On 23 October the amendments to the Resolution of the National Bank of Ukraine (NBU) No. 581 came into force, aimed at further relaxing restrictions on the currency markets and increasing the flow of foreign capital into Ukraine.
Relaxation of requirements for mandatory conversion of foreign currency into Ukrainian hryvnia
No longer subject to mandatory conversion into Ukrainian hryvnia (UAH) are funds:
- Generated by projects which are carried out due to Ukraine’s participation in international EU programs
- Received by Ukraine-resident legal entities pursuant to grants provided by international financial organizations of which Ukraine is a member. This exception applies only ifit’s the Ukrainian Government participates in the management of the Ukraine-resident legal entity
- Submitted as security deposits to the auction organiser’s account by non-residents taking part in auctions for the privatisation of state-owned property.
Clarification on prepayment of loans made by non-residents
The NBU has specified that early repayment of loans made by non-residents can be made from monies obtained by the borrower under another loan agreement made with a non-resident with a later maturity date, subject to the condition that these funds were advanced exclusively in order to repay the original loan. The borrower is entitled to buy foreign currency for early repayment of the original loan up to the amount of the new loan amount sold on the interbank market.
In addition, the NBU allowed early prepayment of loans to creditors enjoying special treatment in Ukraine.
Removal of control over certain export operations
The amended resolution has removed foreign exchange controls over telecommunications companies making payments by way of set off for services for international roaming and international traffic transmission.
Cancellation of restrictions on withdrawal of cash in UAH
The NBU has annulled the previously-established threshold (in the sum of 300 000 UAH) for certain cash withdrawals in UAH. Now banks are obliged to provide individuals with any amount of cash in UAH received as a result of foreign currency exchanges.
Change of restrictions concerning registration of loan agreements with non-residents
The amended resolution allows resident borrowers, who have borrowed from non-residents, to register with the NBU changes of either the initial debtor or borrrower. However, such amendments to a loan agreement can only be registered with the NBU when the borrower merges with a new borrower and / or in the event of the borrower's liquidation.
The amendments also provide for a right to register changes in the parties to loan agreements executed with foreign export credit agencies.