The relaxation of the rules for opening accounts by nonresidents reflects the immutability of the regulation relaxing policy and would positively influence the conditions for doing business in Ukraine, according to lawyers polled by Interfax-Ukraine.
Commenting on the update of the rules of opening and closing accounts of banks’ resident and nonresident clients and correspondent accounts of banks by the National Bank of Ukraine (NBU), which entered into force on April 4, Gabriel Aslanian, counsel to the Asters law firm, said that another important effect of innovation is a “positive signal to foreign companies that the situation in the country is improving, since there is no longer any need to maintain tight restrictions on operations.”
However, the lawyer believes that the inability to open accounts in Ukraine was not a clear obstacle to the work of foreign companies in the country.
“If a foreign company had an intention to operate in Ukraine, it could always establish or acquire a subsidiary here, open a representative office with the right to open current accounts,” he said, adding that, at the same time, the current restriction on opening accounts was quite noticeable for foreign lenders.
Aslanian said that after the lifting of the restriction on opening accounts, a foreign creditor “gets the opportunity, not on paper, but in reality, of selling his pledges in respect of hryvnia payments to residents’ accounts or on proceeds from hryvnia contracts between residents of Ukraine.”
In addition, it is important for the lender to directly, as a beneficiary, receive insurance indemnity from the Ukrainian insurer in case of loss of the funded project.
In turn, Kateryna Tkachenko, a lawyer at the K.A.C. Group international law firm, said that, thanks to the innovations, when changing the name of a legal entity, you will not need to close existing accounts. The presentation of bank cards with specimen signatures is also canceled when customers of banks open accounts, the accounts will be managed only by persons who, according to the legislation, have the right to do so.
In turn, managing partner of the RI-Group law firm, Alexander Keer, said that the introduction of the new rules by the NBU is “a significant step towards currency liberalization in Ukraine.”
“The macroeconomic effect of this decision is likely to be the improvement of investment climate and the attraction of investments in Ukraine. According to the document, foreigners have the opportunity of both opening accounts in our banks and making payments in the national currency, which significantly speeds up the movement of funds, simplifies doing business in our territory,” he said.
According to the new rules, foreign companies will be able to open accounts in Ukrainian banks, make settlements (invest) in the hryvnia, which will greatly simplify and accelerate the movement of funds and business in Ukraine in general.
At the same time, according to Keer, the new rules from the NBU “will not lead to an immediate increase in foreign investment in our country, because we all are now hostages of a long electoral cycle (presidential and parliamentary elections of 2019), but for foreign business already operating here this step by the National Bank is a really positive moment and a focus on qualitative changes in the country.”
The National Bank of Ukraine (NBU) gives an opportunity to open accounts to new non-resident entities on the financial market of Ukraine, including foreign investment foundations and asset managers acting on behalf of such investment foundations, reads a posting on the NBU website.
The right to open accounts in Ukrainian financial institutions and carry out forex transactions through them by non-resident legal entities is ensured by the law of Ukraine on currency and currency operations and the law amending some laws of Ukraine on investment promotion, as well as the EU-Ukraine Association Agreement.
The NBU has updated the instruction on the procedure of opening and closing customer accounts in banks and correspondent accounts in banks for residents and non-residents.
The central bank’s board approved the new version of the document by instruction No. 56 amending some laws and regulations of the National Bank of Ukraine on April 1, 2019. The document was posted on the website of the NBU and came into effect on April 4, 2019.
The instruction regulates the procedure of opening and closing by banks of:
– client accounts of residents and non-residents (individuals and legal entities);
– correspondent accounts of residents and non-residents;
– accounts of international financial institutions and their managers under trust agreement.
The NBU said that the facilitation of the procedure of opening client accounts envisaged by the instruction will have a good effect on the business climate in Ukraine due to the cancellation of the requirement to provide samples of signatures by clients when opening bank accounts. From now on account management will be performed on grounds of the list of entitled persons without notarial certification. In addition, change of name of a legal entity will not entail closing of active accounts.
