Foreign creditors holding freezing or interim relief orders against Russian assets face a two-layer constraint that is frequently underestimated at the litigation planning stage: the freeze itself restricts disposition of the asset by the respondent, but Russian currency control legislation imposes an independent, separate set of restrictions on whether a foreign party can actually transfer the value of that asset out of Russia once the dispute is resolved in the creditor's favour. These two legal regimes operate in parallel, and satisfying one does not satisfy the other.
Russian currency regulation legislation requires that most cross-border transfers involving Russian residents – or assets located in Russia – proceed through authorised channels and, in many cases, obtain prior approval from the Central Bank of Russia or comply with general or individual permits. The scope of what qualifies as a "currency operation" under Russian law is broad and encompasses not only cash transfers but also assignments of rights, debt set-offs, and certain asset-linked payment arrangements. For creditors from jurisdictions designated under Russian regulatory frameworks as unfriendly, additional restrictions introduced by presidential decrees in recent years apply on top of the general currency control regime, limiting or effectively prohibiting certain categories of outbound transfer absent a special government commission approval.
At the freezing and interim relief stage specifically, the practical consequence is that interim measures preserve the asset for enforcement purposes but do not create a pathway for repatriation. A creditor who secures an asset freeze in Russian arbitrazh proceedings has not yet resolved the currency control question. Depending on the structure of the underlying asset – whether it is a receivable, real estate, a share in a Russian legal entity, or cash in a Russian bank account – the route to repatriation, and the regulatory authorisations required, will differ materially. Planning for this divergence at the interim measures stage, rather than at enforcement, is the more disciplined approach.
Foreign creditors navigating Russian interim relief should therefore ensure that the recovery strategy addresses currency control compliance as a standalone workstream from the outset. In practice, this means mapping the asset type, the creditor's jurisdiction of residence, the applicable regulatory permits, and any available exemptions under intra-EAEU arrangements where the creditor's structure or the debtor's counterparties involve EAEU member states.
To discuss a recovery strategy that accounts for both freezing procedure and Russian currency control requirements, make an enquiry: info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76
— Elizaveta Razina Senior Lawyer, Practice Lead – IP Enforcement, Vetrov & Partners vetrovpartners.com/razina/ Elizaveta Razina leads the firm's intellectual property and asset protection practice, representing foreign clients in proceedings before Russian state courts and the IP Court. She advises on asset tracing and recovery strategy, including currency control compliance in cross-border enforcement matters.
This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.