under currency legislation - due to the inability of banks to make certain payments. As a consequence, there were violations of currency legislation," explained Irina Myslivchik.

In order to preserve the possibility of paying for imports, some companies try to leave foreign currency earnings in foreign banks in the hope that they will pay for purchases in the same period. But as a result, there are violations in the registration of export transactions and problems related to the late registration of import contracts, explained Daria Dinets, Head of the Department of Finance and Credit, Faculty of Economics, PFUR.

Photo: IZVESTIA/Sergei Konkov

November U.S. sanctions against almost 100 financial companies have only aggravated the situation. Because of them, there may be even more problems with currency legislation, but the results of such cases will be seen in 2025. According to forecasts of MoneyRoo, a company specializing in international transfers, as a result, manufacturers and suppliers of Russian goods abroad may fail to return more than 30% of annual revenue from accounts in foreign banks in time.

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Another reason for the increase in the number of detected offenses is the tightening of control by the Federal Tax Service and the Bank of Russia, believes Meri Valishvili, Master of Laws, Associate Professor of the Department of State and Municipal Finance at the Plekhanov Russian Economic University. This is required to prevent capital outflow abroad - otherwise the ruble exchange rate will weaken. So, even though business often violates Russian legislation through no fault of its own, we should not expect any relaxation on the part of the state financial regulation and control, the expert believes.

If the West continues to impose more and more sanctions, the trend with the growth of currency violations may worsen, said Daria Dinets from PFUR. On the other hand, business this year is likely to develop algorithms of work in this sphere in such a way as not to violate the legislation, admitted Meri Valishvili.