We weekly update you on how the current political situation in the world affects Kviku. The business operations of the Originator in Russia continue to go as usual, and RUB is at a 2-year high.
Our partnership with Kviku continues and iuvo proactively takes all the needed actions together with the Originator in the process of finding a solution for making money transfers outside of Russia, as for the purpose, we use the help of local law firms.
Due to the sanctions imposed by both sides, receiving money transfers from the Russian Federation is highly restricted. Each transfer must comply with a number of conditions, and the main of them are the following.
All outgoing bank transfers from Russian companies to their counterparties in “unfriendly” states are allowed only in RUB.
For such a transfer to happen, it is needed a beneficiary bank that supports accounts in RUB and the bank sending the transfer to not be a subject of sanctions, to not be excluded from SWIFT, and to be serviced by a correspondent bank that makes international payments in RUB.
The maximum size of such transfers is up to 10M RUB per month to counterparties, which originate from “unfriendly” states. The counterparties are defined as originating from “unfriendly” states depending on whether they are registered in a country in this list, and/or whether their UBOs originate from such countries.
We remind you that all EU member states are in the list of “unfriendly” states of the Russian Federation.
With the purpose to fulfill the aforementioned conditions and in our efforts to find a solution for making money transfers and recovering the invested funds, the teams of iuvo and Kviku took the following measures:
- Kviku established a relationship with a bank outside of the sanctioned list, as the purpose for that was making money transfers with the imposed restrictions.
- Kviku submitted the contract with iuvo that services the money transfers to the investors for approval according to the internal rules of the bank – we are waiting for a decision.
- Iuvo successfully passed all of the extremely difficult procedural requirements and the due diligence of a bank that supports a bank account in RUB. As a result, a contract was signed and iuvo now has a bank account in RUB.
Despite the measures taken, it is needed to keep in mind that successfully receiving funds to an account of iuvo, and the verifying of investor accounts respectively, depends on:
- The approval of the money transfer on different levels – currency and bank control by the Central Bank of the Russian Federation, the bank that is sending the payment, the correspondent bank, and the beneficiary bank. Each of these institutions can stop the transfer without stating clear and specific reasons for that. The approval or refusal of the transaction is a decision, which neither iuvo, nor Kviku can control.
- If the transaction is successful, the received RUB have to be converted to EUR. Big part of the banks refuse to exchange RUB and have stopped supporting services in RUB for an unspecified period of time.
- The dynamic and ever-changing circumstances regarding the Russian Federation and the sanctions imposed by the European Union.
Our team closely follows the situation on daily basis, and together with the team of Kviku, we constantly work in finding a solution for money transfers from Russia. We will continue to inform you about the development of the situation and how it affects the business of Kviku and the possibilities for repaying their debt to the investors on iuvo.