Problems relating to Trade and Investment on Russia
12. Exchange controls |
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Issue |
Issue details |
Requests |
Reference |
| (1) Restricted External Remittance in Foreign Currency | - Due to the requirements under the Advance Notification and Licence Application System (ANLAS), the procedures are quite complex for making external remittance in foreign currency under contract, requiring preparation and production of the application form, the contract (purchase order won't do) and various other documents (passport deal). - While no particular restrictions apply to exchange of rubles into foreign currency or external remittance, depending upon the currency (such as rubles) or settlement method, sometimes, it takes time. - Upon making external remittance and for conducting import/export RFG requires the licence called passport, acquisition of which takes a long time. Passport is issued by a bank and in this process, the relationship gets solidly interlocked between the bank and the applying enterprise, depriving the enterprise the freedom of shopping for a lower bank commission. - Economic sanction, aggravated market from the low oil price impact, even more lengthy and difficult remittance. |
- It is requested that CBR: -- streamlines the ANLAS, and -- simplifies the documental requirements. - It is requested that RFG has the legislative system amended in order to facilitate conversion of rouble funds into foreign currency and external remittance in foreign currency. - It is requested that RFG: -- repeals the requirement for Passport itself, or -- simplifies the procedures. - Improvement is anxiously awaited in the climate surrounding politics and economy. |
- Restrictions on Foreign Currencies |
| (Info) - Please see the "Security Information --> Visa/Immigration" website of Consulate-General of Japan in Vladivostok at: (http://www.vladivostok.ru.emb-japan.go.jp/jap/visiting-japan/index.html) |
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| (Improvement) - Since Elvira Nabiullina's assumption of office as Governor of Central Bank of Russia (CBR) in June 2013, CBR has rapidly advanced its reform policy toward the full free floating exchange-rate system by 2015 (target), such as disclosure of information on its exchange intervention policy, and widening of the range for non-intervention in exchange. |
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| (2) Foreign Exchange Management Made Difficult by Economic Crisis | - Cyclic Russian economic crisis (plunging rubles) raises the risk of running the business un stably. It is especially applicable to the auto industry that relies willy-nilly upon imported parts and materials at the mercy of largely fluctuating foreign exchange rates. It is difficult for them to keep the profitability. | - It is requested that GOR support the industries from the taxation policy, for example, by lower tax rates. | |
| (3) Forward Booking is Restricted in Foreign Exchange | - Enterprises incorporated in Russia is not authorised to conclude Forward Booking Contract of Foreign Exchange other than with the domestic banks in Russia. | - It is requested that GOR deregulates the Foreign Exchange Control. | |
| (4) Inadequate Standards for Transactions in Foreign Currency | - GOR mandates recording in ruble at the CBR official parity rate (OPR) for all transactions in foreign currency. However, due to the vast gap between the OPR and the actual market exchange rate, MFS is unable to reflect accurately the real P/L Status on its financial statement. | - It is requested that GOR takes steps to amend the standards relative to the transactions in foreign currency. | - Federal Law No. 129-FZ, "On the State Registration of Legal Entities and Individual Businessmen" |
| (5) Rapid Exchange Fluctuations | - Radical exchange fluctuations prevail. As it stands, member firm's subsidiary (MFS) benefits from exchange gain on a direct export transaction in yen. Nevertheless, negotiation for raise in price is difficult. In a transaction with its parent company, the prevailing Yen depreciation enables MFS to offer special prices to its customers. However, MFS runs on a thin margin, so that if the exchange rate swings toward appreciation of Yen, it will instantly show operational loss: such is the severity of the fluctuation band. | - It is requested that GOP takes step to: -- stablise foreign exchange fluctuations, and -- holds the fluctuation band within a few percents in 6-months. |
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| (6) Net Asset Provisions under Russian Law on Limited Liability Company | - Due to loss from the weaker roubles, P&L of the local sales subsidiary has gotten aggravated. It is requested that GOR takes step to repeal or change the net asset provisions under the Amended Law on limited liability company. | - Net asset provisions of Russian Law on limited liability company. | - Net Asset Provisions under Russian Law on Limited Liability Company |
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