The first comprehensive clarification of Decrees No. 79, 81 and 95: loans, type C accounts, securities, derivatives, residence

What it says⧉

Eleven subparagraphs: control test (1.1 — no longer applied, see Clarification No. 3-OR); banks’ checks of whether a borrower is foreign-controlled (1.2); restructuring of loans granted before 1 March 2022 (1.3); correspondent accounts and clearing (1.4); securities operations that need no Government Commission permit when no money moves (1.5); opening type C accounts without the creditor’s consent (1.6); the special regime of Decree No. 81 for buying and selling securities and real estate (1.7); all non-resident depo accounts treated as type C (1.8); derivatives above the Decree No. 95 threshold settled through type C accounts, netting allowed (1.9); who is a resident — dual citizens count only as Russian citizens (1.10); foreign securities and real estate abroad outside Decree No. 81 (1.11 — partly no longer applied under Clarification No. 1-OR of 28 March 2023).

Status, October 2026⧉

In force except subparagraph 1.1 and, in part, 1.11.

Unofficial translation⧉

Unofficial translation by BCA Unternehmensberatung UG. Only the Russian text is authoritative: Russian original on usd.bcaun.com · publication of the Bank of Russia ↗. Notes on provisions no longer applied are editorial and not part of the document.

Paragraph 1⧉

1. Guided by paragraph 13 of Decree of the President of the Russian Federation No. 95 of 5 March 2022 “On the Temporary Procedure for Performing Obligations to Certain Foreign Creditors” (“Decree No. 95”), the Bank of Russia clarifies certain provisions of Decree of the President of the Russian Federation No. 79 of 28 February 2022 “On the Application of Special Economic Measures in Connection with the Unfriendly Actions of the United States of America and the Foreign States and International Organisations That Have Joined Them” (“Decree No. 79”), Decree of the President of the Russian Federation No. 81 of 1 March 2022 “On Additional Temporary Economic Measures to Ensure the Financial Stability of the Russian Federation” (“Decree No. 81”) and Decree No. 95.

Paragraph 1.1⧉

1.1. For the purposes of paragraph 1 of Decree No. 81 and of paragraph 12 of Decree No. 95, a person is deemed to be under control if one of the criteria set out in Article 5 of Federal Law No. 57-FZ of 29 April 2008 “On the Procedure for Foreign Investment in Business Companies of Strategic Importance for National Defence and State Security” is present.

Paragraph 1.2⧉

1.2. When making payments intended to provide a loan by a resident in roubles or in foreign currency, a credit institution (non-credit financial institution) must take the measures that are necessary and available in the existing circumstances to establish whether the borrower is a foreign person or a person controlled by foreign persons.

To establish control by foreign persons, a credit institution (non-credit financial institution) may use its internal control procedures, including those applied in servicing clients and identifying beneficial owners.

Paragraph 1.3⧉

1.3. The provisions of Decree No. 79 and Decree No. 81 do not restrict residents in concluding agreements amending the terms (restructuring) of loans provided for by subparagraph “a” of paragraph 3 of Decree No. 79 and granted before 1 March 2022.

Paragraph 1.4⧉

1.4. The provisions of Decree No. 79 and Decree No. 81 do not apply to the topping up by Russian credit institutions of their correspondent accounts opened with foreign banks, or to settlements on the results of clearing of operations made with national payment instruments carried out by Russian credit institutions through correspondent accounts opened by them with foreign banks and opened by foreign banks with Russian credit institutions.

Paragraph 1.5⧉

1.5. The permit provided for by subparagraph “b” of paragraph 1 of Decree No. 81 is not required for the following transactions (operations) involving persons of foreign states that commit unfriendly actions, provided that they are not accompanied by a transfer of funds (transfer of rights to funds):

operations carried out on the conversion of depositary receipts for shares of a Russian issuer into shares of the Russian issuer, provided that as a result of the conversion the shares of the Russian issuer are credited to a depo account opened for the holder of those depositary receipts;

operations carried out in connection with the transfer of securities by a person of a foreign state that commits unfriendly actions who held those securities and performed all related actions in the interests of the person to whom they are transferred (for example, the return of securities from a trust or from a broker who was the title owner);

operations to transfer securities without a transfer of rights to those securities;

operations carried out irrespective of the will of the person exercising the rights under the securities (enforcement of court decisions, conversion of the securities by the person obligated under them, and so on);

operations to debit securities from a nominee holder’s depo account and credit them to another nominee holder’s depo account.

The restrictions established by Decree No. 95 must be complied with.

