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Prohibition on Accepting Deposits Over 100,000 Euros
According to Article 5b of Regulation (EU) No. 833/2014, credit institutions are prohibited from accepting deposits exceeding 100,000 euros from Russian citizens, individuals residing in Russia, Russian legal entities, and organizations that are directly or indirectly controlled by Russian citizens or residents.
A “deposit” refers to a credit balance on an account formed from client funds resulting from standard banking operations, including term and savings deposits, excluding credit balances that the financial institution must repay based on valid legal and contractual terms.
In EU real estate transactions, funds are often deposited into special escrow accounts opened by notaries or lawyers. If a Russian individual or organization subject to restrictions is a party to the transaction, the deposited funds after the transfer of property rights effectively become a contribution from the Russian side.
Restrictions on Cryptocurrency Wallets and Accounts
In addition to traditional deposits, EU credit institutions are also prohibited from providing services of cryptocurrency wallets, accounts, and repositories to the aforementioned Russian individuals and organizations.
The above restrictions do not apply to citizens of the European Union, European Economic Area, Switzerland, and individuals who have a residence permit in these countries.
- Directly or indirectly owning legal entities that provide services of cryptocurrency wallets, accounts, and repositories;
- Directly or indirectly controlling such legal entities;
- Holding positions in the governing bodies of such companies.
Article 5c allows for the possibility of obtaining an exemption from these prohibitions by decision of the competent authority in each EU country. However, it is necessary to demonstrate that the financial transaction is essential for permitted cross-border trade in goods and services between the EU and Russia.
Clarifications from the FAU on Escrow Accounts in Light of EU Sanctions Against Russia
The Financial Analytical Office (FAU) of the Czech Republic, which is the competent authority regarding the application of the EU’s sanctions regime against Russia, has issued important clarifications on the use of escrow accounts during real estate transactions involving the Russian side.
In real estate transactions, the main applicant for obtaining permission should be the notary, lawyer, or other person responsible for managing the escrow account in the specific transaction. The credit institution that opened such an account may apply only after coordination with the notary/lawyer.
- Specify the details of the bank account;
- Indicate the amount and currency of the deposit;
- Confirm the participation of the Russian side in the transaction;
The FAU’s clarifications have brought long-awaited clarity to a situation that often arises in practice and removed uncertainty in the interpretation of EU restrictive measures regarding the use of escrow accounts.
Get Legal Help for Legitimate Cross-Border Transactions
The new EU sanctions restrictions significantly complicate financial operations involving the Russian side. In such circumstances, it is important to seek qualified legal support. The legal firm “NAWI” has the necessary experience and expertise to provide professional assistance in obtaining permits for conducting lawful cross-border transactions in accordance with the current sanctions regimes.
Our experts will carefully study the specifics of your situation, analyze all nuances of the existing restrictive measures, and develop an optimal legal strategy to minimize risks during the necessary transactions. We will accompany the entire process of obtaining the required permits, prepare comprehensive justifications, and provide evidence to confirm the legality of the operations.
