On 19 May 2014 the National Bank of Ukraine (“NBU”) adopted Resolution No 286 “On Adoption of the Procedure for Opening of and Use of Funds on International Financial Organisations’ Current Accounts Opened by Authorised Banks” (the “Resolution”). The Resolution became effective on 24 June 2014 and regulates the procedure for opening and maintaining UAH and foreign currency current accounts by International Financial Organisations (Institutions) (“IFOs”) that are entitled to open such accounts in Ukraine under the international treaties of Ukraine.

The Resolution is a long-awaited development required to establish a mechanism allowing IFOs the right to issue in Ukraine UAH-denominated bonds. The IFO’s right to do so was provided for by amendments to the Law of Ukraine “On Securities and Securities Market” dated 04 July 2013. Until the Resolution became into effect, there was no procedure for the opening by IFOs of UAH accounts and this made it impossible for IFOs to issue UAH bonds.

Generally, the Resolution establishes the right for:

  1. the International Finance Corporation (the “IFC”) and the Nordic Environment Finance Corporation (“NEFCO”) to open and maintain UAH accounts for the purposes of issuing of UAH-denominated debt securities and granting UAH loans (and related activities, e.g. payments under a guarantee issued in connection with UAH loans). In the case of the IFC and NEFCO, UAH loans can be granted at the account of UAH bond placements and/or at the account of UAH received from the sale of foreign currency in the Ukrainian interbank foreign currency exchange market;
  2. other IFOs (including the European Bank for Reconstruction and Development) to open and maintain UAH accounts for the purposes of issuing UAH bonds and granting UAH loans (and related activities, e.g. payments under a guarantee issued in connection with UAH loans). However, such other IFOs can extend UAH loans only at the account of their UAH bond placements; and
  3. all IFOs to open and maintain foreign currency accounts for the purposes of the sale and purchase of foreign currency, crediting of foreign currency transferred from abroad, or other IFO’s current accounts, and the transfer of foreign currency abroad or to other IFO’s current accounts in Ukraine.  

LAW: NBU Resolution No 286 “On Adoption of the Procedure for Opening of and Use of Funds on International Financial Organisations’ Current Accounts Opened by Authorised Banks” dated 19 May 2014