National Bank of Ukraine to Tighten FX controls to Prevent Capital Outflows from the Country
OREANDA-NEWS. The National Bank of Ukraine has tightened FX controls to prevent capital outflows abroad linked to suspicious financial transactions. On 7 April 2016, the Board of the National Bank of Ukraine issued Resolution No.247 On Approval of Amendements to the Rules Governing the Establishment of Registers by Authorized Banks and Amendments to Some NBU Regulations on the Establishment of Registers by Authorized Banks to this effect.
Authorized banks holding General Licenses for FX Operations are obliged to enter information on the following transactions into special registers:
- FX purchase;
- the transfer of foreign currency abroad;
- the transfer of funds in domestic currency for the benefit of non-residents through UAH correspondent accounts in hryvnia of non-resident banks with authorized banks;
- the transfer of funds for the benefit of non-residents through branches of authorized banks incorporated outside Ukraine.
Up until now, requirements as to the establishment of such registers have been set out in the NBU circular letter. Accordingly, the NBU has decided to issue Resolution No 247 setting out requirements as to the establishment of such registers.
The Circular Letter fell short of authorizing the NBU to apply sanctions and enforcement measures against those banks that have entered erroneous information into the register. Resolution No. 247 gives the NBU such a mandate.
The resolution also expands the NBU’s mandate to block suspicious financial transactions, thus contributing to efforts to prevent capital outflows abroad.
NBU Board Resolution No. 140, dated 03 March 2016, On Resolving the Situation in the Monetary and Foreign Exchange Markets of Ukraine has also been amended. Amendments to Resolution No. 140 shall remain in effect through to 8 June 2016.
Resolution No 247 will come into force on 15 April 2016.