General

Russian President Vladimir Putin signed a presidential decree on the 5th prohibiting Russian residents from transferring foreign exchange earnings in the form of dividends to overseas accounts.

According to a document published on the Kremlin’s website, the above-mentioned decree stipulates that the Russian Government’s Foreign Investment Regulatory Commission has the right to restrict residents from transferring foreign exchange to their overseas accounts, as well as using electronic payment methods provided by foreign parties to transfer money without a bank account. The decree also makes new regulations on Russia's repayment of European debts. The decree said Russian companies could fulfill their debt obligations by placing bonds with similar conditions, including maturity and yield, to Eurobond creditors.

The decree clarifies that Russian legal entities that are obligated to Eurobonds are obliged to pay their debts in a manner determined by the Board of Directors of the Russian Central Bank and to fulfill their obligations to Eurobond holders. The decree provides that, if the parties to a syndicated loan agreement (or such loan guarantee agreement) are payment agents of unfriendly countries, Russian legal entities that are debtors of such agreements may bypass these payment agents in rubles or other agreed currencies Fulfill the debt obligations to resident creditors stipulated in the agreement.