ELECTRONIC MONEY FOR BUSINESS

11 november 2020

From 1 January 2021, restrictions for Belarusian legal entities and individual entrepreneurs, notaries and advocates on the use of electronic money will be lifted. These entities will be able to use it in their economic activities: new amendments have been made to the Rules regulating electronic money transactions (hereinafter – the Rules) by the Resolution of the Board of the National Bank of the Republic of Belarus No. 328 dated October 21, 2020.

According to this Resolution, from 1 January 2021 Belarusian banks will be able to provide legal entities and individual entrepreneurs with the services for exchange of electronic money: “electronic money transactions resulting in exchange of electronic money of one e-money payment system for electronic money of another e-money payment system, as well as exchange of electronic money nominated in various currencies and issued within one e-money payment system”.

The Rules (clause 5) are amended by adding the provision that exchange of e-money shall be made subject to the following requirements:

  • e-money exchange services are provided to legal entities, individual entrepreneurs and individuals only by the banks that have a special permission (banking licence) issued by the National Bank providing for the right to carry out currency exchange operations, attract money of individuals and legal entities to accounts and/or deposits, open and operate bank accounts of individuals and legal entities, provide cash and settlement services to individuals and legal entities, including correspondent banks;
  • e-money exchange services are rendered by banks provided that they concluded relevant contracts with e-money issuers in accordance with the rules of e-money payment systems;
  • when exchanging electronic money, banks notify the holders of the terms and procedure for e-money transactions, as well as the amount of fees charged (if any), in a comprehensible form not allowing for varying interpretations. Holder shall be notified through one or more electronic information channel prior to transaction;
  • when exchanging electronic money, banks ensure that the obligations to holders are performed timely and in full;
  • when exchanging electronic money, banks ensure that the documents necessary to conduct e-money exchange transactions in accordance with the rules of e-money payment system are executed in a proper manner;
  • legal entities and individual entrepreneurs conduct e-money exchange transactions only with banks subject to the requirements defined by the Rules.

As from 4 November 2020 the Rules no longer have a provision that requires from legal entities and individual entrepreneurs to indicate a specific date for redeeming electronic money credited on their electronic wallets. The redemption period will be established by contracts between a Belarusian issuing bank and a legal entity or an individual entrepreneur. This does not apply to the cases when electronic money is issued by a non-resident and is credited on an electronic wallet of a legal entity or an individual entrepreneur. In this case the redemption period shall be indicated.

Also, the Rules introduce a requirement that when issuing, distributing and redeeming electronic money, settlements between residents of Belarus shall be made only in Belarusian rubles.

The Rules specify that while conducting electronic money transactions between the residents, electronic money issued only by banks shall be used, unless otherwise provided by the Rules for conducting transactions with electronic money or legislative acts.

The document also provides for more specific terms and procedure for contractual interaction between the bank that issues electronic money and its agents regarding the circulation of e-money issued by this bank. The Rules specify that legal entities, carrying out activities in accordance with legislation in the sphere of gambling industry, lottery, organizing and conducting electronic interactive games, may pay the winnings (return unplayed bets to the extent permitted under applicable law) by electronic money to the amount of the winnings (unplayed bet) providing they perform functions of agents.

The range of electronic money transactions that individuals can perform has also been clarified.

The Rules (clause 15) provides for more specific range of transactions that can be conducted with electronic money.

А). Individuals:

  • have a right to spend e-money for the purposes not related to entrepreneurial activities, including e-money of issuer-nonresidents, transferred to ownership of such individuals in accordance with the procedure established by the Rules, to pay for goods, works, services, carry out other transactions in compliance with legislation (including conclusion of an agreement for gambling gain, payment for taking part in a lottery, electronic interactive game), carry out e-money transactions in accordance with the Rules;
  • who in accordance with the procedure established by the Rules received e-money of issuer-nonresidents, have a right to use such e-money for transfer to e-wallets of individuals - residents  for the purposes provided for by the legislative acts when using currency values between individuals - residents.

B). Legal entities (individual entrepreneurs), unless otherwise specified by the legislative acts, have a right to spend e-money of issuing banks received from issuing banks (agents), individuals, other legal entities (individual entrepreneurs) for:

  • payment of travel and other expenses of their employees abroad;
  • payment in accordance with the procedure established by legislation of customs duties and other payments to the budget;
  • payment in the territory of the Republic of Belarus of travel expenses and expenses during business trip for fuel and lubricant materials, wash, parking, necessary minor repairs of a vehicle, for telephone, facsimile and communications facilities, other expenses during business trip for which payment legal entities (individual entrepreneurs) have a right to give money to an employee in accordance with the laws, as well as for payment of fuel and lubricant, related materials and services connected with maintaining a vehicle;
  • exchange;
  • payment in the territory of the Republic of Belarus of other expenses of a legal entity (individual entrepreneur).

It was specified that the list of business and other expenses abroad is determined in accordance with the legislative acts governing the procedure for business and other expenses abroad. Moreover, it is stated that in cases of non-purpose use of e-money by employees of legal entities (individual entrepreneurs) it is allowed to compensate to a legal entity (individual entrepreneur) the amounts of e-money spent for purposes other than intended by depositing in the cash desk or transferring to the current (settlement) bank account of a legal entity (individual entrepreneur) of money in the amount equivalent to the e-money amount spent by an employee other than intended.

An important provision was added to the Rules that payment of a tax, duty (levy), penalty, other obligatory payments to budget and other payments in accordance with the legislative acts by virtue of e-money shall be made by transfer of the funds received as a result of redemption of e-money in e-wallets, and collection of e-money from e-wallets is made by redemption of e-money in e-wallets opened in e-money payment systems issued by banks. To redeem e-money the issuing bank (sending bank) reduces the rest of e-money in the e-wallet and writes off the equivalent amount in Belarusian rubles from the account intended for accounting of funds received from e-money holders, agents in exchange for e-money, and transfers the funds in Belarusian rubles to the account of a recoverer (beneficiary). 

Prepared by COLLEGIA Law Firm

10 November 2020