Terms and Conditions of Opening and Keeping the Accounts of Natural Persons - Residents of RF with Banks Outside of Russia
On August 29, 2001 the Central Bank of RF issued the Directive No. 100-I On Accounts of Natural Persons-Residents With Banks Outside of RF (hereinafter - "the Directive") which set forth the cases and terms and conditions of opening by natural persons - residents (hereinafter - "a resident") of foreign currency accounts with foreign banks (hereinafter - "the Account"), as well as the procedure for remittance to these Accounts through authorized banks.
The Directive establishes that a resident is entitled to open Accounts with foreign banks and their branches located on the territory of foreign countries - members of the Organization for Economic Cooperation and Development (OECD) and/or Special Financial Commission for Money Laundering Problems (FATF) (para 2.1 of the Directive).
The list of such countries is given in Annex 1 to the Directive and includes the following countries: Australia (OECD, FATF), Austria (OECD, FATF), Argentina (FATF), Luxembourg (OECD, FATF), Hungary (OECD), Greece (OECD, FATF), Ireland (OECD, FATF), Italy (OECD, FATF), Canada (OECD, FATF), Belgium (OECD, FATF), Denmark (OECD, FATF), Spain (OECD, FATF), The Netherlands (OECD, FATF), Norway (OECD, FATF), Sweden (OECD, FATF), Mexico (OECD, FATF), New Zealand (OECD, FATF), Portugal (OECD, FATF), Iceland (OECD, FATF), South Korea (OECD), Poland (OECD), Singapore (FATF), Slovakia (OECD), UK (OECD, FATF), USA (OECD, FATF), Hong Kong (FATF), Turkey (OECD, FATF), Brazil (FATF), Germany (OECD, FATF), Finland (OECD, FATF), France (OECD, FATF), Czechia (OECD), Switzerland (OECD, FATF), Japan (OECD, FATF).
The Accounts are opened by residents for the purposes unrelated to business (para 2.2 of the Directive).
A resident is entitled to enter in his Accounts foreign currency funds transferred or brought out of the Russian Federation in compliance with Russian law, as well as those received outside the Russian Federation, except for the amounts received from business outside the Russian Federation (para 2.3 of the Directive).
A resident is entitled to use the money entered in the Accounts for foreign currency transactions related to capital flow in accordance with the requirements of the Russian foreign exchange legislation (para 2.4 of the Directive).
A resident is entitled to remit with no limitation the money from the Accounts to his accounts with authorized banks (para 2.5 of the Directive).
Section III of the Directive regulates the procedure of foreign currency remittance from the Russian Federation for entry in the Account.
2. Procedure for Notifying Tax Authorities of the Account Opening (Closing) by a Resident.
Subject to para 4.1 of the Directive, a resident forwards a Notice of every Account opening (closing) to tax authorities at his residence location not later than one month after the Account was opened (closed). The form of the Notice of the Account opening (closing) is given in Annex 2 to the Directive.
The resident either delivers the Notice to tax authorities in two copies or sends the same by a registered mail. In the Notice the resident gives his consent to submit statements from the Account at the tax authorities' request.
The note that the Notice of the Account opening (closing) has been received is made by tax authorities on the Notice only in the event the resident has filled in all the checkboxes of the Notice (para 4.2 of the Directive).
One copy of the Notice with the tax authorities' note about its receipt is handed back to the resident or sent by a registered mail within five days following receipt of the Notice (para 4.3 of the Directive) to the resident's address indicated in the Notice.
As regards the issue related to the Notice to tax authorities of the Account opening (closing) by a resident, the Ministry of Taxes and Levies of RF issued on December 13, 2001 a letter No. ШC-6-24/926.
The above letter stipulates, in particular, that the information about opening (closing) by an individual - resident of RF of a bank account abroad is used by tax authorities to exercise foreign exchange and tax control over the individual - tax payer, including control over the expenditures of such individual in compliance with Articles 86.1 - 86.3 of the Tax Code of RF. If necessary, the tax authorities request that the individual concerned submit in a prescribed manner a statement from the bank account opened abroad.
3. Liability of the Natural Person - Resident of RF for Violation of the Directive Requirements
Para 5.1 of the Directive stipulates that violation of foreign exchange legislative requirements and of other normative acts entails liability of residents in compliance with Article 14 of the Law of the Russian Federation On Foreign Exchange Regulation and Control and other legislative acts of Russia.
Thus, subject to para 1, Article 14 of the above Law the persons guilty of violation of the foreign exchange legislation are criminally, administratively, civilly, etc., liable in accordance with Russian law.
Everything received by residents, authorized banks included, and by non-residents under the transaction invalid by virtue of the above law, as well as everything unjustifiably acquired as a result of illegal actions, and not under a transaction, is subject to recovery to the state revenue (para 3, Article 14 of the above Law).
Administrative liability for violation of the foreign exchange legislation is set forth by Article 15.25 of the Code of Administrative Offences of RF which came into force on July 1, 2002.
Para 1, Article 15.25 of the above Code stipulates that foreign currency transactions made without a special permission (license), provided such permission (license) is mandatory, or in violation of the requirements (terms and conditions, restrictions) set forth by a special permission (license), or using the residents' accounts with banking institutions outside the Russian Federation opened in deliberate violation of the statutory procedure entail administrative fines imposed on individuals, officials and legal entities in the amount ranging from one tenth to one amount of an illegal foreign currency transaction.