Free Movement of Capital under the EU’s Conditions: Сan the Hryvnia Withstand It Now?

At the end of February, Ukraine received the conditions for accession to the EU – a package of documents for each of the negotiation chapters, which detailed the list of criteria, as well as determined their classification. The list of criteria provides for the need to adopt a number of laws, and most importantly, these laws must receive the EU’s approval. The conditions received contain the EU-agreed criteria for Ukraine in clusters 1,2,6 and concern a wide range of issues: from justice and fundamental rights, freedoms and security, to the free movement of labor, goods and capital. Volodymyr Harkusha, Senior Partner of K.A.C. Group, told “Minfin” about what will happen to the movement of capital in Ukraine.

Why Do We Really Need to Join the EU?

EU countries are Ukraine’s main donors during the war, powerful political support, shelter for millions of Ukrainians who found refuge in Europe. Yet, for modern Ukraine, in my opinion, the main meaning of Ukraine’s accession to the EU is different.

Implementation of European law norms, as well as mandatory international control over their implementation, is a guarantee of changes in the administration of socio-economic processes in the field of justice, tax industry, prevention of corruption, etc.

This is what has been hindering the development of the country throughout the history of independence. Now Ukraine resembles a quiet district center, where the mayor, prosecutor, judge, chief tax officer and police officer have the same surname and cottages in the same town in Spain.

What Are the Current Risks of the Abolition of All Restrictions on Capital?

So, what should Ukraine do to ensure the free movement of capital? According to the EU, Ukraine, at the time of joining the Union, must abolish all existing restrictions. Frankly speaking, I have no idea how this can be done in modern conditions.

Capital movement is the process of moving financial resources (money, securities, investments) between entities, industries or countries. In our case, to the EU-Ukraine direction, we still need to add “free and without restrictions”.

But the existing legislation of Ukraine contains many restrictions that are caused by a complex economic situation even before the war, and especially now. For example: a global restriction on foreign payments under export-import contracts and discriminatory currency control, the impossibility of paying interest and dividends in foreign currency, restrictions on the purchase and sale of securities in foreign currency.

You can also add the “official NBU exchange rate”, limits on the purchase of foreign currency, special conditions for transactions in partially convertible currencies of the 2nd category and much more. While the issue of excessive administrative intervention can be regulated in the legislative process, the removal of all restrictions on the foreign exchange market will lead to unpredictable consequences.

What Must Ukraine Do Specifically?

The EU sets a condition to bring Ukraine’s legislation into line with the EU rules in the field of payments, in particular regarding payment services in the internal market (Payment Services Directive), cross-border payments and the rules of the Single Euro Payments Area (SEPA), as well as to demonstrate the ability to fully implement these requirements upon accession.

The EU Payment Services Directive 2 (PSD2, 2015/2366/EU) regulates digital payments, aims to increase security, competition and innovation, and strong customer authentication (SCA). Ukraine has already implemented most of the PSD2 provisions in the Law “On Payment Services”.

As such, since 2025, updated capital regulation and authorization rules have been in force for Ukrainian service providers. And we also have our “bingo” — monobank and “Diia”, which are characterized by a level of innovative digitalization of services and customer authentication (“Diia” and monobank are implementing this feature tgether), which the vast majority of EU countries do not have.

As for SEPA (the EU’s project for fast, secure and cheap non-cash transfers in euros, including abroad, via a single IBAN bank account), there are points here to be made.

On the one hand, as of February 2026, the Verkhovna Rada Committee prepared for adoption Draft Law No. 14327, which creates the legal basis for Ukraine’s accession to SEPA, and the NBU had already transferred the electronic payments system to the international ISO 20022 standard. But it should be remembered that SEPA is also perceived as the way of “financial visa-free travel”, the implementation of which in Ukraine is considered extremely difficult for the reasons listed above.

Another requirement is: “Ukraine must have full compliance with EU rules on the prevention of money laundering and terrorist financing (in particular, the Anti-Money Laundering Directive, the Anti-Money Laundering Regulation and the Funds Transfer Regulation). Ukraine must demonstrate sufficient administrative capacity and standards of integrity to properly implement and comply with legislation and obligations on combating money laundering and terrorist financing, and make tangible progress in establishing a reliable reputation.”

As for the “compliance with regulations”, there are no questions here. Ukraine has adopted the rules, entered and joined all things possible which concern this requirement. For instance:

◉ Ukraine has adopted all FATF (International Group on Combating Money Laundering);

◉ It has separately adopted the Crypto-Asset Reporting Framework (CARF) standards, which also cover crypto-assets;

◉ Ukraine participates in CRS (automatic exchange of financial and tax information);

◉ It has joined FATCA, which provides for the exchange of information between the tax authorities of Ukraine and the United States.

Regarding “sufficient administrative capacity, integrity standards for proper implementation and compliance with legislation”, Ukraine has the National Anti-Corruption Bureau, the Economic Security Bureau and the State Financial Monitoring Service. And here is a small detail, the first two institutions are often mentioned in information channels as tools for resolving private economic or political issues. As for the State Financial Monitoring Service, the National Corruption Prevention Agency has got some questions for its head, Filip Pronin, and an investigation by the NACU is taking place.

There are no results from the investigations yet, just as there are no results coming from numerous foreign business trips by the head of the State Financial Monitoring Service. For example, at the FATF plenary meeting in Paris, due to Ukraine’s passive position in this organization, there were no new statements about adding Russia to the FATF “black list”.

Thus, we have clear and realistic conditions for joining the EU, at least in terms of free movement of capital. We have positive dynamics in the legislative process and technologies. There are significant legislative restrictions on the currency market and international transactions, which are objective in the state of the war economy. Perhaps, our European mentors will take this into account, and the requirements will be somewhat adjusted.

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