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Ukrainian Central Bank Continues to Relax Currency Control Restrictions

Ukrainian Central Bank Continues to Relax Currency Control Restrictions

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On 26 May 2017, the National Bank of Ukraine (the "NBU"), by its Resolution No. 41,1 relaxed some of the temporary currency control restrictions that were imposed to stabilise the Ukrainian foreign exchange market.

Namely:

(1) 180-Day Settlement Rule

The NBU extended the period for settlements under export-import agreements of Ukrainian residents from 120 to 180 days. This is the maximum period currently provided for by the applicable law.2

(2) Repatriation of Investment Proceeds

The regulator permitted to repatriate abroad proceeds that a foreign investor receives from (i) selling shares of a Ukrainian company, (ii) decreasing the charter capital of such company or (iii) withdrawing its investment from a Ukrainian company. Such repatriation will be limited to an equivalent of USD 5 million per calendar month.

(3) Cross-Border Lending

The NBU also expanded the list of exceptions for early repayment of cross-border loans by allowing a resident borrower to prepay a cross-border loan in an amount guaranteed by an international financial institution (such as the EBRD, IFC, World Bank and others).

In addition, the central bank amended the rules for registering cross-border loans of Ukrainian borrowers. From now on, a Ukrainian bank responsible for the registration of a cross-border loan with the NBU will be required to establish the ultimate beneficial owners of each foreign lender under such loan before submitting the documents for registration.

These changes become effective on 12 June 2017.

By Ihor Olekhov, Partner, and Dmytro Orendarets, Senior Associate, Baker McKenzie

Ukraine Knowledge Partner

AVELLUM is a leading Ukrainian full service law firm with a key focus on Finance, Corporate, Dispute Resolution, Tax, and Antitrust.

Our aim is to be the firm of choice for large businesses and financial institutions in respect of their most important and challenging transactions.

We build lasting relationships with our clients and make them feel secure in new uncertain economic and legal realities.

We incorporate the most advanced Western legal techniques and practices into our work. By adding our first-hand knowledge, broad industry experience, and unparalleled level of service we deliver the best results to our clients in their business endeavours. Our partners are taking an active role in every transaction and ensure smooth teamwork.

AVELLUM is recognised as one of the leading law firms in Ukraine by various international and Ukrainian legal editions (Chambers, The Legal500, IFLR1000, The Ukrainian Law Firms, and others).

Firm's website: www.avellum.com

 

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