Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

UKRAINE

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
Share
  • ShareShare
Show Summary Details

(Position as of January 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: September 24, 1996.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
Other security restrictionsRestrictions are maintained on payments and on the provision of financial services to the Democratic Republic of the Congo, Côte d’Ivoire, Sudan, the Taliban, and Al-Qaida.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Ukraine is the Ukrainian hryvnia.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe National Bank of Ukraine (NBU) sets the official exchange rate of the hryvnia against the dollar on the basis of rate quotations and other indicators on Ukraine’s interbank foreign exchange market. The NBU intervenes with a view to curbing significant fluctuations in the exchange rate. The hryvnia, although appreciating by 7% since the end of 2000, has remained within a very narrow band vis-à-vis the dollar since end-2001, except for a step appreciation of 5% in April 2005. The official exchange rate is used by residents and nonresidents to account for foreign exchange transactions. Banks are allowed to purchase and sell foreign exchange on the same day.



Banks that have the right to open correspondent accounts at foreign banks must purchase foreign currency in the interbank market directly and not through other Ukrainian banks. In particular, banks are permitted to buy or sell foreign exchange cash at a contractual exchange rate.
Exchange taxOn January 1, 2007, the fee on purchases of noncash foreign exchange used for government pension insurance was reduced to 1%, after it had been lowered on January 1, 2006, to 1.3% from 1.5%.
Exchange subsidyNo.
Forward exchange marketBanks may conduct forward foreign exchange operations with a maturity of up to one year on their own behalf and on behalf of their clients. Banks may transact purchases of foreign currency in Group 1 of the NBU’s Classification of Foreign Currencies and Bank Metals, provided the long (short) open foreign exchange position of the bank for such transactions is not more than 10% (of regulated capital). Transactions with other foreign currency derivatives (such as futures and options) for which the underlying asset is a foreign currency or cross rate of a foreign currency are permitted in the interbank market; settlements on these contracts are in hryvnias.
References to legal instruments and hyperlinksLaws on the 2006 State Budget of Ukraine and on the 2007 State Budget of Ukraine; Statute on Procedures and Conditions for Trading Foreign Currency, as approved by Resolution of the Board of the National Bank of Ukraine No. 281 of August 10, 2005.
Arrangements for Payments and Receipts
Prescription of currency requirementsPayments to and receipts from all countries are settled in foreign currencies, except that settlements for trade with CIS and Baltic countries may also be made in domestic currencies.
Controls on the use of domestic currency
For current transactions and paymentsResidents may conduct settlements with nonresidents in hryvnias through hryvnia correspondent accounts opened with authorized Ukrainian banks by nonresident banks, but they must provide the servicing bank with a certificate from the State Tax Administration (STA) showing that no tax liabilities are outstanding on the date of the transaction. An NBU license is required if the due date for the delivery of imported goods and services, or of proceeds from exports, exceeds 90 days.
For capital transactions
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsIn certain instances, authorization is required from the State Securities and Stock Market Commission.
Credit operationsCommercial credits in hryvnias are extended to economic agents of CIS and Baltic countries only. An NBU license is required if the due date for the delivery of goods and services exceeds 90 days.
Use of foreign exchange among residentsAn NBU license is required.
Payments arrangements
Bilateral payments arrangements
InoperativeThere are arrangements with the Baltic countries, the Russian Federation, and the other FSU countries.
Regional arrangementsYes.
Barter agreements and open accountsBarter is one of the forms of trade for Ukrainian companies in their transactions, used largely with the Baltic countries, the Russian Federation, and other countries of the FSU. The use of barter in foreign trade transactions is prohibited for a group of goods determined by the Ukrainian Cabinet of Ministers.
Administration of controlThe NBU, authorized banks, financial institutions, the STA, the State Customs Committee, the Ukrainian Ministry of Communications, the Ukrpochta National Postal Communications Operator, and the Ministry of Economy administer exchange controls.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents are required to obtain a license from the MOF to deal in precious stones and metals, except for bank metals. The NBU licenses commercial bank transactions in bank metals.
On external tradePermission for residents to export precious metals and precious stones is granted by the Ministry of Economy and European Integration in consultation with the MOF. Bank metals are imported only by authorized banks and do not require NBU permits. Resident legal entities are allowed to import bank metals refined from customer-supplied raw materials outside Ukraine using a special permit from the NBU if there is an agreement with the NBU to sell such metals. Only nonresident legal entities are permitted to export bank metals in the form of Ukrainian coins using a license issued by the NBU.
Controls on exports and imports of banknotes
On exports
Domestic currencyResident and nonresident individuals may export up to Hrv 50,000, including jubilee and commemorative coins made from precious and nonprecious metals in the amount of Hrv 3,000. Resident and nonresident individuals may make an oral declaration for exports of amounts up to Hrv 15,000 (except coins made from precious metals, which are subject to declaration regardless of amount). A written declaration is required for the entire export if the amount exceeds this level. An individual NBU license is required for exports exceeding Hrv 50,000. Resident legal entities that own, lease, or charter means of transportation may export up to Hrv 15,000 through authorized persons aboard the means of transport, subject to mandatory written customs declaration. They may also export proceeds received, if accompanied by supporting cashier documents. Nonresident legal entities must obtain an individual NBU license.
Foreign currencyResident and nonresident natural persons departing from Ukraine for tourism or personal business are permitted to export monetary funds (foreign currency or checks in foreign currency) up to the equivalent of $10,000. Based on an oral declaration, residents and nonresidents may export up to the equivalent of $3,000. Exports in excess of these limits require written declarations of the entire amounts of exports. Nonresidents must present bank statements indicating the debiting of an account.



