Ukraine: Simplified Pre-payments for Imports
CMS Cameron McKenna,
Kyiv, Ukraine, Tue, March 16, 2016
On 3 March 2016, the National Bank of Ukraine (the “NBU”) issued Regulation No. 139 (“Regulation No. 139”), which introduces amendments to NBU Regulation No. 124 dated 23 February 2015 (“Regulation No. 124”). According to Regulation No. 124, importers are obliged to use a documentary letter of credit (LC) confirmed by a first rate bank in order to make any advance payments in respect of the import of goods under a foreign commercial contract, the total value of which exceeds USD 500,000 (or the equivalent in other currency).
Regulation No. 139 simplifies import operations and resolves inconsistencies that existed under Regulation No. 124 by expressly introducing a list of goods exempted from the mandatory LC requirement. The exempted goods include oil, natural gas, non-irradiated fuel elements, electricity, gasoline, fuel oil, diesel fuel oil, military goods and services and any other goods purchased by Ukrainian importers using the funds borrowed from international financial institutions (EBRD, EIB, IFC etc.) or received pursuant to international treaties to which Ukraine is a party. Nevertheless, advance payments for the import of exempted goods under foreign commercial contracts that exceed a total value of USD 50,000 are subject to NBU approval.
Regulation No. 139 became effective on 5 March 2016.
Regulation of the National Bank of Ukraine “On Peculiarities of Certain Foreign Currency Transactions” No. 124 dated 23 February 2015;
Regulation of the National Bank of Ukraine “On Introducing the Amendments to Regulation of the National Bank of Ukraine dated 23 February 2015 No. 124” No. 139 dated 3 March 2016.
Daniel Bilak, Senior Partner, Daniel.Bilak@cms-cmck.com
Vyacheslav Ovechkin, Senior Associate Vyacheslav.Ovechkin@cms-cmck.com