National Bank of Ukraine eased some foreign exchange restrictions

press release The National Bank of Ukraine has eased some foreign exchange restrictions put in place in the first half of the current year to stabilize the foreign exchange market. The measures to liberalize the foreign exchange regulation are enshrined in NBU Board Resolution No. 581 On Resolving the Situation in the Money andForeign Exchange Markets of Ukraine , dated September 3, 2015. The National Bank has increased the amount of FX cash or investment metals that could be withdrawn from from clients’ accounts per day from UAH 15,000 to UAH 20,000. The easing of restriction is aimed at restoring the confidence in the banking system and encouraging the inflow of FX deposits. In case of purchases of foreign exchange by clients, the regulator has allowed banks not to include the account balances of foreign currency of the 3rd Group of the Classification of Foreign Currencies and Investment Metals.  This would enable clients with FX holdings in nonconvertible currencies to purchase foreign exchange. The authorized banks are allowed to discontinue control over clients’ export transactions for which evidence is available that claims thereunder have been offset against similar counterclaims in foreign currencies that are not subject to the mandatory sale. The amount of such liabilities shall not exceed USD 0.5 million per contract. The surrender requirements have also been revised.  From now on, the surrender requirements shall not apply to funds returned upon the initiative of a foreign bank within a 2-day period. The regulator has repealed the mandatory requirement to submit a certificate of no outstanding tax liabilities issued by the State Fiscal Authority of Ukraine as part of documents.  This will bring relief to importers. The regulator has lifted a ban prohibiting the registration of amendments to agreements on granting FX credits/loans to resident borrowers by non-residents, should the amendments pertain to the replacement of a lender and/or a borrower in certain cases. More specifically, if this replacement pertains to the liquidation and/or acquisitions. At the same time, the National Bank remains involved in efforts to prevent nonproductive capital outflow abroad. In particular, the regulator imposes a ban on purchases of foreign currency for settlements for imported goods that underwent customs clearance procedures before January 1, 2014. This applies to cases when the replacement of a debtor and/or creditor takes place in respect of obligations under foreign trade agreements (contracts).  From now on, such resident companies shall fulfill their fx obligations using their own fx funds. The requirement shall not apply to vital goods. The Resolutions shall take effect starting from September 4, 2015, and remain effective till December 4, 2015, inclusive. However, regardless of the validity period of the aforementioned resolutions, the National Bank is set to move ahead with plans to liberalize the foreign exchange regulation in a gradual manner if foreign exchange market conditions and the economic situation are favorable.