Significant Currency Restrictions Were Established

The adoption of the NBU Resolution No 475 "On amending the terms of payment for transactions of exports and imports of goods and mandatory sale of foreign exchange earnings" dated November 16, 2012, has become a new impulse to the rush towards the currency issues. This Resolution found that the calculations the operations of export and import of goods in foreign currency shall be made within a period not exceeding 90 calendar days (before - 180 calendar days) from the date of customs clearance of products exported, or after the signing of the instrument or other document certifying that the execution of work, providing services, export of intellectual property rights.

If import operations of residents are carried out on a deferred delivery, such deferment may not exceed 90 calendar days (instead of the previously existing 180) from the date of advance payment. Before the adoption of this Resolution, the Amendments to the Law "On the order of payments in foreign currency” were adopted, which actually gave the National Bank the authority to set up such limits). This restriction will be valid for 6 months - until 29 May 2013.

The primary enforcement of the timing of such payments is to be implemented by serving banks.

We remind, that breach of this term, is fraught with the fine in the amount of 0.3% of the amount of non-received revenue for each day of delay.

Currently, no clarification of issues such as the transition to the new terms in agreements with the contractors, as well as how to act in case when period of payment in acting agreement is more than the period set up by the new Regulation.

In addition to the previous Resolution No 475, on November 16, NBU accepts another radical Resolution No 479 "On the establishment of compulsory sale of foreign exchange earnings," which ordered the half of resident’s income in the form of foreign exchange earnings received by the sale of goods in foreign trade contracts required necessarily to be sold on the foreign exchange market of Ukraine. NBU included all the currencies of Group 1 of Qualifier and also Russian rubles to be mandatory converted.

On November 28, 2012 the new odious NBU Resolution - No 476 – “On the procedure for payment of remittances from abroad to individuals” came into force. This resolution requires for mandatory conversion into UAH the revenues received outside of Ukraine in foreign currency in favor of persons (residents and non-residents) in an amount equal or greater than the equivalent of UAH 150 thousand per month. In this case, the authorized bank must make a mandatory currency conversion without the request of the client.

As a conclusion we’d like to say that time will show whether these six-month limits justify themselves or become "lifeline" for the national currency, as well as whether or not these restrictions are only temporary. However, in light of the Law № 11433 (regarding the introduction of a 15% tax on sale of foreign currency on cash), which, given recent events, has all chances to be accepted it appears that the performance of ordinary taxpayers the burden of saving rate as payment for government admitted mistakes may be delayed.

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