Dear clients - participants of foreign trade activities!
From November 20, 2018 1 the Directive of the Bank of Russia dated 07/05/2018 No. 4855-U “On introducing amendments to the Bank of Russia Instruction dated 08/16/2017 No. 181-I 2” comes into force; you can familiarize yourself with the regulatory document of the Bank of Russia at the link).
The changes establish control over the return by residents from non-residents of granted loans and interest on them to their accounts in authorized banks 3 .
The obligation of residents to repay loans and interest is established by Law No. 64-FZ from April 14, 2018 for the following loan agreements:
- prisoners after 04/14/2018;
- concluded before 04/14/2018, the conditions of which were significantly changed after 04/14/2018.
To register an agreement to provide a loan to a non-resident, the resident is required to provide the Bank with information on the expected timing of repatriation of foreign currency and (or) Russian currency.
Expected deadlines are calculated in accordance with Instruction No. 181-I (Appendix 3):
- the terms for repayment of the loan and interest are determined on the basis of the loan agreement or are calculated by the resident independently;
- the period for the transfer of funds by credit institutions is added to the calculation;
- the expected period of repatriation of funds cannot exceed the date of completion of fulfillment of obligations under the loan agreement.
Information on the expected terms submitted by the resident is reflected by the Bank in the bank control statement under the loan agreement, clause 8.2 “Description of the payment schedule for repayment of principal and interest payments.”
The statement of banking control under loan agreements is supplemented with a section
V. Information on the resident’s fulfillment of the requirements of Article 19 of the Federal Law “On Currency Regulation and Currency Control” 4 with subsections:
V.I – Information on repayment of the principal debt;
V.II – Information on payment of interest payments.
Responsibility for failure by a resident to fulfill within the established time limit the obligation to receive from a non-resident funds due under loan agreements is established by Part 4 of Article 15.25 of the Code of Administrative Violations of the Russian Federation (as amended by Law No. 64-FZ and Law No. 325-FZ 5).
When transferring a contract (loan agreement) for servicing to another authorized bank, the resident is obliged to provide the new contract accounting bank (hereinafter referred to as the management bank) additionally with the following information 6:
- date of registration of the contract (loan agreement);
- date of deregistration of the contract (loan agreement) in the previous management bank;
- registration number of the previous bank of the management company.
Currently, the resident submits to the new management bank only a contract (loan agreement), or an extract from it and information about the unique number of the contract (loan agreement).
When preparing a certificate of supporting documents for loan agreements with contract type code 5 – “provision of a loan to a non-resident”, you must indicate the following in the “Note” field:
“F” - in case of submission of documents confirming the occurrence of conditions for non-repayment of the loan (clauses 8-10 of part 2 of article 19 of Law No. 173-FZ);
“P” - in the case of submission of documents confirming the fulfillment of obligations to pay interest payments by a non-resident in a way other than settlements.
We draw the attention of individual residents!
The requirements of Article 19 of Law No. 173-FZ on the repayment of loans and interest on them to accounts in authorized banks also apply to resident individuals.
Directive No. 4855-U approved the procedure for individual lenders to submit documents and information on loan agreements to the Bank, including:
- when writing off foreign currency or the currency of the Russian Federation under a loan agreement, the amount of obligations of which is equal to or exceeds the equivalent of 3 (three) million rubles, a resident individual must also provide information to the authorized bank about the expected timing of repatriation of funds;
- when repaying a loan, making interest and other payments by a non-resident under a loan agreement, a resident individual must provide the authorized bank with information about the purpose of such payment no later than 30 (thirty) business days following the day of crediting foreign currency or Russian currency to the individual’s account ;
- other.
1 Directive of the Bank of Russia dated 07/05/2018 N 4855-U “On introducing amendments to the Bank of Russia Instruction dated August 16, 2017 N 181-I “On the procedure for residents and non-residents to submit supporting documents and information to authorized banks when carrying out currency transactions, on uniform forms accounting and reporting on currency transactions, the procedure and timing for their submission" (hereinafter referred to as Instruction No. 4855)
2 Instruction of the Bank of Russia dated August 16, 2017 No. 181-I “On the procedure for the submission by residents and non-residents of supporting documents and information to authorized banks when carrying out currency transactions, on uniform forms of accounting and reporting on currency transactions, the procedure and timing of their submission” (hereinafter referred to as the Instruction No. 181-I)
3 Compliance by the resident with the requirements of Article 19 of the Federal Law of December 10, 2003 No. 173-FZ “On Currency Regulation and Currency Control” (hereinafter referred to as Law No. 173-FZ) as amended by the Federal Law of April 3, 2018 No. 64-FZ “On Amendments to Federal Law “On Currency Regulation and Currency Control” and Article 15.25 of the Code of the Russian Federation “On Administrative Offenses” (hereinafter referred to as Law No. 64-FZ).
4 By analogy with agreements on the export and import of goods and services
5 Federal Law No. 325-FZ of November 14, 2017 “On Amendments to the Federal Law “On Currency Regulation and Currency Control” and Article 15.25 of the Code of the Russian Federation on Administrative Offenses” (hereinafter referred to as Law No. 325-FZ), which came into force on May 14 .2018
6 The specified information is sent to the resident by the previous management bank (the bank that deregisters the contract on the basis of 6.1.1 of Instruction No. 181-I).
E.O. Kalinchenko, economist-accountant
Foreign trade activities: currency control documents for the bank
What documents and within what time frame should residents who have entered into a contract with a non-resident submit to the bank?
