6 March 2018
Liberalization of FX Restrictions

Effective as of 03 March 2018, further liberalization steps were adopted by the NBU by its resolution No. 19 (the “Resolution”).

Early repayment of loans

Ukrainian borrowers are now allowed to make early repayment of loans granted by foreign lenders, subject to compliance with the maximum threshold of USD 2 million (or its equivalent in other foreign currency) per one calendar month.

Furthermore, early repayment restriction shall not extend to loans if the debt is intended to be repaid out of funds granted by a foreign lender under a new loan agreement, in cases where (i) such new loan agreement provides for extended repayment date as compared to the previous loan agreement, and (ii) the funds under a new loan agreement are used for repayment purposes solely.

Repatriation of dividends

The NBU softened the current restriction on repatriation of dividends. Foreign investors are permitted to buy foreign currency and transfer the funds abroad for the purposes of repatriation of corporate/stock dividends accrued for the period preceding 2017 subject to adherence to the maximum threshold of USD 7 million (or its equivalent in other foreign currency) per one calendar month.

Mandatory conversion of FX funds

The NBU has retained currently effective requirement to convert 50% of FX proceeds received by legal entities (except for banks) and individual entrepreneurs in major foreign currencies (such as USD, EUR, GBP) and Russian ruble. At the same time, the above restriction will no longer apply to funds granted to Ukrainian companies under loan agreements by foreign lenders for the purposes of debt refinancing (including foreign debt and bank debt).

The aforesaid changes follow positive developments and tendencies in FX environment and are expected to facilitate the existing currency control regulatory framework.

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