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Economic risks (losses in business) in terms of currency fluctuations in Russia

In present-day trying economic and political conditions, given the constant exchange rate fluctuations and the appreciation of the dollar, the issue of non-fulfillment of contractual obligations by organizations and citizens as participants in economic activity in Russia is becoming increasingly important today. In this regard, there are many problems in case of non-fulfillment of supply contracts and other civil obligations by both Russian and foreign contractors.

Therefore, we consider it very relevant to cover legal issues in the field of entrepreneurial and economic activity in the context of currency fluctuations.

According to Part 1 of Article 2 of the Civil Code of the Russian Federation (RF), the civil law rules apply to relations involving foreign citizens, stateless persons and foreign legal entities, unless otherwise provided by federal law.

Thus, foreign enterprises have the right to take part in selecting suppliers (performers, contractors) in accordance with the Law and to perform work, provide services, and supply goods in accordance with their concluded agreements.

Given the constant currency fluctuations, the question is becoming very relevant today – in what currency should the price be indicated in the contract as one of the essential conditions for the transaction? In what cases can the price in foreign currency be agreed in the contract and how to do it?

Individuals and legal entities have the right to determine the contract price in rubles or in foreign currency (clause 2, article 317 of the Civil Code of the RF). There are no restrictions on this right.

When setting the price in foreign currency, you must provide your consumer with the opportunity to know the amount to pay in rubles in advance. For example, in a store in a conspicuous place, you need to place information about the exchange rate against the ruble. Otherwise, the regulatory authorities may recognize the consumer's right to information as violated and fine the entrepreneur under Part 1 of Art. 14.8 of the Code of Administrative Offenses of the RF.

Clients often ask us: how do they formulate a condition on the foreign currency price in the contract?

To agree on a foreign currency price condition, specify the amount and name of the currency.

Condition Statement Example:

The price of the goods is the amount in rubles equivalent to 1,000 (one thousand) US dollars.

To agree on a foreign currency price condition, specify how the size of the conventional unit is determined. If this is not done, the price condition will be uncoordinated. In this case, the price in rubles will be applied, usually charged under comparable circumstances for similar goods, works or services (clause 1, article 317, clause 3, article 424 of the Civil Code of the RF). Such a price may not meet the expectations of the parties. If the price is an essential condition in this agreement, then it may be recognized as not agreed (clause 1 of article 432 of the Civil Code of the RF). Most often, in practice, the foreign currency mentioned is equated to any particular currency.

In addition, we as lawyers often face the question “how to agree on the payment currency in the contract?” in our work.

To agree on the payment currency condition, indicate its name and the date the exchange rate was determined (clause 2, article 317 of the Civil Code of the Russian Federation). You can also specify a currency band.

✔ Payment currency name. As a rule, this is the ruble, since settlements in Russia are made in rubles, and currency transactions between residents, as a general rule, are prohibited (Articles 140, 317 of the Civil Code of the RF, Part 1 of Article 9 of the Law on Currency Regulation).

✔ Exchange rate determination date. By default, payment must be made at the official exchange rate of the Bank of Russia on the actual payment date (clause 2, article 317 of the Civil Code of the RF, clause 29 of the Decree of the Plenum of the Supreme Court of the RF of November 22, 2016 N 54).
In order to avoid disputes, we recommend specifying the date the exchange rate is determined, since in practice it is difficult to determine the date of the actual payment. The law does not specify what this date is. In addition, the payer's money can be debited on one day, and credited to the recipient's settlement account on another. The exchange rate may change during this time.

The contract can establish any moment of determining the rate, including those that do not depend on payment, for example, the date of signing the acceptance certificate. The most convenient way is to link it to the date the payment order is submitted to the bank. In this case, there are no exchange rate differences and the parties will not need to make additional mutual settlements.

In addition to the above, we also want to focus on the concept of a currency band

In order to protect yourself from losses caused by a sharp exchange rate fluctuation, we recommend that you provide for a currency band in the contract - the minimum and / or maximum rate at which the payment can be made.

If exchange rate restrictions are not mentioned, the party will have to pay in rubles at the new exchange rate, regardless of how much it has changed. In this case, the court may refuse to change or terminate the contract under Art. 451 of the Civil Code of the RF, considering that a change in the rate is not a significant change in the circumstances from which the parties proceeded when concluding the contract (see the Position of the Constitutional Court of the RF, the Supreme Court of the RF).

International transactions involve counterparties from at least two states, and actually this is an export transaction. Since the supply of goods and services in this case involves national borders crossing, payments follow from one country to another. If they choose a certain hard currency as payment method, the issue of foreign currency exchange becomes relevant. The problem of foreign currency also arises when in the legislation of one of the countries participating there are restrictions on receiving foreign exchange earnings. This problem cannot arise in a single economic area such as the European Economic Union, in which there are no currency restrictions on transactions between EU member states (free movement of goods, works, and services principle). But if a transaction is concluded between an EU member state and a third country, then the restrictions imposed in accordance with the currency legislation of that country must be taken into account.

