On 10 September 2024, amendments to the foreign currency (“FX”) regulation came into force, aimed at easing restrictions on business and, on the other hand, at introducing measures to counteract capital outflows.
Specifically, the latest package of amendments, introduced by Resolution No. 108 of the National Bank of Ukraine (the “NBU”) dated 06 September 2024 (“Resolution No. 108”), includes the following measures:
- Permission to transfer funds to pay taxes in the EU countries
E-commerce entities that are residents of Ukraine and registered as VAT payers in EU Member States can now transfer funds in FX to pay mandatory payments to the budget of the country of registration. This easing is intended to support small and medium-sized businesses that export their goods to EU markets.
- An option to compensate for coupon payments made on Eurobonds
Resolution No. 108 allowed companies that have not had any incomplete currency supervision of their exports of goods in the last 12 months to reimburse affiliated non-resident legal entities that are issuers of Eurobonds for the amount of coupon payments made for the period from 24 February 2022 to 09 July 2024. Notably, such payments may be made exclusively using own funds in FX, not borrowed ones.
These amendments are complementary to the easing of dividend payments for Eurobond repayment introduced in July this year, which we described in more detail in this issue of Legal Alert.
- Permission for transfers to purchase carbon emission quotas
State-owned companies can now make transfers to non-resident entities in order to purchase emission quotas to cover or compensate for carbon dioxide (CO2) emissions arising from aviation activities. This amendment is designed to ensure uninterrupted servicing of defence procurement, air transportation abroad and support military-technical cooperation with Western partners.
- Permission to make payments under reinsurance agreements
Resolution No. 108 provided the possibility of making all necessary payments under reinsurance agreements concluded with foreign nuclear pools, and not only payments for reinsurance premiums or payments, as was the case before. This mitigation will allow the Nuclear Insurance Pool to fully fulfil its obligations to partners.
- Limits on payments for certain goods and services
The NBU has set a monthly limit on foreign payments made using payment cards in the amount of:
- UAH 100,000 for transactions with merchant codes 5094 (precious stones, metals and jewellery), 5944 (watches, jewellery and silver items) and 5972 (coin and stamp shops)
- UAH 500,000 for transactions with merchant code 6513 (real estate agents and managers)
These changes are justified by the need to prevent capital outflow from the country and prevent attempts to circumvent the established foreign exchange restrictions.
By Roman Stepanenko, Partner, and Kateryna Oliynyk, Counsel, Asters