Banking currency control is an integral part of foreign economic activity. If you have concluded, for example, a foreign trade contract with a foreign organization, signed an agreement with a non-resident for the provision of services, rent (leasing), then you cannot avoid communicating with the bank within the framework of currency control. But how tight it will be depends on a number of factors. This article will help you figure out what documents and within what time frame will need to be submitted to the bank in relation to a contract with a non-resident.
Non-residents for exchange control purposes- this is, in particular, clause 7, part 1, art. 1 of Law No. 173-FZ of December 10, 2003 (hereinafter referred to as Law No. 173-FZ):
- organizations created in accordance with the laws of foreign states and located outside our country;
- branches (permanent representative offices) of these organizations located on the territory of Russia;
- individuals who are not citizens of our country (with the exception of foreign citizens permanently residing with us (stateless persons) who have a residence permit);
- Russian citizens who have been in a foreign country for at least 1 year:
- permanently reside;
- are temporarily staying on the basis of at least a one-year work or study visa (combined with a total validity of at least 1 year).
Transaction passport
As soon as you have entered into a contract with a non-resident, the first thing you need to do within the framework of bank exchange control is to determine whether you need to issue a transaction passport or not.
If the amount of your contract with a non-resident is equal to the equivalent of 50 thousand US dollars at the rate established by the Central Bank of the Russian Federation on the date of conclusion of the contract, or exceeds this value, you need to issue a transaction passport in an authorized bank through which settlements under the contract will be made pp. 5.2, 6.1 Central Bank Instructions No. 138-I dated 06/04/2012 (hereinafter referred to as Instruction No. 138-I). And in a situation where all payments will go through accounts in foreign banks, you will have to issue a transaction passport at the territorial branch of the Central Bank at your legal address clause 11.1 of Instruction No. 138-I. Looking ahead, we will say that in the future it will be necessary to submit currency control certificates there as well. clause 11.5 of Instruction No. 138-I. If payments are only partially made through foreign accounts, then the transaction passport must be opened at an authorized bank and reported to it pp. 11.2, 11.10 Instructions No. 138-I.
More information about the registration, re-registration and closure of transaction passports is written:It happens that on the date of conclusion of the contract a transaction passport is not required, since the amount of obligations is less than 50 thousand US dollars in equivalent. However, in the future, the liabilities increase (their total amount becomes equal to 50 thousand dollars in equivalent or more). And you already need to issue a transaction passport. This must be done no later than the date when the amount of obligations under the contract exceeds the amounts specified above. clause 6.5.3 of Instruction No. 138-I. Therefore, if you expect such a development of events, you can submit to the bank the documents necessary to obtain a transaction passport in advance. clause 1 of the Central Bank Information Letter dated 05/07/2014 No. 44.
The deadline within which a transaction passport must be issued depends on which operation will be the first under the contract. In general cases, you need to issue a transaction passport within the time limits indicated in the table.
| First operation under a contract with a non-resident | Deadline for submitting documents to obtain a transaction passport |
| Crediting to a foreign currency account (rubles) clause 6.5.1 of Instruction No. 138-I | No later than 15 working days from the date of receipt of money into the account pp. 2.3, 3.8 Instructions No. 138-I |
| Debiting foreign currency from an account (rubles) clause 6.5.2 of Instruction No. 138-I | Simultaneously with an order for currency transfer or a payment document pp. 2.3, 3.8 Instructions No. 138-I |
| Import into Russia (export from Russia) of declared goods in clause 6.5.4 of Instruction No. 138-I | No later than the date of submission of the goods declaration (documents used as a declaration) |
| Import into Russia (export from Russia) of undeclared goods in pp. 6.5.5, 9.1.2 Instructions No. 138-I | No later than 15 working days after the month of registration of shipping and commercial documents in pp. 9.1.2, 9.2.2, 9.3 Instructions No. 138-I |
| Performance of work, provision of services, transfer of information and results of intellectual activity clause 6.5.6 of Instruction No. 138-I | pp. 9.1.3, 9.2.2, 9.3 Instructions No. 138-I |
To obtain a transaction passport, you need to submit an agreement or an extract from it to the bank clause 6.6.2 of Instruction No. 138-I. But the conclusion of an agreement does not always involve the drawing up of one document signed by the parties. You could conclude a foreign economic contract by exchanging, say, telefaxes or electronic documents (allowing you to reliably establish that the document comes from counterparty a) clause 1 art. 160, Art. 434 Civil Code of the Russian Federation. Also, the contract will be considered concluded (in writing) if, having received a written offer from the counterparty, you agree and, say, ship the goods or transfer money and clause 3 art. 438 Civil Code of the Russian Federation. As the Central Bank explained, in this case you need to submit to the authorized bank the documents that you exchanged with your foreign partner Methodological recommendations of the Central Bank dated June 15, 2015 No. 14-MR. For example, a letter received by fax from a foreign counterparty requesting delivery and the original of your reply invoice sent to the partner by fax. Or upon acceptance by action - an invoice for the shipment of goods. The main thing is that the documents that you exchanged with the counterparty contain all the essential terms of the contract necessary for currency control. In particular, the subject of the contract (name of the goods supplied, description of the services provided, etc.), the price of the contract, the deadlines for the parties to fulfill their obligations.
The bank has 3 working days to review the submitted documents and make a decision. If the bank discovers any errors in the transaction passport form you filled out, inconsistencies with the data of the submitted documents, or the absence of any necessary papers, it will return the submitted documents to you to eliminate the shortcomings. pp. 6.9, 6.10 Instructions No. 138-I. At the same time, the documents for issuing a transaction passport are considered submitted in compliance with the deadline only if the bank accepted them within this established period and issued a transaction passport - signed the form you filled out, assigned a number and marked the registration date clause 6.7 of Instruction No. 138-I.
