Foreign exchange operations in a new way: Yulia Stusenko named the main 5 changes in the Currency Law for Business

On February 7, 2019, the Law “On Currency and Foreign Exchange Transactions” was enacted, with the adoption of which the business pinned its hopes on the liberalization of the foreign exchange market in Ukraine. What has changed since today in the legal framework of currency regulation?

Associated Partner of Skliarenko, Sydorenko and Partners, Yulia Stusenko, told the edition of Law and Business about the main novelties for business:

1. For exporters, terms of return of currency earnings in 180 days are canceled. Now the question of the deadlines for settlements on the export and import of goods will be determined by the National Bank. By the Decree of the Board of 05.01.2019 No. 5, National Bank determined such period at the level of 365 calendar days.

Another resolution of the Board dated 02.01.2019 No. 7 of the NBU extended these deadlines to the unfinished operations of the resident in export and import of goods for which the bank did not violate the 180-day settlement period by 7 February 2019.

Thus, exporters were able to make settlements on foreign economic contracts within a doubled deadline, including on operations in progress. At the same time, it should be borne in mind that for the delay of this period the new law established responsibility in the form of penalty for each day of delay in the amount of 0.3% of the amount of funds not received under the relevant contract.

2. From now on, legal entities and individuals, when receiving credits (loans) from abroad, do not need to register them with the NBU and inform the NBU about changes in such credits (loans). This is a significant concession, because the rather lengthy procedure was bureaucratic and involved the submission of a significant set of documents. The lack of registration threatened fines.

3. Individual licenses have been revoked when invested by residents - legal entities and individual entrepreneurs abroad for a total of up to 2 million Euros inclusive during the calendar year. Resident individuals who are not entrepreneurs without obtaining an individual license from the NBU are allowed to carry out foreign exchange operations to transfer funds from Ukraine to invest abroad / place funds on their account outside Ukraine during the calendar year for a total amount not to exceed in aggregate 50 thousand euros inclusive. And operations up to 150 thousand hryvnias in equivalent in general will no longer fall under currency control.

4. Taking into account the existing restrictions established by the legislation, it is possible for residents to open accounts with foreign financial institutions and carry out currency operations through such accounts, as well as acquire currency values abroad, carry out their cross-border movement and (or) cross-border transfer. This will allow businesses in Ukraine to freely open accounts abroad and accumulate foreign currency on them, to invest in foreign real estate and securities.

5. Residents-legal entities and individual entrepreneurs-entrepreneurs to hedge the risks of a change in the exchange rate of foreign currency on export and import of goods are allowed, as an exception, to use the services of banks to carry out operations on the purchase and sale of foreign currency for hryvnas under t  he conditions of "forward" (with foreign currency or without delivery) and operations on the terms of margin trading for the purchase and sale of foreign currency / banking metals for the hryvnia.

The expert also drew attention to the fact that certain significant currency restrictions for businesses remained unchanged. In particular, the requirement for the mandatory sale by exporters of 50% of foreign exchange earnings. In addition, legal entities - exporters and importers will not be able to take advantage of the possibility of acquiring currency on the interbank market online and still have to submit bids to the servicing bank for the purchase of currency, which are executed by banks only the next day.