Agency of Legal Information published a comment by Olesya Petrol, partner of law firm, regarding the legislative bill concerning liberalization of currency control in the Russian Federation.

According to Olesya, “the bill has the potential to significantly facilitate the lives of Russian private individuals – residents who have accounts and property abroad. In general, it considers the global context where financial information is transparent, and strict currency restrictions look as atavisms. It is a logical continuation of several already adopted liberal changes in the sphere of currency control, including the introduction of “special residents” and the adoption of an expanded list of allowed foreign marketplaces.

The strict general rule of the current currency law – “everything is prohibited that is not expressly permitted” is essentially reversed for individuals: crediting currency into foreign accounts is allowed. However, only in banks in the OECD and FATF countries that simultaneously joined the automatic information exchange system (CRS).

The casuistic nature of the law in its current form, the problem of qualification of functionally similar legal institutions in different jurisdictions, the significant interpretative uncertainty of certain rules, combined with repressive fines, forced individuals to make unnecessary and inconvenient banking operations and incur additional costs.

It is worth noting that, in addition to liberal measures, the bill imposes an obligation which did not exist before – the obligation to file notifications on opening of foreign accounts “in other organizations on the financial market”. This, most likely, is primarily about broker accounts and depo accounts. This change is counterintuitive to the idea of ​​liberalization and raises many new questions.”

The full article is available here.