13
Fri, Dec
76 New Articles

NBU Adjusts Currency Control Restrictions to Stimulate Trade and Investment

Ukraine
Tools
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

Starting from 20 November 2024, the National Bank of Ukraine (“NBU”) enacted amendments to the existing currency control restrictions under the moratorium on foreign currency cross-border transfers (“Moratorium”). These amendments aim to facilitate international trade cooperation and technical assistance projects while simultaneously strengthening compliance measures for certain exemptions.

Liberalisation Measures

Funds transfers under import contracts

The NBU allowed Ukrainian companies to settle their obligations under import contracts before foreign suppliers without any limitations on the term of their delivery to Ukraine, provided that foreign currency funds are transferred in favour of:

  • foreign export credit agencies (“ECAs”) or foreign states through authorised institutions or foreign companies which have a foreign state or a foreign state bank among their shareholders;
  • other non-residents, provided that the above-mentioned institutions are participating in such import operations (through lending, insurance, guarantee or suretyship).

Starting from 1 November 2024, Ukrainian companies may repay up to 10% of outstanding debt per month.

To recap, Ukrainian companies were previously allowed to pay under import contracts only if works and services were delivered on or after 23 February 2021.

Settlements under international technical assistance projects

The NBU permitted the transfer of foreign currency funds abroad to facilitate settlements under international technical assistance projects, regardless of the project’s funding state.

Previously, foreign currency funds could be transferred from Ukraine to make payments only under European Union-funded international technical assistance.

Restrictive Measures

New conditions for dividend repatriation transactions

The NBU supplemented existing exemption from the Moratorium previously described in our legal alert. Ukrainian companies can now partially repatriate dividends on corporate rights or shares subject to two additional conditions:

  • a Ukrainian issuer of corporate rights or shares must be registered for at least 12 months before repatriating dividends; and
  • a foreign investor must hold corporate rights/shares of such issuer for at least 6 months before repatriation.

New foreign currency loan restriction

The NBU prohibited to use foreign currency loans to acquire foreign currency-denominated securities.

Additional notes

This LEGAL ALERT is issued to inform AVELLUM clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The information above does not constitute legal or other advice and should not be considered a substitute for specific advice in individual cases.

By Glib Bondar, Senior Partner, Avellum

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

 

Our Latest Issue