The National Bank of Ukraine extended temporary currency control restrictions for another 3-month period
Sayenko Kharenko, Kyiv, Ukraine
Thu, June 16, 2016
On 7 June 2016, a day before the expiry of the then effective currency control restrictions temporarily introduced in 2014 and 2015, the National Bank of Ukraine (the NBU) extended the restrictions for another three-month period, albeit with some concessions. The key restrictions (each subject to certain exemptions) remaining in place include:
- prohibition on early repayment of cross-border loans by Ukrainian borrowers;
- general restriction on repatriation of dividends by foreign investors (now excluding 2014 and 2015 dividends – please see below for details);
- mandatory conversion of 65% of foreign currency proceeds received from outside of Ukraine (please also see below for details);
- ban on repatriation of proceeds from sale of Ukrainian securities and shares in limited liability companies by foreign investors.
2014 and 2015 dividends allowed for repatriation
With effect from 13 June 2016, the NBU allowed repatriation of dividends paid or accrued for 2014 and 2015 (the general dividend repatriation ban remains in place). In order to mitigate a surge in demand for foreign currency, the NBU established monthly caps on amounts of dividends allowed for conversion into foreign currency and repatriation. Depending on the aggregate amount of 2014-2015 dividends to be repatriated, the following monthly caps apply:
- USD 1 million cap – if the aggregate amount is below USD 10 million;
- a cap of 10% of the aggregate amount of repatriated dividends – if such aggregate amount is between USD 10 million and USD 50 million;
- USD 5 million cap – if the aggregate amount of repatriated dividends is above USD 50 million.