Liberalization of currency control

10.07.18 AHK Ukraine - News-Hauptkategorie, Global News

Ausschuss Banken und Finanzdienstleistungen

Parliament has adopted a new law on currency operations designed to liberalize the current currency control regulations, implemented to manage the stability of the UAH. Major changes are based on following principles:

• independence of the National Bank of Ukraine in definition and implementation of monetary and currency policies;

• a flexible exchange rate;

• the use of market instruments for currency regulation is to be prioritized over the use of administrative instruments;

• freedom to perform foreign-currency operations;

• ensuring stability of the financial system and equilibrium of Ukraine’s balance of payments; 

• new legal approach.

What is not explicitly forbidden is allowed A 6 month transition period has been implemented to enable NBU to align its systems and regulations. Furthermore, some more details have been revealed, subject to implementation through National Bank of Ukraine:

• cross-border transfers of currency could be performed without restrictions and exclusively through authorized institutions in accordance with the new procedure established by the National Bank of Ukraine;

• cross-border movement of currency exceeding the equivalent of EUR 10,000 by individuals requires the filing of written declarations with the central executive body responsible for the state’s tax and customs policy;

• Individuals and corporations will be able to maintain offshore accounts with foreign banks, invest in securities and real estate and incorporate foreign legal entities and branches;

• The law will enable non residents to maintain bank accounts and make cross border loans by offshore lenders without NBU registration;

• The current 180 day settlement rule will be cancelled, currency control will be substituted with bank currency oversight for all transactions over UAH 150,000 and the numerous current licenses will be reduced to one.