Question Incoming SWIFT Transfers from Russia for EU-based business?

[mikilos]

Hello Guys!
First of all, a big thank you to this forum for so much information, which is not available anywhere else.

Anyway, here's my problem. I have a business based in the EU (Scandinavia) and we are doing trade actively with Russia and CIS countries + Georgia. Most of our money comes from Russia, through SWIFT transfers, in EUR, from one of the biggest e-commerce companies in Russia. Money is all legal, we sell goods to Russian & CIS-based consumers through their platform (and via our website) and they send us a paycheck for our sales every two weeks.

We have used local banks and Wise for receiving the funds, but since August Wise has declined all incoming transfers from Russia, stating internal policies. So, what options do we currently have to receive the funds from Russia? The company in Russia does not allow us to send the money to anybody else except to our company or our subsidiary.

Here are a few things we are currently trying (hope this helps also someone with similar issues):

• Opened a subsidiary in Georgia. Bank accounts in BoG and TBC. They demand local operations too, which we will do. Based on the info here, it could be too risky to start accepting payments from Russia to these accounts.
• Talked with lawyers in Armenia. Almost impossible to open a business bank account as a non-resident, unless you can prove that you already have an office, workers, and so on. Also, the banks ask for extremely high commissions for sending SWIFT transfers (up to 2-3%).
• Talked with a lawyer in Kazakhstan: Everything is possible, but takes time: 2-3 months for the whole subsidiary setup, also need a person with a CIS passport in order to open a business.
• UAE/Dubai: banking is hell, friends with similar problems have been waiting for months to get their subsidiary/business bank accounts opened because of ties to business with Russia. Maybe they just don't know the right people, but currently the situation there seems iffy.
• Serbia: Right now a bit too late. There are a few banks my friends recommended, but would currently avoid Serbia, if possible.

Thank you in advance for any tips or if you can find someone who could help us with this issue!

 

[Jerry1911]

also need a person with a CIS passport in order to open a business.

Even for a branch?

 

[Sols]

Have you checked if the e-commerce company could pay you in crypto instead of EUR?

• Talked with a lawyer in Kazakhstan: Everything is possible, but takes time: 2-3 months for the whole subsidiary setup, also need a person with a CIS passport in order to open a business.

Such is bureaucracy in Kazakhstan.

• UAE/Dubai: banking is hell, friends with similar problems have been waiting for months to get their subsidiary/business bank accounts opened because of ties to business with Russia. Maybe they just don't know the right people, but currently the situation there seems iffy.

Working with a good agent can help speed things along, but only to a degree.

Thank you in advance for any tips

Turkey and Azerbaijan can also work but the process will be comparable to Kazakhstan in terms of speed and complexity.

But no matter what you go for, these are jurisdictions with slow bureaucracy and slow banks. The situation is made worse by many other businesses doing the same thing and creating a backlog for clerks and officers to go through.

 

[mikilos]

Even for a branch?

Yes, to my understanding. You will still need a person with a CIS passport for all the CIS countries to register the business and be a manager for a few weeks until you get a working visa/residency and the right to be a "director". We only talked with one lawyer, but she was recommended to us by one of the leading accounting firms in Eastern Europe, so we feel she is capable enough to know what she is talking about.

Have you checked if the e-commerce company could pay you in crypto instead of EUR?


Such is bureaucracy in Kazakhstan.


Working with a good agent can help speed things along, but only to a degree.


Turkey and Azerbaijan can also work but the process will be comparable to Kazakhstan in terms of speed and complexity.

But no matter what you go for, these are jurisdictions with slow bureaucracy and slow banks. The situation is made worse by many other businesses doing the same thing and creating a backlog for clerks and officers to go through.

When the war started, Crypto was a possibility for them, but now since there is still a possibility to move money around with more legally stable methods (and not to piss off any banks or shareholders) they are not planning to use crypto.

Dubai will be probably the next possible step for us since we might move our warehouse there.

Turkey would be good, but indeed, there is a lot of bureaucracy and also the taxation is relatively high (since most likely banks will require us to start a local operation).

Will go and talk with the Georgian banks today and see what is their response. Some of them have already opened an account for our subsidiary, so we will see. Or is it just better to send the money and explain after?

