The National Bank of Ukraine (NBU) has abolished the requirement for Ukrainian residents to obtain a price evaluation act to make cross-border payments for the purchase of services and IP rights from foreign residents in the amount exceeding €50,000. The central bank’s decision took effect on August 19, 2016.
Previously, such price evaluations were delivered by the State Research and Information Centre for Monitoring International Commodity Markets (Derzhzovnishinform).
Price evaluation acts were intended to prevent non-productive outflows of capital from Ukraine in the form of payments for intangible assets, such as services and IP rights. Where payments exceeded the regulatory threshold (most recently, €50,000), a Ukrainian payer was required to apply to Derzhzovnishinform for confirmation (price evaluation act) that the price of the services or IP rights purchased under the contract reflected their fair market value.
In the absence of a price evaluation act, Ukrainian banks were prohibited from arranging the payment. This rule, however, was subject to several exceptions.
The abolishment of the price evaluation requirement will simplify cross-border activities of the Ukrainian business. At the same time, the NBU still maintains control over similar outbound transfers. In particular, the NBU is currently empowered to review the underlying documentation and suspend outbound transfers exceeding $50,000.
The NBU also continues its policy of strengthening financial monitoring procedures and increasing the level of control by Ukrainian banks over capital outflows.
This information was provided by Sayenko Kharenko, a leading Ukrainian law firm with an internationally oriented full-service practice. Read the full version here.