The National Bank of Ukraine is updating a number of FX restrictions. The changes take effect on 11 July 2024.
First, the changes are aimed at increasing Ukraine’s investment appeal and attracting foreign private capital. To this end, the NBU has:
- allowed domestic businesses to reimburse non-residents for expenses incurred due to their participation in providing an external loan to a Ukrainian borrower. The condition for such a transaction is that the guarantor, surety provider, or insurer under an external loan must be a foreign export credit agency or a foreign state, or an international financial institution (IFI) must be a guarantor or surety provider for such debt. Such changes will expand the opportunities for Ukrainian companies to attract new external loans
- allowed transferring funds to foreign companies whose shareholders include a foreign state in order to pay insurance premiums under agreements that provide for coverage of war risks in Ukraine. This will be an important signal to investors and donors that they can reduce their investment risks in Ukraine amid the full-scale russian invasion
- enabled residents to transfer funds under guarantees or sureties provided by them in order to ensure the fulfillment of obligations by resident borrowers under external loans (provided that such payments by a resident borrower are permitted by Resolution No. 18). This will have a positive impact on the interest of foreign lenders in resuming credit support to Ukrainian private borrowers
- established the regulatory framework for resident borrowers to purchase foreign currency to make provisions under a loan agreement with an IFI, which will increase the support of Ukrainian businesses by IFIs
- made clarifying amendments to the May FX liberalization package, which allowed making scheduled interest payments on external corporate debt. The amendments are aimed at unifying approaches to paying such scheduled interest (coupons) in cases of different structuring of the borrowings.
Second, the NBU continues to take steps to help improve Ukraine's defense capability and support the volunteer community. In particular:
- the list of defense goods that may be purchased abroad by individual volunteers has been expanded. This list will now include components for UAVs (codes under the Ukrainian Classification of Internationally-Traded Goods: 8407, 8526, 8529, 8537, 8542, 8543, 8807, 9004, 9013-9015, and 9027), as well as thermal blankets and thermopads (UCITG codes 2915, 3824, and 3920).
As a reminder, starting from 4 April 2022, individuals have been allowed to purchase foreign currency within the monthly limit of UAH 400,000 in equivalent and transfer it abroad to purchase goods from the list determined by the NBU in order to contribute to raising the defense capability of Ukraine. In addition, starting from 6 August 2022, individual volunteers may make payments from hryvnia payment cards without restrictions to purchase the respective goods abroad.
The above list already includes thermal imagers, radios, bulletproof vests, helmets, military and tactical uniforms, military and tactical footwear, protective clothing, optical surveillance devices, unmanned aerial vehicles, sleeping bags, and first aid equipment
- in addition to the possibility for non-residents to make charitable contributions in foreign currency in Ukraine, the NBU has allowed them to make corresponding transfers in the hryvnia. Such contributions may be made to the accounts of both government agencies and charitable foundations to contribute to Ukraine's defense capability and to meet other urgent needs of the population during the war.
Third, the NBU made other clarifying changes to support households and businesses, in particular:
- authorized individuals to return social benefits received in a foreign country. These changes will allow Ukrainians to fulfill their obligations to the authorities of foreign countries, which will prevent the deterioration of the conditions for providing assistance to forced migrants
- enabled businesses to pay fees for actions related to the protection of intellectual property rights, including payment for services provided by patent offices of other countries and services of patent attorneys abroad.
Fourth, the NBU clarified the rule for the existing limit of UAH 100,000 per day for the purchase and sale of foreign currency cash for non-cash hryvnia funds, which corresponds to the limit on cash withdrawals from clients' current accounts. The clarification applies exclusively to non-cash funds, which means that Ukrainians will continue to be able to carry out currency exchange transactions with cash without any limits on the amount.
These and other clarifying amendments were adopted by NBU Board Resolution No. 83 On Amendments to NBU Board Resolution No. 18 dated 24 February 2022 dated 9 July 2024. They come into force on 11 July 2024.
In addition, the list of transactions that can be conducted on accounts of foreign companies has been updated. To this end, on 9 July 2024, the Board of the National Bank of Ukraine approved Resolution No. 82 On Amendments to the Regulation on Safeguards and Procedures for Certain Transactions in Foreign Currency, which also takes effect on 11 July 2024.