 

[Forester]

1) From what I have heard (no direct personal experience), Raiffeisenbank still performs transfers from Russia (not related to sanctioned goods, of course); similarly, some Swiss banks seem not to be reluctant.
2) E.g. India and LatAm countries also trade with Russia with no obstacles; but I have no clue whether and how they are used as transit routes. (I do not think that it is a good option to use China for it.) And/but what about some established offshore locations as Mauritius?
3) In many cases, I would be afraid of some troubles with correspondent banks when using EUR for transfer from Russia, even in the innocent location. In spite of FX costs, what about to consider using another currency (I know nothing about your margins, of course)?
4) I fully agree that in UAE it is fundamental to know the right people and how some issues should be managed. I guess @Fred could be able to help you (are you somewhere here, @Fred? )... BTW, in UAE it is recommended to use AED for transfers from Russia, IIRC.

Yes, to my understanding. You will still need a person with a CIS passport for all the CIS countries to register the business and be a manager for a few weeks until you get a working visa/residency and the right to be a "director". We only talked with one lawyer, but she was recommended to us by one of the leading accounting firms in Eastern Europe, so we feel she is capable enough to know what she is talking about.

For me it seems plausible and corresponding with my experience.

Will go and talk with the Georgian banks today and see what is their response. Some of them have already opened an account for our subsidiary, so we will see. Or is it just better to send the money and explain after?

I am not familiar with the current situation in Georgia well; it is true that it is common there to trade with Russia, the frequency even raised nowadays. But generally, I would always recommend to be pro-active and it worked also in Georgia in the past; nevertheless seek for some another opinion.

 

[Mr Eros]

The company in Russia does not allow us to send the money to anybody else except to our company or our subsidiary.

It is nonsence. Most major Russian companies review their policy due to new realities. You just need to talk to them again to find a solution which would be acceptable for both paries. If you don't have time to wait then use intermediary who can recieve money for comission on your behalf and then send it to you. Legally speaking you can sign tripartite agreement or just sign an agreement with intermediary and an addendum with your buyer that payments should be sent there.

ask for extremely high commissions for sending SWIFT transfers (up to 2-3%).

If you think that there is a solution with no additional costs then you are mistaken.

Dubai will be probably the next possible step for us since we might move our warehouse there.

Despite what is advertied here please read carefully latest reviews on this forum regarding payments in USD from Russia to UAE banks. People claim that money are frozen for weeks before reach an account.

Serbia:

Serbian banks are a trash. You will end up receiving your payments in rubles.

Or is it just better to send the money and explain after?

Georgian banks are a trash as well. They will not allow you to operate normally.

 

[PinChoALTA]

Raiffeisen bank works fine.

 

[Mr Eros]

Raiffeisen bank works fine.

Not true. For a single random payment it may work, but if you have a constant money flow from Russia they will put incoming transactions on hold and will freeze it for weeks asking for addtional docs proving that sanctions are not violated, or will randomly reject payments "due to internal policy". It is unreliable solution for european business.

 

[Forester]

It is nonsence. Most major Russian companies review their policy due to new realities. You just need to talk to them again to find a solution which would be acceptable for both paries. If you don't have time to wait then use intermediary who can recieve money for comission on your behalf and then send it to you. Legally speaking you can sign tripartite agreement or just sign an agreement with intermediary and an addendum with your buyer that payments should be sent there.

In theory, you are right. Nevertheless, it can be complicated in practice. If a lot of Russian companies review their policy (what is true), it does not mean that everyone does so. And if it is your customer who can relatively easily find a new supplier (remember that only <50 from <200 countries imposed some trade sanctions against Russia; and we are talking about consumer goods, i.e. presumably nothing extraordinary), your position is not very strong.

Despite what is advertied here please read carefully latest reviews on this forum regarding payments in USD from Russia to UAE banks. People claim that money are frozen for weeks before reach an account.

Using USD for transfers from Russia is of course a highway to hell, in any location. @mikilos talked about EUR (and yes, it can be also complicated, as I have already mentioned).

Raiffeisen bank works fine.

Not true. For a single random payment it may work, but if you have a constant money flow from Russia they will put incoming transactions on hold and will freeze it for weeks asking for addtional docs proving that sanctions are not violated, or will randomly reject payments "due to internal policy". It is unreliable solution for european business.

I heard a positive feedback about RB in this context – but I had not used it personally, as I have mentioned.
@Mr Eros, do you know about some another solution (except intermediary what is perhaps undoable)? Any idea?

 

[OffshoreMonero]

I know crypto has been mentioned already, but these sorts of problems are why it was created in the first place.

I just took a quick look at Local Monero/Agora Desk and there are 45 listings for people selling Monero in Russia in RUB. All sorts of payment methods too.

You could have your customer buy Monero locally over there and simply transmit it to you for your goods and services.

Invoice your customer in Monero, and cash it out into your bank account there. Easy as pie.

You can forgo the complicated bank setup, blood-sucking lawyers, and corporate jerk-arounds this way.

