New temporary currency control restrictions
With effect from 28 March 2014, the National Bank of Ukraine (the “NBU”) imposed further currency control restrictions aimed at stabilising foreign exchange market and preventing foreign currency outflow from the country. The NBU’s Regulation No. 172 dated 28 March 2014 (the “Regulation”) tightens up and extends the term of certain measures introduced by its earlier Regulation No. 49 dated 6 February 2014. The restrictions imposed by the Regulation will remain in effect until 1 May 2014.
In furtherance of the previously established prohibition on purchasing foreign currency by Ukrainian residents for early repayment of cross-border loans, the Regulation imposes an absolute ban on such early repayments (including in cases of acceleration by the lender). The restriction extends to the shortening of the maturity of a loan through amending the loan agreement. The Regulation does not expressly establish retroactive effect of this provision. Nevertheless, based on its wording the restriction appears to apply to loan agreements entered into prior to the date of the Regulation.
The Regulation also provides for the following restrictions:
- foreign currency cash may be withdrawn from bank accounts of an individual only in the amount not exceeding UAH 15,000 equivalent per day (extension of the measure introduced earlier this year);
- early withdrawal of foreign currency deposits may only be made in the national currency at the exchange rate of the account bank (extension of the measure introduced earlier this year);
- clients’ funds to be used for the purpose of purchasing foreign currency must be deposited in the transit account two business days in advance of the date of the exchange transaction. While this is an extension of the measure introduced earlier this year, the funds “freezing” period has been reduced from five to two business days;
- new limits imposed on foreign currency transfers outside of Ukraine by individuals for non-commercial purposes (subject to limited exceptions): up to UAH 15,000 equivalent per month may be transferred freely; up to UAH 150,000 per month may be transferred subject to the submission of supporting documents to the bank;
- sale of foreign currency cash by banks is limited to UAH 15,000 equivalent per day to one client.
For more information, please contact Nazar Chernyavsky or Anton Korobeynikov.