A written declaration is also required for exports by residents or nonresidents of 200 grams of bank metals in ingots, and for the export by nonresident individuals of checks issued by foreign banks or nonbank institutions. In addition, individuals may export funds, checks, and bank metals that were previously imported and declared to customs. Individuals in transit are allowed to export monetary funds up to $30,000 or its equivalent, bank metals up to 1,000 grams, and checks up to $30,000, provided they had previously imported the monetary funds and submit documentary evidence of the transit nature of the travel. Resident and nonresident individuals departing on official business may export up to the equivalent of $13,000.



Resident legal entities that own means of transport may export the following, provided they present a certificate from an authorized Ukrainian bank showing debits from an account and a written customs declaration: (1) funds up to the equivalent of $3,000 to cover settlements for goods and services, (2) funds up to the equivalent of $3,000 to cover operating expenses for motor vehicles abroad, and (3) funds up to the equivalent of $10,000 to cover operating expenses for air and water transportation. An individual NBU license is required for amounts exceeding these limits. The captain of a vessel belonging to or chartered by a nonresident is allowed to export foreign currency (cash or traveler’s checks) to pay for operating expenses and crew services, as specified by the vessel owner, based on a certificate from a bank showing the debiting of funds from an account of a resident marine agent and a written customs declaration. Nonresident legal entities are permitted to export foreign currency legally imported at an earlier date and received for goods sold and services provided on means of transport owned (chartered, leased) by them and making passenger trips in the territory of Ukraine, in an amount supported by documents, provided a written declaration is made to customs authorities by an authorized person. In other cases, the export of foreign currency by nonresident legal entities requires an NBU license.
On imports
Domestic currencyResident and nonresident individuals may import up to Hrv 50,000 in domestic currency, of which up to Hrv 15,000 may be on the basis of an oral declaration. Import of domestic currency exceeding Hrv 15,000 requires written declaration of the entire amount and presentation of a customs declaration confirming the export of the domestic currency out of Ukraine. Resident legal entities may import domestic currency up to the amount previously exported with a customs declaration, as well as proceeds received abroad from transportation services. Nonresident legal entities require an individual NBU license.
Foreign currencyResident and nonresident individuals are allowed to import up to the equivalent of $15,000 in cash and checks, and with an oral declaration up to the equivalent of $3,000. Written declaration of the entire amount is required for import of funds of an amount exceeding the equivalent of $3,000. Written declaration is also required for the import of 500 grams of bank metals in the form of ingots or coins by residents or nonresidents. Resident individuals may also import foreign currency in the amount declared to customs on exit from Ukraine. NBU authorization is required for amounts above these limits.



Individuals in transit may import funds up to the equivalent of $30,000 in cash, up to $30,000 in checks, and up to 1,000 grams of bank metals, subject to documentary evidence of the transit nature of the travel and a customs declaration. Nonresident legal entities owning, leasing, or chartering means of transportation are allowed to import foreign currencies up to the equivalent of $50,000 on written declaration.
References to legal instruments and hyperlinksDecree of the Cabinet of Ministers of Ukraine on the System of Foreign Exchange Regulation and Foreign Exchange Control; Law on Procedures for the Performance of Settlements in Foreign Currency; Law on Foreign Economic Activity; Law on Banks and Banking Activity; Law on Government Regulation of the Extraction, Production, and Use of Precious Metals and Precious Stones and Controls on Operations with Them No. 637 of November 18, 1997; Statute on the Opening and Operation of Correspondent Accounts of Resident and Nonresident Banks in Foreign Currency and of Correspondent Accounts of Nonresident Banks in Hryvnias, as approved by Resolution of the Board of the National Bank of Ukraine No. 118 of March 26, 1998; Statute on the Execution by Authorized Banks of Operations with Bank Metals, as approved by Resolution of the Board of the National Bank of Ukraine No. 325 of August 6, 2003; Instruction on Procedures for Controls and Licenses for Export, Import, and Leasing Operations, as approved by Resolution of the Board of the National Bank of Ukraine No. 136 of March 24, 1999; Statute on Procedures for the Issuance to Banks of Banking Licenses, Written Permissions, and Licenses to Perform Certain Operations, as approved by Resolution of the Board of the National Bank of Ukraine No. 275 of July 17, 2001; Statute on Procedures for the Issuance by the National Bank of Ukraine of Individual Licenses for Settlements between Residents and Nonresidents within the Limits of Trade Turnover of Ukraine in the Currency of Ukraine, as approved by Resolution of the Board of the National Bank of Ukraine No. 484 of October 14, 2004; Statute on Procedures for the Issuance by the National Bank of Ukraine of Individual Licenses for the Use of Foreign Currency on the Territory of Ukraine as a Means of Payment, as approved by Resolution of the Board of the National Bank of Ukraine No. 483 of October 14, 2004; Statute on Procedures for the Movement of Currency of Ukraine, Foreign Currency, Bank Metals, Payment Documents, Other Banking Documents, and Payment Cards across the Customs Border of Ukraine, as approved by Resolution of the National Bank of Ukraine No. 283 of July 12, 2000; Rules on the Use of Cash Foreign Currency on the Territory of Ukraine, as approved by Resolution of the National Bank of Ukraine No. 119 of March 26, 1998.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyCertain conditions apply to these accounts.
Held abroadYes.
Approval requiredA license from the NBU is required to place foreign exchange assets in accounts opened abroad, except when the account is opened during a temporary stay abroad.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyAccount balances may be used to purchase foreign currency in cases in which there exists a legal obligation in that currency.
References to legal instruments and hyperlinksCivil Code of Ukraine; Decree of the Cabinet of Ministers of Ukraine on the System of Foreign Exchange Regulation and Foreign Exchange Control; Law on the National Bank of Ukraine on Banks and Banking Activity; Law on Payment Systems and Transferring Money in Ukraine; Instruction on Procedures for Opening, Using, and Closing Accounts in Domestic and Foreign Currency, as approved by Resolution of the Board of the National Bank of Ukraine No. 492 of November 12, 2003; Statute on Procedures for the Issuance by the National Bank of Ukraine of Individual Licenses for the Placement by Residents (Legal Entities and Individuals) of Foreign Exchange Assets in Accounts Outside Ukraine, as approved by Resolution of the Board of the National Bank of Ukraine No. 485 of October 14, 2004.
Nonresident Accounts
Foreign exchange accounts permittedResident legal entities of Armenia, Azerbaijan, Belarus, Kazakhstan, Moldova, the Russian Federation, and Uzbekistan must have approval from their respective CBs to open accounts in Ukraine. To open accounts with authorized banks of Ukraine (1) resident legal entities of the Russian Federation require permission from the Central Bank of the Russian Federation if Russian Federation legislation stipulates that such permission must be obtained and (2) resident legal entities of the Kyrgyz Republic must register with the National Bank of the Kyrgyz Republic.



