The National Bank of Ukraine (the “NBU”) has issued further guidance to Ukrainian banks in connection with opening, maintaining and closing escrow accounts. The new Regulation No. 133 follows the adoption of the Law of Ukraine No. 1983-VIII On Amendments to Certain Legislation of Ukraine Regarding the Improvement of Corporate Governance of Joint Stock Companies, dated 23 March 2017, which introduced the concept of escrow accounts (please see our Legal Alert).
Under Regulation No. 133 the NBU (i) provides for a list of documents required for opening an escrow account; (ii) sets an exhaustive list of transactions which may be performed through an escrow account; (iii) grants a right to non-resident investors to open escrow accounts in Hryvnia and foreign currency; (iv) expressly allows enforcement against funds in escrow accounts by way of contractual debiting; and (v) clarifies the functions of a Ukrainian bank that is an escrow agent.
The new legislation aims to increase the adoption of the escrow mechanism among Ukrainian banks and their clients and provide more flexibility in implementing certain commercial arrangements in Ukraine.
NBU Regulation No. 133 On Amendments to Certain Legislative Acts of the National Bank of Ukraine, dated 18 December 2017 and effective from 21 December 2017.