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National Bank of Ukraine Amends Foreign Currency Restrictions

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On 10 September 2024, amendments to the foreign currency (“FX”) regulation came into force, aimed at easing restrictions on business and, on the other hand, at introducing measures to counteract capital outflows.

Specifically, the latest package of amendments, introduced by Resolution No. 108 of the National Bank of Ukraine (the “NBU”) dated 06 September 2024 (“Resolution No. 108”), includes the following measures:

  1. Permission to transfer funds to pay taxes in the EU countries

E-commerce entities that are residents of Ukraine and registered as VAT payers in EU Member States can now transfer funds in FX to pay mandatory payments to the budget of the country of registration. This easing is intended to support small and medium-sized businesses that export their goods to EU markets.

  1. An option to compensate for coupon payments made on Eurobonds

Resolution No. 108 allowed companies that have not had any incomplete currency supervision of their exports of goods in the last 12 months to reimburse affiliated non-resident legal entities that are issuers of Eurobonds for the amount of coupon payments made for the period from 24 February 2022 to 09 July 2024. Notably, such payments may be made exclusively using own funds in FX, not borrowed ones.

These amendments are complementary to the easing of dividend payments for Eurobond repayment introduced in July this year, which we described in more detail in this issue of Legal Alert.

  1. Permission for transfers to purchase carbon emission quotas 

State-owned companies can now make transfers to non-resident entities in order to purchase emission quotas to cover or compensate for carbon dioxide (CO2) emissions arising from aviation activities. This amendment is designed to ensure uninterrupted servicing of defence procurement, air transportation abroad and support military-technical cooperation with Western partners.

  1. Permission to make payments under reinsurance agreements

Resolution No. 108 provided the possibility of making all necessary payments under reinsurance agreements concluded with foreign nuclear pools, and not only payments for reinsurance premiums or payments, as was the case before. This mitigation will allow the Nuclear Insurance Pool to fully fulfil its obligations to partners.

  1. Limits on payments for certain goods and services

The NBU has set a monthly limit on foreign payments made using payment cards in the amount of:

  • UAH 100,000 for transactions with merchant codes 5094 (precious stones, metals and jewellery), 5944 (watches, jewellery and silver items) and 5972 (coin and stamp shops)
  • UAH 500,000 for transactions with merchant code 6513 (real estate agents and managers)

These changes are justified by the need to prevent capital outflow from the country and prevent attempts to circumvent the established foreign exchange restrictions.

By Roman Stepanenko, Partner, and Kateryna Oliynyk, Counsel, Asters

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Founded in 1995, Asters is the largest Ukrainian law firm with offices in Kyiv, Washington D.C., Brussels and London.

The Firm provides efficient transactional legal advice and represents clients on a broad spectrum of matters arising in the course of doing business in Ukraine. Asters has extensive industry-specific experience and plays a leading role in advising clients in various market sectors.

Asters’ 130-strong legal team combines world-class professionalism and quality with clear understanding of local realities so that our clients receive practically oriented advice in the most client-friendly manner. Asters’ lawyers received law degrees from the best European, Ukrainian and US law schools, including Yale, Harvard, Chicago University.

Asters has consistently remained at the top of the Ukrainian legal market throughout its history being acknowledged as Ukraine Law Firm of the Year by Who's Who Legal (2018-2022), The Lawyer European Awards (2020-2021), Chambers Europe Awards 2020 and holds top positions in the most authoritative international market reviews: The Legal 500, Chambers Global and Chambers Europe, IFLR 1000, Who's Who Legal, Best Lawyers.

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