 

[koohl]

Invoice your customer in Monero, and cash it out into your bank account there. Easy as pie.

That can work, you still need invoices for source of funds should someone ask.

 

[OffshoreMonero]

That can work, you still need invoices for source of funds should someone ask.

You must have glanced over this line from my previous post:

Invoice your customer in Monero, and cash it out into your bank account there.

 

[Mr Eros]

In theory, you are right. Nevertheless, it can be complicated in practice. If a lot of Russian companies review their policy (what is true), it does not mean that everyone does so. And if it is your customer who can relatively easily find a new supplier (remember that only <50 from <200 countries imposed some trade sanctions against Russia; and we are talking about consumer goods, i.e. presumably nothing extraordinary), your position is not very strong.

Yeah, it's not took for granted that this specific buyer will follow the trend, however in practice most Russian companies engaged in international trade became more flexible in regards of payment policy.
Also in practice it's not easy to substitute your suppliers, especially when it comes to some specific goods.

Using USD for transfers from Russia is of course a highway to hell, in any location. @mikilos talked about EUR (and yes, it can be also complicated, as I have already mentioned).

It may sound crazy, but still most international payments from Russia are settled in USD.
Currently 90% of Russian banks are serviced by 3 US correspondent banks:
- majority of payments in USD come through BNY Mellon
- some payments come through JP Morgan
- and some through Citibank

Usually most of the payments in USD are processed not more than several hours in sender's correspondent banks and depends on the correspondent bank of the beneficiary bank and a policy of beneficiary bank itself, the whole transaction process takes 12 - 72 hrs.

Of course compliance in US banks still do their job and if a payment is set on hold money could stuck literally for months. But still the wast majortity of paymennts come through above mentioned US correspondent banks without issues. US banks act sly. They don't delay payment processing and get their correspondent commision, but after money are sent to beneficiary bank they could strat asking questions.

Payments in national currencies is a pain in the a*s and local banks from both sides are trying to rip off a customer with a cross rate. For an instance RUB conversion into USD or EUR in beneficiary bank in a "friendly" country could easily "eat" 10-15 % of the actual cross rate. I don't want to eleborate but even payment from Russia to China in RMB can become a rip off for russian client.

@Mr Eros, do you know about some another solution (except intermediary what is perhaps undoable)? Any idea?

Sorry, I don't want to elaborate publicly. I can just point out a direction for OP. In regards of countries it is Armenia, Turkey, Kazakhstan and Kyrgyzstan. In regards of setup, I would suggest to use intermediary if he doesn't have time to wait for a couple of months. That's how it works now in practice with Russia.

Some people also use exotic solutions such as Moldova, but I doubt it is better than Serbia or Georgia. Aldo I dont have personal experience with UAE banks, but I read reviews on this form that money are held for weeks.

You could have your customer buy Monero locally over there and simply transmit it to you for your goods and services.

As soon as I know crypto is officially banned by Russia as a currency when you pay for goods and services. But I don't have any updated information on this matter. Maybe something has changed recently. What I know for sure that in practice russian cleints mostly decline crypto.

 

[OffshoreMonero]

As soon as I know crypto is officially banned by Russia as a currency when you pay for goods and services. But I don't have any updated information on this matter. Maybe something has changed recently. What I know for sure that in practice russian cleints mostly decline crypto.

Does the ban include owning crypto assets?

"You can still own crypto, but only as an asset. You won’t be able to use it in Russia, but you will be free to use it abroad."

Okay, how about this for a loophole:

1. Customer receives invoice from Business in Monero.

2. Customer creates a new Local Monero account, finds a seller, transfers RUB to seller and receives Monero.

3. Customer hands over Local Monero account username and password that is now fully funded to the Business.

4. Business logs in and sells the Monero for whatever the OP's local currency is and receives a bank transfer.

5. Business uses the "destroy and wipe" account option.

6. Repeat cycle for each new invoice.

This way the crypto was legally purchased by a Russian national, and the crypto wasn't "used in Russia". A spend wasn't created at all on the blockchain, thus it wasn't used.

In the very unlikely event that this fails - the penalty is a fine.

 

[mikilos]

It is nonsence. Most major Russian companies review their policy due to new realities. You just need to talk to them again to find a solution which would be acceptable for both paries. If you don't have time to wait then use intermediary who can recieve money for comission on your behalf and then send it to you. Legally speaking you can sign tripartite agreement or just sign an agreement with intermediary and an addendum with your buyer that payments should be sent there.

