Currency Control in the Republic of Belarus
1. General information
The law of the Republic of Belarus of July 22, 2003 No 226-З “About currency regulation and currency control” is the main legal act, that regulates activity of state bodies, which are authorized to exercise the currency control in the Republic of Belarus, and also circulation of currency values, the scope of rights and duties of participants of currency operations, etc.
The Currency Control Law divides currency transactions between residents and non-residents into two types as follows:
- Current currency operations (which are treated with fewer restrictions);
- Currency operations associated with movements of capital(the residents as a general rule require a permission of the National Bank of the Republic of Belarus).
Current currency operations are carried out between Belarusian residents and foreigners without restrictions, except currency operations on a deed of gift (particularly donation), which require a permission of the National Bank of the Republic of Belarus.
The legislation provides a closed list of current operations:
- Transfers of foreign currency to and from the Republic of Belarus for making settlements for the export and/or import of goods (except the export and import of money, securities and real estate), works, services and results of intellectual activities;
- Transfer of foreign currency for making settlements for leasing;
- Transfers to and from the Republic of Belarus of dividends and other income, arising from investments;
- Non-trading transfers to and from the Republic of Belarus such as:
- transfer and receipt of cash for payment of wages and salaries, scholarships, pensions, alimony payments, state benefits, allowances and compensation, as well as disbursements for damages;
- transfer of cash to pay an employee’s business trip outside the Republic of Belarus;
- transfer and receipt of cash connected with the acceptance of inheritance;
- transfer and receipt of cash relating to the burial of a deceased person, including grants and financial assistance for burial, transportation and other expenses;
- the reception of monetary compensation by victims of political repression, members of their families and heirs;
- transfer of cash for maintaining diplomatic missions and consular institutions of the Republic of Belarus abroad;
- receipt of cash by courts, the international arbitration court, law enforcement bodies, offices of notary public, the notarial bureaus, in connection with their activity, and also by state bodies or other organizations in the process of fulfillment of notarial actions by their public officials;
- transfer and receipt of cash under the judgment decisions and rulings of the court and other law-enforcement bodies;
- transfer, connected with registration, entrance, membership fees to funds, religious or international organizations, as implementing other charges in connection with participation in international organizations;
- transfer and receipt of Belarusian rubles, foreign currency, transfer and receipt of other currency values on deeds of gift (including donations), contracts of granting of the non-paid (sponsor's) help in accordance with the laws of the Republic of Belarus;
- getting of currency values by residents from non-residents for storage;
- transfers related to payment of taxes and other compulsory payments to the budget, which are established by the legislation of the Republic of Belarus or foreign states, as well as their return;
- transfers related to payment of dues and other payments to patent authorities;
- transfers and getting of currency values connected to participation in conferences, seminars, sport events, exhibitions, fairs;
- transfers related to the return of cash transferred erroneously and (or) excessively;
- other currency transactions enumerated in a list established by the President of the Republic of Belarus or on behalf of the Council of Ministers as well as international treaties of the Republic of Belarus.
Currency operations associated with movements of capital are those, which are not considered as current currency operations. These are:
- acquisition of stocks, spread out among founders, as well as acquisition of a share in a statutory fund or property of non-residents;
- acquisition of securities, emitted by non-residents, from non-residents, except acquisition of stocks, spread out among founders;
- acquisition of property, situated outside the Republic of Belarus and considered as real estate under the Belarusian law;
- placements of money in banks of non-residents or money transfer to non-residents (except non-resident banks) under the terms of trust management;
- providing loans;
- receipt of financial credits and/or loans under certain circumstances, particularly when rate of interest exceeds 14 percent per annum;
- settlements on obligations of a resident (except bank), which is a guarantor, surety for a non-resident according to a guarantee or surety contract, concluded by them;
- settlements on obligations of a resident (except bank) to non-residents (except bank) according to a debt transfer agreement or an assignment of claim agreement.
