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The Law of Ukraine "On Currency and Currency Transactions", which entered into force on February 07, 2019, significantly liberalized the use of various financial instruments for Ukrainian citizens and companies.

The National Bank of Ukraine, following the rules of this progressive law, gradually changes its subordinate acts. The first wave of changes took place in January 2019. In this press release of the NBU you can see a list of major changes in January (

In April, a new Instruction on the procedure for the opening, use and closing of accounts in national and foreign currencies was approved. The most recent liberalization act is to simplify the procedure for issuing non-bank financial institutions licenses for foreign exchange transactions (Resolution of the NBU dated May 07, 2019, No. 65). This resolution, in particular, the NBU relieves securities market participants from the need to obtain licenses for foreign exchange transactions. 

One of the important steps of liberalization is to enable legal entities to open and use accounts in banking institutions abroad. Part 3 of Article 4 of the Law of Ukraine "On Currency and Currency Transactions" provides that: "residents, having regard to the restrictions established by this Law and other laws of Ukraine, have the right to open accounts in foreign financial institutions and to carry out foreign exchange transactions through such accounts."

In addition, the Resolution of the NBU dated 02.05.2019 No. 31 " On the recognition of certain statutory acts of the National Bank of Ukraine as invalid " has been canceled by the Instruction on the procedure for the issuance of individual licenses for investment abroad and the Regulations on the procedure for issuing by the National Bank of Ukraine individual licenses for the placement of foreign exchange valuables by residents (legal entities and individuals) on accounts outside Ukraine.

However, liberalization has certain limits.

Thus, the Regulation on measures of protection and determination of the procedure for the execution of individual transactions in foreign currency, approved by the Resolution of the Board of the National Bank of Ukraine dated January 2, 2019, No. 5, prohibits Ukrainian banks from buying non-cash foreign currency on behalf / statement of resident clients for the purpose of placing funds on deposit (deposit) account in a bank and / or an account abroad in a foreign financial institution (clause 14-1).

However, the prohibition does not apply to cases when legal entities purchase foreign currency for the purpose of placing funds on their own accounts abroad, due to the need to hold their own separate units abroad and / or to fulfill obligations under foreign economic contracts (except for the obligations for the transfer of sums deposits (deposits) to accounts with foreign financial institutions).

That is, today legal entities can freely open and use accounts in banking institutions abroad, except for cases when they transfer funds from Ukraine in foreign currency to accumulate them abroad, transfer funds to banks registered in offshore areas, or for the subsequent payment of dividends, in some other cases provided for by the said Provision on measures of protection and determination of the procedure for the execution of certain transactions in foreign currency.

However, at the same time, our companies should not forget that the procedures for opening accounts in foreign banks are rather complex and require lengthy identification procedures with the submission of documents on the structure of ownership, source of funds, and many others.

In the fight against money laundering, overseas financial institutions are required to conduct customer due diligence procedures (known as KYC procedures, "know your client") in accordance with anti-money laundering legislation.

These requirements to banks and, accordingly, banks themselves to their clients are constantly increasing. So, on June 19, 2018, the Fifth EU 5 Money Laundering Directive (AMLD 5) was published, which came into force on July 9, 2018, and the changes the fourth Anti Money Laundering Directive (AMLD4). Participating countries are obliged to implement the amended rules in their internal law no later than January 20, 2020.


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