The new law, to replace one that was adopted back in 1992, is aimed at liberalizing Russia's currency legislation.
The law's architects describe it as a document of "maximally direct action." It prescribes that Russia's currency control bodies, including the government and the Central Bank, shall issue currency control regulations of procedural or technical character only.
As he met with President Vladimir Putin last week, Central Bank Chairman Sergei Ignatyev said that the enabling regulatory acts had been finalized already. "Today, we have completed the adoption of the whole package of necessary regulatory acts, an overwhelming majority whereof will come into force on June 18 and the remaining few shortly afterwards. We will cover the transition period from the old currency control system to a new one without difficulties," Ignatyev said.
The new law allows resident individuals to open foreign-currency accounts at banks based in OECD and FATF member countries without any restrictions, provided they notify the Russian tax bodies with which they are registered. Corporate depositors will be granted the same right one year from now.
In accordance with the law, monetary transactions between residents and non-residents may be carried out without restrictions, except for capital transactions, which are to be regulated by the government and the Central Bank.
One of the measures to control capital transactions will be the required reservation of 20 to 100 percent of the deal amount for up to one year. The Bank of Russia also has the power to require that a special account be used.
Under the law, the Russian government and the Bank of Russia shall continue to regulate currency operations through January 1, 2007.
The document outlaws foreign-currency operations between Russian residents. Exception will be made for operations in duty-free shops, transactions involving foreign securities, and obligatory payments to the Treasury, such as taxes and duties.
Foreign currencies and foreign-currency denominated checks may be purchased or sold via authorized banks only. Customers are not required to produce their ID cards for such operations, except for special cases envisaged by federal legislation.
The amount of money, securities, and convertible valuables allowed to be taken out of the country and to be brought in is the same as in the 1992 law. The amount of foreign-currency proceeds that is subject to obligatory sale on the domestic currency market also remains unchanged. The clause on the mandatory sale of foreign-currency proceeds will be in force till January 1, 2007.
The new law also gives more specific definitions to relevant terms, such as "foreign currencies" and "the Russian currency," "residents" and "non-residents," and "authorized banks." It also introduces the terms "foreign securities" and "domestic securities." According to it, precious metals and gems no longer fall into the convertible valuables category.
