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

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

• Opened a subsidiary︅ in Georgia. Bank accounts in BoG and TBC. They demand local operations too, which we︆ will do. Based on the info here, it could be too risky to start accepting︇ payments from Russia to these accounts.
  
• Talked with lawyers in Armenia. Almost impossible to open︈ a business bank account as a non-resident, unless you can prove that you already have︉ an office, workers, and so on. Also, the banks ask for extremely high commissions for︊ 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 with︌ a CIS passport in order to open a business.
  
• UAE/Dubai: banking is hell, friends with︍ similar problems have been waiting for months to get their subsidiary/business bank accounts opened because︎ of ties to business with Russia. Maybe they just don't know the right people, but️ 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]

Even for a branch?

 

[Sols]

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 Azerbaijan︂ can also work but the process will be comparable to Kazakhstan in terms of speed︃ and complexity.

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

 

[mikilos]

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.

When the war started, Crypto was︅ a possibility for them, but now since there is still a possibility to move money︆ 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 step︈ 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 most︊ likely banks will require us to start a local operation).

Will go and talk with︋ the Georgian banks today and see what is their response. Some of them have already︌ opened an account for our subsidiary, so we will see. Or is it just better︍ 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, even︀ in the innocent location. In spite of FX costs, what about to consider using another︁ currency (I know nothing about your margins, of course)?
4) I fully agree that in︂ UAE it is fundamental to know the right people and how some issues should be︃ 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.

For me it seems︊ plausible and corresponding with my experience.
I am not familiar with the current︎ situation in Georgia well; it is true that it is common there to trade with️ 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]

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 buyer︀ that payments should be sent there.

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

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

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

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

 

[PinChoALTA]

Raiffeisen bank works fine.

 

[Mr Eros]

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]

In theory, you are right. Nevertheless, it can be complicated in practice. If a lot︀ of Russian companies review their policy (what is true), it does not mean that everyone︁ does so. And if it is your customer who can relatively easily find a new︂ supplier (remember that only <50 from <200 countries imposed some trade sanctions against Russia; and︃ we are talking about consumer goods, i.e. presumably nothing extraordinary), your position is not very︄ strong.
Using USD for transfers︇ from Russia is of course a highway to hell, in any location. @mikilos talked about︈ EUR (and yes, it can be also complicated, as I have already mentioned).

I heard a︎ 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]

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

 

[OffshoreMonero]

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]

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

It may sound crazy, but still most international payments from Russia are︅ 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 through︇ JP Morgan
- and some through Citibank

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

Of course compliance in US banks still do their︋ 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 without︍ 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 in️ 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.

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

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

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

 

[OffshoreMonero]

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 in︀ Monero.

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

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

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

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

6. Repeat cycle for each new invoice.

This way︅ the crypto was legally purchased by a Russian national, and the crypto wasn't "used in︆ 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]

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

And about the banks. The︇ company is not having any problems with paying us, they are the customer of the︈ Unicredit branch in Russia and probably one of their biggest customers, so SWIFT payments go︉ through without problems. The issue we are having is that no bank wants to receive︊ the money from Russia (we're talking about low six figures monthly). We have all the︋ 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 them︎ here if they will work. Today's plan is to visit our Georgian banks with a️ 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 subsidiary︀ in Armenia, but the problem is that it is logistically even more of a shithole︁ than Georgia, so we will see if there is a possibility to open some legit︂ business there too (since nowadays it is necessary there in order to get a bank︃ to open an account for you). I also know some "shady" lawyers there so the︄ company setup and fake office/workers should be quite easy, but prefer doing things the legit︅ way first if it is just possible.

 

[Mr Eros]

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.

Yeah, no doubts they don't want to︇ deal with crypto and want to send via swift transfer in their preffered currency (in︈ 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 agreement︊ that money will be sent in EUR via swift transfer to an in intermediary company︋ who acts on your behalf as an agent? Look, in this situation intermediary is your︌ financial institution same as your bank. It's like they woudn't accept you to chnage a︍ financial institution. I suggest to talk to them again in details.


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

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 you︀ do so, your account will be closed. If you won;t inform you will risk that︁ your assets will be frozen as soon as the bank got to know that company︂ is run by non resident.

 

[OffshoreMonero]

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]

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

Perhaps it is not valid︇ for all business clients but for all corporates almost surely, IMO. See above & below.︈
Of course.
But especially corporates must be also︋ in-line with the laws of their own country and nice with the government (do not︌ underestimate the contemporary russian regime oppressive power). So to workaround sanctions – yes, but to︍ break domestic rules or to behave provocative – no.

Fully understandable, unfortunately.
Perhaps a︍ naive question, but: Aren't you able to open an account (in Scandinavia) with Unicredit, using︎ a reference from your Russian client (and perhaps with a help of their Russian branch️ 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...

Really interesting. But︄ in fact, not so surprising, as all the RU-UK conflict is one big business for︅ the U.S. entities and USA ... 🙁
BTW, what about India or even LatAm? (If you︍ are trading something, it does not mean that the goods must go physically through the︎ concerned country...)

 

[OffshoreMonero]

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

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 make︀ 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.