Changes to Mellow
This January
Hello,
Sanctions against Russia from the EU, US, and UK keep tightening. The 19th package came through in November, and the 20th is already on its way.
NSPK – Russia’s national payment card system – is now on the sanctions list, which means Russian bank cards are affected too. The penalties for violations are serious, including potential criminal liability.
Our goal at Mellow is to keep companies working with their teams without compliance headaches. That’s why we’re making these changes in January:
- Starting January 1 — withdrawals to cards from banks in Belarus will only work for banks on our approved list
- Starting January 1 — withdrawals to accounts of banks in Russia will only work for banks on our approved list
- Starting January 12 – Russian bank cards won’t work for withdrawals anymore
We’re not going to break the law or put you at risk. Instead, we’re helping companies keep working with their people in a way that’s safe and straightforward.
We’ve partnered with several organizations so you have other ways to get your money.
Pavel ShynkarenkoFounder and CEO of Mellow.ioWhat’s Changing at Mellow
The changes work differently depending on whether you’re an individual entrepreneur (IE), self‑employed, or an individual from Russia or Belarus. Here’s the breakdown for each.
Not sure which you are?
Open your Mellow account → “Profile” → “Tax Status” to see what’s set in the system.
Self‑Employed Individuals
Withdrawal changes – January 12
- Russian bank cards won’t work anymore for withdrawals.
- Russian bank accounts will only work if they’re on our approved list – you won’t be able to add other banks
Banks on the approved list
We’ve put together a list of over 150 financial institutions that aren’t under sanctions – Raiffeisenbank, Wildberries Bank, OTP Bank, UniCredit Bank, Credit Europe Bank, Asia‑Pacific Bank, Toyota Bank, and others.
Individuals from Belarus
Withdrawals to Belarusian bank cards will only work for approved banks. Right now that’s BNB‑Bank, BSB Bank, MTBank, Neo Bank Asia, Paritetbank, Priorbank, StatusBank, Technobank, and Zepter Bank. You won’t be able to add other banks.
Individuals from Russia
Withdrawal changes – January 12
- Russian bank cards won’t work anymore since they all run through NSPK.
- You can still withdraw to approved bank accounts, but we’ll automatically withhold personal income tax.
Withdrawals with tax withholding – January 12
Starting January 12, 2026, Mellow will serve as your tax agent if you’re a contractor with “Individual” tax status. We’ll automatically calculate and withhold PIT (personal income tax, known in Russia as NDFL) each time you withdraw funds to a Russian bank account.
These changes apply if you’re a contractor from Russia with “Individual” tax status. No, if you’re registered as “Self‑employed” or “Individual entrepreneur” – your tax responsibilities stay the same, and you’ll continue reporting on your own.
The New Withdrawal Process
- You initiate a withdrawal to a bank account (from the list of approved banks), and Mellow calculates the PIT amount and withholds it automatically
- The remaining funds (after tax) arrive in your account
- We take care of all Federal Tax Service reporting, so there’s no need for you to declare this income or file Form 3‑NDFL
- We transfer the withheld tax to the authorities twice each month
- By March of the following year, your income and tax statement will be available in your personal Federal Tax Service account
One thing to watch
The date that matters is when you withdraw, not when a client paid you. So if a client paid you in December 2025 but you only withdraw after January 12, 2026, PIT will be withheld.
How Much Tax Will You Pay?
Russia has used a progressive tax scale since 2025, which means your rate depends on your total annual income. Mellow calculates tax based only on what you receive through our platform.
The higher rates apply only to income above each threshold, not to everything you earn. Let’s look at an example with annual income of RUB 3 million:
- The first RUB 2.4 million is taxed at 13%: RUB 2.4 million × 13% = RUB 312,000
- The remaining RUB 600,000 is taxed at 15%: RUB 600,000 × 15% = RUB 90,000
- Your total tax would be RUB 402,000
Non‑Residents of Russia
If you’re a non‑resident of Russia but withdraw to a Russian bank account, you’re still subject to PIT withholding. The rate depends on your income and ranges from 13% to 22%.
What You Need Before You Can Withdraw
- A verified account – This tells us your country of tax residency so we can file the correct reports
- Your TIN (taxpayer identification number), known as INN in Russia – Withdrawals to Russian bank accounts won’t work without this
Don’t have these ready? No problem. When you go to withdraw, we’ll walk you through verification and ask you to provide your TIN.
Learn more in our Help Center.
EasyPayments – Armenian and Kyrgyz Bank Cards
Both countries offer cards in dollars or euros, and both work with Mellow withdrawals.
Use this link to apply and send promo‑code MELLOW10 to the manager. You will receive a 10% discount.
Other Card Services
Before choosing one of these services, verify the following:
- Does the card accept incoming payments in dollars, euros, or rubles? (Some cards only send payments but can’t receive them, which means they won’t work with Mellow)
- What are the daily and monthly transaction limits?
- How much does maintenance cost?
Important for Russian tax residents
When you open a card at a bank outside Russia, you’re creating a foreign account. Tax law requires you to notify authorities within 30 days to avoid penalties, and you’ll need to report transactions annually.
