National Bank of Ukraine changes currency restrictions

On 20 November 2024, the National Bank of Ukraine amended the effective currency restrictions. Relaxation of restrictions is expected to have a positive impact on the development of foreign trade and support for international projects and technical assistance programmes, with additional measures also introduced to help minimise risks related to circumventing currency restrictions currently in effect. 

Among the key currency restriction relaxations are the following: 

1. Making payments for imports of goods is permitted without any restrictions on the supply period (generally, payments for imports of goods are allowed for the supplies occurred after February 23, 2021), provided that the funds are transferred in favour of: 

• a foreign export credit agency (ECA)/foreign state through its authorised representative/a foreign entity whose participants (shareholders) include a foreign state or a foreign bank whose shareholder is a foreign state 

• other non-residents, provided that the import of goods was carried out with the participation (through lending, insurance, guarantee, surety) of a foreign ECA/foreign state through its authorised representative/foreign entity whose participants (shareholders) include a foreign state or a foreign bank whose shareholder is a foreign state. 

In turn, such transfers are subject to a monthly limit of 10% of the amount of overdue debt under the goods import contract (as of 1 November 2024). 

2. It is allowed to transfer foreign currency abroad to make payments under international technical assistance projects without restrictions on the criterion of their funding by specific states. Previously, payments under these projects were only allowed if they were funded by the European Union. 

At the same time, the National Bank of Ukraine has clarified and tightened certain currency restrictions relating to the repatriation of dividends and the use of foreign currency loans for the purchase of foreign currency denominated securities, in particular: 

1. Dividends may be repatriated only under the following conditions: 

• the period of the issuer's activity from the date of state registration to the date of the relevant transaction is not less than 12 months; 

• at least six months have elapsed since the foreign investor/non-resident acquired ownership of the corporate rights/shares of the issuer on which dividends are paid, prior to the date of the relevant transaction. 

  2. It was imposed a prohibition on the provision of foreign currency loans and their use for the purchase of securities denominated in foreign currency.