A nonresident investor may credit a foreign currency investment account with the following: (1) funds transferred from abroad for investment in Ukraine in accordance with NBU regulations on foreign investment in Ukraine; (2) funds transferred from another current (including investment) account of the investor opened with an authorized bank in Ukraine; (3) interest accrued on the balance of funds in an investment account belonging to the investor; (4) income, profit, and other funds received by the nonresident investor from investments in Ukraine, including from unincorporated joint ventures; (5) funds returned from a deposit account opened for the investor with an authorized bank in Ukraine; (6) funds transferred in error by the investor from this account on an earlier date (these funds are credited to the investor’s account in an amount not exceeding the amount transferred earlier); (7) funds returned owing to partial or full cessation of investment in Ukraine by the nonresident; and (8) foreign exchange purchased by an authorized bank of Ukraine on the Ukrainian interbank currency market in cases specified by foreign currency trading regulations. Funds transferred from the current account of a nonresident individual opened with an authorized bank in Ukraine may be credited to the foreign currency investment account of a foreign legal entity if the foreign investment is made in cash.



Funds transferred by a foreign investor to deposit accounts from foreign currency investment accounts (as investment contributions) may not be withdrawn until a year after their placement. This restriction does not apply to funds transferred to deposit accounts by nonresident individuals and by representatives of nonresident legal entities in Ukraine from their current accounts opened with an authorized bank in Ukraine.



The following operations may be conducted from a foreign currency investment account by order of the account holder: (1) investment activities in Ukraine (including reinvestments) in accordance with NBU regulations on foreign investment in Ukraine; (2) settlements with customs authorities in cases provided for by Ukrainian law; (3) transfer abroad of income, profit, and other funds received from investments in Ukraine, and of the investment amounts in the event of an investment’s termination, and funds returned from deposit accounts opened with authorized banks in Ukraine by established procedure; (4) payments for services of an authorized bank servicing an account (by procedure specified by Ukrainian law); (5) transfer of funds to one’s own investment account with an authorized bank in Ukraine; (6) transfer of funds to one’s own deposit account opened with an authorized bank in Ukraine; (7) transfers of income, profit, and other funds obtained by an individual investor from investment in Ukraine to the current account of a nonresident individual opened with an authorized bank in Ukraine; (8) sale on the Ukrainian interbank currency market with the purpose of subsequently crediting the foreign currency investment account of a nonresident investor from which the nonresident investor makes investments in Ukraine; and (9) refund of funds received in error. These funds are transferred from this account in an amount not exceeding that received earlier. A foreign investing legal entity may transfer funds from this account to the current account of a nonresident individual opened with an authorized bank in Ukraine if the foreign investment was made in cash.



