Procedure for settlements for services between residents in Russian foreign economic activity clarified - decree

MOSCOW. Nov 2 (Interfax) - President Vladimir Putin signed a decree on November 2 that introduces a number of clarifications to decree no. 72 on the special procedure for settlements between certain legal entities that are residents in the conduct of foreign economic activity, with the document published on the official portal.

The decree introduces the concept of first- and second-level co-executors of contracts. Russian executors of foreign trade contracts and agreements trading in services and works that are provided or performed by other legal entities - residents have the right to special settlements on the basis of contracts concluded in pursuance of intergovernmental agreements. Previously in the decree they were referred to simply as co-executors; now they are referred to as first- and second-level co-executors.

It is also clarified that Russian executors of foreign trade contracts may transfer foreign currency received from non-residents to the accounts of Russian first- and second-level co-executors in authorized banks without mandatory sale of foreign currency and to their accounts in banks located abroad, including in the form of advance payments (previously, there was no such clarification). A similar right is also granted to first-level co-executors under contracts with second-level co-executors.

In addition, Russian executors are granted the right to transfer foreign currency received from non-residents to the foreign accounts of employees (both residents and non-residents) of branches of Russian first- and second-level co-executors located outside Russia. In addition, they may make payments in currency on the obligations of Russian co-executors to tax authorities, social insurance bodies and extra-budgetary funds of foreign states participating in the implementation of intergovernmental agreements, to the accounts of these bodies and funds.