Our company has been engaged in resolution of economic disputes involving foreign citizens and organizations for many years.


As part of the issue of currency fluctuations, we also consider it necessary to talk about the delay in fulfilling obligations (non-fulfillment of obligations) under civil contracts (for example, supply of goods) in Russia, foreign citizens and legal entities participating.

In our practice, there are often cases when one of the parties to a disputed contract fails to perform its obligations (for example, did not pay for the purchased goods within the period specified in the contract), referring to the fact that the delay or failure to fulfill obligations is not the result of intentional dishonest actions, but is caused by circumstances beyond their control.

To justify the delay, foreign enterprises indicate that they are not guilty of non-fulfillment of obligations, pointing to the fact it is possible not to fulfill the contract (unilaterally refuse to fulfill the contract) due to force majeure, namely the appreciation of the dollar.

In this regard, we are often addressed questions whether the appreciation of the dollar is a force majeure? Is it possible not to fulfill the contract terms due to sudden sharp currency fluctuations in Russia? Will there be no fault of the party in the transaction due to an exchange rate change as a circumstance beyond the control of the party?

If we talk about risks in the context of currency fluctuations, we should not forget about the problems that arise under loan agreements.

With regard to loan obligations, it should be noted that there is a judicial practice that was formed during previous crises, which also unequivocally says that currency fluctuations are the risks for borrowers: in assuming obligations under the contract, they should have been aware of the negative consequences of such risks (Resolution of the Federal Arbitration Court of the West Siberian District dated 01/11/2007 N F04-8719 / 2006 in case N A75-2991 / 2006, Resolution of the Federal Arbitration Court of the Volga District dated 05/31/2012 in case N A55-16572 / 2011, etc.). Courts also point out that, in fact, payments under contracts do not change, since they are made in foreign currency, that is, the creditor does not receive more than what is provided for in the contract.

It is worth noting that exchange rate fluctuations are a risk for both parties to the contract. If the foreign exchange rate changes downward against the Russian currency, then the creditor will incur the losses associated with this. However, this does not mean that he or she will have the right to change the terms in the contract or terminate it at all.

Thus, the Supreme Court of the RF, considering the case on the revision of a loan agreement in connection with currency fluctuations, decided to once again point out the only correct position on this issue: currency fluctuations are the risks of borrowers and cannot be recognized as a significant change in circumstances.

At the same time, borrowers in their lawsuits often refer to the lack of economic education and the inability to determine or predict currency fluctuations in the world market. However, the courts do not proceed from the ability to make financial forecasts (which requires a certain education and experience), but from the general common sense of social relations. The evidence in disputes about changing the terms of contracts due to a significant change in circumstances includes only those circumstances that were not unexpected for the parties to the contract by their legal nature. The category of expectations in this case is not subjective, but objective and used in the sense that any person has the right to expect a change in the exchange rate of the national currency.


Considering the issue of currency fluctuations, we cannot help but point out that some parties to contracts concluded in foreign currency tried to challenge the actions of the Bank of Russia, thereby shifting their risks to it.

In accordance with Part 2 of Art. 75 of the Constitution of the RF, the protection and stability of the ruble is the main function of the Central Bank of the RF, which it performs independently of other state authorities.

As stated in Art. 3 of the Federal Law of July 10, 2002 N 86-FZ "On the Central Bank of the Russian Federation (Bank of Russia)", the primary goal of the Bank of Russia is to protect and ensure the stability of the ruble.

Thus, the plaintiffs point to alleged violations by the Central Bank of the RF, expressed in sharp “jumps” in currency fluctuations, which violated their rights. At first glance, it makes sense.

However, the courts, considering such cases, dismissed the requirements. In particular, the Appellate Ruling of the Moscow City Court dated June 10, 2015 in case No. 33-19283/2015 states that all risks associated with exchange rate fluctuations are assumed by the parties by concluding relevant agreements.

Thus, we can conclude that currency fluctuations in cases with loan agreements are common risks that the parties undertake when concluding such an agreement. The courts proceed from the principles of freedom of contract and the balance of the parties’ interests, since the borrower and creditor bear equally the risks of currency fluctuations. At the same time, when a borrower receives a loan in foreign currency, as a rule, he or she concludes an agreement at a lower interest rate, which, in this aspect, is an advantage over ruble loans. The lender expects to receive back funds in foreign currency in the same amount that was transferred to the borrower, taking into account interest, therefore, a change in the court to the ruble equivalent or the use of the exchange rate established at the time of obtaining the loan is a violation of the lender’s rights.

Should you have any questions or you are in need of legal aid in Russia, do not hesitate to contact us:
Tel: +7 909 961-19-09
Visit us: Moscow, Zubovskiy bulvar, building 4, room 308
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