New restrictions for advance payments under import transactions

PwC, Kyiv, Ukraine, 
Wed, Feb 25, 2015 

On 24February 2015 NBU Resolution No. 124 came into force*. The Resolutionintroduced additional restrictions that apply to advance payments under importtransactions. The rules are not entirely clear and individual banks are likelyto treat them differently. In our view, the Resolution introduces the followingrestrictions:

• Banks are required to report all requests for advance payments exceeding USD 50,000 to the NBU and cannot perform them for at least three operational days after informing the NBU. 
• The NBU may reject such applications, in which case no payment can be made. 
• The restriction does not apply to advance payments via a letter of credit, confirmed by a first-grade bank.
• Advance payments under import contracts exceeding USD 500,000 may be performed only via a letter of credit.

The Resolution also introduced a ban on purchase of hard currency at theexpense of UAH loan funds (except purchase by individuals in order to repay adebt under retail hard currency loans).

The Resolution does not set the term of its validity.

We will continue to monitor developments on this issue and keep you updated onthe issue.

* The NBUResolution No. 124 dated 23 February 2015 

Contacts:

Ron Barden,Partner & TLS Leader, ron.j.barden@ua.pwc.com
Andrey Pronchenko, Legal Director, Tax and Legal Services, andrey.pronchenko@ua.pwc.com
Alexey Katasonov,Senior Attorney, Tax and Legal Services, alexey.katasonov@ua.pwc.com
75 Zhylyanska Street| Kyiv | Tel:  +380 44 354 0404 | Fax: +380 44 354 07 90 | pwc.ukraine@ua.pwc.com  |  www.pwc.com/ua 

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