The package of sanctions against Russia approved by the Council of the European Union as a measure in reaction to the war in Ukraine includes the prohibition of accepting deposits of more than 100,000 euros by banking entities.
Specifically, Regulation 2022/328, of February 25, 2022, stipulates in its article 5 ter that it is prohibited to accept deposits from Russian nationals or individuals residing in Russia, or from legal entities, entities or bodies established in that country, if the total value of the deposits of the natural or legal person, entity or body by credit institution is greater than 100,000 euros.
This measure has a great impact on all kinds of transactions that Russian citizens or residents of Russia can carry out in the territory of the European Union. Therefore, it is important to understand its scope.The main aspects of the aforementioned regulation are the following:
a) Subjective scope
The prohibition applies only to: (i) Russian citizens, (ii) natural persons resident in Russia, (iii) legal persons, entities or bodies established in Russia.
Therefore, Russian citizens who also have the nationality of a member state or a temporary or permanent residence permit in the European Union are excluded.
As for legal entities, those that are registered or established outside Russia, but whose owner or controlling person is a Russian citizen or resident, fall within the scope of the Regulation.
The criteria for determining “possession ” and “control” are:
(i) Possession: hold 50% or more of the property rights or the majority interest in the entity.
(ii) Control: meet one of the conditions that reveals effective control over the entity (i.e. having the right to appoint or remove the majority of the members of the administrative body, to use all or part of the assets, to manage the business on a unified base, etc.).
b) Concept of “deposit”
The aforementioned Regulation defines “deposit” as “a credit balance that results from funds left in an account or from temporary situations derived from normal banking operations and that a credit institution is obliged to reimburse under the applicable legal and contractual conditions, including fixed-term deposit and a savings deposit.
The definition also contains some exceptions. Among them, the most important refers to deposits whose existence can only be proven by means of a financial instrument (e.g., negotiable securities, option contracts, futures, swaps, etc.).
It is up to the banking entities to assess whether the specific operation falls under the definition of “deposit” for these purposes.
c) Quantitative scope
The prohibition consists of accepting any new deposit if the total value of the deposits of the natural or legal person exceeds 100,000 euros per bank, implying the following conclusions:
(i) To calculate the aforementioned amount, it is necessary to take into account all the positions of the person with the bank in current accounts and deposits at the time the restrictions came into force.
(ii) If an account is shared by two persons subject to the ban, the maximum value of permitted deposits would be €200,000.
(iii) The prohibition is enforced by a banking license. Therefore, the account holder may have several deposits of up to 100,000 euros in different banking entities.
(iv) The rule refers to new deposits, implicitly allowing those already in banks to be maintained, even if their amounts exceed 100,000 euros, but making it impossible to increase their value above that amount.
d) Exceptions
The regulations contemplate the possibility of authorizing by the competent authorities the acceptance of deposits in some exception cases, among them the following:
(i) Those that are necessary to meet the basic needs of the affected persons and their dependents, such as, for example, paying food, rent, mortgages, medicines, etc.
(ii) Those that are used exclusively for the payment of reasonable professional fees.
(iii) Those that are necessary to defray extraordinary expenses, after communication of the reasons by the competent authority to the authorities of the other member states and to the Commission of the European Union.
Although at first glance it may not seem so, we are faced with a complex regulation with different nuances, making it necessary to evaluate case by case and coordinate with each bank to determine if the prohibition on accepting the aforementioned deposits is applicable or the case is out of scope. of the regulations.
