On 2 January 2019, the National Bank of Ukraine ("NBU") adopted several regulations on currency control issues aimed at implementation of revolutionary provisions of the new Law of Ukraine "On Currency and Currency Operations" ("FX Law").

Among such documents is the NBU's Regulation No. 6[1] setting up new rules on supervision of cross-border loans extended to Ukrainian borrowers ("Regulation"), which comes into effect alongside the FX Law on 7 February 2019.

Registration v. Notification

Importantly, the Regulation replaces the procedure for registration of loans attracted by Ukrainian borrowers with the procedure for notification of the NBU by the Ukrainian servicing bank. The operations under the cross-border loans will be analyzed and monitored exclusively by the servicing bank, while the NBU will have neither the authority nor the obligation to perform any checks of the underlying transactions during such notification procedure.

Interest Rate Cap and Remarkable Stories

The other remarkable changes to the Regulation include:

  • the requirement that loan agreements may become effective only upon registration with the NBU is no longer in force;
  • the maximum interest rate concept has been abolished; instead, the servicing bank performing financial monitoring checks will be required to verify whether the cost of attraction of a loan corresponds to the arm's length conditions and market rates for the relevant borrower;
  • the Regulation requirements will not be extended to loan transactions performed through offshore accounts, which is likely to simplify structuring mechanics for loan disbursement and repayment through offshore accounts of a borrower and other involved parties; and
  • the notification requirement does not apply to the loans attracted by Ukrainian banks or secured with crops' receipts.

Significantly, the Regulation will cover cross-border loans attracted not only in foreign currencies but also in any currency values, including Hryvnias.

Cross-Border Loan Notification


The notification of NBU about a cross-border loan could be initiated by either:

  • the Ukrainian borrower: the servicing bank must notify the NBU of the respective loan agreement within five business days of the borrower's application; or
  • the servicing bank: where notification shall be made by the day of respective financial transaction under the loan agreement.

The record about the cross-border loan will be entered into a special automated system of the NBU ("System") by the servicing bank.

Loans Registered Prior to 7 February

With effect from 7 February 2019, the records about cross-border loans duly registered with the NBU by 6 February 2019 will be automatically transferred to the System. No further actions will be required from the parties to the respective loan arrangements.

Other Positive Novelties

The other NBU resolutions adopted alongside the Regulation to implement the FX Law should have a positive effect on cross-border lending. Such changes include the following:

  • abolition of prohibition on early repayment of cross-border loans;
  • permission to the Ukrainian borrower to purchase and accumulate on its account with the servicing bank funds in foreign currency to be used for payments under cross-border loans;
  • permission to the Ukrainian borrower to hedge currency risks under cross-border loans through particular instruments, including forward operations with the bank.

Loans to Non-Resident Borrowers

The loans extended by Ukrainian lenders to non-resident borrowers remain subject to various NBU restrictions. Such lending by Ukrainian businesses will be limited by an annual cap of EUR 2 million. The NBU left the ban on extension of loans to non-residents in Hryvnias unchanged.