Long-awaited liberalization of currency control restrictions by NBU

Since the beginning of the full-scale war in Ukraine the National Bank implemented the largest package of amendments lifting some of the currency control restrictions with the aim of improving business and investment climate in the country. By its Resolution of 3 May 2024 No. 54 “On introduction of amendments to the Resolution of the Board of the National Bank of Ukraine dated 24 February 2022 No. 18”, the NBU introduced the following major currency control reliefs:

• All currency restrictions for importation of goods and services were lifted.
• Payment of interest under loans obtained by resident borrowers from non-resident creditors before 20 June 2023 and which interest became due after 24 February 2022 is allowed subject to the following:
• The borrower has no overdue indebtedness as of 24 February 2022;
• Under one loan agreement with interest overdue as of 1 May 2024 the borrower is allowed to transfer currency in the equivalent of not more than Euro 1 million per one calendar quarter;
• Under loan agreements with interest due after 30 April 2024 the interest shall be paid in foreign currency without restrictions;
• The borrowers shall not use loan funds from resident creditors to repay interest due under the loans from non-resident creditors;
• Early repayment under loan agreement is not allowed.
• Payment of principal amount and interest under loans obtained by resident borrowers from non-resident creditors after 20 June 2023 is allowed subject to the following:
• Under the loans obtained for not more than 1 year term the repayment by the borrower of the principal amount shall be allowed only with own (not purchased, not loaned) funds in foreign currency. For the interest payment purchase of foreign currency is allowed;
• Under the loans obtained for more than 1 year term, the repayment by the resident borrower of the principal amount shall be allowed only with own (not purchased, not loaned) funds in foreign currency during the first year of the loan term. For the interest payment purchase of foreign currency is allowed.
• Payment of dividends in foreign currency to foreign investors shall be allowed subject to the following:
• The dividends are due for the period starting from 1 January 2024 (excluding the undistributed profit for other periods);
• The dividends shall be paid to the bank accounts of non-resident investors outside Ukraine (directly by the shares issuer or via depository system of Ukraine);
• A monthly limit of Euro 1 million equivalent shall be set for payment of dividends in foreign currency.
• Legal entities and individuals-entrepreneurs shall be allowed to transfer lease payments in foreign currency abroad under leasing/lease agreements without limitation as to the subject matter of leasing/lease, as well as the date of the respective agreements.

The above reliefs came into effect on 4 May 2024, except for the repayment of dividends provisions which become effective on 13 May 2024.