You must contact the bank to obtain a transaction passport in advance. Ideally, immediately after the conclusion of the contract.
“Currency control” communication with the bank is not limited to merely issuing a transaction passport. For further transactions under the contract, you will have to report to the bank.
Reporting on foreign exchange transactions for the bank
You need to report to the bank not only for operations related to settlements under a contract with a non-resident. The need to submit documents to the bank may arise, say, during the import/export of goods, or during the provision (performance of work). For your convenience, we have provided all the information about in what cases, what documents and within what time frame you need to submit to the bank in the table.
| Operation | When do you need to report to the bank? | Documents submitted to the bank | Deadline for submitting documents |
| Operations related to monetary settlements under the contract | |||
| Receipt of foreign currency to the transit account clause 2.1 of Instruction No. 138-I | Always. clause 2.4 of Instruction No. 138-I |
Appendix 1 to Instruction No. 138-I. 2. Documents related to the currency transaction, for example, agreements, invoices, acts Part 4 Art. 23 of Law No. 173-FZ. In the certificate of foreign exchange transactions that you submit in connection with the receipt of foreign currency, you can also indicate information about the debiting of the money received from the transit foreign currency account. clause 2.1 of Instruction No. 138-I |
No later than 15 working days from the date of receipt of currency to the transit account clause 2.3 of Instruction No. 138-I. The bank must notify you of receipt of currency into your account no later than the next business day clause 3.1 of the Central Bank Instruction No. 111-I dated March 30, 2004 |
| Write-off of foreign currency from account a clause 2.1 of Instruction No. 138-I | Always. With a few exceptions, for example:
|
|
|
| Receipt of rubles to the account from a non-resident clause 3.6 of Instruction No. 138-I | clause 3.6 of Instruction No. 138-I. Exception - the agreement with the bank states that the bank can fill out a certificate of foreign exchange transactions independently clause 3.9 of Instruction No. 138-I |
No later than 15 working days from the date of receipt of rubles to the account clause 3.8 of Instruction No. 138-I | |
| Write-off of rubles in favor of a non-resident clause 3.6 of Instruction No. 138-I |
|
||
| Settlements with a foreign counterparty through accounts in a non-resident bank pp. 11.5, 11.10 Instructions No. 138-I | If a transaction passport is issued under the contract and clause 2.6 of Instruction No. 138-I | 1. Certificate of foreign exchange transactions x pp. 11.5, 11.10 Instructions No. 138-I. 2. Copies of bank statements - only if payments under the contract only partially go through accounts in a non-resident bank pp. 11.2, 11.10 Instructions No. 138-I |
No later than 30 working days after the month of debiting money from an account with a non-resident bank (crediting money to the account) pp. 11.5, 11.10 Instructions No. 138-I |
| Operations for the export of goods from Russia | |||
| Export of goods from Russia with the submission of a customs declaration clause 9.8 of Instruction No. 138-I | If:
|
clause 9.8 of Instruction No. 138-I | clause 9.8 of Instruction No. 138-I |
| Export from Russia of goods declared by documents other than the customs declaration clause 9.1.1 of Instruction No. 138-I | pp. 9.1, 9.2 Instructions No. 138-I. clause 9.1.1 of Instruction No. 138-I; clause 4 art. 180 TK TS |
clause 9.2.1 of Instruction No. 138-I | |
| Export of goods from Russia to the EAEU countries clause 9.1.2 of Instruction No. 138-I | If a transaction passport is issued under the contract | 1. Certificate of supporting documents x pp. 9.1, 9.2 Instructions No. 138-I. |
clause 9.2.2 of Instruction No. 138-I. Question 6 of the Central Bank Information Letter dated January 21, 2014 No. 43 |
| Operations for the import of goods into Russia | |||
| Import of goods into Russia with the submission of a customs declaration clause 9.8 of Instruction No. 138-I | If:
|
Certificate of supporting documents x clause 9.8 of Instruction No. 138-I | No later than 15 working days after the month of declaring the goods in clause 9.8 of Instruction No. 138-I |
| Import into Russia of goods declared by documents other than the customs declaration clause 9.1.1 of Instruction No. 138-I | If a transaction passport is issued under the contract | 1. Certificate of supporting documents x pp. 9.1, 9.2 Instructions No. 138-I. 2. Documents used as declaration, for example transport documents clause 9.1.1 of Instruction No. 138-I; clause 4 art. 180 TK TS |
No later than 15 working days after the month, the documents used as a declaration are marked with the date of release (conditional release). If there are several such release marks, the period is counted from the latest date clause 9.2.1 of Instruction No. 138-I |
| Import of goods to Russia from EAEU countries clause 9.1.2 of Instruction No. 138-I | If a transaction passport is issued under the contract | 1. Certificate of supporting documents x pp. 9.1, 9.2 Instructions No. 138-I. 2. Transport (shipping), commercial documents. 3. Statistical form for recording the movement of goods in Appendix No. 1 to the Rules, approved. Government Decree No. 40 dated January 29, 2011. Information about it does not need to be indicated in the certificate of supporting documents x Question 6 of the Central Bank Information Letter dated January 21, 2014 No. 43 |
No later than 15 working days after the month of registration of supporting (shipping and commercial) documents in clause 9.2.2 of Instruction No. 138-I. An exception is the statistical form of accounting for the movement of goods. There is no deadline for submitting it. You will need to take the statistical form to the bank after you have completed it and submitted it to customs. Question 6 of the Central Bank Information Letter dated January 21, 2014 No. 43. Do this before closing the transaction passport |
| Other operations | |||
| Performance of work, provision of services, transfer of information and results of intellectual activity, including exclusive rights to them clause 9.1.3 of Instruction No. 138-I | If a transaction passport is issued under the contract. Exception - rental agreements, leasing agreements, provision of communication services or insurance in terms of periodic fixed payments clause 9.5 of Instruction No. 138-I | 1. Certificate of supporting documents x pp. 9.1, 9.2 Instructions No. 138-I. 2. Supporting documents, such as acceptance certificates, invoices, license agreements clause 9.1.3 of Instruction No. 138-I; List, approved. MVES of Russia 01.07.97 No. 10-83/2508, State Customs Committee of Russia 09.07.97 No. 01-23/13044, VEK of Russia 03.07.97 No. 07-26/3628 |
No later than 15 working days after the month of registration of supporting documents in clause 9.2.2 of Instruction No. 138-I |
| Other fulfillment of obligations under the contract (for example, return of previously exported (imported) goods to) Ch. 12 Instructions No. 138-I.
