Currency restrictions in the insurance sector have been eased and the procedure for repatriation of interest on OVDP by foreign investors has been clarified

Date:

The National Bank continued to ease currency restrictions in the insurance sector and regulated the procedure for conducting operations related to the payment of interest on domestic state loan bonds (OVDP) to foreign investors.

Regarding easing currency restrictions in the insurance sector

Insurers will be able to make insurance payments in favor of non-residents, as well as return insurance payments in favor of non-residents for prematurely terminated insurance (reinsurance) contracts received by insurers after February 24, 2022, including in the presence of relevant court decisions.

We would like to remind you that currently the following insurance payment transactions are allowed:

  • to foreign nuclear pools, which are carried out by an authorized insurer on behalf of members of the “Nuclear Insurance Pool” association;
  • according to “Green Card” international insurance contracts;
  • under contracts of personal insurance, other than life insurance, for treatment in medical institutions of a foreign country, transportation of patients connected with the death of citizens abroad (including transportation costs and burial costs);
  • under insurance contracts for persons traveling abroad.

In addition, the National Bank unblocks foreign exchange transactions for payment of membership fees by insurers to international organizations and international associations of insurers. The Motor (Transport) Insurance Bureau of Ukraine will also be able to carry out currency transactions for the payment of membership fees to the Board of the Bureau of the International Automobile Insurance System “Green Card”.

Regarding operations related to the payment of interest on OVDP to foreign investors

For the possibility of repatriation of funds received from the payment of interest on OVDP after April 1, 2023, an additional requirement has been established regarding the minimum continuous period of possession of this OVDP by the investor for at least the last 90 consecutive calendar days until the moment of receiving interest. This will help prevent premature repatriation of investments by foreign investors.

We will remind that the National Bank introduced the possibility of repatriation of funds received from the payment of interest on OVDP after April 1, 2023, in order to create incentives for non-residents to reinvest the received principal amount and accumulated hryvnia funds on the primary market of OVDP.

These changes are foreseen by Resolution of the Board of the National Bank of Ukraine dated May 19, 2023 No. 68 “On Amendments to Resolution No. 18 of the Board of the National Bank of Ukraine dated February 24, 2022”, which enters into force on May 20, 2023. The revised procedure for conducting operations related to the payment of interest to foreign investors for OVDP will enter into force on May 22, 2023.

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