Legislative changes in the field of currency regulation

DLA Piper
Kyiv, Ukraine, Thursday, August 23, 2012

As of 10 November 2012, the registration procedure for agreements, which provide for the discharge by residents of liabilities to non-residents, will change.

On 15 June 2012, the Board of the National Bank of Ukraine adopted Resolution No. 246 ("Resolution") introducing amendments to Regulation No. 270 on the procedure for residents to obtain foreign-currency credits and loans from non-residents and the procedure for residents to provide foreign-currency loans to non-residents .

Amendments

The Resolution approves a new procedure for registration of such agreements (and amendments to such agreements) concluded by resident borrowers:
Now, instead of applying to a territorial branch of the National Bank of Ukraine ("NBU") for registration of an agreement, a resident borrower will apply to the authorized bank which has agreed to process transactions under the agreement ("Servicing Bank").
Following receipt from a resident borrower of notice of the agreement (or notice of amendments to the agreement) along with a set of required documents, the Servicing Bank shall review such notice, certify it with the signature of a bank employee and the bank's stamp, and submit the set of documents to NBU's territorial branch.
The NBU's territorial branch shall register the agreement with the electronic register of notices on agreements and shall issue a stamped notice on agreement registration, in the form of a registration certificate.

Under the Resolution natural persons who are not registered as an entrepreneur can only use foreign currency loans for the following purposes:
Settlement of accounts with non-residents to discharge the natural person's own liabilities for payment for goods (works, services);
Sale of foreign currency in hryvnia on the Ukrainian interbank foreign exchange market, provided that amounts in hryvnia will be credited to the natural person's current account with the authorized bank for the purpose of their subsequent use in Ukraine in cashless form or for withdrawal of cash in the national currency.

The amendments shall become effective as of 10 November 2012.

Changes in legal relations between borrowers and lenders in respect of invalidation of loan agreements.

On 25 July 2012, Verkhovna Rada of Ukraine registered a draft Law of Ukraine No. 11029 "On Introduction of Changes to Certain Legislative Acts of Ukraine Regarding Discharge of Business Obligations" introduced by the Cabinet of Ministers of Ukraine. This draft law contains provisions for the amendment of the Civil Code of Ukraine with a new Article 10571, which sets out the legal consequences of invalidation of a loan agreement, one of which is to enable the court, upon the lender's request, to attach the property provided as security by the borrower or its guarantor under the agreement that has been declared invalid. The attachment may be removed, if the borrower has paid the lender the amount determined by the court within 30 days of the judgment taking effect. In case of delay, the lender will be entitled to file a claim in court to enforce against the attached property.

NBU initiates mandatory sale of foreign currency proceeds of foreign trade activities.

On 25 July 2012, the National Bank of Ukraine submitted a draft law No. 11033 to Verkhovna Rada of Ukraine, which authorises the NBU to introduce a mandatory requirement for foreign trade entities to sell a portion of the foreign currency proceeds they earn for a period of up to 6 months. In addition, this draft law entitles NBU to temporarily change the deadlines for settlement of accounts under export and import transactions.

We hope that this information will be helpful. Should you have any questions, please do not hesitate to contact us.

Oleksandr Kurdydyk

Partner

T +380 (44) 490 95 70

F +380 (44) 490 95 77

E oleksandr.kurdydyk@dlapiper.com

Rodion Ignatenko

Senior Associate

T +380 44 495 92 82

F +380 44 490 95 77

E rodion.ignatenko@dlapiper.com

DLA Piper Ukraine LLC is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities.

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