Ukraine

1. Which financial (not tax or labour) short-term compensation schemes for immediate losses due to social distancing measures have been implemented? For which industries/sizes of business?

The Ukrainian parliament and government have adopted a number of laws and by-laws to deal with the threat COVID-19 and related quarantine are having on the economy. At the same time, measures adopted up to date do not provide for any specific compensation schemes. 

The National Bank of Ukraine has announced that it is negotiating with the Internal Monetary Fund (IMF) the possibility to obtain part of the emergency financing facilities provided by IMF. However, no agreements have yet been reached in this respect.
 
The National Bank of Ukraine has also announced that it has introduced a special grace period for servicing commercial and consumer loans, however, no formal decision has been adopted yet. Thus, any special conditions for the existing financing may be adopted only on voluntary basis by the banks.

2. Which medium-to long-term stabilisation measures are in place in your jurisdiction?

The special legislation adopted to date aims to support businesses in the areas of taxation and labour-related issues and also deals with consumer loans granted to individuals.

The National Bank of Ukraine has adopted a number of measures to ensure liquidity and stability of Ukrainian banks, including the following:

  • postponed stress-testing of banks;
  • postponed audits of banks;
  • cancellation of fees for using NBU domestic payment system;
  • simplified prudential requirements;
  • new refinancing programmes.

At the same time, details of some of the abovementioned measures with respect to banks (e.g., refinancing terms) are not available to the general public.

3. Which measures (Guarantees, Loans, Equity Injections, etc.) are available?

No specific COVID-19 related instruments are available. Assistance that may be granted to businesses through the available instruments (e.g., state guarantees) will most likely be subject to clearance of national antitrust bodies in Ukraine.

4. Have these mid- to long-term stabilisation measures already been notified with EU or other antitrust bodies?

No.

Comments

Ukraine is not member of the EU.  However, Ukraine applies state aid rules modelled on EU law and such measures would likely require approval by the Antimonopoly Committee of Ukraine.

5. Which prerequisites are necessary to qualify for a programme?

N/A

6. Are there any major reasons that may inhibit an applicant from successfully applying for a stabilisation measure?

Other.

Comments

N/A

7. In an international context, are subsidiaries and branches of foreign parent/holding companies eligible to apply? For EU-States: Also for non-EU-third countries?

No.

Comments

Since no specific programmes exist as of now, it is not possible to answer this question. However, given the usual approach of the Ukrainian authorities, it is reasonable to expect that any financial assistance measures, if adopted, would most likely apply to residents of Ukraine only.

8. Do your country’s stabilisation schemes foresee restrictions on use of cash/other restrictions?

No.

Comments

No new restrictions have been introduced in connection with COVID-19. The National Bank of Ukraine which is in charge of currency control regulation strongly opposes any new currency-related restrictions. However, the law provides for a number of measures (e.g., introduction of limits for repatriation of investments, a ban on repayment of cross-border loans, etc.) that may be adopted by the NBU if the economic situation in Ukraine deteriorates (e.g., a drop in the value of the national currency UAH). 

Ukraine is already a jurisdiction with rather strict currency control restrictions. For example:

  • as a general rule businesses cannot transfer more than EUR 2,000,000 per year or its equivalent in other currency abroad (save for certain exceptions such as repayment of loans, repatriation of investments, etc.);
  • all cross-border loans are subject to NBU notification;
  • legal entities can purchase foreign currency provided they require it to perform obligations denominated in such currency.

9. How are insolvency application deadlines handled in times of Corona?

To date, Ukrainian insolvency laws (including with respect to deadlines) have not been amended.

10. How far have local insolvency/restructuring laws been changed/eased which might have an impact on international businesses?

To date, Ukrainian insolvency laws (including with respect to deadlines) have not been amended.

No.

Comments

To date, Ukrainian insolvency laws (including with respect to deadlines) have not been amended.

To date, Ukrainian insolvency laws (including with respect to deadlines) have not been amended.

Olekhov, Ihor
Ihor Olekhov
Partner
Kyiv (CMS CMNO)