NBU Clarifies Some FX Restrictions

Effective 20 November 2024, the National Bank of Ukraine is introducing amendments to the current FX restrictions.
On the one hand, the NBU has eased a number of restrictions to support international cooperation in foreign trade, as well as international technical assistance projects and programs.
On the other hand, the regulator has taken measures to tighten the discipline of compliance with FX restrictions.
The changes will cover several areas.
Transfer of funds to meet obligations under import contracts.

Currently, Ukrainian businesses are allowed to pay for imports only if the goods delivery was/is performed after 23 February 2021.
However, starting from 20 November 2024, Ukrainian enterprises will be able to pay for imports of goods without restrictions on the deadline of delivery to Ukraine, provided that the funds are transferred to:     
a foreign export credit agency (ECA), foreign state through their authorized entity, or foreign entity in which a foreign state or foreign bank is a participant (provided that the foreign state is a participant of that bank) other non-residents, provided that they participate in import transactions (through lending, insurance, guarantee, surety) of a foreign ECA, foreign state through their authorized entity, or foreign entity in which a foreign state or foreign bank is a participant (provided that the foreign state is a participant of that bank). The monthly limit for such transfers is set at 10% of the overdue debt under an agreement for the import of goods (as of 1 November 2024).
Such changes will encourage foreign governments, state-owned banks, and ECAs to maintain and strengthen commercial ties between foreign exporters and the Ukrainian market participants.
They will also allow to minimize the risks of a reduction in potential funding and a decline in Ukraine"s investment attractiveness.
Settlements under international technical assistance projects.
Currently, FX transfers abroad are authorized for making settlements under international technical assistance or cross-border cooperation projects/programs funded by the EU.
At the same time, Ukrainian residents receive technical assistance not only from EU countries but also from other countries for projects funded by foreign donors.
In view of the above, the NBU has authorized, effective 20 November 2024, fund transfers from Ukraine to make payments under international technical assistance projects, regardless of which state/organization finances the project.
Said changes will help to comprehensively regulate payments under international technical assistance projects and will positively impact the position of Ukraine and individual beneficiaries of such assistance, including residents, thereby also contributing to the approval of positive decisions by international donors regarding the continuation of support for Ukraine.
Repatriation of dividends abroad.
The NBU has been closely monitoring compliance with the established FX restrictions.
Based on the results of inspections that revealed attempts to circumvent the monthly limit on repatriation of dividends, the NBU has set additional criteria for such transactions.
Starting from 20 November 2024, Ukrainian companies will be able to partially repatriate dividends on corporate rights or shares subject to the following conditions:
the period of the issuer’s activity from the date of state registration to the date of the relevant transaction is less than 12 months at least six months have passed since the foreign investor/non-resident acquired ownership of the corporate rights/shares of the issuer paying dividends before the date of the relevant transaction. Use of FX loans to purchase securities denominated in foreign currency.

In order to minimize the risks of circumventing the current FX restrictions, the NBU will also prohibit, starting from 20 November 2024, the use of FX loans to purchase FX-denominated securities.
Said amendments were approved by NBU Board Resolution No. 136 On Amendments to NBU Board Resolution No. 18 dated 24 February 2022 dated 19 November 2024, which comes into effect on 20 November 2024.