On 26 April 2016, the National Bank of Ukraine (the “NBU”) issued Regulation No. 290 (“Regulation No. 290”), which simplifies its requirement to sell 75% of foreign currency proceeds obtained from abroad. Regulation No. 290 amends NBU Regulation “On Regulating the Situation in the Monetary and Foreign Currency Markets of Ukraine” No. 140 dated 3 March 2016 (“Regulation No. 140”).

Regulation No. 290 is a part of the on-going liberalization of capital controls by the NBU aimed at promoting the crediting of the Ukrainian economy.

Until now Regulation No. 140 provided for the mandatory sale of 75% of proceeds in foreign currency transferred from abroad to Ukrainian bank accounts and the accounts opened outside of Ukraine based on the NBU individual licences (with certain exceptions including, but not limited to, loans from international financial institutions of which Ukraine is a member; loans involving foreign export credit agencies; the funds transferred by a non-resident as a security for participation in a state procurement or privatization of a state property; payments to a Ukrainian agent receiving payment on behalf of the principal for further transfer to the owner of the funds, etc.).

According to Regulation No. 290 the 75% mandatory sale rule will now not apply to foreign bank loans in respect of export-import transactions, provided that all loan amounts will be transferred from a foreign lender directly to a non-resident exporter, i.e. without first being credited to the account of a Ukrainian borrower-importer. 

Regulation No. 290 became effective on 29 April 2016.

Legislation:

Regulation of the National Bank of Ukraine “On Regulating the Situation in the Monetary and Foreign Currency Markets of Ukraine” No. 140 dated 3 March 2016 as amended; Regulation of the National Bank of Ukraine “On Introducing the Amendments to Regulation of the National Bank of Ukraine dated 3 March 2016 No. 140” No. 290 dated 26 April 2016.