14 Dec 2023 14:53

Putin confirms position on temporary nature of requirement to repatriate, sell forex earnings

MOSCOW. Dec 14 (Interfax) - The requirement for mandatory repatriation and sale of foreign currency earnings by large Russian exporters, as implemented by the Russian presidential decree in October, are temporary, President Vladimir Putin noted, reviewing the year on live TV.

"By the way, the decree that was intended to regulate the situation with currency - this partly affects the exchange rate - it of course has played its role all the same. This is owing to the fact that there had been no need for any restrictions in previous years, because we received sufficient information from the countries where a significant volume of our exports goes," Putin said.

"We understood the movement of capital. Now we do not receive information from there, as they have closed this for us, [and] the government and the Central Bank do not see what is happening with the volumes of funds that our exporters receive from exports. The Central Bank and the government have a legitimate desire to see how rubles are accumulating, how they travel, where, [and] in what volumes. In this sense, the decree introduces elements of certain control. However, I proceed from the fact that everything will return to normal, [and] this is temporary," the president said.

In October, a presidential decree was issued, followed by a government decree, which introduced requirements for the mandatory repatriation and sale of part of foreign currency earnings for six months, until April 30, 2024. The presidential decree itself, which contains a list of the exporting companies covered by it, is classified as Eyes Only and is not published. The only reporting on it said that the list included 43 groups of companies. In accordance with the procedure approved by the government, as of October 16, within 60 days from the date of receipt of funds, companies included in the list are required to credit to their accounts in Russian banks at least 80% of all foreign currency received in accordance with the terms of their export contracts. They are also obliged to sell at least 90% of credited foreign exchange earnings on the country's domestic market within two weeks (but not less than 50% of the funds received in accordance with each export contract, within no more than 30 days from the date of receipt).

The requirements also apply to subsidiaries of companies included in the decree, including those registered abroad; however, the exporter may request an exception by applying to a subcommittee of the government's Foreign Investment Commission.

Earlier, Russian Finance Minister Anton Siluanov also noted that these measures are temporary. "I hope that the measures that were taken - we saw that they have had their results, we'll see how the situation develops further - but I am sure that the restrictions that exist today will gradually go away," he said, noting that the financial and economic bloc in the government is "fully interested" in this.

Head of the Central Bank, Elvira Nabiullina, also previously confirmed the position of the Bank of Russia, which is wary of currency restrictions (except for "mirror" restrictions and those related to money laundering and terrorism financing) and insists that they should be limited in time.