“As of today, the NBU is changing currency restrictions: what awaits business. From November 20, 2024, the National Bank will introduce changes in currency restrictions to support international trade. The updates relate to import contracts, repatriation of dividends and the use of foreign currency credits.”, — write on: unn.ua
From November 20, 2024, the National Bank of Ukraine will make changes to the current currency restrictions. On the one hand, the NBU relaxes a number of restrictions to support international cooperation in the field of foreign trade, as well as international projects and programs for technical assistance. On the other hand, it takes measures to strengthen the discipline of observing currency restrictions
As reported, the changes will apply to several areas:
- Transfer of funds to fulfill obligations under import contracts
As the National Bank said, currently Ukrainian business can pay for the import of any product only if the product is delivered after February 23, 2021. However, from November 20, Ukrainian enterprises will have the opportunity to pay for the import of goods without limiting the term of their delivery to Ukraine, provided that the funds are transferred to the benefit of:
– a foreign export credit agency (ECA) / a foreign state through a person authorized by it / a foreign person whose members include a foreign state or a foreign bank (provided that the foreign state is a member of this bank);
– other non-residents, on the condition of participation in import operations (through lending, insurance, guarantee, surety) of a foreign ECA / foreign state through a person authorized by it/a foreign person whose members include a foreign state or a foreign bank (provided that the foreign state is a member of this bank).
The monthly limit for such transfers is set at the level of 10% of the amount of overdue debt under the contract for the import of goods (as of November 1, 2024).
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The National Bank believes that such changes will stimulate foreign countries, state banks and EKA to preserve and strengthen the existing commercial ties of foreign exporters with the Ukrainian market. This will also make it possible to minimize the risks of reducing the potential volume of financing and reducing Ukraine’s investment attractiveness.
- Calculations for international technical assistance projects
Currently, as indicated in the NBU, it is possible to transfer foreign currency from Ukraine for settlements within the framework of projects/programs of international technical assistance/cross-border cooperation financed by the EU. At the same time, residents of Ukraine receive technical assistance not only from EU countries, but also from other countries for projects financed by foreign donors.
Taking this into account, the National Bank of Ukraine from November 20, 2024 provides the opportunity to transfer foreign currency abroad for settlement of international technical assistance projects, regardless of which state or organization finances such a project
Such changes, according to the NBU, will make it possible to comprehensively solve the problem of calculations for international technical assistance projects, which will positively affect both the position of Ukraine and individual beneficiaries of such assistance – residents, as well as contribute to the adoption of positive decisions by international donors regarding further support to Ukraine.
- Repatriation of dividends abroad
As reported, the National Bank closely monitors compliance with established currency restrictions. According to the results of the inspections, which confirmed attempts to circumvent the monthly limit on the repatriation of dividends, the NBU established additional criteria for such operations.
Thus, from November 20, 2024, Ukrainian companies will be able to take advantage of the possibility of partial repatriation of dividends for corporate rights or shares only if the following conditions are simultaneously observed:
– the period of activity of the issuer from the date of state registration to the date of the relevant transaction is at least 12 months;
– at least six months have passed since the acquisition by the foreign investor/non-resident of the right of ownership of the corporate rights/shares of the issuer paying dividends to the date of the relevant transaction.
- Use of foreign currency loans to purchase securities denominated in foreign currency
In order to minimize the risks of circumventing the current currency restrictions, the National Bank also prohibits the use of foreign currency loans for the purchase of securities denominated in foreign currency from November 20, 2024.
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