Paragraph 1.6⧉

1.6. Type “C” bank accounts in the name of foreign creditors are opened in the cases provided for by Decree No. 95 taking into account the following:

credit institutions do not need to obtain the foreign creditors’ expression of will to open the relevant type “C” accounts;

foreign creditors do not need to submit to the credit institution the documents provided for by Bank of Russia Instruction No. 153-I of 30 May 2014 “On Opening and Closing Bank Accounts and Deposit Accounts” (after 1 April 2022 — Bank of Russia Instruction No. 204-I of 30 June 2021 “On Opening, Maintaining and Closing Bank Accounts and Deposit Accounts”), and the foreign creditor’s representative does not need to appear in person;

the credit institution identifies new clients — foreign creditors, their representatives, beneficiaries and beneficial owners — in accordance with the requirements of Federal Law No. 115-FZ of 7 August 2001 “On Countering the Legalisation (Laundering) of Proceeds of Crime and the Financing of Terrorism” and the Bank of Russia regulations adopted under it, on the basis of the documents (information) on the foreign creditors available to it in the circumstances, not later than 30 days after the day of opening the type “C” bank accounts for them;

the credit institution identifies foreign creditors, their representatives, beneficiaries and beneficial owners in full in accordance with the requirements of Federal Law No. 115-FZ of 7 August 2001 “On Countering the Legalisation (Laundering) of Proceeds of Crime and the Financing of Terrorism” and the Bank of Russia regulations adopted under it if the foreign creditor applies to the credit institution in order to use the funds held in the type “C” bank account opened in its name.

Paragraph 1.7⧉

1.7. For the purposes of Decree No. 81, the special procedure for residents to carry out (perform) transactions (operations) giving rise to ownership of securities or real estate, established by the third paragraph of subparagraph “a” of paragraph 1 of Decree No. 81, applies to transactions (operations) carried out by residents with the persons specified in the first paragraph of subparagraph “a” of paragraph 1 of Decree No. 81, other than Special Foreign Persons, aimed both at the acquisition and at the disposal by residents of securities or real estate.

Paragraph 1.8⧉

1.8. In view of the need to prevent situations threatening the financial stability of the Russian Federation, for the purposes of paragraph 4 of Decree No. 95, all depo accounts opened in the name of non-residents before the date of entry into force of Decree No. 95 are treated as type “C” depo accounts from that day.

Any transactions (operations) of non-residents with securities whose rights are recorded in depo accounts are carried out using type “C” depo accounts.

Paragraph 1.9⧉

1.9. Obligations under concluded contracts that are derivative financial instruments (“derivative contracts”)¹ to the foreign creditors specified in paragraph 1 of Decree No. 95, where the amount of the obligations under such derivative contracts exceeds the amount specified in paragraph 2 of Decree No. 95, must be performed using type “C” bank accounts and type “C” depo accounts, unless another procedure is established by the Bank of Russia or a permit of the Bank of Russia is issued in accordance with paragraphs 10 and 11 of Decree No. 95 respectively.

The procedure for performing obligations provided for by Decree No. 95 does not prohibit the termination of obligations under derivative contracts concluded under a master agreement by netting.

Paragraph 1.10⧉

1.10. For the purposes of Decree No. 79, Decree No. 81 and Decree No. 95, residents are determined according to the concept of “resident” defined in Article 1 of Federal Law No. 173-FZ of 10 December 2003 “On Currency Regulation and Currency Control”. A resident who is a citizen of the Russian Federation and also holds another citizenship is, taking into account part 1 of Article 6 of Federal Law No. 62-FZ of 31 May 2002 “On Citizenship of the Russian Federation”, treated only as a resident who is a citizen of the Russian Federation.

Paragraph 1.11⧉

1.11. The restrictions contained in Decree No. 81 do not apply to transactions (operations) giving rise to ownership of securities and real estate carried out (performed) by residents with persons of foreign states that commit unfriendly actions if:

the securities are held by a foreign depositary, foreign bank or other financial market organisation located outside the territory of the Russian Federation that records rights to securities and holds them outside the territory of the Russian Federation;

the real estate (including real estate under construction) is located outside the territory of the Russian Federation;

settlements under transactions (operations) with such securities or real estate are made through accounts (deposits) opened by residents with foreign banks and other financial market organisations located outside the territory of the Russian Federation, information on which has been disclosed by the residents to the tax authorities of the Russian Federation in accordance with the requirements of the legislation of the Russian Federation.

Paragraph 2⧉

2. This official clarification shall be posted on the official website of the Bank of Russia on the Internet and applies from the date of its posting.

Guides that discuss it⧉