Funds may be credited to and debited from accounts opened to support activities, such as cooperative production and other joint activities with the participation of unincorporated nonresident investors, exclusively for purposes prescribed by agreements (contracts) on joint investment activity, including distribution of income between parties to an agreement (contract) in accordance with Ukrainian law.
Approval requiredYes.
Domestic currency accountsNonresident investors may credit domestic currency accounts at authorized banks with the following: (1) funds obtained from sales of foreign currency on the Ukrainian interbank foreign currency market in connection with a foreign investment made in accordance with NBU regulations on foreign investment in Ukraine; (2) income, profit, and other funds received by a nonresident investor from investment in Ukraine, including from unincorporated joint activity; (3) funds returned as a result of partial or full cessation of investment in Ukraine by the nonresident in accordance with NBU regulations on foreign investment in Ukraine; (4) funds transferred from one’s own current (including investment) account opened with an authorized bank in Ukraine; (5) funds transferred from one’s own deposit account opened with an authorized bank in Ukraine; (6) interest accrued on the balance of funds in one’s own investment account; and (7) funds transferred in error by an investor from this account on an earlier date. These funds are credited to the investor’s account in an amount not exceeding that transferred earlier. Money may not be transferred from domestic currency investment accounts to the deposit accounts of foreign investors to form the investment contributions of foreign investors. This restriction does not apply to funds transferred to deposit accounts by nonresident individuals and by representatives of nonresident legal entities in Ukraine from their current accounts opened with an authorized bank in Ukraine.



The following operations may be conducted from a domestic currency investment account by order of the account holder: (1) investment activities in Ukraine (including reinvestments) in accordance with NBU regulations on foreign investment in Ukraine; (2) settlements in purchases of foreign currency on the Ukrainian interbank currency market in cases specified by foreign exchange trading regulations; (3) settlements with customs, tax, and other authorities in cases provided for by Ukrainian law; (4) settlements with residents with respect to joint investment activities; (5) payments for services of an authorized bank servicing an account (by procedure specified by Ukrainian law); (6) transfer of income, profit, and other funds received by an individual investor from investment activities in Ukraine to the current account of a nonresident individual opened with an authorized bank in Ukraine; (7) transfers of funds to one’s own investment account with an authorized bank in Ukraine; and (8) refund of funds received in error. These funds are transferred from this account in an amount not exceeding that received earlier. A foreign investing legal entity may transfer funds from this account to the current account of a nonresident individual opened with an authorized bank in Ukraine if the foreign investment is made in cash.



P accounts may be opened for the permanent representative offices of foreign companies, or international organizations established without the status of a legal entity, through which these nonresidents conduct all or part of their business activities in Ukraine. P accounts may be credited with the proceeds from current transactions from any economic activity in Ukraine.



N accounts may be opened for (1) official representative offices and representative offices of nonresident legal entities that represent their interests but do not engage in business activities in Ukraine, (2) representative offices of foreign banks, and (3) organizations or institutions (program or project management groups) that implement international or technical assistance programs and projects. N accounts may be credited (1) with proceeds from the sale of foreign exchange to the servicing bank in order to effect settlements associated with the maintenance of a representative office, including embassies and consulates; (2) for purposes stipulated by the charter of an international organization; or (3) for an organization or institution (program or project management group) to introduce or implement assistance programs and projects or international assistance. All N account holders may purchase foreign exchange on the interbank currency market for the transfer of funds abroad to the account of the relevant entity whose interests they represent, including interest accrued on balances in these accounts.
Convertible into foreign currencyP account holders may (1) convert and transfer to a nonresident entity that they represent proceeds from the sale of goods or services in Ukraine, interest accrued on deposit accounts and balances in these type P accounts, and balances in accounts when ceasing activities in Ukraine; and (2) credit to their own account in foreign currency funds intended for labor compensation of nonresident employees and to provide payments for business trips abroad. Holders of type N accounts may use funds from these accounts to purchase foreign currency in the interbank currency market for the purpose of transferring them to (1) the account of the appropriate authority of a foreign state or the account of the nonresident legal entity whose interests are represented in Ukraine by the mission (transfers may also be made in the event of termination of the mission’s activities, as confirmed by the appropriate documents); or (2) their own foreign currency accounts with authorized banks for compensation of work performed by nonresident employees, for business travel, and for entertainment expenses abroad.



Nonresident individuals may convert and transfer abroad funds from hryvnia-denominated accounts.
Approval requiredYes.
Blocked accountsNo.
References to legal instruments and hyperlinksCivil Code of Ukraine; Decree of the Cabinet of Ministers of Ukraine on the System of Foreign Exchange Regulation and Foreign Exchange Control; Law on the National Bank of Ukraine on Banks and Banking Activity; Law on Payment Systems and Transferring Money in Ukraine; Instruction on Procedures for Opening, Using, and Closing Accounts in Domestic and Foreign Currency, as approved by Resolution of the Board of the National Bank of Ukraine No. 492 of November 12, 2003; Statute on Procedures and Conditions for Trading Foreign Currency, as approved by Resolution of the Board of the National Bank of Ukraine No. 281 of August 10, 2005.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsImporters must receive goods or services no later than 90 days from the date the advance payment is made or a draft is provided. An NBU license is required if payment takes place more than 90 days in advance.
Documentation requirements for release of foreign exchange for importsTo purchase foreign currency in the Ukrainian foreign currency market for import payments, residents must provide the transacting bank with the import contracts involved. When transferring and/or purchasing foreign currency under reinsurance agreements with nonresident reinsurers, resident insurers and resident insurance (reinsurance) brokers must provide an authorized bank with notarized copies of these agreements that have been approved by the body responsible for supervision of the insurance activities.
Domiciliation requirementYes.
Preshipment inspectionInspection is not mandatory but may be undertaken by the Ukrainian Chamber of Commerce and Industry at the request of nonresidents.
Letters of creditYes.
Othern.a.
Import licenses and other nontariff measures
Negative listYes.
Other nontariff measuresNontariff measures are limited to those carried out for national security or environmental protection reasons.
Import taxes and/or tariffsThere are three customs duty categories with a trade-weighted average rate of about 5% (including energy imports). The first category (preferred duty rate) applies to goods from countries with which Ukraine has free trade agreements, imports from developing countries, and imports from countries that have a preferential agreement with Ukraine. The second category (concessional duty rate) applies to imports from countries that have entered into MFN agreements with Ukraine. The third category applies to imports from other countries.



