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Certain foreign currency transactions between residents and non-residents that involve non-cash settlements will be carried out using special bank accounts under new Russian currency legislation.

On June 18 2004 a number of regulations of the Central Bank of Russia (the CBR) took effect. They elaborate certain aspects of the new Federal Law On Currency Regulation and Currency Control, and include CBR Instruction No 116-I Types of Special Accounts of Residents and Non-Residents, dated June 7 2004.

Authorized banks open special bank accounts for resident individuals (F accounts) and for resident individual entrepreneurs and legal entities (R1 accounts and R2 accounts) to carry out the following transactions, among others:

  • F: transactions with external securities; loans obtained or extended in foreign currency.
  • R1: foreign currency loans obtained; receipt of foreign currency proceeds from the primary offering (issue) of external shares and bonds issued by a resident; issue of promissory notes and bills of exchange that are foreign securities; and disposition of other foreign securities issued by the resident holder of the account concerned.
  • R2: foreign currency loans extended; acquisition of external securities; and disposition of external securities excluding securities held in an R1 account.

Non-residents may open the following special bank accounts to carry out, among others, the following transactions with internal securities and in Russian currency:

  • S: bonds issued on behalf of the Russian Federation.
  • A: shares and investment funds' units.
  • O: bonds, excluding bonds issued on behalf of the Russian Federation and held in S accounts.
  • V1: loans obtained; foreign currency proceeds of the primary offerings (issues) of shares/bonds issued by a non-resident.
  • V2: loans extended; acquisition and disposition of internal securities, excluding securities issued in series and except for the disposition of promissory notes and bills of exchange.

* See also Coudert Brothers' previous briefing on currency legislation published in the February edition of IFLR.

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