Country Manuals Credits –
We would like to inform you that BRP has updated its COUNTRY MANUALS CREDITS for the following jurisdiction:
RUSSIA FEDERATION OUT OF CREDIT INSTITUTION’S COUNTRY OF ESTABLISHMENT (RT, BT & Def)
| SOURCE OF CHANGES | ANSWERS |
| Law/Regulation | Yes |
| New Position of the Authorities | No |
| Evolution of Expert’s interpretation | No |
Regulatory Template
While there have been no changes in the approach of the Russian regulation on licensing requirements for cross-border credit business, the Russian Federation has adopted various countersanctions (starting in late February 2022) in response to the impact on the Russian economy/currency of international sanctions levied against Russia in the wake of the conflict of the in the Ukraine.
These countersanctions are largely of a capital-control nature. They have changed regularly since then and indeed can be expected to continue to change. Accordingly, they should be checked carefully at the time a particular operation is intended to be carried out. Nevertheless, we have described the more salient points in the section on Foreign Exchange Control (as in effect in mid-August 2022) and where appropriate.
In this context, it must be flagged for foreign credit institutions that lending to natural and legal persons resident in Russia, if such persons intend to use funds located in Russia to repay such loans, has become extremely problematic upon adoption of Edict No. 95 on 5 March 2022. This Edict proscribes the repayment of such loans (as well as obligations under guarantees and other financial instruments) and requires that (with certain limited exceptions) repayments be made solely in Roubles to accounts opened in Russia in the name of such institutions but blocked from normal usage (including conversion and transfer from Russia). Currently, no repeal or amendment of Edict No. 95 appears on the horizon. Foreign credit institutions are hence strongly cautioned against making loans to Russian residents unless the latter have sufficient assets outside Russia with which to secure and repay such loans.
In addition, it must be flagged that since the adoption by the Russian President of Edict No. 81 dated 1 March 2022, it has been extremely problematic for non-Russian persons (including foreign credit institutions) from countries which have levied international sanctions against Russia to sell their rights in real estate in Russia. Such sale requires a special prior approval (issued on a case-by-case basis) by the Commission of the Government of the Russian Federation on Control for Effectuation of Foreign Investments (Governmental Commission). Accordingly, the taking of security over real estate in Russia merits careful attention in determining whether obstacles to the realisation of value may arise, e.g. where the mortgagor assumes title to (credit bids on) the collateral.
Moreover, we have included information on Edict No. 520 dated 5 August 2022 prohibiting (until 31 December 2022) shareholders from so-called unfriendly jurisdictions (and persons controlled by them) to pledge (inter alia) shares (conditions apply).
The manual must be read against this backdrop of the Russian countersanctions.
Non-material changes
The documents have been reformatted onto the latest templates.
Behaviour Template
The answers in the BT have been aligned to those contained in the RT.
Definitions and Concepts
The document Definitions and Concepts now includes a Concordance Table. This Table is designed to help the users of the Country Manual Credits easily recognize existing or potential interactions between the rules of different types of credits.
For more information, please contact us: info@brpsa.com
Best regards,