Currency operations by residents associated with movements of capital require permissions of the National Bank of the Republic of Belarus, if other rules are not stipulated by the Law or by the President of the Republic of Belarus. It is not required to obtain permission of the National Bank to carry out these currency transactions by non-residents.
2. Implementation of Foreign-Trade Operations
Export and import transactions are traditionally subject to special oversight by the public authorities. Today according to the Edict of the President of the Republic of Belarus of March 27, 2008 No 178, for each foreign trade contract, providing compensatory transfer of goods, total value of which, taking into account all appendixes and amendments to the contract, is 3000 Euro in equivalent or more, a resident is obliged to register the transaction in its servicing bank before fulfilling his obligations to non-residents. Registration takes place as of the date of submission of the document by which the foreign-trade contract is executed. The fee for registration of the transaction is not charged by banks.
The Edict provides for time-frames of completion of foreign-trade operations which as a general rule are:
- for export — within 90 calendar days (within 120 calendar days under a commission agreement) from the date of shipping (transmission of proprietary information, exclusive rights to the results of intellectual activities), execution of works, provision of services;
- for import — within 60 calendar days from the date of the payment.
Completion of foreign-trade operations means, in particular, cash inflow for the transferred goods according to the foreign trade contract for export, and receipt of goods according to the foreign trade contract for import (legislation also provides for other methods of completion of foreign-trade operations).
Under the Belarusian legislation advance payments for import by Belarusian residents in favor of non-residents require a permission of the National Bank of the Republic of Belarus. To get the permission the importer has to submit a petition of the Council of Ministers substantiating the necessity of obtaining this permission and a copy of relevant foreign-trade agreement.
The permission of the National Bank of the Republic of Belarus is not required for advance payments from accounts opened in banks of Belarus in following cases:
1. When importers use a payment by a letter of credit.
2. When advance payments are made by the following residents of Belarus:
- residents with special permits (licenses) for carrying passengers and freight — on costs associated with transportation of cargo and passengers, as well as payment of taxes and charges, passing through the territory of foreign states;
- forwarding organizations — for the costs associated with imports of services undertaken by railway, air and sea transport.
3. When advance payments that are made by residents of Belarus at the expense of revenue available in foreign currency. In particular, revenue is cash in foreign currency received from legal entities and individuals under agreements including:
- with non-resident legal entities and individuals engaged in entrepreneurial activity on a reimbursable basis: the transfer of goods, proprietary information, exclusive rights of intellectual property, property rent, works and services;
- from the banks of Belarus, the non-resident banks, other foreign credit institutions: financing (factoring) on monetary obligations arising from the transactions mentioned above, or registration (purchase) of securities, performing the function of settlement documents for such transactions;
- with individuals: realization of goods (works, services) for foreign currency in Belarus and abroad;
- with the closed Joint Stock Company "Belarusian Oil Company" (“Белорусская нефтяная компания”) - realization of oil products;
- with the closed Joint Stock Company "Belarusian Potash Company" (“Белорусская калийная компания”)- realization of potash;
- with resident legal entities (commissioners) - reimbursable transfer of goods for export sales by a consignor.
- with non-resident legal entities (consignors) - transfer of monetary means to a commissioner for execution of the consignor’s order;
- with resident legal entities - carrying out settlements in foreign currencies (except the bank loans) in cases when the use of foreign currency for such transactions is permitted by the law.
4. When advance payments are made by residents of the Republic of Belarus at the expense of foreign currency received under loan agreements (credit agreements) concluded with non-residents.
5. When advance payments are made by residents of Belarus at the expense of funds in foreign currency acquired after November 15, 2008 as:
- contributions to an authorized fund;
- foreign donations;
- dividends and other investment income;
- interest on the loan agreements concluded with non-residents;
- interest for the allocation of foreign currency bank accounts;
- interest on debt obligations of banks of Belarus.
When advance payments are made by residents of Belarus to non-residents registered in the Russian Federation or the Republic of Kazakhstan on foreign trade agreements providing for the import of goods, works and services.