Having received a certificate of currency transactions (certificate of supporting documents), the bank will check whether it is drawn up correctly and whether the information specified in it (including the code of the type of currency transaction and the code of the type of supporting document) corresponds to the data of the attached documents and the information transmitted to the bank by customs clause 18.1 of Instruction No. 138-I. The bank must check the certificate of currency transactions clause 18.2 of Instruction No. 138-I:
And for checking the certificate of supporting documents, the bank is given the following period and clause 18.2 of Instruction No. 138-I:
The bank will not accept the certificate if it finds any errors or inconsistencies. You will receive an incorrect certificate back indicating the date and reason for the return. pp. 18.5, 18.6 Instructions No. 138-I. Within the deadline set by the bank, you will have to submit a new certificate of currency transactions (on supporting documents), eliminating all comments clause 18.7 of Instruction No. 138-I. Inquiries on currency transactions and supporting documents are considered submitted on time, If clause 18.9 of Instruction No. 138-I:
Therefore, the sooner you submit “currency” certificates to the bank, the better. There are clarifications from Rosfinnadzor, where it is stated: when certificates of currency transactions, certificates of supporting documents and the supporting documents themselves are submitted to the bank, “the period for the fulfillment of the obligation by the resident does not include the period for their verification by the authorized bank.” Letter of Rosfinnadzor dated October 5, 2012 No. 43-01-06-25/4133. But judicial practice shows that you may still face a fine if you submit a new, correct certificate of currency transactions (on supporting documents) instead of a timely submitted but erroneous one to the bank after the deadline for submitting the certificates has expired. By returning the certificate to you, the bank sets a deadline for correcting the shortcomings and submitting a new certificate. But, according to some courts, the bank’s instructions do not in any way affect the deadline set for submitting the right to Resolution 1 of the AAS dated March 30, 2015 No. A43-21628/2014. With regard to submitted certificates of currency transactions and supporting documents, one cannot be guided by the “submit and forget” principle. After all, if the information provided in these certificates changes (with the exception of changes in data about the resident or authorized bank), you will need to submit a corrective certificate. This must be done no later than 15 working days after the date of execution of documents confirming the changes. These documents will need to be submitted to the bank along with a certificate pp. 2.9, 3.15, 9.7 Instructions No. 138-I. You can agree with the bank that, based on the documents you submit, the bank itself will issue pp. 2.4, 3.9, 6.3, 9.4 Instructions No. 138-I:
These services, of course, are paid. Check with your bank for rates. You may prefer to pay an amount within 5,000 rubles. for issuing a transaction passport (within 1,500 rubles for issuing certificates), rather than doing it yourself. But keep in mind that you will still need to understand the rules for issuing transaction passports and certificates. After all, the bank’s preparation of these documents does not relieve you of responsibility for their correct content and compliance with deadlines! If you do not submit the necessary documents to the bank on time, the bank will not be able to issue a transaction passport or certificate in a timely manner. After the bank fills out the transaction passport (or certificate), you will need to check this document. And if you find errors and inaccuracies, you must submit an application to the bank for its re-issuance (or a corrective certificate) within 15 working days after the date of receipt of the transaction passport (certificate) pp. 2.10, 3.9, 6.11, 9.4 Instructions No. 138-I. | |||
Large banks offer a number of services to clients participating in foreign economic activities and themselves become an important link in international trade. As a rule, banks create specialized departments for external relations. There are specialized banks (in Russia Vneshtorgbank).
To carry out foreign economic activities, banks:
Conclude agreements on correspondent relations with banks abroad and open correspondent accounts;
Open branches and offices abroad;
Acquire ownership shares in foreign banks;
They open factoring, leasing, etc. companies.
Goals foreign economic activity of banks:
Provide maximum services to exporter/importer clients;
Reduce the risks of international transactions;
Provide the bank with foreign exchange income.
These goals are achieved through the use of various methods and tools that are agreed upon by the exporter and importer at the time of concluding the trade contract.
Payment methods, used in international practice:
Advance payment;
Documentary letter of credit;
Payment after shipment;
Documentary collection;
Trading on an open account. Tools(calculation methods):
Bills of exchange;
Postal, telegraphic, telex payment orders;
International money transfers (S. W. I F. T system) International payments are made on the basis of generally accepted
rules established by the international community.
Let's consider the two most significant payment methods from the point of view of reducing the risk of international trade transactions - documentary in cash and documentary letter of credit.
