On 31 October 2011, the Main Department of the NBU in the city of Kyiv and Kyiv region (the "NBU Kyiv Department") issued a letter (the "Letter") clarifying requirements that apply to loan agreements with foreign lenders and the set of documents submitted with the NBU Kyiv Department for registration.
The main clarifications made by the NBU Kyiv Department were as follows:

1. The Letter prohibits contractual provisions, which require resident borrowers to pay taxes accruing on incomes derived by foreign lenders' under the loan agreements. However, it remains unclear whether the aforementioned tax payment prohibition applies to tax gross-up provisions, which are normally used in loan agreements with foreign lenders.
2. The loan agreement signed by legal entities must bear its parties' corporate seals. In case the legislation of the foreign lender's jurisdiction allows execution of contracts without affixing a seal, the NBU Kyiv Department may require a formal confirmation from the lender referring to the relevant provisions of legislation of such lender's jurisdiction. The Letter is not clear as to the form of document serving such a confirmation. Under unfavorable interpretation, a statement referring to applicable legislation of the lender's jurisdiction certified by a notary (or other certifying authority) and legalized (if applicable) may be required.
3. The Letter provides that the set of documents submitted for registration of the loan agreement must include copies of all documents, which are mentioned in the loan agreement and constitute its integral part (schedules, supplements, memoranda etc.). Apparently, the list of documents that can be required for registration is not narrowly worded which allows substantial room for discretion by the NBU Kyiv Department.
4. An original counterpart of the loan agreement submitted for registration must be stitched. Notably, the Letter is silent as to what stitching techniques should be used by the parties. The stitching requirement should not apply if a notarized copy of the loan agreement is submitted for registration.

Implications
The Letter was issued to the banks located within the area of the NBU Kyiv Department supervision (i.e., the city of Kyiv and Kyiv region) and replicated the clarifications issued by the NBU Kyiv Department on 27 April 2011. Although the Letter appears to be a recommendation rather than a set of new binding rules, it may serve a good explanation of approaches taken by the NBU Kyiv Department officers while reviewing documents submitted for registration. Furthermore, local banks servicing loans with foreign lenders may treat the clarifications of NBU Kyiv Department as mandatory requirements.