Tuesday, July 14, 2015

National Bank provided explanations regarding the foreign exchange control rules governing online export of services

In an effort to address the needs of the modern services market and in response to a large number of 
requests related to the exercise of control over residents' export operations conducted via the Internet, 
the National Bank of Ukraine hereby informs of the following.
When residents settle their payments, banks require their clients to produce copies of contracts 
entered into with nonresidents, certificates and other documents confirming performance of works, 
provision of services, and export of intellectual property rights.  In order to simplify the settlement 
confirmation procedure and ensure compliance with all the necessary procedures, residents 
are allowed to use in the capacity of a foreign economic contract documents that are commonly 
used in international practice, providing that these documents meet certain requirements.

In particular, these documents can be deemed a contract if they are executed in a proper manner, 
contain sufficient information about the counterparties that settle payments, terms and requirements 
under which obligations are assumed, as well as the counterparty's acceptance of an offer and 
the execution of deeds to this effect. These documents may include a firm offer and the confirmation 
of its acceptance by the counterparty, an invoice or other documents.
If under the terms of an export contract, an invoice or any other document is deemed to be 
the document confirming performance of works, provision of services to the nonresident, and 
export of intellectual property rights, a bank client will be required to submit this very document to 
the bank in order for the latter to exercise foreign exchange control over export operations. 
This document will constitute grounds for the bank to determine the settlement period under 
the relevant export operation in accordance with the timeframes established by the applicable laws.
Please note that it is acceptable for a resident to certify the copies of documents to be submitted to 
the bank by signing and applying the stamp to it (if available).
As regards the requirement to translate the documents, banks by themselves are allowed to determine 
whether it is necessary for their clients to translate into Ukrainian the contracts executed in a foreign 
language and other documents required for the exercise of foreign exchange control over clients’ 
export and import operations by banks.
Commenting on the decision to simplify the foreign exchange control rules governing residents’ export 
operations conducted via the Internet, Deputy Governor of the National Bank of Ukraine: “Such a step 
by the National Bank of Ukraine is a win-win situation for Ukraine: Entrepreneurs working in 
IT industries will be able to focus on their core businesses without having to spend valuable time 
on bureaucratic procedures and paper work, whereas the market will expand at a faster pace due to 
the deregulation. 
This will lead to GDP growth and encourage inflows of foreign exchange into the country, which 
yesterday was held in accounts with foreign banks. I hope that other sectors will take a similar 
approach to the development of IT-industry. There is still much yet to be done by the National Bank 
of Ukraine for the deregulation and de-bureaucratization of the foreign exchange market.   That is, so
to speak, one of the first steps in this direction.
For reference.
The aforementioned rules apply to the following business activities:
freelance industry (software engineers, designers, copywriters, and translators);
direct sales  (software engineers, designers, copywriters, and translators);
online application stores (software engineers), outlets (photographers, illustrators, cameramen);
trading sites (commercial agents promoting the sale of goods made in Ukraine);
advertising intermediaries (owners of websites, bloggers), etc.



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