Documentary collection– payment method (bank settlement operation), in which the bank, on behalf of the exporter client, receives the funds due to it on the basis of the goods settlement documents submitted by the client to the bank (Fig. 38).
1. Signing a contract for the supply of goods;
2. The exporter provides the bank with a collection order and goods settlement documents;
3. The bank checks the correctness of the documents and transfers them to the collecting correspondent bank;
45. The importer’s bank transfers documents to the importer against payment of the amount indicated in them;
6. The collecting bank transmits a payment notice to the exporter's bank;
7. The exporter's bank credits funds to the client's current account and notifies him of receipt of payment.
Unified rules for documentary letters of credit were established by the International Chamber of Commerce for the first time in 1933. Currently, version No. 500, adopted in 1993, is in effect. In Russia, this form of payment is regulated by the Civil Code of the Russian Federation, Part II, Art. 867873.
Documentary letter of credit This is the bank's obligation to make the amount agreed upon by the counterparties available to the seller on behalf of the buyer in accordance with strictly defined conditions.
Target reducing the risks of foreign economic transactions.
The essence of the operation:
Exporter receives a guarantee of timely receipt of export proceeds, importer makes payment upon delivery (Fig. 39).
Signs of a letter of credit:
It is a monetary obligation, the fulfillment of which occurs subject to the provision of the documents provided for in the letter of credit;
It is a transaction separate from the foreign economic contract, which provides for a letter of credit form of payment;
The bank makes payment under the letter of credit in its own name, but on behalf of its client;
The bank makes the payment at the expense of its own funds or the client’s funds;
Issuance of a letter of credit and payment from the letter of credit give rise to a chain of transactions between participants in credit settlement relations.
1. Contract.
2. The importer, within the terms agreed with the exporter, instructs his bank to open (issue) a letter of credit (application for open letters of credit).
3. The importer’s bank asks the exporter’s bank to open a letter of credit in favor of the corresponding exporter and immediately or within the stipulated time frame
ki provides coverage, i.e. transfers the amount of the letter of credit (issuance of the letter of credit).
4. The exporter's bank sends a notice to the exporting client.
5. The exporter, having received a notice (advice) from his bank and having checked the terms of the letter of credit, sends the goods to the importer and prepares the documents necessary to receive payment from the letter of credit.
6. The exporter submits to his bank the shipping and other documents specified in the letter of credit.
7. Shipping and other documents are sent by the exporter’s bank to the importer’s bank, which makes the payment.
8. The exporter receives the payment amount due to him.
9. The importer’s bank transfers the received documents to the importer, which give him the right to receive the purchased goods.
Types of documentary letter of credit:
To bearer;
Paid on time;
With deferred payment terms;
Revolving (renewable);
Non-revolving;
Confirmed;
Unconfirmed.
The most important criterion is revocability of letter of credit– involves division into:
Revocable letters of credit are a bank obligation that can be canceled or modified without notice to the exporter;
Irrevocable letters of credit are a firm commitment of the bank, which is beneficial for the exporter and risky for the bank.
All currency transactions of the bank are subject to currency control rules 1 (See Fig. 39 and Fig. 40).
Information updated: 06/14/2019
If an entrepreneur cooperates with foreign companies, then he becomes a participant in foreign economic activity - foreign economic activity. This activity has a number of nuances that must be taken into account. Otherwise, you may face serious problems with banks, tax authorities and governments.
In this article you will learn what foreign economic activity is and how it is regulated. Here we will also look at the main problems that an entrepreneur may most often encounter when conducting foreign trade activities.
What is foreign economic activity
Foreign economic activity, or FEA, is any economic activity that involves interaction with other states and foreign companies. Foreign trade activities include international trade, import and export of products, investments in foreign companies, participation in international projects, obtaining financing abroad and other types of activities.
States and their structures, banks, companies, individual entrepreneurs and even individuals can participate in foreign economic activity. For different categories of participants there are both general rules and specific restrictions and features. They all need to be taken into account when interacting with other countries. In this article we will consider only the rules and features of conducting foreign trade activities for business.
States regulate foreign trade activities in various ways and establish rules for its conduct. At the same time, participants in the foreign economy need to take into account the rules and requirements of several countries at once. With some of them it is easier to conduct foreign economic activity, with others it is more difficult.
Types of foreign economic activity
There are several main types of foreign trade activities:
- Foreign trade activities. This includes any activity related to the exchange, import and export of goods, works, services, information and the fruits of intellectual activity. This area also includes international leasing, clearing (organization of settlements), engineering (engineering and consulting work and services) and some other activities
- Industrial cooperation. This is cooperation between entrepreneurs from different countries, which is based on the international division of labor. Cooperation participants share the main tasks among themselves, jointly plan the import and export of products, and conduct joint scientific and technical developments
- Investment cooperation. This is the organization of joint production with companies from other countries by attracting mutual investments. It also involves a common organization of production, exchange of technologies and joint sales of products. Such cooperation with foreign companies is considered the most risky
- Financial and currency transactions. Usually carried out in parallel with other types of foreign trade activities. These include the organization of foreign currency accounts and the movement of money between them, currency exchange, lending, co-financing and project financing.
The procedure for conducting it and legal restrictions depend on the type of activity. In most cases, entrepreneurs with foreign trade activities and financial transactions. Therefore, further we will take into account only them.
How foreign trade activities are regulated in Russia
The main law regulating foreign trade activities in our country is the Federal Law “On the Fundamentals of State Regulation of Foreign Trade Activities”. It defines the main methods and tools for regulating interaction with other countries.
