Siluanov to head sub-commission to issue permissions for transactions with foreign entities, forex dealings

MOSCOW. March 7 (Interfax) - The Russian Finance Ministry has set up a sub-commission within the governmental commission on foreign investments to issue permissions to residents to conduct transactions with foreign entities and with foreign currency.

The commission is headed by Finance Minister Anton Siluanov, the ministry said.

Applications for permissions can be submitted to podcom@minfin.gov.ru, or mailed to 109097, 9, Ilyinka Street, Moscow, or submitted in person to the Finance Ministry office (9, Ilyinka Street, Moscow, entrance 5, room 121).

On Saturday evening, the Kremlin published a presidential decree introducing a provisional procedure for fulfilling obligations to certain foreign creditors that are non-residents from countries officially designated as unfriendly to Russia. The procedure stipulates that a debtor shall open a special Type S account with a Russian financing institution/central depository in the name of a foreign creditor or nominal holder. This account shall serve for depositing the amount of funds in Russian rubles equivalent to the value of obligations in a foreign currency at the Russian Central Bank's official exchange rate as of the day of payment, "in order to be further remitted to foreign creditors holding securities," the presidential decree says.

These ruble sums may be converted into a foreign currency only with permission from the government commission on foreign investment.

"The owner of a Type S account may apply [to the commission] for permission for currency conversion," the Bank of Russia told Interfax earlier.

As for creditors who are Russian residents and creditors from countries which have not joined sanctions on Russia, they will be able to receive payments on the debt in rubles in the amount of a ruble equivalent at the exchange rate at the time of payment or, provided special permission, in the currency of the debt, the Central Bank said in an official explanatory note. Such creditors shall not be subject to any restrictions as to the use of rubles they receive, including as regards conversion operations.

Several redemptions of Eurobonds by large Russian issuers are due in early March, particularly by Rosneft ($2 billion, on March 6), Gazprom ($1.3 billion, on March 7), and Norilsk Nickel ($500 million, on March 9).

The nearest payments on sovereign Eurobonds are due on March 16 (coupons on issues maturing in 2023 and 2043 for $3 billion and $1.5 billion, respectively).