On January 4, 2019, the National Bank published a package of regulatory acts, which are a prerequisite for the full functioning of the new Law of Ukraine «On Currency and Currency Operations». What changes should be accepted in connection with the liberalization of the currency legislation of Ukraine? What are the main restrictions in action?
The currency legislation of Ukraine has long needed to be changed. Based on the outdated Decree of 1993 and the uncounted regulatory acts of the National Bank of Ukraine, it reminded a slow-moving monster, which only prevented business from developing. In addition, the situation was aggravated by the interim NBU regulations designed to resolve the financial crisis of 2014. These regulations significantly limited the rights of subjects of currency operations.
However, 2018 was marked by a change of the paradigm and adoption of a completely new regulation in the currency relations. Continuing the ideas of the new Law of Ukraine «On Currency and Currency Operations», the NBU presented the draft of new regulatory acts which will come into force on February 7, 2019.
Among the changes to be expected:
- increase in the period for calculating export-import contracts – from 180 to 365 days;
- abolition of currency supervision over export-import operations to 150 thousand UAH;
- free use of accounts of legal entities abroad is allowed;
- cancellation of individual licenses for currency transactions – they will be replaced by a system of electronic limits (2 million euros/year for legal entities, 50 thousand euros/year for individuals);
- cancellation of sanctions in the form of termination of foreign economic activity for breach of terms of payments;
- cancellation of restrictions on early repayment of external obligations;
- free realization of operations on accounts of legal entities non-residents in Ukrainian banks;
- cancellation of registration of external borrowings;
- online-purchase of foreign currency by individuals;
- an increase in the limit for foreign currency transfers abroad without opening an account for individuals – from 15 to 150 thousand UAH/year;
- permission to invest in Ukraine not only in the currencies of the first but also the second group of classifiers of currencies.
Unfortunately, other currency restrictions are still in force. Such a step is explained by the need to stabilize the financial market by the National Bank.
Of course, for a full restart of the investment landscape in Ukraine, it is desirable to abolish all existing currency restrictions and cease to restrain the free movement of capital. However, it is hoped that due to the liberalization of the NBU’s policy, this will be achieved by the end of 2019.