Amid reports of substantial volumes of foreign exchange proceeds going unreceived under certain export transactions, the National Bank of Ukraine (NBU) has taken steps to shorten the mandatory settlement deadlines for the export of certain agricultural products.
The list of affected products includes wheat, a mixture of wheat and rye (meslin), rye, barley, oats, corn, soybeans, seeds of barbarea and rapeseeds, sunflower seeds, various types of oil (soybean, sunflower, safflower, cottonseed, barbarea, rapeseed and mustard oil), and press cake.
Effective as of 11 November 2023, the mandatory settlement period for exporting these goods has been reduced from 180 days to 90 days. As a result, local agricultural exporters must ensure the receipt of foreign currency proceeds in their Ukrainian bank accounts within 90 calendar days from the date of exporting these goods.
The NBU's decision has been adopted amid the Ukrainian government's broader efforts to increase supervision of agricultural exporters' compliance with local foreign exchange regulations.
It is important to note that the settlement deadlines for exporting and importing other categories of goods remain 180 days, subject to certain exceptions.
Context
These recent changes have been enacted under the ongoing martial law regime, instituted in Ukraine on 24 February 2022. Martial law has resulted in significant capital outflow restrictions and stricter foreign exchange controls.
Currently, the overall foreign exchange regime in Ukraine remains highly restrictive, and transactions not explicitly permitted by the NBU are prohibited during the martial law period or until the NBU lifts the relevant restrictions.
By Serhiy Chorny, Managing Partner, Bohdan Diakovych, Senior Associate, and Polina Korotka, Junior Associate, Baker McKenzie
