The National Bank of Ukraine continues to relax FX restrictions in the insurance sector and has clarified the procedure for transactions to pay interest on domestic government debt securities to foreign investors.
Regarding the loosening of FX restrictions in insurance
Insurers will be able to make insurance payments to nonresidents. Insurers will also be able to return insurance premiums to nonresidents under prematurely terminated insurance (reinsurance) agreements if said insurance premiums were received by insurers after 24 February 2022 and if relevant court rulings have been made, among other conditions.
Please be advised that the following insurance payment transactions are currently allowed:
- payments to foreign nuclear pools that are made by an authorized insurer on behalf of members of the Ukrainian Nuclear Insurance Pool
- payments under Green Card international insurance agreements
- payments under personal insurance agreements, other than life insurance, to reimburse expenses on treatment in medical institutions abroad, transportation of patients, and expenses related to the deaths of citizens abroad (including transportation and burial costs)
- payments under insurance contracts to persons traveling abroad.
In addition, the NBU has unblocked insurers’ FX transactions to pay membership fees to international organizations and associations of insurers. The Motor Insurance Bureau of Ukraine will also be able to make FX transactions to pay membership fees to the Council of Bureaux of the International Motor Insurance Card System, also known as the Green Card system.
Regarding transactions to pay interest on domestic government debt securities to foreign investors
To enable the repatriation of interest payments received after 1 April 2023 on domestic government debt securities, an additional requirement has been established: the investor shall have owned such domestic government debt securities for at least 90 consecutive calendar days that immediately precede the receipt of said interest. This will help prevent premature repatriation of investments by foreign investors.
Please be reminded that the NBU introduced the possibility to repatriate interest received after 1 April 2023 on domestic government debt securities in order to incentivize nonresidents to reinvest the principal amount and accumulated hryvnia funds into the primary market for domestic government debt securities.
The changes outlined above were stipulated by NBU Board Resolution No. 68 On Amendments to NBU Board Resolution No. 18 dated 24 February 2022, dated 19 May 2023 and effective from 20 May 2023. The revised procedure for the conduct of transactions related to the payment of interest on domestic government debt securities to foreign investors is effective from 22 May 2023.