On 1 December 2014 the National Bank of Ukraine (the "NBU") adopted a new regulation (“Resolution No. 758”) with effect from 3 December 2014 which extended the application of certain currency control restrictions to 3 March 2015 that were set forth by NBU Resolution No. 540 dated 29 August 2014 and Resolution No. 734 dated 20 November 2014.
What Measures Apply?
The NBU has extended, inter alia, the application of the following measures:
- the prohibition of the following transactions in foreign currency:
- repatriation of proceeds of the sale of (i) securities of Ukrainian issuers, if such sale was not conducted on a stock exchange (except for sovereign bonds), or (ii) corporate rights (other than shares);
- repatriation of dividends to foreign investors (except for dividends on securities traded on stock exchanges); and
- payments permitted by individual licenses issued by the NBU (except under licenses issued to legal entities for opening bank accounts abroad and depositing foreign currency in such accounts). However, the NBU also additionally eased this limitation whereby it does not apply to a guarantor (surety) which obtained a license to pay under a guarantee (surety) securing obligations under a loan issued by the international financial institution or export-import agency.
Foreign investors are entitled to receive the purchase price for securities or corporate rights, or dividends in foreign currency, on their investment accounts in Ukraine. However, such proceeds cannot be transferred abroad.
- the application of the requirement regarding the maximum amount of foreign currency that one bank can sell in cash per capita a day, which is the equivalent of UAH3,000. This restriction does not apply if the foreign currency is purchased to repay loans denominated in foreign currency.
- the application of the provisions which require settlements under export/import of goods transactions to be conducted within 90 days.
- the application of the mandatory requirement for legal entities and representative offices to sell two thirds (75%) of the foreign currency proceeds received from abroad.the restriction to prepay cross-border loans prior to their maturity date (subject to certain exceptions).
Nevertheless, Resolution No. 758 now permits banks to issue registered savings (deposit) certificates, denominated both in foreign and national currency with a maturity of not less than six months.
The extension of these currency control restrictions is aimed at stabilizing the situation in the monetary and forex markets and preventing the use of the Ukrainian financial system for money laundering and financing of terrorism.