Ukraine: NBU further prolongs capital control regulation restrictions


On 28 March 2014 the National Bank of Ukraine (the “NBU”) issued Regulation No. 172 “On Regulating of Financial Institutions’ Activities and Performance of Currency Operations” (“Regulation No. 172”), which replaced the NBU Regulation No. 49 dated 06 February 2014 (“Regulation No. 49”). Regulation No. 172 will remain in effect until 01 May 2014.

Regulation No. 172 slightly softens the restrictions, previously imposed by Regulation No. 49, and aims to ensure the stability of the Ukrainian national currency and sustainability of the banking system in Ukraine.

Under Regulation No. 172:

1. The rule under which legal entities and private entrepreneurs are required to credit the relevant amount in UAH to the bank's nominated internal (analytic) account in order to buy foreign currency, is prolonged. However, as of 01 April 2014, the period for which the bank must hold the relevant amount in UAH was reduced to two business days.

2. Individuals are now allowed to sell foreign currency up to an amount that does not exceed 150,000 UAH, without having to present identification documents.

3. The purchase of foreign currency by individuals is restricted to the equivalent of 15,000 UAH per one business day within the same banking institution.

4. The 15,000 UAH per day limit for withdrawal of foreign currency from current and deposit accounts is prolonged. However, this restriction applies to the withdrawal of cash both within and outside the territory of Ukraine regardless of the number of accounts that the customer has with the same banking institution.

5. The limitation, according to which foreign currency deposits may only be withdrawn early in UAH at the foreign currency sale rate of the respective servicing bank as of the day of such withdrawal, is prolonged. The same applies to early payments under deposit certificates nominated in foreign currency.

6. The prohibition on early prepayment by residents under cross-border loan agreements is broadened and prolonged. While Regulation No. 49 only prohibited prepayment under cross-border loan agreements through foreign currency, Regulation No. 172 completely prohibits such early payments, including through a company’s own foreign currency income.

7. The restriction on foreign currency purchases for the purposes of making investments abroad and covering part of insurance reserves by insurers is abolished.

8. An individual (resident or non-resident) can buy foreign currency at the equivalent of up to 150,000 UAH per month, upon providing relevant documentary evidence, exclusively from his or her current account. An individual resident can also buy foreign currency without relevant documentary evidence (from a foreign currency account or otherwise) up to an amount not exceeding 15,000 UAH per month.

9. The issuance of saving (deposit) certificates by banks is suspended.

Legislation: Regulation of the National Bank of Ukraine “On Regulating of Financial Institutions’ Activities and Performance of Currency Operations” No. 172 dated 28 March 2014.