The National Bank of Ukraine significantly eases currency control

From May 4, 2024, the NBU will cancel many currency control restrictions introduced due to the invasion of Russia, namely:

1. Repatriation of "new" dividends is allowed

From February 24, 2022, the ban on paying dividends from Ukraine is in effect. From May 13, 2024, the NBU allows the repatriation of eligible dividends in the amount of EUR 1 million (or equivalent) per month. Eligible dividends include dividends accrued from January 1, 2024, but do not include undistributed dividends from prior periods and reserve capital.

2. Interest payable on "old" cross-border loans is extended

Previously, for loans received before June 21, 2023, it was possible to pay only a small part of the interest accrued during the first half of 2022. Interest on such loans maturing from February 24, 2022 to April 30, 2024 can now be paid in the amount of EUR 1 million (or its equivalent) per calendar quarter. Interest on these loans maturing after April 30, 2024 can be paid without monetary restrictions.

3. Restrictions on repayment of "new" cross-border loans are further relaxed

In 2023, the NBU allowed Ukrainian borrowers to service loans received after June 20, 2023, under certain conditions. From May 4, 2024, the NBU will cancel some of the most stringent of these conditions. In particular, borrowers can repay the principal amount for loans with a term of up to one year (previously three years), but using only their currency reserves for such payments. However, other payments on these loans, such as interest and fees, are now not limited to available currency reserves, so borrowers can purchase foreign currency to make such payments. For loans that exceed one year, in the first year of such loans borrowers may repay principal and interest as just described above for loans of up to one year, and there is no requirement to use their foreign currency reserves for payments related to the following years.

The above loans are still subject to the maximum interest rate cap of 12% and the early repayment ban remains in place. (However, it should be noted that the restrictions in both paragraph 2 above and this paragraph 3 do not apply to the repayment of sovereign borrowings and loans to international financial institutions - for example, EBRD, IFC, EIB, NIB, NEFCO, etc. - and foreign development institutions - including foreign state banks and EKA.)

4. All currency restrictions on the import of works and services have been abolished

Previously, Ukrainian companies were allowed to make cross-border payments only for certain services provided after February 23, 2021. Current relaxations allow all categories of imported services to be paid abroad. In addition, the changes clarified that payment of fines, compensations, commissions, unforeseen expenses and other expenses is also allowed for import operations.

5. International payments under leasing contracts are allowed

Local businesses now have the ability to transfer funds abroad to settle any leasing/rental contracts. Previously, this exemption only applied to the leasing/leasing of vehicles.

6. It is allowed to collect foreign currency for enforcement of court decisions against state-owned companies

Previously, local bailiffs had no clear authority to purchase foreign currency and transfer it abroad (except for certain specific payments related to insurance). Now state executives can collect currency from the state or state-owned companies and transfer it abroad to foreign creditors. Also, if the debtor does not have foreign currency, the bailiff may convert the collected hryvnia amounts into foreign currency, provided that such funds are transferred to the foreign creditor's account opened in Ukraine.

At the same time, it remains unknown whether the NBU intends to extend this benefit to operations with private debtors.

7. Representative offices of international card payment systems and foreign airlines may transfer foreign currency to their parent companies.

The NBU allowed representative offices of international card payment systems and foreign airlines to transfer up to 5 million euros (or equivalent) per month to their parent companies. All other representative offices are prohibited from carrying out such operations.