While it is true, we are working with one of the biggest retail companies in the country, and since we work based on the agreement made with them, they are not willing to send us the money the other way than via SWIFT transfer, and in EUR. I have many friends with business entities in Russia or around the world in places where they could easily receive the money, but according to the agreement, they can only send the money to our business accounts. This might of course change over some time, but this is the current reality for us working with them. This is also why crypto is out of question for us currently

And about the banks. The company is not having any problems with paying us, they are the customer of the Unicredit branch in Russia and probably one of their biggest customers, so SWIFT payments go through without problems. The issue we are having is that no bank wants to receive the money from Russia (we're talking about low six figures monthly). We have all the documentation of the sales, customs declarations, and tracking numbers so everything is legit and well-documented. But since Russia is considered high-risk, no bank is willing to open us an account, at least in western countries. I have now found some solutions and will update them here if they will work. Today's plan is to visit our Georgian banks with a lawyer and we will see what will the outcome be.

And if it helps anybody with similar issues. There are currently 3 banks I know which can send money out from Russia via SWIFT: Unicredit (not accepting new customers as far as I know), Raiffeisen, and Tinkoff. There are probably many more but these are the biggest ones I know of. Unicredit works the best since for EUR transfers they use their own intermediate bank, about Raiffeisen not sure. Tinkoff is having a lot of problems but is working better than it did during the spring.

After Georgia, the plan is to open another subsidiary in Armenia, but the problem is that it is logistically even more of a shithole than Georgia, so we will see if there is a possibility to open some legit business there too (since nowadays it is necessary there in order to get a bank to open an account for you). I also know some "shady" lawyers there so the company setup and fake office/workers should be quite easy, but prefer doing things the legit way first if it is just possible.

 

[Mr Eros]

Does the ban include owning crypto assets?

Sorry, I am not fluent in Russian legislation. As soon as I know it is legal to invest in crypto, but it is illegal to use crypto as a currency and illegal to pay for goods and services. I don't know whether there is a loophole in their legislation or not. I am just telling you from a practical standpoint, that currently Russian corporate clients don't want to deal with crypto.

While it is true, we are working with one of the biggest retail companies in the country, and since we work based on the agreement made with them, they are not willing to send us the money the other way than via SWIFT transfer, and in EUR. I have many friends with business entities in Russia or around the world in places where they could easily receive the money, but according to the agreement, they can only send the money to our business accounts. This might of course change over some time, but this is the current reality for us working with them. This is also why crypto is out of question for us currently

Yeah, no doubts they don't want to deal with crypto and want to send via swift transfer in their preffered currency (in your case this is EUR.) That's how mostly russian companies do.
Now tell me please, have you asked them directly whether they accept to make an addendum to the agreement that money will be sent in EUR via swift transfer to an in intermediary company who acts on your behalf as an agent? Look, in this situation intermediary is your financial institution same as your bank. It's like they woudn't accept you to chnage a financial institution. I suggest to talk to them again in details.

There are probably many more

Yeah, there are many more: Rosbank, Uralsib, Bank Saint Petersburg etc. There are no any problems to send money out of Russia. The problem is to receive the money from Russia.

I also know some "shady" lawyers there so the company setup and fake office/workers should be quite easy, but prefer doing things the legit way first if it is just possible.

Stay away from them. The trick is they appoint a local director (a citizen of Georgia or Armenia) and the bank accout will be opended by him. Then he will "resign" and legally speaking you need to inform your bank that you are the owner. If you do so, your account will be closed. If you won;t inform you will risk that your assets will be frozen as soon as the bank got to know that company is run by non resident.

 

[OffshoreMonero]

I am just telling you from a practical standpoint, that currently Russian corporate clients don't want to deal with crypto.

That sounds like a broad generalization. I'm sure not every Russian corporate client feels that way.

Logically one would think that the people you engage in business with are in business to make money, and would be flexible enough to work around sanctions.

 

[Forester]

Does the ban include owning crypto assets?

"You can still own crypto, but only as an asset. You won’t be able to use it in Russia, but you will be free to use it abroad."

Okay, how about this for a loophole:

1. Customer receives invoice from Business in Monero.

2. Customer creates a new Local Monero account, finds a seller, transfers RUB to seller and receives Monero.

3. Customer hands over Local Monero account username and password that is now fully funded to the Business.

4. Business logs in and sells the Monero for whatever the OP's local currency is and receives a bank transfer.

5. Business uses the "destroy and wipe" account option.

6. Repeat cycle for each new invoice.

This way the crypto was legally purchased by a Russian national, and the crypto wasn't "used in Russia". A spend wasn't created at all on the blockchain, thus it wasn't used.

In the very unlikely event that this fails - the penalty is a fine.

