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