Back in February 2019, the National Bank of Ukraine (NBU) adopted a number of resolutions that introduced a new regime for regulating foreign exchange transactions, which is usually simply called as “foreign exchange liberalization”.
On June 29, 2021, the NBU adopted a new Resolution No. 62, which entered into force on June 30, 2021, which continues to take further steps towards currency liberalization. The Resolution introduces changes to:
- Regulation on the structure of the foreign exchange market of Ukraine, conditions and procedure for trading in foreign currency and bank metals on the foreign exchange market of Ukraine (Resolution No. 1);
- Regulation on the implementation of operations with currency values (Resolution No. 2);
- Regulation on protection measures and determination of the procedure for carrying out certain transactions in foreign currency (Resolution No. 5).
Purchase and sale of foreign currency and purchase-sale-exchange of bank metals for non-cash funds
In accordance with Resolution No. 62, individuals and legal entities are now allowed to perform following operations through banks:
- purchase by resident and non-resident individuals of cash foreign currency both for cash in hryvnia and for non-cash funds in hryvnia from current accounts of these individuals;
- exchange of cash foreign currency of one foreign state by resident and non-resident individuals for cash foreign currency of another state;
- sale to banks by resident and non-resident individuals of banking metals both for cash in hryvnia and for non-cash funds in hryvnia with their subsequent crediting to current accounts of these individuals;
- purchase of banking metals by resident and non-resident individuals both for cash in hryvnia and for non-cash funds in hryvnia from current accounts of these individuals;
- purchase by legal entities of coins (bank metals) for non-cash funds in hryvnia;
- exchange by resident and non-resident individuals of one bank metal for another bank metal with physical delivery or cash in foreign currency.
In addition to banks, through non-banking institutions it is also possible to perform transactions at cash desks, currency exchange offices for the purchase of cash foreign currency by individuals and the sale of cash foreign currency by individuals for cash or for non-cash funds in hryvnia.
Resolution No. 62 also expands the possibilities for resident individuals to invest abroad. A resident individual can make investments abroad with the participation of a resident securities trader. An individual makes a transfer of funds in foreign currency from his own current account in the bank to the current account (or to the account of accounts payable for settlements in securities for the clients of a securities trader, which is a bank) of a securities trader (opened in the same bank ) with their subsequent transfer to their destination from the current (correspondent) account of the securities trader abroad or to the current accounts of non-resident legal entities opened in Ukraine (except for investment accounts). In this case, the limit of EUR 200,000 must be respected.
List of exceptions for foreign exchange transactions
Resolution No. 62 also expanded the list of transactions to which the limit of EUR 2,000,000 is not applied when carrying out foreign exchange transactions in order to carry out economic activities by residents (legal entities and individual entrepreneurs). Thus, the specified limit is not applied to:
- operations related to the fulfillment of obligations under guarantees, sureties, pledges, as well as operations to reimburse the resident-debtor of funds to the non-resident-guarantor (surety), which was performed secured by a guarantee/ surety of the obligations of the resident-debtor to the non-resident creditor – the exception applies if transactions related with the fulfillment of the main obligation are included in the list of transactions that are not covered by the specified limit of EUR 2,000,000;
- operations on reimbursement by the resident-debtor of funds to the non-resident-guarantor (surety), which has performed obligations of the resident-debtor to the resident-creditor secured by a guarantee/ surety;
- operations carried out on the current (correspondent) account of a securities trader in the event that the securities trader acts on his own behalf (on behalf of an individual), at the insrtuctions and at the expenses of this individual, upon the condition of following the rules regarding established limit for an individual of EUR 200,000.
Thus, the NBU has in a certain way expanded some opportunities for both individuals and legal entities for the purchase and sale of currencies and coins, as well as provided new opportunities for investing abroad.
The full text of Resolution No. 62 can be found at the link: https://bank.gov.ua/ua/legislation/Resolution_29062021_62