Russia Based Businesses Must Report Foreign Subsidiary Currency Transactions From January 1 2024

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From January 1, 2024, Russian companies will have to report not only on their own currency transactions but also on those of their foreign subsidiaries. Corresponding amendments to the law “On Currency Regulation and Currency Control” have been submitted by the Government to the State Duma.

The measure is intended to ensure more effective monitoring and assessment of the uniformity of currency inflows and outflows, as well as allowing for timely identification of potential imbalances that could create difficulties for the stability of Russia’s financial market.

Maxim Chereshnev, the chairman of the board of the Russian Council for the Development of Foreign Trade and International Economic Relations, has discussed how the initiative will affect Russian exporters:

“For exporters, this is an additional bureaucratic burden, and one can see the risk of some possible additional regulatory measures on foreign currency proceeds. But because there is already an obligation for exporters to return foreign currency proceeds to the Russian Federation within six months, such a bill simply adds transparency to the existing state of affairs and gives the government a greater ability to forecast.  In general, it does not create any significant risks for exporters, as the information will be available only to the regulator, and there will be no disclosure of commercial secrets, so there is no such risk.”

The move has significant implications for Russian based businesses trading with Asia as trade volumes have skyrocketed over the past 18 months. A side effect will also be the analytical data can be used to ascertain the impact or otherwise of de-dollarisation within Russian corporates foreign subsidiaries.    

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