You can also note the laws “On currency regulation and foreign exchange control”, “On export control” and “On technical regulation”. They determine the rules for conducting certain types of foreign trade activities.
The main control over foreign economic activity is exercised by the Ministry of Industry and Trade. Other regulatory bodies are appearing in different areas: in the scientific sector - the State Committee for Science and Technology, in the financial sector - the Central Bank and Vnesheconombank, in the export-import sector - the Federal Customs Service. At the regional level, foreign economic activity is controlled by specialized local government bodies.
How to conduct foreign trade activities correctly for a business - main points
If an entrepreneur decides to engage in foreign trade, he will face new business difficulties. It is necessary to open a foreign currency account, undergo currency control for each transaction, and resolve the issue with the customs service. Let's consider the main problems that have to be solved when conducting foreign economic activity:
Opening a foreign currency account
Before starting foreign economic activity, you must open an account in foreign currency. This can be done at any bank - not just the one where you opened your main current account. In the first case, it is usually enough to send an application and sign an agreement. In the second, it is necessary to prepare a package of documents necessary for opening a cash settlement.
The foreign exchange account is divided into two components - current and transit. The current account stores money in foreign currency, and it is also used to transfer money to counterparties. The transit account is used to credit receipts and pass exchange control. Money from a transit account can be withdrawn to a current account or exchanged for rubles.
If you are going to work with European companies, then it is best to open an account in euros, otherwise - in US dollars. To work with companies from China, you can open an account in yuan, but only a few large banks offer such accounts.
When choosing a bank to open a foreign currency account, take into account all the conditions - the number of available currencies, conversion commission, cost of foreign currency payments, cost of opening and maintenance. Remember that sometimes foreign currency accounts cannot be opened at the basic rates of cash settlement services. Also, some banks offer accounts with special conditions for foreign trade.
Checking counterparties abroad
Before concluding a transaction with a foreign company, you need to check its reliability. Transactions with counterparties from other countries are always riskier, so they need to be checked more carefully. In addition, due to cooperation with unreliable and suspicious companies, you may have problems with the tax and customs services of both countries.
There are several ways to check information about a foreign counterparty:
- Request information from the register of enterprises of the country from which the counterparty originates. This way you will find out all the basic information - registration date, amount of authorized capital, information about managers and others. For residents of other countries, this information is usually provided for a fee.
- Request an extract from the register and constituent documents from the counterparty itself. All information must be provided in writing and certified by a notary. They must be affixed with an apostille - a stamp confirming the legal validity of a foreign document. It must be received in the country from which the documents were sent. Find out in advance which authority affixes this stamp in the desired country
- Contact a specialized database, for example, D&B. To do this, you need to register in the database (the cost of registration depends on the service), and then order a verification service for the company you need. However, this method may not work if your counterparty is not registered in the database.
- Use the services of a service that offers verification of foreign counterparties. The service specialists themselves will collect the most detailed information about the company you need. The cost of their services usually does not depend on the country in which the company is registered
Currency control
This is the name of the system of measures that regulate the circulation of foreign currency and compliance with the requirements of currency legislation. All transactions with foreign companies go through currency control. Its purpose is to confirm the legality of the transaction and the fulfillment of obligations between its participants.
Supervision over the implementation of currency control is carried out by the Central Bank, the Government, the Ministry of Finance and the Customs Service. Its direct implementation is carried out by agent banks, which are vested with certain powers. They monitor the correct execution of the transaction and compliance with its terms. You can find out whether your bank is an authorized agent on the website or in the support service.
If the object of the transaction (for example, a consignment of goods) does not cross the Russian border, then currency control is not required
The entrepreneur is given 15 days to pass exchange control. This period is counted from the day the money is received in the transit account or the goods cross the border. The currency control procedure consists of several stages:
- Preparation of transaction documents - contracts, customs declarations, certificates of operations and others. The composition of the package of documents depends on the specific transaction and the requirements of the agent bank
- Drawing up a transaction passport. It is required if the transaction amount is more than $50,000. The transaction passport must be issued no later than 15 days from the date of transfer of money, import or export of goods, or provision of services. The agent will help you prepare it
From March 1, 2018, it is no longer necessary to issue a transaction passport. Instead, agent banks will register contracts in the amount of 3,000,000 rubles (for import) or 6,000,000 rubles (for export). The remaining stages of currency control remain the same.
- Registration of the transaction agreement. This is done by your agent bank. In addition to the main package, you will need to prepare certificates of supporting documents
- Start of transaction execution and creation of a reserve. When the conditions are fully met, the reserve is returned
- Closing the transaction and preparing reports. This is also done by the agent.
The entire currency control procedure goes through an agent bank. He helps prepare all the necessary documents, registers contracts, generates reports and advises the client. In many ways, the speed and success of passing control depends on the choice of agent bank.
To use the services of an agent, you must open a bank account at a rate that provides for currency control. You need to open a foreign currency account in the same bank. The cost of supporting a foreign exchange transaction depends on the bank’s tariffs; each expense item (preparing a transaction passport, issuing certificates, consultations, etc.) is paid separately.
Import or export of goods
This process consists of two important stages - searching for a carrier and going through customs clearance. This can be done either by you or by an intermediary company - a customs broker. In the first case, delivery support is entirely your responsibility. In the second case, this is done by an intermediary for an additional fee.