These services operate independently from Mellow, so we can’t guarantee their service quality or support response times.
E‑wallet — coming soon
We’re setting up an integration with an e‑wallet that isn’t under EU, UK, or US sanctions. Contractors will be able to open one and add it to Mellow for receiving money.
This takes time to set up. You’ll get a separate email from us, and we’ll update this article.
Individual Entrepreneurs
Withdrawal changes – January 1
- Russian account withdrawals will only work for approved banks.
Banks on the approved list
We’ve put together a list of over 150 financial institutions that aren’t under sanctions – Raiffeisenbank, Wildberries Bank, OTP Bank, UniCredit Bank, Credit Europe Bank, Asia‑Pacific Bank, Toyota Bank, and others.
Some banks have special offers for our clients. Contact support to learn more.
How Sanctions Work and Why We’re Changing the Rules
Let’s walk through our operating model and explain how sanctions actually work.
Why We’re Making These Changes
We’re updating our rules to stay compliant with the law and keep you protected.
Here’s the issue: any payment to a Russian bank card now falls under sanctions because they all run through the National Payment Card System (NSPK), which is sanctioned. Even Visa and Mastercard cards issued before 2022 – after those systems left Russia, NSPK took over processing for them too.
So we’re partnering with providers outside Russian infrastructure – like those in Tajikistan. You get your money to a payment method in that region, then move it wherever you need.
We guarantee: money from Mellow never touches Russian payment infrastructure. That’s how we keep you safe.
Why an Entity Outside the UK, US, and EU Won’t Shield You from Sanctions Liability
Sanctions are more complex than they appear. You can’t just relocate team operations to another region and escape European, US, or UK sanctions laws.
EU, UK, and US sanctions reach any company, transaction, or operation that has a meaningful connection to the US, EU, and UK.
This gets interpreted very broadly. Using national currency? That’s a connection. Paying for national services? Also counts. Many factors come into play, and if you want the full details, check the actual documents: UK sanctions, US sanctions.
When EU, UK, or US residents knowingly let their subsidiaries or partners violate sanctions, those residents are held responsible.
Same goes for companies that structure their operations to use intermediaries for actions that would be prohibited in the EU, UK, or US.
Why Hiring Contractors Outside the UK, US, and EU Won’t Shield You Either
Here’s what the law requires: before any transaction, you need to verify your counterparties and the transaction itself (this is called due diligence) to make sure you’re not violating sanctions. Article 12 of Regulation No 833/2014 spells this out.
The European regulator lays out minimum verification steps: check transaction documentation, transaction basis, money flow structure, and delivery routes.
If an intermediary service breaks sanctions rules, you’re liable too – the law says you must verify all intermediaries before transacting.
The consequences: frozen accounts, fines based on turnover, canceled residency for European residents, sometimes even criminal charges.
And there’s another risk: if the intermediary operates and holds assets outside the EU/US/UK, regulators might find it easier to go after you than them.
When you work with us, you can trust we’re sanctions‑compliant – we have to be. Mellow is a group of companies with our main office in the EU.
Why Cryptocurrency Isn’t an Option
- Some countries restrict or ban cryptocurrency. In Russia, for instance, individuals can’t legally accept crypto as payment for goods, work, or services.
- Using cryptocurrency to get around sanctions is treated as a sanctions violation.
We won’t violate sanctions or put you at legal risk.
We monitor cryptocurrency regulations and stay current with legislation. When the laws shift, we’ll turn on crypto access right away.
Can You Actually Work with Russian and Belarusian Residents if Your Company’s in the EU, US, or UK?
Yes – as long as the person isn’t sanctioned individually and you’re paying for services that aren’t specifically restricted.
Right now, no sanctions ban you from working with Russian and Belarusian residents just because they hold Russian or Belarusian citizenship or live there.
How Closely Do Regulators Watch Sanctions Compliance?
Pretty closely. Enforcement stories appear in the news regularly – here’s one example.
You’ve probably noticed banks suddenly updating terms or blocking accounts overnight – that’s sanctions at work.
We won’t block access unless the law requires it. We built Mellow so companies can work with people worldwide safely, quickly, and easily. Our job is lowering your risk, not adding to it – especially in places with tricky banking systems and tangled regulations.
Q&A
No. We’re absorbing all the extra costs from these new withdrawal methods. We’d rather make less money than see you break the law.
Yes, just not through every method. Russian bank cards will no longer be available. Russian bank accounts and Belarusian cards will only work if they’re on the approved list.
It depends on the withdrawal method. For withdrawals to bank accounts, the rate stays the same. For Tajikistan cards, here’s how it works: you withdraw in dollars or euros, then the currency converts when you make a card transfer (if the transaction currency doesn’t match your card currency). That rate comes from the bank – you can track it in the app.
Nothing changes. Invoices and work completion certificates generate normally.
The system won’t let you – you’ll see an error message.
Absolutely. The new rules only touch withdrawals, not invoices or offers.
If sanctions against Russia are lifted, yes.