The National Bank of Ukraine continues liberalisation of currency control

The National Bank of Ukraine (the “NBU”) has kept to its prior promises and adopted a number of regulations aimed at further liberalisation of the existing currency control regime.

The most noteworthy changes include:

a) the mandatory sale requirement with respect to foreign currency proceeds was decreased from 75% to 65% of the total amount of such proceeds credited to either local or offshore account of a Ukrainian resident;

b) the ban on repatriation of dividends from Ukraine is lifted subject to the following:

the dividends are paid for the years 2014 and/or 2015;

a foreign investor can repatriate dividends through a single Ukrainian bank, which may be changed by following a special procedure applicable in the case of import and export transactions;

the total amount of dividends which can be repatriated during a month cannot exceed the higher of:

- the equivalent of USD 1,000,000; and

- 10% of the total amount of dividends accrued (but in no event more than the equivalent of USD 5,000,000);

c) the limitation for the sale of foreign currency to one person was increased from the equivalent of UAH 6,000 to the equivalent of UAH 12,000 per day;

d) the limitation of UAH 500,000 on daily withdrawals of UAH from bank accounts was completely abolished;

e) the limitation on daily withdrawals of foreign currency from bank accounts was increased from the equivalent of UAH 50,000 to the equivalent of UAH 100,000; and

f) banks and other financial institutions which render currency conversion services will be permitted to change their commercial exchange rates during the course of their operational day.

The above changes, other than the changes described in paragraphs (b) and (f), became effective on 9 June 2016 and will remain in place until 14 September 2016. The ban on repatriation of dividends will be lifted starting from 13 June 2016, whilst a flexible commercial rate will be allowed from 15 June 2016.

The NBU has expressed its intention to eventually also permit repatriation of dividends accrued for the year 2016 as well as for the years preceding 2014, and to further relax the other currency control restrictions, provided that the situation in the foreign currency market continues to improve.

If you would like to receive further information in connection with the above, please contact Olexiy Soshenko.