On Aug. 5 one of the most popular Ukrainian newspapers Segodnya wrote on its web-site that the National Bank of Ukraine (NBU) planned to exchange all foreign currency payments from abroad into hryvnias. This information that was immediately reposted by dozens of web-sites almost caused hysteria among Ukrainian users. NBU immediately held a briefing and explained that no new regulations had entered into force. The rule on foreign currency payments has existed since November 2012 and was only clarified, the state regulator explains.
The decree
on exchanging foreign currency payments from abroad into hryvnias was published in
November 2012 and signed by ex-NBU head Serhiy Arbuzov. Then, as well as now,
the rule was applied only to payments that exceed Hr 150,000. According to
experts, one of the reasons for this measure was to decrease Ukraine’s
dependence on the dollar. It was also done to restrain the hryvnia’s
devaluation, economist Andriy Novak said to Ukrainsky Tyzhden.
The first decree lasted six months, until the end of May. But in May the
NBU decided to issue an additional and nearly identical decree for six more
months, until Nov. 19. According to another NBU Board’s decree published on June 6,
if a payee, who receives more than Hr 150,000, owns only a foreign currency account, a bank must also create
another one in a local currency. At the moment the NBU plans no new
restrictions on this issue, NBU deputy head Vira Rychakivska promised.
At the same
time, the regulator is set to put an end to the decades-long practice when both
residents and non-residents of Ukraine could make unlimited payments in cash.
According
to the National Bank’s decree, from the first of September individuals and
companies will be able to make cash payments that do not exceed Hr 150,000
($18,750). It means that if individuals want to purchase or sell property
exceeding this amount they must transfer money from one current bank account to
another or to deposit the required amount with the notary. However, this figure
is even lower for enterprises: starting in September they can make cash
payments of no more than Hr 10,000 per day.
National
Bank of Ukraine officials believe this decision will not negatively influence most
people’s lives, as they “rarely buy a car or an apartment,” Vira
Rychakivska said in June, when the decree was designed. Those who can afford to
spend this amount of money must pay taxes, paying by bank transfer,” first deputy
prime minister and ex-NBU head Arbuzov told RBC news agency. At the same time, the
NBU expects such measures might cause GDP growth of 0.2%.
The main
goal of these innovations could be related to the NBU’s desire to increase the amount
of non-cash controlled payments in the country, Ilyashev and Partners’ lawyer
Oleksiy Khrystoforov believes. “It’s almost impossible to hide from the
National Bank the operations passing through banks. Come face to face with the
economic downturn in the recent years, the NBU has consistently tried to turn
the biggest possible amount of financial transactions into official watercourse,”
he wrote in a column on the Ekonomichna Pravda news website.
However,
those who do not want to pay officially could find ways to hide the amount of
transactions, Khrystoforov wrote. Among others, it could be done through payments
by installments, the legalization of money for purchasing expensive cars or apartments
through obtaining loans, or creating fictitious collateral agreements, under
which the property will be transferred as if for debts, but in reality be sold
for cash.
Kyiv Post staff writer Kateryna Kapliuk can be reached
at [email protected].
