Effective from today, 13 September 2017, the National Bank of Ukraine (the "NBU") has introduced the following changes relaxing certain currency control restrictions and simplifying procedures for attraction of funding by Ukrainian residents (i.e., Ukrainian companies, banks, individual-entrepreneurs and individuals) from international financial institutions ("IFIs") such as the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), the European Investment Bank (EIB), the Nordic Environment Finance Corporation (NEFCO) and others:
- NBU registration cancelled. Loan agreements between Ukrainian residents and IFIs are now exempted from the mandatory registration of such loan agreements with the NBU;
- NBU licencing cancelled. Ukrainian residents (acting as guarantors/surety providers under the relevant guarantee/surety agreements securing obligations of Ukrainian obligors in favour of IFIs) are now permitted to purchase (exchange) FX and transfer such FX funds on IFIs' account abroad without individual licence from the NBU; and
- New rules for UAH loans. Ukrainian residents are now permitted to enter into loan agreements with IFIs denominated in Ukrainian hryvnia (UAH) where all transactions are conducted only in FX. Further development of the UAH financing rules is a logical step, considering that during the last month both the EBRD and IFC provided financing to Ukrainian companies in Ukrainian hryvnia (UAH).
It is expected that the introduced changes will increase the general number of projects financed by IFIs in Ukraine and facilitate the UAH lending.
We note that aforementioned changes will not affect operations of foreign banks or finance institutions which do not have the status of an IFI in Ukraine.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.