Currency restrictions applied by the National Bank of Ukraine – the old ones continued and the new ones introduced as well
Read previous infoletters regarding the NBU restrictions
On March 3, 2015 the period of currency restrictions introduced by the Resolution of the National Bank of Ukraine “On Measures for Stabilization of Ukrainian Monetary and Foreign Currency Markets” as of December 1, 2014 No. 758 expired.
The National Bank of Ukraine (hereinafter “the NBU”) has decided to continue introduced restrictions by the adoption of new resolution (the Resolution of the NBU “On Measures for Stabilization of Ukrainian Monetary and Foreign Currency Markets” No. 160 as of March 3, 2015 – hereinafter “the Resolution No. 160”). The Resolution No. 160 is effective for 3 months (till June 4, 2015). Except for prolongation of current restrictions the Resolution No. 160 introduced the new ones as well.
Along with that, the NBU Board has adopted the Resolution No. 161 on March 3, 2015 (hereinafter “the Resolution No. 161”). This Resolution amended restrictions which were introduced by other acts of the NBU. Both regulations are published on the web-site of the NBU.
The following regulations, which have been prolonged, are worth mentioning:
- crediting of currency returns in result of goods’ export under suppliers’ credit conditions as well as supply of goods during the import under advance payments conditions shall be carried out within 90 days;
- requirement for obligatory selling of 75 % of foreign currency return;
- prohibition of any set-off within the framework of export transactions;
- prohibition of early repayment of credit or loan taken from non-residents as well as amending credit or loan agreements for shortening of the loan repayment period;
- prohibition of foreign currency purchase with UAH funds borrowed by the client;
- restrictions on purchase of currency in cash and of precious metals at the cash-desk of the bank (not exceeding UAH 3000 equivalent for one person per day);
- restrictions on withdrawing cash in a foreign currency from cash-desks and ATM (not exceeding the equivalent of UAH 15,000 equivalent for one person per day at the official NBU exchange rates);
- prohibition of issuance of bearer deposit certificates as well as registered deposit certificates with the turnover not exceeding 6 months.
We would like to mention separately the rule about confirmation by the NBU of any advance payments in foreign currency for goods’ import under international economic agreement in the total amount exceeding the equivalent of USD 50 000. This regulation has been introduced by the Resolution of the NBU “On Details of Some Foreign Exchange Transactions” of February 23, 2015 No. 124.
The wording of this resolution forbids carrying out of mentioned advance payments by the bank if the NBU does not confirm making of such payments for this bank. However, the NBU interprets this resolution as a requirement for receiving of previous confirmation (permission) for such payment (in particular, see this information in the respective press-release published on the web-site of the NBU). Though verbally interpreting the wording one may observe rather the principle of “implicit consent” (if the NBU does not forbid the payment, it may be carried out).
The abovementioned restriction is still effective as far as the Resolution of the NBU of February 23, 2015 No. 124 has unlimited period of validity. At the same time the Resolution No. 161 adds one more requirement – the certificate of the State Fiscal Service of Ukraine on absence of indebtedness as for tax and duty payments must be submitted for carrying out an advance payment.
There are also some new restrictions introduced by Resolutions No. 160 and No. 161 which worth mentioning:
- act of price examination of the State National Research and Information Center for Monitoring International Commodity Markets (hereinafter – SC “Derzhzovnishinform”), which confirms compliance of contract prices on works, services, intellectual property rights, which are the subject of the agreement, with market conditions/ opportunities, is required when payment for works, services, intellectual property rights exceeds amount of 25 000 Euro (the threshold amount was 50 000 Euro before);
- the copies of documents for substantiation of payment must be submitted to the NBU for purchase and/or transfer of currency under foreign economy contract in the amount exceeding the equivalent of USD 50 000 (let us to note that advance payments are not under discussion now). In case of import transactions the list of documents shall also include the certificate of the State Fiscal Service of Ukraine on absence of indebtedness as for tax and duty payments. In other words the certificate of the State Fiscal Service is required in order to pay for already supplied goods. Besides the NBU has a right not to confirm such payment (in such case the bank is forbidden to carry out the payment). We consider that there is a risk of the same interpretation as regarding the abovementioned regulations on advance payments. Thus the NBU will require previous permission for every payment (unlike the principle of “the implicit consent” which is read from the wording of the norm);
- bank is forbidden to purchase foreign currency on behalf of the client (except for natural person) if such client already have foreign currency on its account in any bank in the amount not less than USD 10 000. At that, the funds which are in pledge; or have been deposited before March 4, 2015; funds in insolvent banks, where the temporary administration is established, or which are in the process of liquidation, are not considered/ included.
- bank is forbidden to give credit to client in UAH secured by the pledge of property rights to funds in foreign currency placed on the bank accounts;
- restrictions on selling precious metals for non-cash payment in UAH to legal entities and individual entrepreneurs (not exceeding 3,216 of the Troy ounce or an equivalent of weight of other metal at the NBU rate for week);
- prohibition on acquisition of Ukrainian state bonds by foreign investors except for cases of their acquisition for UAH received in result of foreign currency sale, or for funds received from transactions with Ukrainian state bonds;
- prohibition on payment of any dividends to foreign investor abroad (this prohibition has not been related before to the payment of dividends for the securities circulated on the stock markets);
- prohibition to pay back funds abroad which have been received by foreign investors within the framework of withdrawal from the company or decreasing the charter capital of a legal entity;
- prohibition to pay back funds abroad which have been received by foreign investors in result of sale of securities issued in Ukraine. Earlier this prohibition did not cover the sale of any securities on stock markets; at present the prohibition does not cover only sale of debt securities on stock markets.
The above commentary presents the general statement for information purposes only and as such may not be practically used in specific cases without professional advice.
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