Decree No. 285 of September 13, 2023 “On Special Accounts” (hereinafter, Decree No. 285) determines the procedure for using special accounts for the payment of dividends to foreign shareholders (and owners of the property of unitary enterprises) from “unfriendly countries”.
You will recall that the Law “On the Use of Special Restrictive Measures” entitled the Council of Ministers to impose certain restrictive measures on “unfriendly countries” and their residents.
The law does not expressly provide for a restriction on the use of dividends (profit) by foreign shareholders (owners) of Belarusian legal entities. However, the law contains some broad wording, e.g. “imposition of prohibitions or restrictions on the performance of financial operations” and even provides for the introduction of “other measures determined by the Council of Ministers of the Republic of Belarus”.
Decree No. 285 states that if the “use of dividends and profit by foreign shareholders and owners” is restricted, the following bank accounts should be opened:
► For Belarusian legal entities that have foreign shareholders or owners from “unfriendly countries”
A Belarusian legal entity may open only one bank account for the transfer of all dividends and profit, irrespective of the number of shareholders or owners.
► For foreign shareholders (owners of the property of unitary enterprises) from “unfriendly countries”
Foreign entities may open only one bank account, irrespective of the number of Belarusian companies in which they are a shareholder or owner.
The accounts may be opened only in Belarusian rubles in any Belarusian bank.
A special account may be opened even if a bank has received decisions or resolutions from authorized bodies or officials suspending operations on accounts or arresting funds on accounts.
Funds are to be transferred to the special bank accounts of nonresidents from the special bank accounts of Belarusian legal entities within 10 working days after a foreign shareholder (owner) makes such a request.
The funds transferred to such special bank accounts of nonresidents may be used exclusively for:
1. Financing investment projects in the Republic of Belarus
2. Repaying loans granted by the Bank of Development of the Republic of Belarus JSC (in some cases, loans granted by other banks)
3. Purchasing state securities of the Republic of Belarus issued specifically for the purposes of implementing a special restriction on the transfer of dividends (profit); it must also be expressly stated that such state securities are not traded
4. Placement in irrevocable bank deposits for a term of at least one year
Funds on special bank accounts may be used for other purposes, but only with the additional approval of the Council of Ministers.
The Decree was published on September 15, 2023, and enters into force after its official publication. For special accounts to begin functioning, however, special restrictive measures must first be implemented under the Law “On the Use of Special Restrictive Measures”.