National Bank of Ukraine Has Liberalized Current Restrictions on Foreign Currency Market

LEGAL ALERT - ARZINGER lawfirm,
 Kyiv, Ukraine, Friday, October 23, 2015

OnOctober 22, 2015 the NBU passed the Resolution of the Board No. 718 "Onamendments to the Resolution No 581 of the NBU Board " (hereinafter, the"Resolution No. 718")

ResolutionNo. 718 has introduced liberalization of certain rules in the currency market,intending to increase foreign exchange inflows into the country in general andits banking sector in particular. These changes are as follows:

–       the requirement for compulsory exchange of revenues in foreign currency shallno longer apply to projects carried out under agreements between the EU andUkraine involving Ukraine’s participation in the EU-led international programsand to grants awarded to the resident legal entities (notably, applicable toresident entities that are funded through grants and controlled by theGovernment of Ukraine) by international financial organizations;

–       foreign currency received to the accounts of the auction (bidding) organizer ascash security (guarantee contribution) of nonresident’s participationin the auction (bidding) on state-owned property privatization shall not besubject to the surrender requirement ;

–       it shall be permitted to register the changes arising from the replacement of acreditor or a borrower to agreements on granting FX credits/loans to residentborrowers by non-residents upon the following conditions:

•  the replacement of the initial creditor (assignor) is related to his liquidation or a merger with  a new creditor (assignee),
•  to the loan agreement  under which a loan has been issued to a resident through participation of a foreign export-and-import agency;

–       the requirement for limitation of domestic currency cash disbursement throughcashier’s offices and ATMs up to UAH 300000 per day per customer shall notapply to FX operations with individuals;

–        henceforth the control over operations performed by telecommunicationcompanies to settle bills for international telecommunication services(international roaming services and traffic steering) may be discontinued onthe basis of documentary evidence of the offset of claims against similarcounterclaims in foreign currencies that are subject to the mandatory sale.

Therest of the restrictions, introduced by the Regulation of the NBU Board"On Regulating the Situation on the Monetary and Currency Markets ofUkraine" No 581 as of September 3, 2015, remain to be effective.  

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Kind regardsand best wishes,

OleksanderPlotnikov

Counsel,Head of Banking and Finance Practice

Oleksander.Plotnikov@arzinger.ua