Changes in Currency Restrictions: Investments, Import and Currency Loans

26.11.2024

With the effect from 20 November 2024, the amendments approved by Resolution No. 136 of the Board of the National Bank of Ukraine (the NBU), dated 19 November 2024, “On Amendments to NBU Board Resolution No. 18 dated February 24, 2022” (Resolution No. 136), came into force.

Key changes

1/ Expansion of exceptions for international technical assistance

To conduct a foreign currency purchase transaction, a resident client (excluding individuals) must provide the bank with information about the total amount of foreign currency held in its current and deposit accounts with banks or confirm its absence. The total amount of foreign currency held in current and deposit bank accounts of the client is determined based on the balance at the beginning of the operational day.

  • The exceptions now include all funds received onto client`s accounts within the framework of international technical assistance projects (programs), without considering daily receipts.

2/ Cancellation of time limitations for import operations

Residents are now allowed to make payments for import of goods delivered prior the February 23, 2021, provided that:

  • The funds are transferred for the benefit of:
    a) foreign export credit agencies (ECA) / foreign states through their authorized representatives / foreign entities whose participants include a foreign state or foreign bank (if the foreign state is a participant in this bank);
    b) other non-residents provided that a foreign ECA has been involved in the import operations (through lending, insurance, guarantees, or suretyship). 
  • The payment does not exceed 10% of the overdue debt as of November 1, 2024, within a calendar month.

3/ Allowance for payments within international technical assistance

Payments for all international technical assistance projects and cross-border cooperation programs are now permitted. Formerly only payments to EU countries were allowed.

4/ Additional conditions for dividend payments

From May 13, 2024, residents may transfer foreign currency abroad for the benefit of foreign investors for dividend payments on corporate rights/shares, provided that:

  • The issuer has been registered for at least 12 months before the date of the transaction.
  • At least six months have passed since the foreign investor acquired ownership of the corporate rights/shares on the issuer.

5/ Restrictions on banking operations with foreign currency loans

  • Banks are prohibited from providing foreign currency loans with a purpose of buying FX securities.
  • It is forbidden for bank clients to transfer foreign currency obtained in the form of loans, credits, or repayable financial assistance for the purchase of foreign currency-denominated securities and/or to the current account of a central counterparty*.

* Central counterparty - a clearing institution that has the right to carry out clearing activities of a central counterparty in accordance with the Law of Ukraine “On Capital Markets and Organized Commodity Markets” аnd obtained a license from the National Bank of Ukraine to carry out settlements in foreign currency under transactions with Ukrainian domestic government bonds denominated in foreign currency (“Ukrainian government bonds”), as well as other foreign exchange transactions necessary for carrying out/ensuring such settlements within the clearing activities of the central counterparty.

 

The update prepared by INTEGRITES Banking and Finance team

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