NBU allows to finance foreign repr offices up to EUR1 mln/year, pay for export/import litigation

The National Bank of Ukraine has increased the possibilities of financing foreign representative offices of Ukrainian companies: if earlier this was possible within the limits of actual transfers in 2021, now it is either within these limits or up to EUR1 million per year, depending on which of these values is greater.

"The corresponding easing will not have an impact on the foreign exchange market of Ukraine, since such transfers will be allowed to be made only at the expense of the business's own currency. At the same time, this will allow Ukrainian enterprises to intensify work on promoting their products to foreign markets," the National Bank reported on its website on Saturday.

The regulator allowed such transfers to relatively young companies, setting a restriction that at least 12 months must pass from the date of their state registration to the date of the transaction.

"In the future, the adopted changes will contribute to the growth of the country's export potential by expanding cooperation between Ukrainian businesses and foreign partners and increasing trade turnover," the NBU emphasized.

In addition, the central bank allowed payments related to judicial procedures regarding non-residents' failure to fulfill the conditions under import and export contracts.

"The adopted decisions allow legal entities of all forms of ownership to purchase foreign currency and transfer it abroad to pay registration, arbitration, court fees and other payments and expenses during enforcement proceedings regarding non-residents' failure to fulfill the conditions under import and export contracts," the National Bank explained.

He added that, taking into account the customer survey conducted by banks this year, the impact on the foreign exchange market is expected to be insignificant. In return, businesses will have the opportunity to protect their property and other rights and interests in foreign jurisdictions in a timely and appropriate manner when resolving issues of returning foreign exchange proceeds under export contracts or prepayments under import contracts.

The NBU clarified that the relevant changes to "military" resolution No. 18 of February 24, 2022 were made by resolution No. 53 of the regulator's board of May 9 of this year and entered into force on May 10.