Starting from 20 November 2024, the National Bank of Ukraine (“NBU”) enacted amendments to the existing currency control restrictions under the moratorium on foreign currency cross-border transfers (“Moratorium”). These amendments aim to facilitate international trade cooperation and technical assistance projects while simultaneously strengthening compliance measures for certain exemptions.
Liberalisation Measures
1. Funds transfers under import contracts
The NBU allowed Ukrainian companies to settle their obligations under import contracts before foreign suppliers without any limitations on the term of their delivery to Ukraine, provided that foreign currency funds are transferred in favour of:
- foreign export credit agencies (“ECAs”) or foreign states through authorised institutions or foreign companies which have a foreign state or a foreign state bank among their shareholders;
- other non-residents, provided that the above-mentioned institutions are participating in such import operations (through lending, insurance, guarantee or suretyship).
Starting from 1 November 2024, Ukrainian companies may repay up to 10% of outstanding debt per month.
To recap, Ukrainian companies were previously allowed to pay under import contracts only if works and services were delivered on or after 23 February 2021.
2. Settlements under international technical assistance projects
The NBU permitted the transfer of foreign currency funds abroad to facilitate settlements under international technical assistance projects, regardless of the project’s funding state.
Previously, foreign currency funds could be transferred from Ukraine to make payments only under European Union-funded international technical assistance.
Restrictive Measures
1. New conditions for dividend repatriation transactions
The NBU supplemented existing exemption from the Moratorium previously described in our legal alert. Ukrainian companies can now partially repatriate dividends on corporate rights or shares subject to two additional conditions:
- a Ukrainian issuer of corporate rights or shares must be registered for at least 12 months before repatriating dividends; and
- a foreign investor must hold corporate rights/shares of such issuer for at least 6 months before repatriation.
2. New foreign currency loan restriction
The NBU prohibited to use foreign currency loans to acquire foreign currency-denominated securities.
Additional notes
This LEGAL ALERT is issued to inform AVELLUM clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The information above does not constitute legal or other advice and should not be considered a substitute for specific advice in individual cases.
For further information on this legal alert and other issues regarding currency control restrictions, please contact our senior partner, Glib Bondar.
