With effect from 19 August 2016, the National Bank of Ukraine
(the "NBU") abolished the requirement
for Ukrainian residents to obtain a price evaluation act – an
approval from State Enterprise "State Research and Information
Centre for International Commodity Markets Monitoring"
("Derzhzovnishinform") – for
cross-border payments for purchases of IP rights from foreign
residents for the value exceeding EUR 50,000.
The reasoning behind price evaluation acts was that they were
supposed to prevent non-productive outflows of capital from Ukraine
in the form of payments for intangible assets, such as IP rights.
Where payments exceeded the regulatory threshold (most recently,
EUR 50,000), a Ukrainian payer was required to apply to
Derzhzovnishinform for the document (price evaluation act)
confirming that the price of IP rights purchased under the contract
was consistent with their fair market value. If a price evaluation
act was not available, Ukrainian banks were prohibited from
arranging the payment (save for a few exceptions).
Abolishment of the price evaluation act
requirement is definitely a positive step in terms of simplifying
cross-border activities of the Ukrainian business. At the same
time, the NBU still maintains control over similar outbound
transfers. In particular, the NBU is currently empowered to review
the underlying documentation and suspend outbound transfers
exceeding USD 50,000.
The NBU also continues its policy of
strengthening the financial monitoring procedures and increasing
the level of control by Ukrainian banks over capital outflows. In
particular, the NBU has instructed Ukrainian banks to carry out a
detailed analysis of transactions and obtain additional
documentation from clients, where the bank has concerns that the
contractual price of goods, services or assets may be inconsistent
with their fair market value.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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