Экономические науки/Государственное регулирование экономики

Гудыма Е.С., Рассолова Л.В.

Донецкий национальный университет экономики и торговли

им. М. Туган- Барановского, Украина

WHAT IS THE NATIONAL BANK OF UKRAINE PERMISSION SYSTEM

Ukraine as any other country is open for foreign investments if it has advantages and favourable rules of currency regulation, which make it an attractive field of investment activity and allow foreign investors to place their funds freely into our economy. Moreover, such rules must not prevent local individuals and legal entities from effective operating on international markets and cooperating with foreign banks and financial institutions. All the determined rules must strictly correspond to the economy’s requirements. That is why in order to ensure the growth of Ukraine’s positions on the international market due attention by government authorities must be paid to the policy of currency regulation. However, applicable Ukrainian legislation contains a lot of restrictions and conflicting provisions in this area, which sometimes do not facilitate the forming of transparent investment policy for foreign investors. The policy of currency regulation is aimed at governing issues related to international payments and regime of transactions with currency values. In Ukraine it is performed through the mechanism of currency limitations and currency control, in particular, control over currency transactions, which are conditionally divided into three main groups and relate to: — the transfer of ownership rights to the currency assets, excluding transactions between residents in the national currency of Ukraine; — the application of currency values in international turnover as the form of payment together with transfer of indebtedness and other obligations having currency values as its subject; — import, remittance and transfer of currency values to the territory of Ukraine and export, remittance and transfer from Ukraine [1]. The NBU permission system includes bank licenses, written permits, and licenses for certain currency transactions, general and individual licenses and is based on the above legislative acts and NBU regulations. The licensing system is applied to

all bank and currency operations and is intended to enhance the reliability and stability of Ukrainian banking system as well as not to admit the entry of commercial

banks that do not meet NBU requirements for the Ukrainian and international banking services markets. Thus, it was brought in to control currency transactions

performed by banks and other subjects, to improve the level of the Ukrainian banking system, to protect interests of creditors and bank depositors, and is required to ensure that each particular bank meets NBU standards. Bank licenses and permits cover different spheres of bank relations and are applied in different situations. If a commercial bank has such a permit for currency

operations it acquires the status of an authorised bank, which is to fulfil currency control. The NBU issues general and individual licenses for currency transactions depending on the nature of and the term for the performance of each particular currency operation. General licenses are issued to commercial banks, credit and financial institutions in Ukraine, to the national post operator for carrying out currency transactions, which do not require an individual license. Here, we suppose

that certain priority is established for individual licenses, acquisition of which needs to be considered on a primary basis nearly in every case. It also means all the transactions that require individual license cannot be covered by the general one. Individual licenses are issued to residents and non-residents (both individuals and legal entities) in order to perform certain single currency transaction and are valid only for the period required to carry out such transaction. The problem is that applicable legislation provides for a definite list of currency transactions which require the acquisition of an individual license. The NBU has adopted a number of regulations that cover, inter alia, the following issues: placement by residents and non-residents of currency values on accounts opened abroad; remittance of currency values by residents from Ukraine in order to purchase bonds of external government loans of Ukraine; remittance by residents of foreign

currency from Ukraine to pay for currency values; making investments abroad; payments between residents and non-residents in the Ukrainian national currency within commercial turnover; remittance of foreign currency from Ukraine to pay for banking metals and carry out certain currency operations; use of foreign currency

in Ukraine as a payment instrument; transfer of currency values and cheque forms to and from Ukraine by authorized banks and remittance of foreign currency from Ukraine in order to pay for banking metals; obtaining loans in foreign currency by residents from non-residents and provision of loans to non-residents by residents of Ukraine, etc. NBU licenses are issued on a paid basis and in any case must be obtained prior to carrying out any particular currency transaction. If one of the parties to a currency transaction has obtained an individual license, it means that the other party or any third party is allowed to carry out the same transaction, unless otherwise

contemplated by such a license. The NBU’s refusal to issue a relevant license can be contested in a court or arbitration. Thus, the subject of licensing is a rather complicated issue governed by a bunch of legislative acts that currently form a vast and, unfortunately, at times ambiguous legal base. We believe that the terms “license”, “written permit” and “general/individual license” should be clearly differentiated and that straight criteria for issuing various types of licenses should be specified. In other words, the relevant clauses of applicable currency legislation should be worded in a more precise and clear way, which would help to avoid inconsistencies in legislative provisions and any potential misunderstandings in the interpretation thereof [2].

References:

1. “The Ukrainian” №4-5; 2010

2. http://ogk.kiev.ua/OGH%20(2).pdf