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Foreign Exchange Transactions in Belarus

 The Law N226-3 dated 22 July 2003 On Foreign Exchange Regulation and Currency Control lays down the key principles of the foreign exchange market. 

In line with applicable legislation in Belarus, non-residents can take out and bring in foreign exchange without any limitation. 

To execute some foreign exchange transactions, residents have to secure a permit from the National Bank of Belarus. (Such cases will be considered below).

Foreign exchange transactions involving both residents and non-residents can be broken down as follows:

- current foreign exchange transactions and
- foreign exchange transactions involving the movement of capital.

The following transactions are defined as current: foreign trade transactions which should be settled within 180 days; loans with a maturity of up to 180 days; and transfer and receipt of interest on investments and non-commercial transactions. Non-commercial transactions include the payment of salaries, stipends, pensions, taxes, and per diems. 

All other transactions are treated as foreign exchange transactions involving the movement of capital.

Foreign Exchange Transactions Abroad

No limitations are imposed on current foreign exchange transactions between residents and non-residents.

Foreign exchange transactions involving the movement of capital face a more restrictive regime. Below is the list of cases when individual citizens are obliged to secure a permit, while legal entities and individual entrepreneurs are not. 

Belarusian nationals, who spend less than a year abroad, must obtain a permit to execute foreign exchange transactions involving the movement of capital in the following cases: 
- acquisition of shares during their distribution among company founders or a stake in the charter capital of a non-resident entity;
- purchase of securities from a non-resident entity except for the acquisition of shares during their distribution among company founders;
- acquisition of real estate abroad and depositing of funds with foreign banks and non-bank institutions; and
- extension of loans whose maturity exceeds 180 days.

Belarusian nationals residing abroad for more than a year do not require a permit from the National Bank of Belarus to execute foreign exchange transactions involving the movement of capital unless these transactions relate to business deals in Belarus.

Legal entities and individual entrepreneurs do not require a permit to carry out the following foreign exchange transactions involving the movement of capital:
- payments by non-residents with regard to liabilities involving the transfer of real estate to a resident; 
- settlements under foreign trade contracts whose maturity exceeds 180 days and lease contracts for real estate in Belarus; 
- transactions involving securities issued by Belarusian residents;
- contributions by a non-resident to the charter capital of a Belarusian resident; 
- payment of dues to international organizations; and 
- transaction related to funding of the budget deficit, servicing of the foreign debt and settlements guaranteed by the Belarusian government.

Foreign Exchange Transactions Performed by Residents on the Domestic Market

Residents are prohibited from using foreign currencies, securities denominated in foreign currencies and payment documents in foreign currencies for settlements in Belarus.

This provision does not apply to the following cases: 

- For legal entities and individual entrepreneurs – marshalling of term financing for the national and local budgets and payments from these budgets; 

- For individual citizens – extension and repayment of loans and provision of grants as well as safekeeping and return of foreign exchange.

In addition, residents can accept foreign currency from other residents as payment for insurance services in cases set forth in applicable legislation. Foreign currency can also be used to settle liabilities of a forwarding agent to a foreign transportation company. 

Foreign Exchange Transactions Performed by Non-Residents on the Domestic Market

The Law On Foreign Exchange Regulation and Control  imposes no restrictions on settlements between non-residents in either foreign currency or Belarusian roubles which employ accounts opened Belarusian banks and non-bank institutions provided these accounts can be used for such transactions.

Any currency quoted by the National Bank  can be used for such settlements. 

No limitations are imposed on transactions involving securities denominated either in Belarusian roubles or in a foreign currency between non-residents provided these transactions are performed in Belarus.

Non-residents can execute cash-based foreign exchange transactions only in exceptional cases set forth in the National Bank’s Instruction On the procedure for Executing Cash-Based Foreign Exchange Transactions.

Exchange Transactions 

Only banks and licensed non-bank financial institutions are authorized to exchange foreign currency in Belarus.

Foreign exchange can be sold, purchased or converted at the Belarusian Currency Stock Exchange and the over-the-counter foreign exchange market.

Mandatory Sale of a Portion of Foreign Exchange Revenues

To stabilize the financial market, the Belarusian authorities have obliged economic entities to sell a portion of their foreign exchange revenues.

Presidential Decree N452 dated 17 July 2006 On the Mandatory Sale of Foreign Exchange regulates the procedure and the volume of such sales. This document stipulates that legal entities and individual entrepreneurs resident in Belarus are obliged to sell 30% of their foreign exchange revenues at the Belarusian Currency Stock Exchange within seven days from the date the funds were deposited at their bank accounts.

There are certain exceptions to this rule.

The mandatory sale provision does not apply to Belarusian banks, non-bank financial institutions and insurance companies.

Foreign exchange revenues used to settle debts and pay interest on loans extended by non-residents or Belarusian banks to acquire lease objects or fixed assets are also exempt from this requirement.

The mandatory sale provision does not affect revenues which are paid to a bank or a non-bank financial institution within seven days under a factoring contract or which are used to purchase government securities or foreign currency-denominated securities issued by the National Bank, provided these securities will be held for at least 30 days.

Bringing in, Taking out and Transfer of Foreign Exchange by Individual Citizens

The Instruction for the Procedure for Bringing in, Taking out and Transferring Foreign Exchange, Belarusian Roubles, Foreign Currency Payment Documents, and Certified Securities Denominated in Foreign Currencies and Belarusian Roubles by Individuals adopted by the Edicts of the National Bank and the State Customs Committee N73/38 dated 30 April 2004 is the key document in this field.

There exist no restrictions for bringing foreign exchange, foreign currency payment documents, and certified securities denominated in foreign currencies in Belarus by individuals. However, if an individual has more than 10,000 dollars, he must enter these funds into a customs declaration.

There are no limitations for taking foreign exchange out of Belarus. If the sum exceeds 10,000 dollars, an individual should present a document confirming its provenance (a certificate stating that these funds were bought from a bank in Belarus). 

Foreign exchange brought into Belarus can be taken out of the country if it was properly declared.

Sums in excess of 3,000 dollars should be declared in writing while crossing the border.

No limitations are imposed on individual citizens in terms of certified securities denominated in foreign currency or payment documents both in foreign currency and Belarusian roubles. Neither should be declared. Foreign exchange legislation does not regulate plastic cards at all. 

The amount of Belarusian roubles is limited to 500 base values. Mandatory declaration is not required.

All these rules do not apply to companies based in Belarus and Russia. Under the Customs Union of Belarus and Russia, there are no restrictions on brining in and taking out Belarusian roubles and foreign exchange.   


Vladimir Tarasov

 

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