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Russian exporters may obtain the right to refuse the obligatory sale of foreign currency earnings

The Government Commission for the Control of Foreign Investment may begin to provide Russian exporters with the option of partial or full refusal to fulfil their obligations to sell foreign currency earnings.

Russian exporters may obtain the right to refuse the obligatory sale of foreign currency earnings

Companies may be justified in refusing if more than half of their proceeds from foreign trade contracts are received in roubles.

This may also apply to extending the deadline for depositing foreign currency into accounts with Russian banks and deducting amounts of foreign currency loans from sales in Russia. All this is supposed to allow companies to minimise currency risks.

It is expected that each request for the relevant authorisation will be considered individually, and companies that receive it will be required to submit weekly reports on their activities to Rosfinmonitoring.

This draft has not yet received government approval and is subject to change. However, it has already been agreed with the Central Bank and other agencies, including the Ministry of Economic Development, which have approved the proposals with technical comments.

The decree on the obligatory sale of foreign currency earnings by exporters was signed by the President of the Russian Federation in October 2023. It included 43 groups of companies. Thus, exporting companies were ordered to submit to the Central Bank and Rosfinmonitoring plans for the purchase and sale of foreign currency, taking into account the mandatory crediting of 80% of foreign currency proceeds to accounts in Russia and the sale of 90% of this volume on the domestic market.

In late January, the government said it would propose to extend the measures stipulated by the decree until the end of this year. The Central Bank opposed the prolongation of the measures. The measures are now in force until 30 April 2024.

The Bank of Russia believes that the decree on compulsory sale of foreign currency earnings by exporters is losing its relevance due to the tight monetary policy. Some experts even suggest that the obligation to sell foreign currency by exporters should be made permanent.


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