Shortening of the payment term of export-import operations to three months in Ukraine
Analytical periodical "Lawyer and Law" published an article of our firm’s lawyer Alyona Lytvyn.
The article has been published in the issue number 80 (30/11/2012 - 04/12/2012).
The text of the article is accessible below:
90 - 180 - 90!
National Bank of Ukraine has once again shortened the payment term of export-import operations to three months.
Exchange rate of the dollar has been a topic of interest for the recent years despite the fact whether interested persons have foreign currency or not. In November of this year the National Bank of Ukraine decided to show that it is concerned with the unstable motions more than anybody else. The activities of the National Bank resulted in adoption of several resolutions by the NBU’s Board that had started even before the provision of corresponding legal powers to the NBU.
In particular the NBU’s Resolution number 475 “On Changing of payments” term for transactions with exports and imports of goods and introduction of compulsory sale of foreign exchange currency revenues" (hereinafter - the Resolution number 475) was adopted on the 16th of November. At the same time the Law of Ukraine number 5480 that authorizes the National Bank to carry out such actions (change the term, implement mandatory sale of foreign currency) came into force the next day - November 17.
In any case international traders got new rules which must be followed during the next six months - this is the term NBU decided to be sufficient to calm the fluctuations.
As for the main aspects of changes first of all attention should be drawn to the shorten term of payments for export-import operations from 180 to 90 days. More important is that this provision of course applies not only to such kind of relations as "first product / service - then money" but to the cases of prepayment as well. In other words whether the contract provides for payment in advance or not - bilateral obligations should be discharged within the period of 90 days.
Also one should pay attention to the Cabinet’s of Ministers of Ukraine resolution number 1009 "On amendments to section 3 of an Order of term and conditions defining during import transaction’s completion without importing of goods into Ukraine" dated 29.10.2012. Based on the resolution above the Cabinet of Ministers of Ukraine prohibited conduction of foreign exchange netting advance payments to non-residents with corresponding uniform demands of non-residents. So to complete an import operation that does not involve import of goods into Ukraine it is necessary to receive money from non-resident to whom the goods were sold outside Ukraine into a resident account in an authorized bank or for such resident to provide documents confirming the use of the product outside of Ukraine.
Another important question which concerns every international trader is “Which relations fall under regulations of the Resolution number 475?” As a rule legal acts are not retroactive. From this we can conclude that agreements made before the date when Resolution number 475 entered into force (19.11.2012) do not fall under its provisions.
However based on the current law enforcement practice of NBU one can see that it is not so. Apparently the National Bank doesn’t care much that at the conclusion of an agreement the parties rely on the specific term and stable legal regulations but as the result they may get quite different ones. Back in 2009, in a letter number 28-311/4492-22644 the regulator had clearly outlined its position on this matter.
At that time due to the adoption of the Law number 1533 dated 23.06.2009 "On amending of some laws of Ukraine in order to overcome the negative effects of the financial crisis" the period of 180 days was also reduced to three months. The National Bank has clarified that the new three-month period may apply to previously signed contracts if any action of its realization (supply of goods, processing of customs declaration, signing of the completed works’ act or payments) occurred after the entry into force of term changing provisions.
Thus according to the NBU not a contract itself but rather various actions performed for its execution are the legal basis for legal relations.
It would be logical to assume that a similar approach will be applied to the current situation. The only thing that can be recommended to the international traders who rely on much longer term of transactions completion is to adjust date of the first action in those cases where it is possible. For example when drafting the completed works act any date before 19/11/2012 will allow you to rely on 180 days while for example the current date in the act will reduce the term to three months.
AS A CONCLUSION:
The National Bank started to solve the exchange rate problems of foreign currencies rather actively so business entities will experience these regulatory actions quite significantly. This applies not only to shortening of payment term of foreign economic operations but also to innovations about the mandatory sale of a half of foreign exchange revenues. It is hoped that the "bottom line" will bring not only negative for the business but also positive aspects in the form of achievement the National Bank purposes.
