Russian Parliament Blunders Over Currency Law

by Tatiana Smolenska, for LawAndTax-News.com, Moscow

25 March 2003

Leading international law firm, Herbert Smith has released a report which raises concerns over the transfer of foreign currency out of Russia by non-residents, following an amendment to the country's Currency Law which came into force on March 15.

The report's authors, John Balsdon, Liza Ivanova, and Luke Wells revealed that:

'The intention of the amendments was to introduce a simplified regime for non-resident individuals to take cash out of Russia in the amount of up to US$10,000 without the need to prove to the Russian customs authorities that such foreign currency has been previously transferred into Russia.'

'However, when incorporating these amendments into the text of the Currency Law, the general provision allowing non-resident entities to transfer foreign currency out of Russia was deleted. As a result, the current version of the Currency Law does not contain any provisions expressly allowing non-resident legal entities to transfer foreign currency out of Russia.'

The Central Bank has been in contact with the Russian Parliament regarding this omission, although the latter body reportedly refused to rectify the situation at present due to 'internal procedural reasons'. However, the Central Bank told the law firm last week that it would issue a clarification confirming that such transfers are permitted.

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