Main content and commitments of Ukraine
Ukraine took a commitment to take all measures to establish the liberalization of the movement of capital, which will be equal to the level of the EU legislation. Such liberalization is one of necessary preconditions to establish a common market of financial services.
Cooperation of Ukraine and the EU in current payments and movement of capital is provided in Chapter 7, Title IV “Trade and trade-related matters” of the Association Agreement (Articles 144-147).
The Agreement provides that the EU and Ukraine:
- allow all kinds of payments and transfers in convertible currency between the parties;
- provide free movement of capital related to the provision of credits and portfolio investments;
- do not establish limitations on the movement of capital and do not restrict current conditions;
- consult each other in order to facilitate movement of capital.
Association bodies
The Trade and Sustainable Development Subcommittee
Responsible bodies in Ukraine
- National Bank of Ukraine;
- National Commission for the state regulation of financial services market;
- The Ministry of Economic Development and Trade of Ukraine.
Expected results
- The reduction of restrictions on current payments is the expectable result for the implementation of the Agreement.
- Above all, the reduction of the possibility of establishing new restrictions is described, particularly concerning medical bills, education abroad, online purchases and services.
- Lifting of the restrictions on export-import transactions and foreign direct investments for the enhancement of export potential of our country is also envisaged.
- Next step should be a liberation of portfolio investments and debt capital flows.
- On the final stage all the barriers on the financial transactions of private individuals abroad will be abrogated.
The state of adaptation of Ukrainian legislation and cooperation with the EU
Among the main steps to achieve purposes of the Association Agreement in the area of financial services:
- a decent number of currency restrictions for corporate and private individuals were lifted and simplified;
- measures for the liberalization of the exchange market were drafted.
The concept of currency liberalization provides the draft of the Law of Ukraine “On foreign currency” which will enable National Bank of Ukraine to react more effectively and rapidly on the changes of the balance of payments and market conditions.
Gradual work on the debureaucratization and liberalization of the currency market is also conducted.
Basic documents in this sphere are approved, a public version of the concept of new exchange regulations was presented.