Setting off profit distributions against unfriendly participants only with a permit

What it says⧉

Under paragraph 3 of Decree No. 254, paying profit to participants of Russian LLCs, business partnerships and production cooperatives who are persons of unfriendly states without the type C procedure of Decree No. 95 requires a permit — of the Bank of Russia for credit and non-credit financial institutions, of the Government Commission for others. Accordingly, terminating such an obligation by set-off is also allowed only with such a permit.

Status, October 2026⧉

In force (navigator cards 8.7, 10.4).

Unofficial translation⧉

Unofficial translation by BCA Unternehmensberatung UG. Only the Russian text is authoritative: Russian original on usd.bcaun.com · publication of the Bank of Russia ↗. Notes on provisions no longer applied are editorial and not part of the document.

Paragraph 1⧉

1. Guided by paragraph 9 of Decree of the President of the Russian Federation No. 254 of 4 May 2022 “On the Temporary Procedure for Performing Financial Obligations in the Field of Corporate Relations to Certain Foreign Creditors” (“Decree No. 254”), the Bank of Russia clarifies the application of certain provisions of Decree No. 254.

Under paragraph 3 of Decree No. 254, performance by limited liability companies, business partnerships and production cooperatives that are residents (“residents”) of obligations to pay profit to participants of such companies, partnerships and cooperatives who are persons of unfriendly foreign states¹, without complying with the temporary procedure for performing obligations established by Decree of the President of the Russian Federation No. 95 of 5 March 2022 “On the Temporary Procedure for Performing Obligations to Certain Foreign Creditors”, namely without crediting the performance due to the person of the unfriendly foreign state to a type “C” account, is carried out on the basis of permits issued by the Bank of Russia in respect of residents that are credit institutions and non-credit financial institutions, or by the Government Commission for Control over Foreign Investment in the Russian Federation in respect of other residents.

Accordingly, termination by set-off of residents’ obligations to pay profit to their participants who are persons of unfriendly foreign states is permitted only on the basis of permits issued by the Bank of Russia in respect of residents that are credit institutions and non-credit financial institutions, or by the Government Commission for Control over Foreign Investment in the Russian Federation in respect of other residents.

Paragraph 2⧉

2. This official clarification shall be posted on the official website of the Bank of Russia on the Internet and applies from the date of its posting.

Operations that rest on it⧉