Recently, the NBU approved a large number of regulatory acts that are either directly prescribed by the Law of Ukraine “On Currency and Currency Transactions” of 21.06.2018, No. 2473-VIII(hereinafter – Law), or directly related to it. It should be immediately noted that the adoption by the National Bank of the relevant legal acts is not an empty formality. The NBU, in accordance with the Law, gave the right to determine the mechanism of action of many norms, which are prescribed in the Law rather declaratively. Therefore, we can say that since February 7, 2019, the Law began to really work, and there was a real revolution in the currency regulation. Let’s consider how currency purchase and sale transactions changed.
Currency exchange can be carried out at post offices
The population will be able to buy and sell foreign currency not only in banks and currency exchange offices of non-bank financial institutions, but also in post offices. The amendments were approved by the decision of the NBU Board dated January 2, 2019 No. 9 “On approval of amendments to certain normative legal acts of the National Bank of Ukraine”. Postal operators will receive a license from the NBU for foreign exchange transactions under the following conditions:
- the presence of at least 50 structural subdivisions located in the territory from 50% of the regions of Ukraine;
- receipt of not less than 50% of revenues from activities in the field of postal services;
- compliance with the requirements for financial standing, ownership structure, business reputation (including their managers and owners of substantial participation) and the professional suitability of managers.
Easing of conditions for licenses issuance
In addition, the National Bank eased conditions for the licenses issuance for trading currency valuables in cash to non-bank financial institutions (NFI). In particular, the minimum amount of equity of NFI is reduced from UAH 10 to 5 million (provided that the financial institution carries out such activities with the use of no more than 50 structural subdivisions). In addition, the requirement for the presence in the NFI of not less than five structural subdivisions, premises which meet the requirements of the NBU.
Non-bank financial institutions and a national postal operator who already have general licenses for foreign exchange transactions will have 6 months of transition to bring their business in line with the new requirements. The NFI and the national postal operator, which had general licenses for currency exchange transactions received before the date of enactment of the Law, will be able to continue to carry out currency exchange transactions on the basis of these licenses.
Other changes
The peculiarities of the implementation of certain current foreign exchange transactions and the purchase of foreign currency for their implementation is considered in Section V of the Regulations on measures of protection and determination of the procedure for the implementation of certain transactions in foreign currency approved by the decision of the NBU Board of 02.01.2019, No. 5 (hereinafter –Regulation No. 5). According to para. 38 of the document, banks are prohibited to buy foreign currency on behalf of clients at the expense of funds in UAH, attracted by these customers in the form of a loan.
Compulsory currency sale
The incomes in foreign currency in favor of legal entities-residents which are not banks, individuals-entrepreneurs, foreign representations (except official representative offices), as well as accounts opened in banks for joint activities without establishing a legal entity are subject to mandatory sales:
- from abroad;
- in the territory of Ukraine, from current accounts of legal entities – non-residents (except investment accounts).
The mentioned above incomes are the subject to the mandatory sale from 07.02.2019 to 28.02.2019 (inclusive) in the amount of 50%, and from 01.03.2019 – in the amount of 30%. It should be mentioned that para.26 of the Regulation No. 5 includes the list of incomes that are not the subject to the mandatory sale.
