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27 May 2020

Financial and insolvency measures: legislative fallout from the COVID-19 outbreak. Ukraine

Source: Financial and insolvency measures

Currently, specific legislative measures in the area of financing are mostly focused on protecting borrowers under consumer loans. For corporate loans, Ukrainian authorities have been using a softer approach of non-binding nature. There are certain initiatives relating to insolvency regime, but these are at a very early stage.


  • moratorium on increasing loan interest rates
  • Ukrainian banks and other financial institutions are prohibited to increase interest rates under all loans extended by them. This prohibition is effective from 2 April 2020 and until the end of quarantine measures in Ukraine.

Corporate debt restructurings

  • Ukrainian central bank (the “NBU”) recommends that Ukrainian banks restructure loans of corporate borrowers affected by the pandemic.
  • while the recommendation does not have a binding nature, in order to encourage banks to follow the recommendation, the NBU adjusted the regulations governing the loan provisions to avoid adverse effect of restructurings. In particular, banks are temporary allowed not to treat the loans restructured in line with the NBU recommendations as defaulted loans. Hence, no additional provisioning will be required due to such restructurings
  • restructuring is available for borrowers under loans which were not in default as of 1 March 2020.
  • the borrower should provide the bank with evidence of its short-term drastic decrease in revenues or its temporary shutdown.
  • the affected loans should be restructured by the end of September 2020.
  • typical terms of restructurings suggested by the NBU:
  • deferral of principal repayments for as long as quarantine measures are effective; and
  • in case of severe impact on the borrower – deferral and capitalization of interest.
  • the NBU discourages banks from worsening the position of the borrower, increasing effective interest rates or charging any fees as part of the restructuring.

Consumer loans

  • with the introduction of amendments into the consumer loans legislation, Ukrainian banks and other financial institutions are prohibited to increase consumer loan interest rates other than floating rates during the period from 1 March 2020 to 31 May 2020.
  • consumers are exempted from any sanctions for the non-performance under loans for the period from 1 March 2020 to 30 April 2020.

Currency transfer restrictions

No currency transfer restrictions have been imposed or are planned to be introduced (according to public announcements of the NBU).

Insolvency related matters   

  • there are legislative initiatives to introduce insolvency moratorium
  • a draft law has been submitted to Ukrainian Parliament which proposes to introduce moratorium on the commencement of insolvency proceedings.
  • if this law is adopted, creditors will be precluded from filing insolvency petitions under claims, which arose beginning from 1 February 2020.
  • it is proposed that this insolvency moratorium will be effective for as long as the quarantine measures are in place and 90 days after their revocation.
  • the draft law is at early stages of internal review by the parliamentary committees and it remains unclear whether and how it will progress through the Parliament.


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