On 15 March 2022, the Parliament of Ukraine adopted the Law of Ukraine No. 2120-IX “On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine Concerning the Effects of Norms for the Period of Martial Law” (hereinafter – the Law) which:
– prohibits the increase of interest rates under consumer loans specifically for the period until 30 days after martial law ends;
– establishes that borrowers that fail to perform their obligations under loan agreements within the martial law period or 30 days after, should not bear the negative consequences of such failure, i.e., should not pay penalties or make other payments triggered by the failure. The borrowers, however, will not be released from the obligations to perform their underlying payment obligations under the loan, such as the payment of principal and interest, upon the expiry of the aforesaid period. Creditors still have the right to debit penalties, if the borrower’s failure to pay occurred before or on 24 February 2022.
On 25 February 2022, the National Bank of Ukraine introduced Regulation No. 23 “Rules of Banks’ Activity Due to the Introduction of Martial Law” (hereinafter –
Regulation No. 23). The Regulation No. 23 stipulates that during the period of martial law and 30 calendar days after its termination or cancellation, banks have the right to apply long-term restructuring instruments to debtors under the following conditions:
– the need to enter into the restructuring is caused by the borrower’s financial difficulties due to Russia’s military aggression against Ukraine;
– the loan agreement is restructured within the martial law period;
– the bank is able to justify the commencement of a restructuring based on the debtor’s evaluation in terms of the timeframes defined by the restructuring;
– the restructuring will not lead to a decrease in the value of the loan for the bank by more than 10% compared to the value defined as of the day when the Regulation No. 23 became effective.
On 24 February 2022, the National Bank of Ukraine introduced Regulation No. 18 “On Work of the Banking System during Martial Law” which imposes significant currency and capital control restrictions in Ukraine. The measures imposed by the National Bank of Ukraine include the following:
– UAH-USD official exchange rate fixed at the level of UAH 36,5686 for USD 1 starting at 9:00 AM on 21 July 2022;
– cash withdrawals within Ukraine are limited to an equivalent of UAH 100,000 per day for one client (except for UAH payroll payments and other exceptions);
– cash withdrawals outside Ukraine using Ukrainian bank accounts are limited to an equivalent of UAH 50,000 per calendar month for UAH accounts; limit for cash withdrawals abroad for UAH accounts has been adopted on weekly basis: UAH 12,500 (equivalent) for seven calendar days;
– cash withdrawals outside Ukraine using Ukrainian bank accounts are limited to an equivalent of UAH 100,000 for foreign currency accounts;
– clients of Ukrainian banks are generally restricted from buying and selling foreign currency, with the exception of (among other things):
➢ selling foreign currency for UAH;
➢ buying foreign currency in cash for UAH only in exceptional cases;
➢ exchanging one convertible currency (e.g., USD, EUR, GBP) for another;
➢ buying of non-cash foreign currency for UAH for further deposit within monthly limit of UAH 100,000 (equivalent);
– cross-border payments from Ukraine abroad are also restricted and may be carried out only in exceptional cases, which include:
➢ Ukrainian banks’ own transactions (including payments under loans from non-residents);
➢ transactions of Ukrainian residents to import goods classified No. 01-97 at the Ukrainian Classifier of Goods (UKT ZED) according to the Law of Ukraine “On Customs Tariff of Ukraine”, as well as services, works, intellectual property rights according to the list, approved by the Resolution of the Cabinet of Ministers of Ukraine as of 24.02.2022 No. 153 (amended by the Resolution of the Cabinet of Ministers of Ukraine as of 07.07.2022 No. 761);
➢ transfer of own funds by enterprises to the accounts of their divisions and branches abroad to finance their functioning;
➢ payments of Ukrainian residents under transactions guaranteed by state guarantees;
➢ payments of international financial institutions (IFIs) and payments of residents and non-residents to IFIs;
➢ payments made based on separate permits of the NBU issued at the request of the Cabinet of Ministers of Ukraine or other state institutions;
➢ settlements outside of Ukraine using electronic payments instruments (including payment cards);
➢ foreign currency payments made by individuals in order to promote Ukraine’s defense capability;
– prohibition on making debit transactions of residents of the Russian Federation and Belarus and Ukrainian entities whose ultimate beneficial owners are residents of the Russian Federation and Belarus (with some exceptions);
– prohibition on making quasi-cash transactions from UAH bank accounts.
According to the Regulation of the National Securities and Stock Market Commission as of 4 August 2022 No. 1053 almost all restrictions on capital markets and organized commodity markets, which were introduced on24 February 2022 in connection with Russia’s armed attack on Ukraine and the introduction of martial law, have been canceled.
At the same time, during the period of martial law, it is prohibited, in particular, for professional participants of the capital markets and organized commodity markets to establish business relations and/or commit transactions with persons in respect of whom the prohibitions stipulated by the Law of Ukraine “On Prevention and Counteraction of Legalization (Laundering) of Income, Obtained through Crime, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction”, and by persons associated with the aggressor state or for their benefit and/or carrying out actions regarding the assets or liabilities of such persons, and/or carrying out income payments, repayment amounts on the benefit of such persons.