Recent Updates on Economic Sanctions in Russia
In a recent decree (Decree No. 958) dated December 18, 2023, President Putin extended a series of economic restrictions targeting non-residents from unfriendly countries. This decision has significant implications for businesses operating within the affected regions and underscores the importance of staying informed on the latest developments.
Extension of Payment Restrictions
Until December 31, 2024, certain payments outlined in President Putin’s March 18, 2022, decree (No. 126) are prohibited without obtaining individual approval from the Central Bank. These restrictions include payments related to shares, deposits, and shares in the property of non-resident legal entities.
Empowering Corporate Decision-Making
Additionally, the validity of President Putin’s January 17, 2023, decree (No. 16) has been extended until December 31, 2024. This decree allows management bodies of specific companies to make decisions without considering the votes of non-residents from unfriendly countries. This move aims to streamline decision-making processes and enhance the flexibility of these companies.
Continued Repatriation Measures and Special Settlement Procedures for Certain Obligations
Until July 1, 2024, measures introduced by President Putin’s July 5, 2022, decree (No. 430) on the repatriation of foreign currency and Russian Federation currency by residents engaged in foreign economic activities remain in effect. Notably, this includes the repatriation of income from the sale of goods to non-residents from unfriendly countries, performance of work for them, rendering services to them, transfer of information and intellectual property. These measures also provide for a special procedure for settlements related to the repayment of obligations under Eurobonds and syndicated loans.
Prolonged Special Economic Measures
The validity of President Putin’s August 5, 2022, decree (No. 520) is extended until December 31, 2025. The measures provided for by this decree primarily restrict the possibility to carry out transactions involving securities and shares in the authorized capitals of certain enterprises owned by non-residents from unfriendly countries, as well as such non-residents’ rights of participation in production sharing agreements, joint venture agreements and other similar contracts, with a specific focus on the transactions in the financial and fuel-energy sectors.
Conclusion
As economic landscapes evolve, businesses must stay agile and adapt to regulatory changes. Navigating through these sanctions requires a keen understanding of the updated decrees and their implications. By doing so, businesses can not only mitigate risks but also identify and capitalize on emerging opportunities in the market. Companies can explore strategic partnerships and collaborations within regions unaffected by these restrictions, fostering new client relationships and diversifying their client base.
The Russin & Vecchi attorneys will continue monitoring the changes and will update you on the latest developments.
