The policy of “easing” the foreign exchange regulation. The NBU allowed to pay dividends for 2016 and other changes

27 April, 2017 Newsletters

On April 14, 2017 the Resolution of the National bank of Ukraine (hereinafter – “the NBU”) No. 331 came into force, it introduced amendments into the Resolution of the NBU No. 1242 as of February 23, 2015 and the Resolution of the NBU No. 4103 as of December 13, 2016. Herebelow we bring to your attention a brief review of the main changes.

The dividends for 2016 are allowed to be paid out

The NBU allowed the purchase and transfer of foreign currency for the purposes of payment of the dividend abroad for the corporate rights/shares within the period from 2014 till 2016 (previously – till 2015).

As before, the purchase/transfer of foreign currency in this case should be carried out by (1) the issuer of corporate rights/shares under which the dividends are paid, or (2) the depositary that serves the foreign investor in securities, or (3) a foreign investor personally.

The value threshold for payment of dividends is increased

From now, the total amount of purchased/transferred foreign currency for the purposes of paying out dividends abroad within one calendar month shall not exceed USD 5 000 000 or equivalent of this amount in foreign currency at the official NBU rate on the date of the transaction (previously, the value threshold for payment of dividends could not exceed the greater of two limiting values: USD 1 000 000 or 10% of the total amount of dividends, which should be paid abroad).

Some restrictions that concerns repayment of credits/loans are removed

The NBU provided for the further lightening for banks-borrowers. Now prior repayment of the credit/loan is allowed in case of:

  • repayment of credit/loan in favour of foreign bank-creditor, which has an official rating not lower than “A3″/”A-” (and which is confirmed by a leading rating companies, – for example, Fitch Ratings and/or Standard & Poor`s and/or Moody`s);
  • repayment of credit/loan in favour of non-resident creditor, if the credit/loan was provided by means of funds received from the placement of debt securities outside of Ukraine.

The “threshold” value of the import contract, which requires necessary advance payment with the settlement by letter of credit, is increased

From now authorized banks are required to make advance payments in foreign currency using the settlement of account by letter of credit for import of goods under international business contracts, in case if the total value of the contract exceeds USD 5 000 000 or the equivalent of this amount in other foreign currency at the official NBU rate on the date of the transaction (previously – for contracts, total value of which is USD 1 000 000).

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.

Footnotes:

1 the Resolution of the National bank of Ukraine “On Amending Certain Regulatory Acts of the National Bank of Ukraine” No. 33 as of April 14, 2017;

2 the Resolution of the National bank of Ukraine “On Features of Implementation of Some Currency Transactions” No. 124 as of February 23, 2015;

3 the Resolution of the National bank of Ukraine “On Regulating the Situation in the Monetary and Foreign Currency Markets of Ukraine” No. 410 as of December 13, 2016.

 

Kind regards,

© WTS Consulting LLC, 2017

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