A VAT of 20% is levied on most imports, and some imports are subject to excise taxes.
State import monopolyNo.
References to legal instruments and hyperlinksLaw on Procedures for the Performance of Settlements in Foreign Currency; Statute on Procedures and Conditions for Trading Foreign Currency, as approved by Resolution of the Board of the National Bank of Ukraine No. 281 of August 10, 2005; Instruction on Procedures for Controls and Licenses for Export, Import, and Leasing Operations, as approved by Resolution of the Board of the National Bank of Ukraine No. 136 of March 24, 1999; Statute on the Use of Foreign Currency in Insurance Activities, as approved by Resolution of the Board of the National Bank of Ukraine No. 135 of April 27, 2000.
Exports and Export Proceeds
Repatriation requirementsExporters must repatriate all proceeds in foreign currency or in hryvnias through domestic commercial banks within 90 days of the shipment of goods or rendering of services. An NBU license is required to extend the repatriation period for export proceeds beyond 90 days.
Surrender requirementsThe NBU board has the authority to introduce a 100% surrender requirement, if necessary, to reduce pressure on the exchange rate.
Financing requirementsn.a.
Documentation requirements
Domiciliationn.a.
Preshipment inspectionInspection is not mandatory but may be undertaken by the Ukrainian Chamber of Commerce and Industry at the request of residents.
Othern.a.
Export licenses
Without quotasn.a.
With quotasGoods subject to voluntary export restraints or other international agreements and those falling under the “special export regime”—coal, precious metal scrap, and alcoholic beverages—are also subject to export quotas and licenses. The licenses required for these goods are, however, freely provided to exporters, except in the case of export licenses for precious metal scrap. For grain exports, sales must take place through the agricultural commodity exchange. Export contract preregistration is limited to goods subject to voluntary export restraints or antidumping actions. Registration of exports is automatic and for statistical purposes only.
Export taxesTaxes are applied to exports of sunflower seeds, livestock, skins, and hides.
References to legal instruments and hyperlinksLaw on Procedures for the Performance of Settlements in Foreign Currency; Statute on Procedures and Conditions for Trading Foreign Currency, as approved by Resolution of the Board of the National Bank of Ukraine No. 281 of August 10, 2005; Instruction on Procedures for Controls and Licenses for Export, Import, and Leasing Operations, as approved by Resolution of the Board of the National Bank of Ukraine No. 136 of March 24, 1999; Statute on the Use of Foreign Currency in Insurance Activities, as approved by Resolution of the Board of the National Bank of Ukraine No. 135 of April 27, 2000.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersIn accordance with regulatory provisions related to anti–money laundering measures, when customers effect cash transactions involving Hrv 50,000 or its equivalent and noncash transactions involving Hrv 80,000 or more that have one or more of the features of transactions subject to financial monitoring, a bank sends a notice regarding the transaction to the state financial monitoring body.
Investment-related payments
Prior approvalIncome from domestic investments in Ukraine may be transferred abroad without restriction on confirmation and payment of taxes due.
Payments for travel
Quantitative limitsLimits apply on the movement of domestic and foreign currency across the border of Ukraine.
Indicative limits/bona fide testYes.
Personal paymentsResident individuals may freely transfer foreign currency abroad for current noncommercial transactions as defined by norms set forth in current legislation. In particular, resident individuals may transfer without opening an account with an authorized bank (1) the equivalent of $600 in favor of persons permanently or temporarily abroad, (2) $600 for the purchases of foreign publications, and (3) $200 for other services provided by nonresidents.
Quantitative limitsDepending on the purpose of the transfer, transfers in excess of established norms require an NBU license.
Indicative limits/bona fide testYes.
Credit card use abroadResidents may use abroad credit cards that are issued by Ukrainian banks. Resident legal entities of Ukraine are prohibited from using payment cards in settlements with nonresidents for foreign economic agreements.
Other paymentsAn NBU license is required for transfers abroad for membership dues. Legal entities may subscribe to periodicals and literature on the basis of an agreement, and individuals may subscribe within the limits of the established norm, $600 a month.
References to legal instruments and hyperlinksLaw on Payment Systems and Transferring Money in Ukraine; Statute on Procedures for the Issuance of Payment Cards and the Performance of Operations Using Them, as approved by Resolution of the Board of the National Bank of Ukraine No. 137 of April 19, 2005; Statute on Procedures for the Movement of Currency of Ukraine, Foreign Currency, Bank Metals, Payment Documents, Other Banking Documents, and Payment Cards across the Customs Border of Ukraine, as approved by Resolution of the National Bank of Ukraine No. 283 of July 12, 2000; Rules on the Performance of Transfers of Foreign Currency at the Instruction and for the Benefit of Individuals, as approved by Resolution of the National Bank of Ukraine No. 486 of October 14, 2004; Rules on the Use of Cash Foreign Currency on the Territory of Ukraine, as approved by Resolution of the National Bank of Ukraine No. 119 of March 26, 1998; Statute on Procedures and Conditions for Trading Foreign Currency, as approved by Resolution of the Board of the National Bank of Ukraine No. 281 of August 10, 2005; Statute on Procedures for the Issuance of Individual Licenses for the Transfer of Foreign Currency outside Ukraine for Payment for Bank Metals and the Performance of Certain Foreign Exchange Operations, as approved by Resolution of the National Bank of Ukraine No. 266 of June 17, 2004.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds, except those of a few organizations with international operations (i.e., those enterprises licensed by the NBU to place and use some funds from an account abroad for their maintenance, such as the national airlines), are subject to repatriation requirements.
Restrictions on use of fundsYes.
