ON MAY 21, 2018, VERKHOVNA RADA OF UKRAINE ADOPTED IN SECOND READING THE LAW OF UKRAINE «ON CURRENCY»
National Bank of Ukraine expects that adoption of the Law will provide ground for departure from obsolete legislation, which restricted currency transactions towards transformation into a transparent and free movement of capital.
As a consequence of adoption of the Law, the Decree of the Cabinet of Ministers of Ukraine dated from February 19, 1993 «On the System of Currency Regulation and Currency Control» and the Law of Ukraine «On the Procedure of Settlements in Foreign Currency» dated from September 23, 1994 will lose their legal force, amendments to some legislative acts are foreseen as well.
Adopted law provides that currency restrictions will be gradually cancelled in the presence of favorable macroeconomic conditions in order not to shake Ukraine’s financial stability.
We would like to note that that changes in currency regulation will not come into force immediately. The Law enters into force next day following the publication date, and is put into effect six months after its entry into force.
The Law will introduce key changes that relate to the following:
- Necessity of obtaining individual licenses for outbound investment is cancelled;
- The requirement for registration of loans from non-residents is cancelled;
- No restriction is set for cross-border transfer of currency values through authorized banks;
- Currency supervision is established for foreign trade activities (FTA) transactions only in the amount exceeding 150 thousand hryvnias;
- Non-residents in the field of currency transactions enjoy the same rights as residents of Ukraine.
As a general rule, currency transactions are carried out without restrictions, except for cases of introduction of protective measures by the National Bank of Ukraine.
National Bank of Ukraine, in the presence of signs of an unstable financial situation of the banking system, significant pressure on Ukraine’s balance of payments, the emergence of circumstances threatening the stability of the banking and / or financial system of the state, has the right to introduce the following protective measures. National Bank of Ukraine has a right to impose these measures for a period not exceeding six months from the date of their introduction.
It should be noted that during six months of transitional period, other regulatory acts of National Bank of Ukraine will be revised in accordance with the Law.