Kyiv Post Legal Quarterly - - Contents - Kateryna Bredu­liak Se­nior as­so­ci­ate, Evris 52 Bo­hdan Kh­mel­nyt­sky, Kyiv, Ukraine, 01030. of­fice@evris.law, www.evris.law

One dream of busi­ness is the “visa – free” move­ment of cap­i­tal and cur­rency. The long- awaited revo­lu­tion­ary Law "On Cur­rency and Cur­rency Op­er­a­tions" is meant to pro­vide just that: cre­at­ing con­ve­nient con­di­tions for do­ing busi­ness in Ukraine, while at­tract­ing for­eign in­vestors with its lib­er­al­ism. How­ever, in­vestors’ in­ten­tions in 2019 de­pend on not only free cur­rency move­ment. Mak­ing a de­ci­sion on for­eign in­vest­ment, in­vestors also an­a­lyze the level of cor­rup­tion, the rule of law, and the ex­pe­ri­ences of oth­ers do­ing busi­ness over the past four or five years in the coun­try. At the mo­ment, banks and for­eign com­pa­nies in­volved in var­i­ous spheres of the econ­omy are in a pos­i­tive mood, and ex­pect an in­flow of for­eign in­vest­ments into Ukraine.

With the im­ple­men­ta­tion of the law from Fe­bru­ary 2019, the fol­low­ing changes are ex­pected:

• the dead­line for ex­port and im­ports pay­ments is pro­longed to 365 days (cur­rently

180 days);

• cur­rency con­trols are abol­ished for for­eign eco­nomic ac­tiv­ity up to UAH 150,000;

• Ukraini­ans are al­lowed to in­vest abroad with­out in­di­vid­ual li­censes, the sys­tem be­ing re­placed with e- lim­its;

• in­ef­fec­tive ad­min­is­tra­tive pres­sure on banks and their clients is re­moved;

• sanc­tions are can­celed in the form of ter­mi­na­tion of for­eign eco­nomic ac­tiv­ity the

case of vi­o­la­tion of ma­tu­rity dates;

• non- res­i­dents are given equal rights to res­i­dents of Ukraine in the sphere of cur

rency trans­ac­tions;

• can­cel­la­tion of the reg­is­tra­tion of loans from non- res­i­dents;

• cur­rency pur­chases made on­line by in­di­vid­u­als – the same as the limit on cash

cur­rency pur­chase (cur­rently up to equiv­a­lent of UAH 150,000);

• re­peal of the ban on mak­ing pay­ments in cur­rency for life in­sur­ance;

• res­i­dents can in­vest in se­cu­ri­ties in global mar­kets and send funds to any bank

of the world;

• can­cel­la­tion of li­censes for cur­rency trans­ac­tions with se­cu­ri­ties for stock mar­ket


• only two types of li­censes in place: bank ( in­cludes cur­rency li­censes) and cur­rency – for non- bank fi­nan­cial in­sti­tu­tions.

Cur­rency li­censes will be is­sued with­out a set limit. Ac­tive li­censes are valid un­til their ex­pi­ra­tion and a er ex­piry will be reis­sued. Postal op­er­a­tors will be able to con­duct cur­rency ex­change trans­ac­tions in cash and trans­fer funds.

The NBU is given seven months to adopt reg­u­la­tory acts in ac­cor­dance with the Law. Un­til the im­ple­men­ta­tion of the Law, cur­rency trans­ac­tions are reg­u­lated by the De­cree of the Cabi­net of Min­is­ters of Ukraine "On the Sys­tem of Cur­rency Reg­u­la­tion and Con­trol" dated Fe­bru­ary 19, 1993, No. 15- 93, the Law "On the Pro­ce­dure for Set­tle­ments in Ukraine" and a large num­ber of in­struc­tions, reg­u­la­tions, let­ters and ex­pla­na­tions from the NBU. From Fe­bru­ary 2019, these doc­u­ments are ter­mi­nated, and by this time the reg­u­la­tor plans to re­duce their num­ber as much as pos­si­ble. It is planned that in­stead of the cur­rent 56 reg­u­la­tory acts, there will be only seven, on: • Mar­ket struc­ture and trade • Set­tle­ments, pur­chases and trans­fers • Cross- border trans­fers • Cri­te­ria for im­ple­ment­ing pro­tec­tion mea­sures, and their gen­eral list • Pro­tec­tion mea­sures in the cur­rency mar­ket • Other in­stru­ments for sta­bi­liz­ing the money mar­ket • Meet­ing of pay­ments’ dead­lines

Apart from the lib­er­al­iza­tion agenda, the NBU re­mains fo­cused on fight­ing against money laun­der­ing and tax avoid­ance. As be­fore, cur­rency op­er­a­tions that ex­ceed the thresh­old of fi­nan­cial mon­i­tor­ing lim­its are sub­ject to con­trols.

The NBU con­firms that not so many sanc­tions ap­ply in the case of oper­a­tional vi­o­la­tions. Penal­ties ap­ply if money laun­der­ing or tax avoid­ance is de­tected. Ap­ply­ing a risk- ori­ented ap­proach, the NBU has re­duced the num­ber of il­le­gal cap­i­tal out­flows abroad.

The new Law cer­tainly ex­pands the op­por­tu­ni­ties for busi­ness, and will con­trib­ute to the growth of the na­tional econ­omy. But along with this, the fi­nan­cial sta­bil­ity of the cur­rency mar­ket in Ukraine de­pends on the re­quire­ments and re­stric­tions of the NBU, so the NBU will strictly con­trol all for­eign ex­change op­er­a­tions.

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