References to legal instruments and hyperlinksResolution of the Cabinet of Ministers of Ukraine and the National Bank of Ukraine No. 215 of March 30, 2005, on Amendments to Anti-Crisis Measures for Financial Stabilization; Resolution of the National Bank of Ukraine No. 95 of March 30, 2005, on Amendments to Anti-Crisis Measures for Financial Stabilization.
Capital Transactions
Controls on capital transactionsAn NBU license is required for transfer of foreign currency by resident securities traders to the account of a nonresident foreign investor abroad for the purpose of paying for securities issued in Ukraine, provided these securities were not acquired on the Ukrainian stock market and/or from the commercial information system.
Repatriation requirementsNo.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThese transactions must be registered.
Sale or issue locally by nonresidentsForeign securities may be traded in Ukraine once they have been registered with the State Securities and Stock Market Commission (SSSMC). They must be placed with a depository in the country of their origin and either listed on the stock exchange or cleared for trading in the trading information system in the country of their origin and listed with one of the following stock exchanges: American Stock Exchange, Frankfurt Stock Exchange, New York Stock Exchange, Tokyo Stock Exchange, Toronto Stock Exchange, Stock Exchange of Hong Kong, or London Stock Exchange. Persons offering foreign securities for sale in Ukraine must provide Ukrainian investors with the opportunity to inspect the issue prospectus and the issuer’s report for the most recent fiscal year. An NBU license is required for the acquisition by residents of foreign securities in Ukraine.
Purchase abroad by residentsAn NBU license is required.
Sale or issue abroad by residentsA resident issuer may place securities outside Ukraine with permission of the SSSMC.
Bonds or other debt securities
Purchase locally by nonresidentsNonresidents are not required in primary auctions to predeposit in hryvnias the bidding amounts for government securities. Purchases of government securities must be registered with the NBU depository. Authorized banks acquire bonds on instructions of nonresidents at auctions conducted by the NBU. Purchases of other debt securities must be registered.
Sale or issue locally by nonresidentsThe regulations governing shares or other securities of a participating nature apply.
Purchase abroad by residentsAn NBU license is required.
Sale or issue abroad by residentsA resident issuer may place securities outside Ukraine on the basis of a permit from the SSSMC.
On money market instrumentsThe regulations governing shares or other securities of a participating nature apply.
Purchase locally by nonresidentsNonresidents are prohibited from purchasing government securities with a maturity of less than 12 months.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securitiesThe regulations governing shares or other securities of a participating nature apply.
Purchase locally by nonresidentsThese operations must be registered.
Sale or issue locally by nonresidentsThe regulations governing shares or other securities of a participating nature apply.
Purchase abroad by residentsAn NBU license is required.
Sale or issue abroad by residentsA resident issuer may place securities outside Ukraine with permission of the SSSMC.
Controls on derivatives and other instrumentsHedging is permitted against exchange rate risk arising from contracts between residents and foreign economic agents, provided the hedging is conducted by the execution of a forward agreement maturing in up to one year through banking institutions, and the foreign currency involved is included in Group 1 of the NBU’s Classification of Foreign Currencies and Bank Metals. Banks are also permitted to conduct forward foreign exchange operations with a maturity of up to one year on their own behalf and on behalf of their clients. Banks may transact purchases of foreign currency in Group 1 of the classification, provided the long (short) open foreign exchange position of the bank for such transactions is not more than 10% (of regulated capital). Transactions with other foreign currency derivatives (such as futures and options) for which the underlying asset is a foreign currency or cross rate of a foreign currency are permitted in the interbank market; settlements on these contracts are in hryvnias. Authorized banks may conduct forward transactions in the purchase or sale of bank metals for foreign currency in Group 1 of the classification within 50% of the limits of a bank’s long (short) open foreign exchange position. Banks may transact futures contracts on changes in the exchange rate of bank metals maturing in not more than six months. Transactions with other foreign exchange derivative instruments (derivatives) are prohibited.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsAn NBU license is required.
Sale or issue abroad by residentsA resident issuer may place securities outside Ukraine with permission of the SSSMC.
Controls on credit operations
Commercial credits
By residents to nonresidentsAn NBU license is required if the repayment deadline exceeds 90 days.
Financial credits
By residents to nonresidentsThese transactions require a license and written permission from the NBU.
To residents from nonresidentsRegistration with the NBU is required for credits (loans) in foreign currency. The registration requirement does not apply to commercial credits and credits solicited under government guarantees. The NBU establishes ceilings on interest rates for borrowing of resources abroad. Effective March 11, 2006, banks are no longer required to hold with the NBU 20% of foreign currency credits from nonresidents with a maturity of up to 180 days as unremunerated required reserves.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsAn NBU license and a written permit are required for banks and financial institutions.
Controls on direct investment
Outward direct investmentDirect investments by residents abroad (including resident acquisitions of foreign securities in Ukraine and abroad) are subject to NBU licenses. The acquisition of foreign securities by a resident is considered a portfolio investment and also requires an NBU license.
Inward direct investmentAcquisitions of interest in a Ukrainian enterprise (including through the acquisition of securities) by a nonresident investor must be registered within three days after the investment is undertaken. Registration of foreign investments is administered by the Council of Ministers of the Autonomous Republic of Crimea and by the authorities of the oblasts and of the cities of Kiev and Sevastopol.



