The Federal Tax Service clarified the qualification of illegal foreign exchange transactions for mock transactions

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Many tax authorities interpret the concept of a “mock  transaction” in foreign exchange transactions in different ways.  The Federal Tax Service explained in its letter what should be considered a “mock transaction”.

The letter indicates that the commission of illegal currency transactions, that is, transactions prohibited by the currency legislation of the Russian Federation or carried out in violation of it, constitutes the objective side of the offense.

Thus, currency transactions are recognized as illegal if they are committed on the basis of false documents that were concluded for appearance, that is, without intent and legal consequences.

In this regard, the fact of unreliability of documents is established during the verification of compliance with currency legislation. Based on this, the grounds for considering the transaction fictious and subsequently illegal are revealed.

In some cases, the use of forged documents in foreign exchange transactions may be reclassified from an offense to a crime.

When identifying the alleged nature of foreign trade contracts, administrative proceedings should be initiated against a legal entity, while administrative proceedings should be initiated against an official if a criminal case is refused according to a message sent to law enforcement agencies.