How much does the first consultation cost?

The consultation is free when an engagement is signed: if you entrust the matter to us, the first meeting costs nothing. At it we go through the situation and tell you whether the matter has prospects in court, what scenarios are available and roughly what running the case will cost. This information does not constitute a public offer (art. 437(1) of the Civil Code of the Russian Federation).

Do you guarantee the outcome of a case?

No, and nobody can: the outcome of litigation is decided by the court. We are answerable for the quality of our work, for the pace and for making sure you always know what stage the matter is at. You receive our assessment of the prospects before the engagement is signed.

Who will handle my matter?

Every matter has a responsible partner. He assembles the team for the task — a litigator, a tax specialist, a valuer — and remains your point of contact until the end. Where the task requires the status of an advocate, advocates of the Kovalev, Malyutov, Tsypkalo & Partners Moscow Bar Association are brought in under a cooperation agreement.

Do you work with the regions?

Yes. We have two offices — in Moscow and Mariupol — and we run matters throughout Russia. The engagement can be signed remotely, documents are accepted electronically, and we stay in touch by telephone, messenger and e-mail.

How do the firm's lawyers and the advocates work together?

Legal review, transaction support, insolvency and representation in commercial and civil proceedings are carried out by the lawyers of Kovalev & Partners LLC under an engagement with the company. Tasks that require the status of an advocate — criminal defence, attendance at searches and interviews, an advocate's formal request — are carried out by advocates of the Kovalev, Malyutov, Tsypkalo & Partners Moscow Bar Association: the company has a cooperation agreement with the Bar Association, while the agreement on the provision of legal assistance is made by the client directly with the advocate (art. 25(1) of Federal Law No. 63-FZ of 31 May 2002 “On Advocacy and the Bar in the Russian Federation”). For you this is a single point of entry: we assemble the team.

What happens after I send an enquiry?

We read your description of the situation and come back within one working day: we ask clarifying questions and tell you what we can realistically do. We do not pass your documents or your description of the situation to anyone.

LATIN AMERICA / 06

Making and receiving payments between Russia and Latin America

There is no exchange market for the rouble against the real or the peso, and payments routed through banks in third countries can be delayed or returned. Settlements with Latin America therefore need to be designed up front: which currency, which banks, who bears the exchange risk, and what happens if a transfer fails. We align these choices with Russian currency law and the restrictive decrees and set them out in the contract.

Call: +7 (499) 460-63-47

What is happening

The Russian LLC of a Brazilian group is buying equipment from its parent. The parties would like to pay in reais, but the LLC's bank offers roubles or yuan, and they must decide who bears the cost of double conversion.

A Chilean exporter shipped goods to a Russian buyer, and the payment routed through a correspondent bank in a third country was returned. The contract does not cover this, and the parties disagree on whether the buyer is in default.

A Colombian company wants its Moscow representative office to pay local contractors directly. First it must be clear how the currency rules apply to a non-resident and how funding from the parent should be documented.

What the law says

Residents include legal entities incorporated under Russian law, among them LLCs with foreign participation; non-residents include foreign legal entities and their branches and representative offices in Russia (Article 1 of Federal Law No. 173-FZ of 10 December 2003 on Currency Regulation and Currency Control).
Rouble credits and loans and transactions in securities and real estate with persons from states committing unfriendly acts, and with persons under their control wherever registered, follow a special procedure requiring permission of the Government Commission (subparagraph (a) of paragraph 1 of Presidential Decree No. 81 of 1 March 2022).
Taking foreign currency cash out of Russia in excess of the equivalent of USD 10,000 is prohibited (subparagraph (zh) of paragraph 1 of Decree No. 81).
Certain obligations to foreign creditors from states committing unfriendly acts are performed under a temporary procedure through type C rouble accounts (Presidential Decree No. 95 of 5 March 2022 on the Temporary Procedure for Performing Obligations to Certain Foreign Creditors).
The countries of continental Latin America are not on the list approved by Russian Government Order No. 430-r of 5 March 2022; the Bahamas and the British overseas territories are.
A bank may refuse to carry out a transaction (Article 7(11) of Federal Law No. 115-FZ of 7 August 2001 on Countering the Legalisation (Laundering) of Proceeds of Crime and the Financing of Terrorism), so the documents behind each payment should explain its purpose.

What we do

We determine each party's status under Law No. 173-FZ and the rules that follow for the contract and payments.
We choose the currency and route: roubles, the national currency through a bank with correspondent accounts, or a third currency, and work out on whose side the conversion happens.
We draft the currency clause: which rate source and date apply, and who bears bank charges and exchange differences.
We build into the contract a backup currency and bank, the moment payment is deemed made, steps for delayed or returned transfers and a force majeure clause for blocked payments.
We check intra-group loans and funding against the restrictions of Decree No. 81 where the group includes persons from listed states.
We prepare documents for the bank on currency transactions: contract, explanations, evidence of delivery or services.
We brief the company's representatives on the limits for taking currency cash out of Russia when travelling.

What we will need from you

Existing or draft contracts with counterparties.
A group chart: who pays whom and for what.
The parties' banks and any banks previous payments went through.
Expected amounts, frequency and currency of payments.

HOW THE WORK IS BUILT

How the work is built

Payment map

Who pays whom, in which currency, through which banks.

as required

Status and restrictions

Residence, List No. 430-r and the restrictive decrees for each party.

as required

Payment structure

Main and backup currency and bank, allocation of charges.

as required

Contract

Currency clause, moment of payment, delayed and returned payments, force majeure.

as required

Payment support

Documents and explanations in response to bank queries.

the bank decides on each transaction

NEARBY

Other services in this practice

All services in this practice

QUESTIONS

Frequent questions

Why can't we simply buy reais on the exchange?

The Moscow Exchange has no trading of the rouble against Latin American currencies. The Bank of Russia sets official rates for the Brazilian real, the Bolivian boliviano and the Cuban peso, but an official rate does not mean exchange conversion. National currency is therefore bought from banks with correspondent accounts in it, or payment goes through a third currency.

Which third currency is typically used?

Often the Chinese yuan or the UAE dirham, sometimes roubles with conversion on the counterparty's side. The choice depends on the parties' banks: both need working correspondent relationships in that currency.

Who is liable if a payment is stuck at a bank in a third country?

If the contract is silent, a dispute is almost inevitable. We state expressly when payment is deemed made, how many days are allowed to retry through the backup bank and who bears the costs. Nobody can guarantee that a payment will clear through a particular correspondent bank.

Do the countermeasures affect us if we are a Brazilian company?

Brazil, like the rest of continental Latin America, is not on the list of unfriendly states. However, Decree No. 81 also covers persons controlled by persons from listed states. If the group has a US or EU shareholder or a holding company in a British overseas territory, we design the payment structure with that in mind.

Does currency control concern a branch?

A branch or representative office is a non-resident, and different rules apply to it than to an LLC. Its Russian counterparties and banks, however, follow the currency rules and ask for documents, so a branch needs contracts and payment evidence just as much.

NEXT STEP

Let us discuss your situation

The consultation is free of charge when an engagement agreement is signed: on it we say what has to be done and by when.

Call: +7 (499) 460-63-47