The NBU by itsResolution No. 534 dated 28 August 2014 (the "Resolution No. 534")has amended its Resolution "On Settling the Situation on UkrainianCurrency Market" No. 515 dated 20 August 2014, which was addressed in ourprevious letter.

The ResolutionNo. 534 establishes that banks shall not cease the currency control overclients’ export operations based on the documents on set-off of obligations. Inpractice it means that residents of Ukraine are prevented now from set-off ofobligations with their subcontractors under export operations.

In addition,it is prohibited to banks to provide loans in foreign currency to legalentities, private entrepreneurs and permanent representative offices ofnon-residents of Ukraine for utilization of such loans on the local market.Loans in foreign currency may be provided exclusively for performance of aborrower’s cross-border obligations.

The NBU hasalso improver the procedure of control over the mandatory exchange of theforeign currency. Namely, banks shall provide the NBU each day with a detailedreport on the total amount of foreign currency which is subject to mandatoryexchange on the next working day. Such a report shall contain information abouta bank’s clients who received foreign currency which is subject to mandatoryexchange.

The ResolutionNo. 534 became effective on 29 August 2014.