On 19 November 2009, the President of Ukraine signed Law No. 1533-VI which was adopted by the Parliament of Ukraine on 23 June 2009. The Law will come into force upon its official publication and will introduce certain temporary restrictions with respect to foreign currency and foreign investment matters . In particular, the Law provides for the following restrictions that would be applicable until 1 January 2011:
- domestic loans may be granted in local currency only, except for loans for medication and study purposes abroad;
- Ukrainian residents may not amend foreign currency loan agreements with non-residents if the amendments will shorten the maturity date or lead to early repayment;
- Ukrainian residents are prohibited from early repayment of cross-border loans (this restriction applies both to new loans as well as loans that had been concluded before the law came into force);
- foreign investors may invest into Ukraine in cash exclusively through investment accounts opened with authorised banks of Ukraine;
- the state registration of foreign investments in cash is mandatory; and
- foreign investments must be made in Ukrainian currency. In practice, this would mean that a foreign investor will need to wire hard currency into its investment account, exchange it into Ukrainian hrvynia, and use that hryvnia to make its investment.
Besides this, the Law shortens the term (from 180 days to 90 days) during which the foreign currency income of Ukrainian residents must be credited on their bank accounts in Ukraine.
Law: Law of Ukraine No.1533-VI, dated 23 June 2009 "On Amendment to Certain Laws of Ukraine for the Purpose of Overcoming Adverse Consequences of the Financial Crisis".
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The original publication date for this article was 23/11/2009.