Ukraine. Protective Legislative Measures During Martial Law | Denton

To assist Ukrainian individuals and businesses in the context of war and the application of martial law, Ukraine has introduced a number of legislative relief measures. These are summarized below.

Amendments to the Civil Code of Ukraine

On March 15, 2022, Ukraine enacted the Law “On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine Regarding the Action of Norms for the Period of Martial Law” (the “Straight”).

The law introduces changes in the Civil Code of Ukraine. During martial law, the state of emergency and within 30 days of its cancellation, borrowers under a loan contract are released from any responsibility in the event of inability to meet their monetary obligations. In the event of late payment under loan agreements, borrowers are released from the obligation to pay penalties (fines). Any such penalties, which accrued after February 24, 2022 for a delinquent payment, are subject to cancellation by the lenders.

In addition, the statutory limitation period has been extended for martial law or a state of emergency in Ukraine. The same extension applies to the duration of the bond and other procedural details.

Amendments to the Consumer Credit Act

Similar to the above amendments to the Civil Code of Ukraine, during martial law, state of emergency1 and 30 days later, individual borrowers are released from all liability in the event of inability to fulfill the obligations provided for in their consumer loan contract. The borrower is released from the obligation to pay penalties (fines) to the lender.

Changes to the enforcement procedure

The enforcement procedure is suspended, the replacement of the collector is prohibited in the enforcement procedure when this collector is the Russian Federation, a citizen of the Russian Federation or a legal entity registered under the laws of the Russian Federation (or has a Russian beneficial owner) until the Act on the Settlement of Relations with Persons Connected with the Aggressor State comes into force.

During martial law:

  • Certain transactions are authorized from seized accounts.
  • Procedural deadlines in enforcement proceedings are extended.
  • It is forbidden to initiate enforcement proceedings or execute decisions on the territories temporarily occupied as a result of the military aggression of the Russian Federation.

Changes to mortgages

During the period of martial law and 30 days after its cancellation:

  • Mortgagees are prohibited from seizing consumer loan collateral from individuals.
  • It is limited to the eviction of residents of residential buildings and premises, which are mortgaged and in respect of which there is a court decision to apply for the seizure of such objects.

Amendments to banking law

The law amended Ukraine’s Law “On Banks and Banking Activity”, to lift certain triggers on the classification of banks as problematic or insolvent during martial law and within four months of its cancellation.

National Bank of Ukraine (NBU) raises limit for cash withdrawals from FX accounts in Ukraine

The NBU Board of Directors adopted Resolution No. 58 of March 21, 2022 and Resolution No. 68 of April 04, 2022 “On Amendments to the Resolution of the Board of Directors of the National Bank of Ukraine of February 24, 2022 2022 No. 18” (the “Resolutions”).

The resolutions establish the following limits for cash withdrawals from FX accounts:

  • UAH 100,000 (in equivalent) for withdrawals from foreign currency accounts in Ukraine (daily limit).
  • UAH 100,000 (in equivalent) for foreign currency withdrawals outside Ukraine from foreign currency accounts opened with Ukrainian banks (daily limit).
  • UAH 100,000 (in equivalent) for withdrawals of foreign currency from hryvnia accounts abroad (monthly limit).
  • 100,000 UAH of hryvnia accounts in Ukraine remain the same (daily cap).

The NBU also set a monthly limit of 100,000 UAH on:

  • Remittances to personal accounts from Ukraine abroad using the payment details of the payer’s and recipient’s cards (P2P transfers).
  • Cash-like transactions with cards to purchase assets that are directly converted (exchanged) into cash. These transactions include replenishing e-wallets and brokerage or forex accounts, cashing travelers checks, buying virtual assets, and more.

NBU restrictions on cross-border payments from Ukraine should not apply to the transfer of foreign currency by individuals for particular goods from the list of critical import goods in an amount not exceeding the limit monthly of 400,000 UAH (in equivalent) for individuals.

In addition, the list of exceptions to the ban on cross-border fund transfers has been expanded by adding to the list foreign exchange transactions carried out by residents to meet commitments secured by a state guarantee. The purchase of foreign currencies was permitted forward under forward contracts entered into before February 23, 2022, subject to predetermined conditions.

The NBU shortened the settlement terms for export and import transactions from 365 days to 90 calendar days.

Amendments to the Anti-Money Laundering (AML) Law

The Act introduces the following changes to the AML Act during Martial Law, among others, which mandate that:

  • Banks do not have to take measures to establish the sources of funds, when an individual customer makes a cash deposit in his current account in an amount corresponding to the financial transaction threshold, in cases where the customer does not provide the respective documents.
  • Banks are prohibited from carrying out expenditure operations from the accounts of individual customers with the funds specified in the point above, except for specified donations.
  • Banks must freeze cash on deposit in the event of suspicion of the financing or proliferation of terrorism and/or weapons of mass destruction.
  • After the cancellation of martial law or a state of war, banks have the right to carry out spending transactions on current accounts of individual customers with funds deposited by them in cash, having taken measures to establish the sources of these funds.

  1. According to Article 1 of the Law of Ukraine “On the Legal Regime of the State of Emergency”, the state of emergency is a special legal regime that can be temporarily imposed in Ukraine or in a separate place in case of emergency. man-made or natural emergency. at the national level which will or could lead to loss of life and property, endangering the life and health of citizens or in an attempt to seize state power or change the constitutional order of Ukraine by violence and give the competent state authorities, the military administration and local governments in accordance with the law “on the state of emergency”, the powers necessary to prevent threats and ensure the safety and health of citizens, the normal functioning of the national economy, state power and local self-government bodies, the protection of the constitutional order, and also allows temporary, threatened, violation of the constitutional rights and freedoms of the man and citizen and the legitimate rights and interests of legal persons by specifying the term of these restrictions.