This is perhaps possible for some trading between two individuals or even small companies; but no corporate will engage in such a scenario. Such a process is too non-standard and brings too much burden. (Remember about auditors, shareholders etc.)

That sounds like a broad generalization. I'm sure not every Russian corporate client feels that way.

Perhaps it is not valid for all business clients but for all corporates almost surely, IMO. See above & below.

Logically one would think that the people you engage in business with are in business to make money,

Of course.

and would be flexible enough to work around sanctions.

But especially corporates must be also in-line with the laws of their own country and nice with the government (do not underestimate the contemporary russian regime oppressive power). So to workaround sanctions – yes, but to break domestic rules or to behave provocative – no.

While it is true, we are working with one of the biggest retail companies in the country, and since we work based on the agreement made with them, they are not willing to send us the money the other way than via SWIFT transfer, and in EUR. I have many friends with business entities in Russia or around the world in places where they could easily receive the money, but according to the agreement, they can only send the money to our business accounts. This might of course change over some time, but this is the current reality for us working with them. This is also why crypto is out of question for us currently

Fully understandable, unfortunately.

And about the banks. The company is not having any problems with paying us, they are the customer of the Unicredit branch in Russia and probably one of their biggest customers, so SWIFT payments go through without problems. The issue we are having is that no bank wants to receive the money from Russia (we're talking about low six figures monthly). We have all the documentation of the sales, customs declarations, and tracking numbers so everything is legit and well-documented. But since Russia is considered high-risk, no bank is willing to open us an account, at least in western countries. I have now found some solutions and will update them here if they will work. Today's plan is to visit our Georgian banks with a lawyer and we will see what will the outcome be.

And if it helps anybody with similar issues. There are currently 3 banks I know which can send money out from Russia via SWIFT: Unicredit (not accepting new customers as far as I know), Raiffeisen, and Tinkoff. There are probably many more but these are the biggest ones I know of. Unicredit works the best since for EUR transfers they use their own intermediate bank, about Raiffeisen not sure. Tinkoff is having a lot of problems but is working better than it did during the spring.

Perhaps a naive question, but: Aren't you able to open an account (in Scandinavia) with Unicredit, using a reference from your Russian client (and perhaps with a help of their Russian branch which can be asked for it by your partner)? If your partner is a top-tier customer of Unicredit Russia, I can imagine that it may work...

It may sound crazy, but still most international payments from Russia are settled in USD.
Currently 90% of Russian banks are serviced by 3 US correspondent banks:
- majority of payments in USD come through BNY Mellon
- some payments come through JP Morgan
- and some through Citibank

Usually most of the payments in USD are processed not more than several hours in sender's correspondent banks and depends on the correspondent bank of the beneficiary bank and a policy of beneficiary bank itself, the whole transaction process takes 12 - 72 hrs.

Of course compliance in US banks still do their job and if a payment is set on hold money could stuck literally for months. But still the wast majortity of paymennts come through above mentioned US correspondent banks without issues. US banks act sly. They don't delay payment processing and get their correspondent commision, but after money are sent to beneficiary bank they could strat asking questions.

Really interesting. But in fact, not so surprising, as all the RU-UK conflict is one big business for the U.S. entities and USA ...

Sorry, I don't want to elaborate publicly. I can just point out a direction for OP. In regards of countries it is Armenia, Turkey, Kazakhstan and Kyrgyzstan. In regards of setup, I would suggest to use intermediary if he doesn't have time to wait for a couple of months. That's how it works now in practice with Russia.

Some people also use exotic solutions such as Moldova, but I doubt it is better than Serbia or Georgia. Aldo I dont have personal experience with UAE banks, but I read reviews on this form that money are held for weeks.

BTW, what about India or even LatAm? (If you are trading something, it does not mean that the goods must go physically through the concerned country...)

 

[OffshoreMonero]

This is perhaps possible for some trading between two individuals or even small companies; but no corporate will engage in such a scenario. Such a process is too non-standard and brings too much burden. (Remember about auditors, shareholders etc.)

Paying a bill in another currency should be fine as long as everything is documented.

But especially corporates must be also in-line with the laws of their own country and nice with the government (do not underestimate the contemporary russian regime oppressive power). So to workaround sanctions – yes, but to break domestic rules or to behave provocative – no.

Governments should be afraid of their people, not the other way around.

I hope that one day people will grow a pair of balls and make a stand.

 

[myhand]

From all I read here Turkey and Dubai would be one of the destinations I would choose if I were in your place. It is not just to place your business somewhere, it is like you need some sort of stable places and where you can find trusted people.