The National Bank of Ukraine allowed payments on new loans from non-residents

Recently, on June 19, we informed about the changes in legislation that allowed residents to make cross-border transfers for the purpose of fulfilling debt obligations on credits/loans obtained from non-residents, including repayable financial aid that was, fully or partially, provided through international financial organizations, foreign export credit agencies/foreign states through authorized persons, etc.
The National Bank of Ukraine (“NBU”) continues to ease currency restrictions, in particular those related to the repayment of credits/loans from non-residents.

On 21 June, the latest amendments to the NBU’s Decree No. 18 dated 24 February 2022 came into force that allow transferring of funds abroad for servicing and repayment of external credits/loans obtained after 20 June 2023.

Updated list of permitted cross-border transfers from Ukraine

Decree No. 18 was amended by the NBU’s Decree No. 77 dated 20 June 2023.
The regulator allowed residents to make cross-border transfers for the purpose of fulfilling debt obligations on credits/loans, including repayable financial aid obtained from any non-residents after 20 June 2023.
The transfers permitted by the NBU include repayment of the principal amount of a credit/loan, payment of interest, commissions, fees, and other charges for using a credit/loan.

At the same time, a number of requirements must be met simultaneously, in particular:

• Funds under an external credit/loan must be credited to the current account of a resident borrower in a bank in Ukraine; 
• Payment of interest, commissions, fees, and other charges for using a credit/loan shall be made in an amount not exceeding the amount of payments at the maximum interest rate of 12% per annum; 
• Transfer of funds to fulfill obligations under a credit/loan granted for a period of up to three years shall only be made at the expense of own funds in foreign currency (i.e. not purchased, borrowed or raised from a resident in the form of a credit or loan); 
• Transfer of funds for the purpose of repaying the principal amount of a credit/loan granted for a period exceeding three years: during the first three years such transfers shall be made only at the expense of own funds in foreign currency (i.e. not purchased, borrowed or raised from a resident in the form of a credit or loan). At the same time, the borrower may purchase foreign currency to pay interest, commissions, fees, and other charges, and starting from the fourth year – to repay the principal amount of a credit/loan.

However, no such transfers will be allowed until due dates specified in the relevant credit/loan agreements with non-residents.

We will be monitoring how the easing measures introduced over the past week will contribute to supporting Ukrainian businesses and attracting foreign capital.

We will continue to monitor changes in currency legislation during martial law and will share useful information with you.

_{Comments provided by Deloitte experts herein are for information purpose only and should not be used by taxpayers without an in-depth expert analysis on a case-by-case basis.} 

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