Effective as of 1 May 2014, the National Bank of Ukraine (the “NBU”) has adopted Resolution No. 245 “On regulation of Activity of Financial Institutions and Carrying out of Foreign Currency Transactions” (the “Resolution 245”) introducing certain restrictions on transactions in foreign currency as well as measures enhancing stability of banking and financial activities. The Resolution 245 cancelled the previous NBU Resolution No. 172 “On Regulation of Activity of Financial Institutions and Carrying out of Foreign Currency Transactions” (the “Resolution 172”) governing the similar issues.
The Resolution 245 cancelled previously introduced requirement for minimum period for purchase of FX funds by Ukrainian banks under instructions of their clients, which provided that a purchase of FX funds could be made not earlier than on the second (2nd) banking day after submission of the relevant instruction and transfer of UAH funds to an interim account of the bank.
At the same time, the Resolution 245 has extended most of the restrictions which were set out by the Resolution 172, in particular:
Restrictions on purchase of foreign currency
According to the Resolution 245, Ukrainian residents are prohibited from any early repayment of any loans, credits or financial aid raised from foreign lenders/donors in any foreign currency (including in case of entry into any amendment agreement shortening maturity of any such borrowings). Such prohibition applies to early repayment by Ukrainian residents of principal, interest and any other payment obligations under credit, loan facility arrangements and/or financial aid agreements, in each case with foreign lenders/donors. In addition, NBU will not register any amendments to such agreements to the extent such amendments provide for reduction of the tenor or early repayment of a loan.
Purchase of foreign currency for non-commercial transactions of individuals
The NBU has preserved a monthly limit of the total amount of foreign currency that may be purchased by an individual for the purposes of transfers of FX funds abroad under any non-commercial transactions. For Ukrainian residents, such limit currently amounts to an equivalent of UAH 15,000 (without provision of supporting documentation) and to UAH 150,000 (subject to provision of supporting documentation). Non-resident individuals may transfer FX funds abroad within the abovementioned limits subject to provision of supporting documentation, irrespective of the amount of transfer. The aforesaid limits, however, do not apply to certain types of non-commercial transactions, such as, among others, payment for education abroad, medical treatment abroad and transfer of FX funds purchased for UAH received as salary by foreign residents employed in Ukraine.
Withdrawal of cash and conversion of cash funds by individuals
The banks are permitted to purchase FX cash funds from individuals without verification of their identification documents provided that the amount of such transaction does not exceed UAH 150 000. Purchase of FX funds (in cash) by individuals may be made in the amount not exceeding UAH 15 000 per one day.
The NBU has preserved the requirement for the banks not to disburse to their clients any foreign currency funds (in cash) in excess of an equivalent of UAH 15 000 per day per one client calculated at the official FX exchange rate established by the NBU. This requirement applies to withdrawal of cash from current and deposit accounts regardless of number of accounts of a client in the respective bank and irrespective whether such withdrawal is made in Ukraine or outside of Ukraine.
This restriction on FX cash funds withdrawal does not apply to instances where Ukrainian companies, entrepreneurs and representative offices of foreign companies cover/reimburse business trip expenses of their respective employees.
Regulations in respect of banking activity
The requirement regarding early repayment by the banks of foreign currency denominated deposits in UAH remains in force. The NBU has also extended the suspension of any issuance of savings (deposit) certificates by Ukrainian banks. Payments under previously issued savings (deposit) certificates may be made only via wire transfer of funds to the bank accounts of the owners of such certificates.
In addition, the NBU has temporarily established zero rate on provisioning by Ukrainian banks in respect of FX funds raised from any foreign residents, provided that the maturity of such borrowings is up to (and including) 183 calendar days.
The Resolution 245 shall remain effective until 1 June 2014.