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Residents are temporarily permitted to issue foreign currency loans to non-residents not affiliated with unfriendly states

DATE: January 12, 2023 | AUTHOR: AT

On December 27, 2022, a sub-commission of the Government Commission on Monitoring Foreign Investment in the Russian Federation adopted a decision:

to permit residents, up to and including 31 March 2023, to carry out foreign currency lending operations under loan agreements to non-residents not affiliated with unfriendly states, i.e. to issue, repay loans, pay interest on loans and carry out other possible transactions falling under this definition.

Residents are still not permitted to carry out the specified transactions in respect of the following non-residents:

  • foreign persons associated with foreign states who commit unfriendly acts, including if such foreign persons:
    i. are citizens of those states,
    ii. have their place of incorporation, their place of predominant business activity or their place of predominant profit from their business activity in those states;
  • foreign persons who are controlled by the aforementioned foreign persons, irrespective of the place of their incorporation or the place of their predominant business activity.

We will remind that earlier, the Government Commission had already permitted foreign currency loans to non-nationals from July 20, 2022 to October 1, 2022, and then from November 10, 2022 to December 31, 2022.

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