It is best to entrust the transportation of goods to a specialized company - a forwarder or carrier. She will be able to deliver the goods in the way you need and ensure their storage and safety. When choosing such a company, take into account the methods of delivery of goods, the countries and regions with which it works, the organization of transportation, the availability of insurance and the availability of additional services. It is advisable to contact proven and reliable companies with a large number of reviews.
Once the goods arrive at the border, they will need to go through customs clearance. It consists of several stages:
- Registration of declarations for goods. This is done by a company representative. During the process of filling out declarations, customs officers will inspect the cargo and check its compliance with the documents
- Obtaining commodity nomenclature codes (TN-VED) and non-tariff regulation. You can clarify the codes in a special reference book, for example, this one. Also check whether the import or export of a particular product is allowed, and if so, under what conditions
- Checking customs value. Customs officers check whether the declared value corresponds to the real value. If they differ significantly, an additional check will be assigned.
- Payment of customs duties - excise taxes, VAT, customs duties and fees. Their amount depends on the volume of cargo, customs value and customs codes
- Currency control. You should definitely go through it if you haven't done so before. This process is described in more detail in the previous section.
- Issuance of permission for goods to cross the border. If it is positive, your carrier will continue to deliver the goods to the final destination
To undergo customs clearance, you will need to prepare the following documents:
- Registration and constituent documents
- Product codes according to TN-VED and activity codes according to OKVED
- Certificate of opening a current account
- Contract for the supply of goods
- Copy of the manager's passport
- Power of attorney addressed to the company representative
- Documents about goods and transactions (certificates, invoices, invoices, transaction passports and others)
You can provide both originals and copies of documents - in the second case, they need to be certified by a notary.
It is very difficult to carry out customs clearance of cargo yourself. Therefore, sometimes it is easier and more profitable to turn to a customs broker for help. He will not only be able to resolve the issue with customs, but will also help you find a carrier, organize storage and delivery of the goods, and, if necessary, explain to you all the unclear points.
Bank guarantees abroad
Sometimes a bank guarantee may be required to conclude a transaction with a foreign guarantee. This is an obligation under which the bank pays compensation to its client's counterparty if the client has violated its obligations. you will learn more about how this financial instrument works.
In general, for foreign economic activity, bank guarantees are valid in the same way as for transactions within the country. The only difference is that in this case they can be issued in foreign currency - for example, dollars or euros. For transactions with foreign companies, you will need a guarantee of payment, performance of a guarantor or return of the advance payment.
It is best to apply for a guarantee for foreign trade activities to a large and reliable bank, which is known not only in Russia, but also abroad. A good option would be the Russian branch of a foreign bank, for example, Raiffeisenbank. Please note that if you have not previously used the services of an organization and have not opened a current account with it, then the requirements for you may be much stricter.
Separately, customs guarantees are distinguished, which serve to ensure customs payments. Most often, they are needed to arrange installment plans or deferred payments, obtain excise stamps, store and transport imported goods. Only banks that have permission from the Federal Customs Service have the right to provide such guarantees. You can check the availability of such permission in the registry on its website.
How to open a branch in another country
Sometimes, in order to conduct business abroad more efficiently, a company may open a branch or representative office in another country. For example, if in your home country the market is underdeveloped or, on the contrary, oversaturated. The procedure for opening a branch abroad has a number of its own features and nuances that must be taken into account.
The decision to open a branch abroad is made by the founders. If it is positive, then it will be necessary to amend the charter and approve the regulations on a separate division. It is necessary to register a separate name, which will not coincide with the head office, and appoint branch management.
It is also advisable to prepare a business plan for your unit and plan its development in advance
Study in advance the procedure for registering a branch in the country you are going to enter. Different states create certain conditions and restrictions for representative offices of foreign companies. In some countries (for example, offshore), it will be easier to create a branch, in others it will be much more difficult.
After making a decision, it is necessary to provide the future branch with property (real estate, equipment, etc.), open a separate current account in a foreign bank and accrue authorized capital. The amount of capital is determined by the country in which the unit is opened. For employees who are transferred to a branch, apply for a work visa or residence permit (if necessary).
Then you need to register a branch. Registration procedures may vary by country. Typically, registration includes choosing a legal address and tax regime, paying state fees and submitting an application to the registration authority. Also, do not forget to report the foreign branch to the Federal Tax Service. All documents must be translated into the national language of the country and certified by the consulate, they must have an apostille.
After registration and notification of the start of activities, the branch can begin work. If he operates only within one country, then taxes must be paid only to that country. The activities of the branch must be taken into account in all main reports.
Foreign trade and taxes
Like any other economic activity, foreign trade activities are subject to taxes. This is another measure to regulate foreign economic transactions. When working with a foreign company, you must pay the following taxes:
- VAT. You need to pay if you import goods. The tax base depends on customs value, excise taxes, duties and other parameters. For export, the VAT rate is zero
- Excise taxes. Charged when importing certain categories of products (for example, alcohol). The amount of excise tax is established by law; it can be determined as a fixed amount or a percentage of the customs value of the goods
- Income tax. Paid upon export of goods. It is calculated in the same way as for internal trading
If an individual entrepreneur or LLC uses a simplified taxation system, then it is still required to pay VAT on imported goods.
All these taxes must be paid to the state where you are a tax resident. A company is recognized as a tax resident of a country if it is registered in it and carries out its main activities there. That is, if your business is registered and conducts its main activities in Russia, then you are its tax resident and pay taxes to the Federal Tax Service. A branch in another country is a tax resident of that country.
There is usually no need to pay taxes to another country - this issue is regulated by double taxation agreements. They specify when and who must pay taxes in both countries. Find out in advance whether such agreements have been concluded with the country you are interested in, and under what conditions they apply.