Foreign investment in Ukraine may be undertaken in any currency listed in Group 1 of the NBU’s Classification of Foreign Currencies and Bank Metals.



Foreign investment in most types of businesses is permitted, although licenses are required in some cases. Investment in insurance and businesses engaged in intermediation activities requires a license from the MOF, and investment in the banking sector requires a license from the NBU.
Controls on liquidation of direct investmentThe transfer of proceeds, after payment of taxes due, is not restricted.
Controls on real estate transactions
Purchase abroad by residentsThese transactions are considered foreign investments abroad and are subject to an NBU license. The acquisition and termination of property rights are determined by the country in which the property is located.
Purchase locally by nonresidentsThese transactions are considered domestic capital investments by nonresidents and must be registered as direct investments.
Sale locally by nonresidentsThe transfer of proceeds, after payment of taxes due, is not restricted.
Controls on personal capital transactions
Loans
By residents to nonresidentsAn NBU license is required.
To residents from nonresidentsThese loan agreements must be registered with the NBU.
Gifts, endowments, inheritances, and legaciesA license is required for transfers of resources by residents to nonresidents. Inherited resources are transferred by nonresidents without restriction on condition of confirmation of the inheritance.
By residents to nonresidentsYes.
Settlements of debts abroad by immigrantsn.a.
Transfer of assets
Transfer abroad by emigrantsTransfers by nonresident individuals are not restricted after settlement of tax liabilities.
Transfer into the country by immigrantsTransfers by nonresident individuals are unrestricted.
Transfer of gambling and prize earningsn.a.
References to legal instruments and hyperlinksDecree of the Cabinet of Ministers of Ukraine on the System of Foreign Exchange Regulation and Foreign Exchange Control, Law on Procedures for the Performance of Settlements in Foreign Currency; Law on Foreign Economic Activity; Law on the Foreign Investment Regime; Law on Securities and the Stock Market; Law on Investment Activity; Statute on Procedures for the Receipt by Residents of Credits and Loans in Foreign Currency from Nonresidents and the Provision by Residents of Loans in Foreign Currency to Nonresidents, as approved by Resolution of the Board of the National Bank of Ukraine No. 270 of June 17, 2004; Instruction on Procedures for the Issuance of Individual Licenses for Investments Abroad, as approved by Resolution of the Board of the National Bank of Ukraine No. 122 of March 16, 1999; Resolution of the Board of the National Bank of Ukraine No. 280 of August 10, 2005, on Regulation of Questions of Foreign Investment in Ukraine; Instruction on Procedures for Controls and Licenses for Export, Import, and Leasing Operations, as approved by Resolution of the Board of the National Bank of Ukraine No. 136 of March 24, 1999; Statute on Procedures and Conditions for Trading Foreign Currency, as approved by Resolution of the Board of the National Bank of Ukraine No. 281 of August 10, 2005; Statute on the Execution by Authorized Banks of Operations with Bank Metals, as approved by Resolution of the National Bank of Ukraine No. 325 of August 6, 2003; Instruction on Procedures for Opening, Using, and Closing Accounts in Domestic and Foreign Currency, as approved by Resolution of the Board of the National Bank of Ukraine No. 492 of November 12, 2003; Rules on the Performance of Transfers of Foreign Currency at the Instruction and for the Benefit of Individuals, as approved by Resolution of the National Bank of Ukraine No. 486 of October 14, 2004.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadLoan agreements exceeding one year require registration with the NBU. The NBU sets ceilings on interest rates for borrowing from abroad.
Maintenance of accounts abroadA banking license and written permission from the NBU are required.
Lending to nonresidents (financial or commercial credits)A banking license and written permission from the NBU are required.
Lending locally in foreign exchangeA banking license and written permission from the NBU are required.
Purchase of locally issued securities denominated in foreign exchangeA license is required from the SSSMC.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsDifferent reserve requirements apply to deposits, depending on the currency and the type of funds. Effective March 11, 2006, banks are no longer required to hold with the NBU 20% of foreign currency credits from nonresidents with a maturity of up to 180 days as unremunerated required reserves.
Investment regulations
Abroad by banksAn NBU license is required.
In banks by nonresidentsRegistration and prior consent from the NBU are required.
Open foreign exchange position limitsOpen foreign exchange position limits are set by the NBU. Authorized banks may transact their own operations for the purchase and sale of foreign currency for hryvnias within the framework of the established open foreign exchange position limits. Open foreign exchange position limits are established as a percentage of the regulated capital: (1) the total open foreign exchange position limit for foreign currencies and bank metals is not more than 30%; (2) the total short open foreign exchange position limit for foreign currencies and bank metals is not more than 10%; and (3) the long (short) open foreign exchange position limit for forward transactions is not more than 10%.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionAn NBU license is required for transferring own funds to nonresident accounts opened with foreign banks for the purpose of purchasing securities from the latter.
Pension fundsn.a.
Investment firms and collective investment funds
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadDiversified mutual funds are prohibited from (1) acquiring or investing in shares and bonds of foreign issuers cleared for trading on organized stock exchanges of foreign countries in amounts exceeding 20% of the mutual fund’s total value; (2) acquiring or investing in other assets, as allowed by legislation, in amounts exceeding 5% of the mutual fund’s assets; (3) acquiring or exchanging securities issued by persons, asset management companies, or depositories that are affiliated with the mutual fund; and (4) acquiring or investing in securities with income guaranteed by foreign governments in amounts exceeding 20% of the total value of the mutual fund’s assets.



