Emerging Markets Rates and Currencies Handbook

Onshore Restrictions: Regulatory & Risk limitations Allowed: - FCY purchase for UAH, and payments for goods. - FCY purchase and payment for critical services (logistic, telecom etc). - No obligatory sale for incomings in FCY. - FCY purchase and transfer for interest payments under loan agreement with non-residents , if i) no overdue under loan agreement as of Feb 24th, 2022 ii) due date for interest payment falls on period from Feb 24th till Aug 10th 2022 iii) no overdue tax, payroll etc. iv) funds not received as loan from resident, and other conditions are met. - FCY purchase and repatriation of interest payment on domestic government bonds falling after April 1, 2023 and in case bonds are held on custody account within 90 days before interest payment. - Lending with support from Parent and max tenor 1w- 1m depending on type of support (Citi Risk limitation). Prohibited cross-border transactions with the purpose: -Dividends, return of investment, inter-co and offshore loans principal repayment, except MFIs. - FCY purchase, if the client has own FCY balances more than equivalent of UAH 400k. - Set-offs under export/import (except insurance and telecom services). - Offshore spend for all corporate cards is equivalent of UAH 100k per month per a Company for accounts in UAH. - Any type of transaction in RUS or BEL RUBs or with counterparties-residents of Ru/Bel. License Requirements No specific license requirements for onshore transactions. Requirements to open a foreign currency account Foreign currency account should be opened for each currency of transactions. Non-resident clients that open a bank account must be registered in local tax authorities before account opening in a bank. Deal Management Rollover: N/A. Unwinding: Unwind/Net settlement is not allowed. Early Maturity: N/A. Documentation Requirements Ukraine has a rather complex legislation that regulates FX transactions of companies and banks. In addition, the legislation often changes and new requirements are often issued by separate rulings, letters or directives. Due to such regulatory conditions, usually banks in Ukraine have separate so called “Currency Supervision” departments in their structure, specialists of which have dual roles, they: 1. Communicate with clients on question of FX related regulatory requirements to advise them what documents shall be prepared and provided to the bank for FX execution, and 2. Review provided by clients documents and control the fulfilment of all necessary regulatory requirements. The most important legislative requirement that regulate FX transactions in Ukraine is that in order to convert UAH into FCY the client should provide to his servicing bank a full list of required documents, which will be reviewed by a servicing bank at least 1 day before the execution of FX transaction. No currency control is needed for FCY sale into UAH. Both FX purchase and FX sale are executed on T+0 basis. FX hedging. FX hedging instruments, such as FX forwards, NDFs, FX options, are NOT available at the moment. FX swap. one sided only. Residents are allowed to only sell FCY ag UAH on the near leg and buy FCY on the far leg. While non-residents are allowed to only do the opposite, i.e. to buy FCY on the near leg ag UAH, and to sell FCY on a far leg. Trade Flows In Ukraine FCY purchase to be handled via single FX bank only for each import contract with stringent documentation requirements. FCY purchase is executed on a T+0 basis. Purchased FCY should be used for the purpose it was purchased and paid out within 2 working days from the date of purchase.; LCY loans/overdrafts are allowed for FCY purchase transactions (except purchase with the purpose of loan/interest repayment). The bank has right to request additional documents and information from the client necessary for analysing the financial transactions, especially for verification of: FCY purchases; X-border FTs; Loans from non-residents, etc. Capital Flow and FDI Similar to Trade Flows.