Use of foreign currency accounts during martial law
Author: Natalia Ponomarenko, lawyer of Dynasty Law & Investment
The use of foreign currency accounts opened in banking institutions of other countries by legal entities registered in Ukraine without obtaining a license from the National Bank of Ukraine became possible with the entry into force of the Law of Ukraine “On Currency and Foreign Exchange Transactions” of 21.06.2018.
Since the beginning of martial law, the Board of the National Bank of Ukraine has adopted Resolution № 18 of 24.02.22 “On the operation of the banking system during martial law”, which introduced a number of restrictions on foreign exchange transactions carried out from foreign currency accounts opened in Ukrainian banks.
As a general rule, it is forbidden to take foreign currency abroad during martial law. That is, in fact, paragraph 14 of this Resolution №18, prohibits the settlement of import transactions from accounts opened in Ukraine, except for critical imports.
However, the current restrictions do not affect foreign exchange transactions carried out by residents from accounts opened abroad. At the same time, business should keep in mind that despite the rather significant easing by the National Bank of Ukraine regarding financial monitoring measures, the NBU Board Resolutions № 5 and № 7 of January 2, 2019, which regulate currency supervision and deadlines settlements on export-import operations, not suspended. Therefore, business entities must strictly adhere to the provisions set by the National Bank of Ukraine.
We would also like to draw your attention to the fact that in the conditions of martial law, the National Bank of Ukraine introduces new relaxations or restrictions on banking operations almost every day. Therefore, in order to avoid the imposition of penalties for violations of foreign exchange legislation, before conducting foreign exchange transactions, be sure to consult on current rules and restrictions.