It covers payment methods and information on, banking systems, foreign exchange controls, and U.S. and correspondent banking.
Methods of Payment
Payment methods and terms vary depending upon the U.S. company’s business model and relationship with its Ukrainian trading partner. For new-to-market companies, requesting advance payment for goods and services from a Ukrainian customer may be a prudent course to follow until both parties establish a record of payment. While all internationally acceptable forms of payment are available in Ukraine (e.g., checks, bills of exchange, letters of credit, and collection arrangements), the recommended method of receiving payment for U.S. exports is through an irrevocable letter of credit.
Payment transfers in foreign currencies are made either through a cover at a foreign partner-bank or the International Settlements Department of the National Bank of Ukraine (NBU). The EBRD trade finance partners in Ukraine are Credit Agricole Ukraine, Oschadbank, OTP Bank, Raiffeisen Bank Aval, State Export-Import Bank of Ukraine, Ukrsibbank. To conduct hard currency transactions a bank has to be authorized by the NBU. All authorized Ukrainian commercial banks are members of SWIFT (Society for Worldwide Interbank Financial Telecommunications).
Ukrainian legislation allows settlement under export or import contracts between a Ukrainian resident and a non-resident to be carried out in foreign currency as well as in hryvnia. The foreign currency proceeds of a Ukrainian resident under an export contract (except for export of services, other than transport and insurance services, and intellectual property rights) must be collected on such resident’s bank account within 365 days from the date of the customs clearance of the exported goods.
For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
To access Ukraine’s ICS section on financing, visit the U.S. Department of State Investment Climate Statement website.
The Ukrainian banking sector has a two-tier structure comprising the National Bank of Ukraine (NBU) and commercial banks. The NBU is responsible for monetary policy, commercial bank licensing, and activity oversight. Current Ukrainian legislation distinguishes between “universal” (general) commercial banks and “specialized” commercial banks, with the latter including savings, investment, mortgage, and settlement (clearing) banks. A commercial bank carries out its banking activities under a license issued by the NBU.
Russia’s invasion has severely stressed the stability of Ukraine’s banking sector. Despite these pressures, 68 banks continue to operate and provide client services in regions where the security situation allows. By mid-June 85% of bank branches were operational.
For the first time in five years, the sector saw losses due to a sharp increase in provisioning. In the near-term, banks will continue to see credit risk losses: the NBU estimates that the banks will lose at least 20 percent of their loan portfolios in the wake of the crisis. Fortunately, banks’ capital cushions significantly exceeded minimum requirements before the start of the war and they have sufficient capital to cover their losses. Banks should also be able to maintain operational efficiency and return to profitability after the war subsides.
Foreign Exchange Controls
On May 21, the NBU allowed the exchange rate to be regulated by market conditions without government intervention. As such the NBU has lifted:
- Restrictions on the exchange rate at which authorized institutions may sell cash foreign currency to customers
- Restrictions on setting the exchange rate at which banks may debit hryvnia funds from customers’ accounts if customers pay with hryvnia cards abroad
Previously the rates of the relevant transactions were not allowed to deviate from an official one by 10 percent.
On July 21, 2022, the National Bank of Ukraine devaluated hryvnia by 25 percent to align the official exchange rate with the cash rate in the market. Then NBU Governor Kyrylo Shevchenko said the new level of the exchange rate “will become the anchor for the economy and make it more resilient at the times of uncertainty.”
“Keeping the exchange rate fixed will enable the NBU to maintain control over inflation dynamics and support uninterrupted functioning of the financial system,” he said. “This is the key condition for the stable operation of the economy, which is vital during the war.”
US Banks & Local Correspondent Banks
Citi Bank is the only American bank currently operating in Ukraine. The bank is located at: 16-G Dilova Street, Kyiv; Tel.: +38 (044) 490-10-00.