Changes in the Work of the Banking System

Resolution of the Board of the National Bank of Ukraine of May 09, 2022 No. 96 introduced amendments to the Resolution of February 24, 2022 No. 18 “On the Operation of the Banking System during Martial Law”, which provide for loosening and clarification of some currency restrictions. Main changes are described below.

1. Transactions with bank metals have been allowed

Authorized banks are allowed to carry out operations on sale of bank metals by customers – individuals to banks with physical delivery/without physical delivery.

2. Cross-border currency transfer to return non-resident prepayment in case of non-performance of the contract has been allowed

Authorized banks are allowed to carry out transactions to return non-resident prepayment (advance payment) received by the resident to their current account in a bank in Ukraine after February 23, 2022 under a contract concluded with a non-resident for the sale of goods due to non-performance of obligations by the resident under this contract.

3. Certain currency transactions have been allowed:

– transfer of funds for the purpose of fulfilling the resident’s obligations to a non-resident under a contract of sale of goods between them, provided that such transfer is made at the expense of funds received on credit (loan) from MFIs or sub-loans from the state to finance which the state credit (loan) from MFIs;

– transactions for the transfer of funds for the payment of alimony;

– separate currency transactions on the basis of separate permits (decisions) of the National Bank of Ukraine, adopted on the basis of appeals of the Cabinet of Ministers of Ukraine, ministries, the National Security and Defense Council of Ukraine, the Security Service of Ukraine;

– transfers by non-resident individuals of foreign currency purchased with funds received in the event of the death of a serviceman, in accordance with the resolution of the Cabinet of Ministers of Ukraine of February 28, 2022 No. 168 “Issues of Certain Payments to Servicemen, Members of the Rank and Senior Staff, Police Officers and Their Families during Martial Law”(as amended);

– transfer to a foreign investor/non-resident of funds received in connection with the repayment/payment of income on domestic government bonds of Ukraine in accordance with the terms of their placement (issue).

4. Certain expenditure operations for companies with beneficiaries in Russia or Belarus have been allowed

The list of expenditure operations allowed on the territory of Ukraine by servicing banks on the accounts of residents of the Russian Federation/Republic of Belarus, on the accounts of legal entities (except banks), whose ultimate beneficial owners are residents of the Russian Federation/Republic of Belarus, have been supplemented by the following items:

– payments of income, amounts of repayment in cash according to issuance of
own securities, payment for services of depository institutions for the implementation of such payment/repayment;
– insurance payments under contracts of compulsory and voluntary insurance of civil liability of owners of land vehicles, as well as voluntary insurance against accidents (on transport) and land transport in favor of insurers for vehicles leased before February 23, 2022 (inclusive).

In addition, the National Bank of Ukraine adopts decisions to carry out expenditure operations by servicing banks on the accounts of the above legal entities on the basis of relevant appeals (petitions) of state bodies of Ukraine provided in connection with the performance of important functions and/or provision of important services by such legal entities.

Read more:

Functioning of Currency and Monetary Markets during Martial Law