Responsibility for those who violate foreign trade rules
Basically, administrative liability is established for non-compliance with the rules of foreign economic activity. Criminal liability arises mainly in case of serious violations during currency transactions and transportation of goods. The laws of the Russian Federation establish the following penalties for major violations in the conduct of foreign economic activity
|
Violation |
Punishment |
|
Failure to notify about opening a current account abroad |
Fine up to 100,000 rubles |
|
Violation of the rules for conducting currency transactions |
Fine up to the full amount of the illegal transaction |
|
Failure to comply with currency control deadlines |
Fine up to 50,000 rubles |
|
Incorrect execution of documents for currency control (including typos) |
Fine up to 50,000 rubles, for repeated errors - up to 100,000 rubles |
|
Non-payment of customs duties |
Fine up to 300,000 rubles |
|
Failure to provide or incorrect provision of certificates |
Fine up to 300,000 rubles |
|
Non-compliance with reporting on foreign exchange transactions |
Fine up to 50,000 rubles depending on the duration of the violations |
|
Non-refund of an amount in foreign currency from another country |
Fine up to 1,000,000 rubles Imprisonment for up to 5 years |
|
Providing incorrect information about transactions with foreign accounts |
Fine up to 500,000 rubles Imprisonment for up to 3 years |
Which bank to choose for foreign economic activity
Further work with foreign counterparties will largely depend on the choice of bank for conducting foreign trade activities. Various organizations offer their clients various services to support foreign exchange transactions, assistance in paying customs duties and advice on controversial issues. The following are the main terms of services for foreign trade from popular banks for business:
Dot
The point is trying to make foreign trade support as convenient as possible for small businesses. All operations with the account and confirmation of documents are carried out remotely, each transaction is accompanied by a personal manager. The bank also charges low fees for its services.
- : for free
- Available currencies: US dollars, euros, yuan, pounds sterling, Polish zloty
- The transfer fee: 25 dollars
- Conversion fee: 20 kopecks
- Cost of currency control: 0.12% of the transaction amount, maximum 9,500 rubles
- : 0.2% of the transaction amount, maximum 15,000 rubles
Tinkoff
Like Tochka, this bank services foreign trade activities completely remotely - through the website and visiting specialists. It allows you to open an account not only in dollars or euros, but also in pounds sterling. Tinkoff offers all basic services for foreign economic activity.
- Opening and servicing a foreign currency account: for free
- Available currencies: US dollars, euros, pounds sterling
- The transfer fee: 0,2%
- Conversion fee: 1%
- Cost of currency control: 0.2% of the transaction amount
- Consultations on currency control: included in price
Sberbank
A reliable and well-known bank - it can be chosen by those who plan to actively conduct foreign trade activities. It offers a variety of services for such clients - from foreign currency accounts to convenient repayment of customs duties. Tariffs for services for foreign trade activities can vary greatly in different regions of Russia.
- Opening and servicing a foreign currency account: up to 3,300 rubles
- Available currencies: US dollars, euros
- The transfer fee: up to 0.15%
- Conversion fee: free at the Sberbank rate
- Cost of currency control: up to 0.15% of the transaction amount
- Consultations on currency control: included in price
Alfa Bank
For companies that actively conduct foreign trade activities, Alfa-Bank has a separate tariff with special conditions. It features low fees for all transactions, including currency control. Alfa-Bank also organized qualified customer support on foreign trade issues.
- Opening and servicing a foreign currency account: for free
- Available currencies: US dollars, euros
- The transfer fee: 0.13% of the amount
- Conversion fee: from 0.20%
- Cost of currency control: from 600 rubles, filling out a certificate - 770 rubles
- Consultations on currency control: included in price
Modulbank
The bank is very effective in supporting foreign exchange transactions. Its specialists will carry out currency control themselves and prepare the necessary documents. In addition, Modulbank allows you to open an account in yuan - useful for those who plan to cooperate with Chinese companies.
- Opening and servicing a foreign currency account: for free
- Available currencies: US dollars, euros, yuan
- The transfer fee: 30 dollars, 30 euros or 150 yuan
- Conversion fee: up to 1%
- Cost of currency control: from 300 rubles depending on the amount
- Consultations on currency control: included in price
Conclusion
For an entrepreneur, especially a beginner, foreign economic activity is a very difficult area. Therefore, before you tackle it, we advise you to prepare a fairly reliable foundation. Open accounts in reliable banks, find specialists who will help you conduct your business, find out more about the countries with which you want to cooperate. This way you can significantly reduce the problems that arise when conducting foreign trade activities.
Don’t forget about the risks: foreign trade can be either profitable or very unprofitable. Therefore, if you are planning to get into it, carefully study the markets of both countries, especially the import and export markets. Planning and calculation will help you reduce costs and organize work with foreign companies most efficiently.
In foreign economic activity, all transactions that entrepreneurs enter into with foreign companies. What those involved in foreign trade activities need to remember:
- Choose a bank that offers a convenient foreign currency account and favorable exchange rates
- Before concluding a transaction with a foreign counterparty, do not forget to check its reliability
- Any currency transaction must be carried out through the currency control procedure
- When importing or exporting goods, it is important to find a reliable carrier
- Do not forget to clear goods at customs on time and pay all necessary fees
- If you need a guarantee abroad, it is best to obtain it from a bank with foreign participation
- Before opening a branch in another country, check the operating procedures that apply there
- When importing, do not forget to pay VAT and excise taxes, when exporting - income tax (11 ratings, average: 4.7 out of 5)
