– The Bank of Russia too conservative to change of currency legislation, liberalization which is necessary for the development of foreign trade, said the head of the Ministry Maxim Oreshkin.
“There are serious problems, which we did and the Ministry of Finance (before appointment to the post of Minister M. … was the Deputy head of the Ministry of Finance – if), and now the government takes this position, and the Central Bank prevents us – to be liberalized currency legislation, currency control,” said Oreshkin, speaking at the “round table” at the new economic school.
The event was also attended by first Deputy Chairman of the Central Bank Ksenia Yudaeva.
“Very tough (CB – if) advocates that it’s all (limitations in foreign exchange legislation – if) survived. It is also one of the rudiments, which I think is an added cost in the way of more active (external – if) for trade,” said the Minister.
Yudaeva later explained the inflexibility of the Central Bank on currency control that it is a tool in the fight against money laundering and enforcement of the obligations to the FATF. “However, we went to change procedures now. I think we are ready to consider proposals on how to change the system without to have changed the result. To the tools associated with the control of washing. These tools we need. If it can be done with fewer costs for business, then such options we will consider,” – said the first Deputy Chairman of the Central Bank told reporters.
In particular, the differences of the positions of interested Federal Executive authorities, associations of exporters, credit institutions and the Bank of Russia said in a draft report to the government prepared by the Ministry of Finance and Ministry of economic development, on the appropriateness of removing the requirement for the repatriation of ruble in export revenue, said the Agency “Interfax” a source familiar with the document.
The Finance Ministry’s proposals, sent in early June to the government, in the course of later discussions were conceptually supported by the Ministry of industry and trade, the Federal financial monitoring service, Federal customs service, Federal tax service, Rosneft, rostec, and banks VTB and Gazprombank, as well as the Center for strategic studies.
For example, in “Rosneft” consider that the implementation of proposals for the revision of the government’s approach to the question of compulsory repatriation of the resident of currency of the Russian Federation when carrying out foreign trade activities and the establishment of the rights of residents to enroll export revenue in Russian currency to Bank accounts outside Russia with the possibility of using it to pay for imported Russian goods will contribute to expanding the use of rubles in foreign trade payments, creating conditions for external convertibility of the currency of the Russian Federation.
In addition, in the case of implementation of proposals of the Russian exporters, including PJSC “NC “Rosneft” will receive additional opportunities for debt financing secured in the form of export proceeds and currency of the Russian Federation.
With the introduction concerning a number of major Russian companies and banks illegal US sanctions and the EU imposing a ban on long-term financing in U.S. dollars and Euro, the proposed measures will allow the companies to get additional opportunities to attract external borrowings, I believe in NC.
FCS suggested at the initial stage to consider abolishing the requirement of repatriation in respect of foreign trade contracts in the currency of the Russian Federation concluded by Russian exporters with residents of the States members of the Union, subject to crediting the resident export revenue to your overseas account in a country that is part of the EEU, and notifying the Russian tax authority of such foreign account reports on movement of funds on it.
According to the FCS, additionally, it may be considered the possibility of introducing similar rules in relation to residents of the BRICS, taking into consideration approved by the President of the Russian Federation the concept of Russia’s participation in BRICS, according to which Russia in the framework of cooperation in currency-financial sphere is using participation in BRICS, to achieve the goal of increasing the role of national currencies in mutual settlements between the BRICS countries and development of cooperation in the field of financial markets.
Not supported the concept of the feasibility of eliminating the requirement of repatriation of export proceeds in the currency of the Russian Federation the Bank of Russia.
According to the Central Bank, the abolition of the requirement of repatriation of ruble revenues will not bring the desired positive result and will increase the risk of residents doubtful operations on withdrawal of funds abroad, as in the case of the elimination of the requirement for the repatriation of ruble revenue residents are not to Deposit U.S. dollars into accounts in the Russian credit organizations, and to give instruction to convert rubles into foreign currency to non-resident banks using correspondent accounts to the Russian credit organisations (i.e. internal currency market of the Russian Federation) and leave the foreign currency in accounts abroad.
Thus, according to the Bank of Russia, it is the mechanism of bypass resident requirements on the repatriation of proceeds in foreign currency.
At the same time, the Bank of Russia noted that the proposed Treasury changes to the legislation will provide an incentive for residents to save and use their money outside of Russia, not to return and invest in the Russian economy.
Initiated the change in the accounting treatment of foreign exchange transactions associated with the discontinuation of reporting under exchange control ruble payments, bears the risk of loss of information when calculating the relevant articles of the balance of payments of the Russian Federation “trade credits and advances”.
According to the expressed positions of the Bank of Russia, being the monetary authority and the regulator should be required to have information about the amount of currency of the Russian Federation and foreign currency accounts of resident exporters abroad and the payments made by the residents using foreign accounts, for the adoption of regulatory measures for fast response in case of need.
The Bank of Russia drew the attention that in the future it is possible to replace the requirement for mandatory repatriation of export earnings by more modern approaches that do not create opportunities for the implementation of doubtful operations.