New Law of Ukraine on Currency and Currency Operations (the "Law") was officially published on 6 July 2018 to amend the 1990s legislation regulating private clients’ currency valuables operations. Final and transitional provisions of the new Law provide that it will be enacted in seven months following the day of its publication.
After the Law is enacted, private investors will receive a number of new opportunities:
1. The principle of freedom in currency operations is introduced:
- Investors are henceforth entitled to conclude agreements with residents and (or) non-residents freely and to fulfill their obligations under those agreements either in national or foreign currency, and to open accounts with financial institutions in other countries;
- Investors are entitled to purchase freely currency valuables and assets abroad and to transfer currency valuables across the customs border of Ukraine.
2. The Law specifies that neither securities nor their derivatives are currency valuables, and currency laws do not regulate operations involving such assets.
3. The most popular operations among private clients such as opening accounts with foreign banks, purchasing equity interests in foreign legal entities, including securities of foreign issuers and acquisition of currency valuables abroad may be carried out without any individual licenses from the National Bank of Ukraine. It will be easier to obtain loans from, and to provide loans to non-residents.
4. In addition, the Law expressly provides for the principle of equal rights of residents and non-residents in the currency market of Ukraine: non-residents have the same rights as residents to perform currency operations. This provision intends to improve the investment attractiveness of Ukrainian currency market for foreign investors.
5. Individuals' crossborder transfers of currency valuables in an amount equivalent to or exceeding EUR10,000 at the official exchange rate set by the National Bank of Ukraine on the date of a transfer across the customs border of Ukraine must be reported to the State Fiscal Service of Ukraine. In accordance with the Law, crossborder transfers of currency valuables include imports, exports, transfers or transits of precious metal and cash currency into, from, to or through the customs territory of Ukraine.
6. All operations with currency valuables exceeding the threshold for financial monitoring are subject to currency monitoring.
The National Bank of Ukraine and other government authorities are required to bring their secondary legislation in line with the provisions of the Law before it is enacted. Regulatory authorities are therefore expected to determine specific controls over the performance of currency valuables operations and aspects of legal regime applicable to some of them within the abovementioned period.