Easing of NBU currency restrictions since the beginning of the full-scale war

The changes concern several areas. The vast majority of them will enter into force on May 4, 2024, only the possibility to repatriate "new" dividends will start on May 13, 2024.

First, all currency restrictions for the import of works and services are abolished.

The National Bank of Ukraine enables businesses to buy and transfer foreign currency abroad for the purpose of importing works and services. In connection with these changes, the resolution of the Cabinet of Ministers of Ukraine dated February 24, 2022 No. 153 "On certain issues regarding ensuring the implementation of imports" becomes invalid as of May 7, 2024 .

In addition, the NBU separately provided the opportunity for businesses to buy foreign currency and transfer funds abroad to pay airport and port fees, fines, and membership fees. This is due to the fact that the aforementioned resolution of the Government of Ukraine also partially contains relevant operations.

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Such changes will support Ukrainian producers and provide an opportunity for domestic businesses to enter new markets, including those from which the producers of the aggressor country are displaced due to sanctions. Accordingly, this will contribute to a gradual increase in export revenue to Ukraine. We would like to remind that a similar easing of restrictions on the import of commodity products was implemented in July 2022.

Secondly, the possibility of business to repatriate "new" dividends is ensured.

Enterprises will be able to repatriate dividends on corporate rights or shares abroad, accrued based on the results of operations for the period starting from January 1, 2024. This relief does not apply to the payment of dividends resulting from retained earnings of previous periods or reserve capital.

In order to minimize risks to macro-financial stability, the National Bank set a monthly limit for the repatriation of "new" dividends at the level of 1 million euros equivalent. Monitoring of compliance with this norm will be ensured thanks to the automated information system of the NBU "E-limits".

Providing the opportunity to repatriate "new" dividends will contribute to the inflow of new investments into Ukraine, minimize the risks of the collapse of the activities of enterprises with foreign capital and support the economy.

Thirdly, it is possible to transfer funds abroad under leasing / rental.

Legal entities and natural persons-entrepreneurs will be able to transfer funds abroad for settlements under leasing / rental contracts without additional restrictions regarding the subject of leasing / rental, as well as the date of conclusion of the contract. Previously, such a permit applied only to the leasing / renting of vehicles.

Corresponding changes will also enable businesses to settle under previously concluded leasing/rental contracts, which will in fact make it possible to conclude new contracts and bring to Ukraine the necessary equipment for conducting business activities.

Fourthly, restrictions on repayment of "new" external loans are eased.

The NBU is simplifying the conditions for the purchase of foreign currency by residents in order to service and repay "new" external loans, the funds for which are received in foreign currency from abroad after June 20, 2023, to the accounts of borrowers in Ukrainian banks.

In particular, the minimum term of using a "new" loan, upon reaching which it is allowed to buy foreign currency to repay such a loan, is reduced from three to one year. Accordingly, the ban on buying foreign currency to repay "new" loans will be applied exclusively to repayment of short-term loans with a term of up to one year.

In addition, the NBU will allow businesses to buy foreign currency to pay interest on "new" loans, regardless of the term of the loan.

All this will contribute to increasing the opportunities of Ukrainian business to attract new external loans not only from official partners, but also from private investors.

Fifthly, it is possible to repay interest on "old" foreign loans.

Resident borrowers will be able to transfer funds abroad to pay interest payments on "old" external loans, which, according to the terms of the credit agreement, are due from February 24, 2022.

Within the limits of one contract, for overdue (as of May 1, 2024) interest payments, it is possible to transfer no more than EUR 1 million equivalent per calendar quarter. However, this limitation will not apply to future scheduled interest payments.

To protect macro-financial stability, additional conditions are also provided for the following operations:

absence of overdue debt under the relevant credit agreement as of February 24, 2022;
it is prohibited to purchase and transfer funds as a result of credits or loans received from residents;
there is no provision for early payment or restructuring of overdue payments.

These changes will make it possible to minimize the probability of defaults of Ukrainian borrowers and provide more favorable conditions for the restructuring of external loans, as well as improve the conditions for attracting new capital to Ukraine.

Sixth, the restrictions on the transfer of foreign currency from representative offices to the benefit of their parent companies are eased.

The NBU will allow representative offices of international card payment systems and foreign airlines to purchase and transfer foreign currency abroad to the account of a non-resident — a legal entity whose interests these representative offices represent in Ukraine. The monthly limit for carrying out such operations (by one representative office of one company) is set at the level of 5 million euros equivalent. Such changes, in particular, will contribute to the further development of cashless payments in Ukraine.

These and a number of other technical changes were introduced by the resolution of the Board of the National Bank of Ukraine dated May 3, 2024 No. 56 "On Amendments to the Resolution of the Board of the National Bank of Ukraine dated February 24, 2022 No. 18" . The vast majority of provisions of the document will enter into force on May 4, 2024, only in the part of the repatriation of "new" dividends, the changes will enter into force on May 13, 2024. The consolidated text of NBU Resolution 18 is here.

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