If a closed, undiversified mutual fund makes an exclusively private placement of its own securities, and more than 50% of its assets consist of corporate rights and securities not cleared for trading on the stock exchange or for the trading information system, it is treated as a venture fund. Only legal entities may be participants in a venture fund.
Limits (min.) on investment portfolio held locallyDiversified mutual funds are prohibited from (1) holding more than 30% of the total value of the mutual fund’s assets in monetary resources, bank accounts, savings certificates, and/or bonds issued by commercial banks; (2) acquiring or investing in securities of one issuer in amounts exceeding 5% of the total value of the mutual fund’s assets; (3) acquiring or investing in government securities with income guaranteed by the Cabinet of Ministers in amounts exceeding 25% of the total value of the mutual fund’s assets (investment of a mutual fund’s resources in fewer than three types of government securities is prohibited); (4) acquiring or investing in securities of local governments in amounts exceeding 10% of the total value of assets; (5) acquiring or investing in bonds of enterprises issued by residents (except commercial banks) in amounts exceeding 20% of the total value of the mutual fund’s assets; and (6) acquiring or investing more than 40% of the total value of the mutual fund in shares of Ukrainian issuers.



Assets of a mutual fund are managed by an asset management company (any legal entities created pursuant to Ukrainian legislation may be an asset management company). The total value of the assets of a mutual fund that are managed by a single asset management company may not exceed an amount set by the commission’s statutes and regulations.
Currency-matching regulations on assets/liabilities compositionn.a.
References to legal instruments and hyperlinksDecree of the Cabinet of Ministers of Ukraine on the System of Foreign Exchange Regulation and Foreign Exchange Control, Law on the Foreign Investment Regime; Law on Securities and the Stock Market; Law on Investment Activity; Law on Community Investment Vehicles (Mutual and Corporate Investment Funds); Resolution of the Board of the National Bank of Ukraine No. 280 of August 10, 2005, on Regulation of Questions of Foreign Investment in Ukraine; Statute on Procedures for the Receipt by Residents of Credits and Loans in Foreign Currency from Nonresidents and the Provision by Residents of Loans in Foreign Currency to Nonresidents, as approved by Resolution of the Board of the National Bank of Ukraine No. 270 of June 17, 2004; Resolution of the Board of the National Bank of Ukraine No. 122 of March 16, 1999, on Approval of the Instruction on Procedures for the Issuance of Individual Licenses for Investments Abroad; Resolution of the Board of the National Bank of Ukraine No. 290 of August 12, 2005, on Amendments to Several Regulatory Acts of the National Bank of Ukraine and Establishment of Open Foreign Exchange Position Limits for Banks; Statute on Procedures for the Issuance by the National Bank of Ukraine of Individual Licenses for the Placement by Residents (Legal Entities and Individuals) of Foreign Exchange Assets in Accounts outside Ukraine, as approved by Resolution of the Board of the National Bank of Ukraine No. 485 of October 14, 2004; Statute on the Opening and Operation of Correspondent Accounts of Resident and Nonresident Banks in Foreign Currency and of Correspondent Accounts of Nonresident Banks in Hryvnias, as approved by Resolution of the Board of the National Bank of Ukraine No. 118 of March 26, 1998.
Changes during 2006
Exchange arrangementJanuary 1. The fee on purchases of noncash foreign exchange used for government pension insurance was reduced to 1.3% from 1.5%.
Capital transactions
Controls on credit operationsMarch 11. Banks were no longer required to hold with the NBU 20% of foreign currency credits from nonresidents with a maturity of up to 180 days as unremunerated required reserves.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsMarch 11. Banks were no longer required to hold with the NBU 20% of foreign currency credits from nonresidents with a maturity of up to 180 days as unremunerated required reserves.
Changes during 2007
Exchange arrangementJanuary 1. The fee on purchases of noncash foreign exchange used for government pension insurance was lowered to 1% from 1.3%.

    Other Resources Citing This Publication