“An attempt to avoid default”: why Russia has tightened business with “unfriendly countries”
An official list of “unfriendly countries” has appeared in Russia. This means a special form of settlements with investors from these states. The BBC was figuring out how they would get rubles instead of dollars.
“These sanctions that are coming into force, they are declaring war,” President Vladimir Putin commented on March 5 on joining the Russian mission, the chairmanship surrounded by women, the government in the Russian Federation.
The next day, he instructed the government to draw up a list of unfriendly countries. The list that came into being to fulfill the order included 48 states – the USA, all EU member states, Great Britain, Ukraine, Switzerland, Montenegro, Japan, Monaco, Iceland, Andorra, Albania, Australia, Canada and others.
The BBC knew what they were facing.
What awaits “unfriendly countries”
List of agreements within the framework of the “temporary procedure for the fulfillment of obligations to foreign foreign creditors”.
First, now Russian companies, citizens and even the self-government can pay off the creditors of “unfriendly countries” not in foreign currency, but in rubles. This applies to all payments, the amount of which is 10 million rubles per month.
To do this, the debtor will need to request a Russian bank to create a special ruble account “C” in the name of a foreign creditor and transfer payments to it in ruble equivalent at the exchange rate of the Central Bank on the day of payment.
Secondly, in accordance with the decisions taken in accordance with the new rules, from the list of “unfriendly countries.” All transactions and operations of Russian companies are approved by a special commission for control over the import of foreign investments. This commission includes a representative of the Central Bank and the presidential administration.
Any of the meeting participants (whether a Russian resident or a foreign company) will need to provide “comprehensive information” about the applicant, including disclosure of beneficial partner companies.
why is it done
The goal-achieving scheme adopted is pursuing a goal – it represents another form of capital control. The need to control availability due to the fact that Russia has sharply reduced the volume of foreign currency, said Oleg Vyugin, professor at the Higher School of Economics.
“There is very little of it. Export revenues are falling. And the Central Bank’s reserves in euros and dollars are frozen.
With this established government, he wants, on the one hand, to show that Russia does not renounce its obligations, but because of “unfriendliness”
How will it look like
The diagram might look something like this. Rubles are credited to a special type “C” ruble account. Legally, they become the property of the investor, that is, they are not expropriated, but in fact they cannot dispose of them in moderation – they are under the control of the diet, vitamin Vyugin.
With the free movement of the market, the movement of capital does not occur, and in exceptional cases you can dispose of it as you like – you can buy prices and get it for transactions. However, in the current conditions, he will not be able to immediately convert into foreign currency, export currency.
This was done in order to keep the ruble exchange rate from being held.
“If a company immediately goes to the market for foreign currency, where the rate is already above 100, then the ruble will fall further and further,” says Vyugin.
A similar scheme operated in the 1990s, when government short-term bonds (GKOs) were circulated. If a foreign owner of GKOs sold Russian GKOs, the funds were immediately credited to an account of type “C” in rubles.
Later, the state (then the Central Bank) had the right to regulate the conversion of these accounts and withdrawals abroad. A 90-day order was established – that is, they had to be on the account for 90 days.
According to Vyugin, the fate of salvation led to order, but he himself is proven.
“On the one hand, it allows you to maintain obligations – not to declare a default on all fronts. On the other hand, it does not increase the possibility of increasing demand for foreign currency,” Vyugin concluded.
Russian government In Russia’s estimates, there are two issues of sovereign Eurobonds, income must be received and received.
“We are talking about the amount of 2.5 billion dollars. And so far there is no information on how the government will act,” Vyugin said.
Measures may also apply to Russian companies
Economist Evgeny Nadorshin.
Such companies have a parent structure abroad, and the main business is in Russia. We can talk about any significant corporate actions – such as changing shares, lending to a special company, and even suspicion of transferring bonuses to managers, says Nadorshin.
For example, in the Netherlands, “Yandex” refers to a company.
“Operations will be controlled and regulated at a fairly decent level of arbitrariness.
What the lawyer says
The opening of special ruble accounts for settlements with foreign savings is an attempt to avoid a technical default, that is, to refuse to make a payment at the set time, lawyer Vladimir Entin said.
“It will be a type of international or amicable commission – an observational unilateral refusal, a bilateral deal. On the way of searching for a possible equivalent in the calculation,” Entin said.
With regard to the special commission, this measure primarily concerns the control of large-scale settlements in foreign currency: now it will be necessary to find its application.
work of the commission, according to Princip Entin, will be such.
“If there are no special manifestations in case of detection, then refrain from approval. The filter requires automatic mechanical screening according to acceptable criteria.
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