16 Feb 2023 11:49

Russia to fulfill obligations on previously issued govt forex guarantees in rubles - presidential draft decree

MOSCOW. Feb 16 (Interfax) - The Russian Federation will fulfill its obligations under government guarantees as provided in foreign currency - to Russian legal entities and individuals, as well as to foreign legal entities and individuals, and to foreign countries and international organizations - in rubles, and the corresponding presidential draft decree, as prepared by the Finance Ministry, has been published in the database of draft regulations.

As noted in the explanatory note to the draft, the provisions of the decree are owing to the current geopolitical situation, in which the possibility of the Russian Federation to fulfill its government guarantees in foreign currency is "significantly limited and unpredictable"; and the provisions have been adopted in order to prevent a technical default on the guarantees.

The amount of unfulfilled obligations required for payment under a foreign-currency-denominated government guarantee must be indicated by the beneficiary in rubles at the exchange rate of the Central Bank of Russia (CBR) on the date of said demand. The funds will be transferred to the beneficiary's bank account, or to the bank account of a third party, upon the beneficiary's request, as opened in the currency of the Russian Federation.

The requirements of beneficiaries of government guarantees to fulfill obligations under said guarantees in a foreign currency will not be satisfied.

The decree enters into force on the day of its official publication, and it applies to government guarantees issued prior to its signing.