Last week the National Bank of Ukraine (the NBU) issued a series of new Resolutions Nos. 339, 341 and 342 dated 07 June 2016 and cancelled part of the currency restrictions that had been effective for more than two years. Some of the amendments entered into force on 09 June, and some will enter into force on 15 June 2016.

The key changes are as follows:
  1. Part of currency earnings that is subject to mandatory sale has been reduced from 75% to 65%.
  2. Dividends for the period of 2014-2015 are allowed to be paid to foreign investors. The total amount of such payments during one calendar month should not exceed: USD 1 mln or 10% of the total amount of payable dividends. If 10% of the total amount of dividends exceed USD 5 mln, the limit of the monthly payment will be USD 5 mln. Payment of dividends for preceding periods or in larger amounts is still prohibited.
  3. The limit for the sale of foreign currency in cash per one customer and during one day has been increased from 6,000 to 12,000 in the UAH equivalent.
  4. The daily limit for the issuance of foreign currency in cash from current deposit accounts to one client has been increased from 50,000 to 100,000 in the UAH equivalent.
  5. The limit for the issuance of national currency in cash, which previously amounted to UAH 500,000 per day, has been fully removed.
  6. Copies of documents to be submitted for performance of foreign exchange transactions associated with payment for services, works and intellectual property rights of non-residents or for fulfillment of obligations under promissory notes may now be certified directly by the resident payer. It is no longer necessary to provide their notarized copies. However, the banks retain the right to request the Ukrainian translation of documents executed in a foreign language.
  7. For obtaining the NBU’s permit for performance of currency transactions associated with payment for services and works of non-residents, the respective calculation certified by the non-resident is not required any more.
  8. Banks and other financial institutions that engage in foreign exchange transactions are permitted to set different rates for the purchase and sale of foreign currency in their units and exchange points located in different places. In addition, changing rates for purchase and sale of foreign currency during one trading day is also permitted for banks and financial institutions engaged in foreign exchange transactions.

Until 14 September 2016, the following restrictions will remain in force: 
  • Foreign currency purchase and transfer for the purposes of returning abroad the funds received from the sale of Ukrainian issuers’ securities, corporate rights in Ukrainian entities, funds received from the Ukrainian entities’ capital reduction or as the result of withdrawal from its participants are prohibited.
  • Early loan repayment in foreign currency to non-residents is prohibited, while a change of interest payment period within 180 days is allowed.
  • Foreign currency purchase and transfer on the basis of the NBU individual licenses is prohibited if the sum of payment under such licenses exceeds USD 50,000.00 per month, with a few exceptions whose list, however, has not been changed.
  • The term for settlement under export-import operations should not exceed 90 calendar days.

Generally, such changes may hardly be called revolutionary, however, several regulatory derogations, primarily concerning the possibility of payment of dividends and facilitation of settlements in foreign currency, will not only allow the market participants to feel themselves more freely, but will probably also contribute to the restoration of the confidence of investors whose attention Ukraine continuously struggles to attract.