Starting from 29 July 2016, the National Bank of Ukraine (the NBU) has extended the settlement deadlines for export and import transactions to 120 days, as well as changed the rules governing the execution of payments by clients under import contracts.

The aforementioned changes were introduced further to the NBU Board Resolution No. 361 "On Amendments to Certain Regulations of the National Bank of Ukraine", dated 28 July 2016.

This Resolution, inter alia, has:

  • Extended the settlement deadlines for export and import transactions from 90 to 120 days, and
  • Simplified the requirements to advance payments, which means the banks are required to use a letter of credit payment method for settlements under import contracts exceeding USD 1 million, whereas previously the letter of credit payment method was required for import contracts exceeding USD 500,000.

Furthermore, subject to certain conditions, the NBU Board Resolution No. 361 allows Ukrainian banks to purchase foreign currency to repay index-linked domestic sovereign bonds.

Aside from the above, NBU Board Resolution No. 124 "On Peculiarities of Certain Currency Transactions" dated 23 February 2015 and NBU Board Resolution No. 342 "On Resolving the Situation in the Money and Foreign Exchange Markets of Ukraine" dated 7 June 2016 remains in effect.

NBU reduces discount rate

On 29 July 2016 the NBU Board reduced the discount rate to 15.5% from 16.5% further to the Resolution No. 172-рш from 28 July 2016.

We note that prior to the mentioned reduction the NBU Board had already reduced the discount rate from 18% to 16.5% (effective 24 June 2016).

Commission prescribed procedural rules relating to shares of insolvent banks

The State Commission for Regulation of Financial Services Markets of Ukraine (the "Commission") has amended the Regulation on the depository activities further to Resolution No. 683 from 30 June 2016.

The amendments deal with certain issues of depository activities of the Central register and depository institutions that arise in the course of their dealings with clients and depositors.

In particular:

  • Deposit Guarantee Fund (the Fund) is entitled to dispose of shares of an insolvent bank (on behalf of the depositor) as of the date of approval of the settlement plan providing for the sale of an insolvent bank to an investor (the Plan).
  • The Fund shall notify the Central Depository on the approval of the Plan no later than the next business day following the date of such approval. On the same day, the Central Depository shall notify the relevant depository institution of the Fund's approval, as well as providing the Fund with information on the list of clients of the Central Depository, in which accounts the shares of an insolvent bank are held.
  • Upon receipt of such notification from the Central Depository, the depository institution ceases to execute orders of the depositor and/or the depositor’s account manager with regard to the insolvent bank shares held by such depositor.
  • Under certain conditions, the Central Depository and depository institutions (where the shares of an insolvent bank are/will be registered) may officially work during holidays and/or days off.

Resolution No. 683 is effective as of 2 August 2016.