The National Bank of Ukraine (NBU) is further easing currency controls
The NBU has further eased the currency control regulations imposed on 24 February 2022 in response to russia’s ongoing military aggression. NBU’s aim in easing the controls is to boost investment activity.
Paying for war risk coverage is allowed
Ukrainian residents may now pay foreign companies for war risk coverage with respect to damage caused by russia’s invasion of Ukraine (including lost profit), provided the foreign companies are fully or partially owned by foreign states.
Payments under certain guarantees and suretyships are allowed
Prior to the new change, Ukrainian sureties/guarantors could not purchase and transfer foreign currency to pay under suretyships/guarantees provided to non-residents. Following the new change, Ukrainian residents may now pay under suretyships/guarantees that they have provided in connection with Ukrainian borrowers’ obligations under cross-border loans that are allowed for repayment during martial law.
Ukrainian companies may now pay non-resident sureties, guarantors or security providers under recourse claims once the latter has repaid the Ukrainian borrowers’ debt under loans guaranteed/secured by international financial institutions, foreign export-credit agencies and companies owned by foreign states/foreign state-owned banks.
Ukrainian companies can purchase foreign currency for onshore DSRAs
Prior to the new change, Ukrainian borrowers of international finance institutions including EBRD, IFC, EIB, NIB, NEFCO, BSTDB and others (“IFIs“) were not allowed to purchase foreign currency to replenish DSRA/pledged accounts. These transactions are now allowed, provided that the foreign currency purchased is only used for discharging debt obligations under loan agreements with IFI lenders. However, non-IFI borrowers still do not have a similar exemption.
Paying fees in relation to sovereign transactions is allowed
Ukrainian residents may now pay fees to foreign banks for services provided in connection with Ukraine’s sovereign borrowing transactions.
Dividend payments to repay certain coupons under Eurobonds have been allowed
Subject to certain requirements, Ukrainian companies may now pay dividends to their foreign shareholders to repay coupons under Eurobonds due after 10 July 2024, that are traded on foreign stock exchanges.
For more information, please contact Olexiy Soshenko, Managing Partner or Olesia Mykhailenko, Counsel.