By its Resolution No. 996, dated 30 December 2015, the National Bank of Ukraine (the "NBU") cancelled the prohibition of assignment of cross-border and domestic loans denominated in foreign currency introduced on 20 August 2015.
The cancelled loan assignment prohibition has been substituted with an enhanced control over the registration of cross-border loan agreements and amendments thereto. Pursuant to Resolution No. 996, the bank servicing payments under the loan agreement must require additional documents (the "Additional Documents") from the Ukrainian borrower and submit them to the NBU if the transaction meets any of the following criteria:
- a public figure or an affiliated person of a public figure is a party to the transaction;
- the amount borrowed by an individual exceeds 500,000 US Dollars (or an equivalent amount in other foreign currencies);
- the registration of amendments to the cross-border loan agreement results from the assignment of the loan, transfer of debt under the loan agreement or legal succession;
- the re-registration of the loan agreement is required due to the cancellation of the initial registration (other than in cases of borrower's failure to receive the loan under the registered loan agreement within the regulatory deadline of 180 days upon loan agreement registration);
- the Ukrainian borrower received a cross-border loan without the registration of the loan agreement;
- the loan agreement contemplates providing the loan by way of direct payment to the local borrower's supplier under a cross-border contract (without crediting the borrower's account with the servicing bank).
Resolution No. 996 does not provide for an exhaustive list of Additional Documents. Instead, some Additional Documents are defined as "documents confirming the economic viability of the transaction" or "documents confirming the origin of amounts to be utilized for the repayment of the loan (including principal, interest, etc.)".
The set of documents including Additional Documents must be reviewed and analyzed by the NBU to reveal whether the servicing bank has provided untrue or invalid documents or conclude whether the transaction processed by the servicing bank may threaten the interests of the depositors or other creditors of the servicing bank.
The NBU has extended the terms during which the set of documents submitted for the registration must be reviewed by the servicing bank and the NBU:
- from four to seven business days for the servicing bank; and
- from five to seven business days for the NBU. In case Additional Documents are submitted, these can be reviewed by the NBU within 30 calendar days upon submission of the full set of documents.
The new rules introduced by Resolution No. 996 shall become effective on 11 January 2016.
Originally published 5 January 2016
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