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Currency Regulation Prevents Selling Ukrainian Goods Abroad Via the Internet

16.12.2016 Andriy Savanets, USAID Leadership in Economic Governance (LEV) Program legal expert, explains in a ‘Hubs’ column about how the lack of direct possibility of opening accounts in foreign banks hinders exports from Ukraine and how to get rid of this problem.

In summer 2015 LEV experts initiated the simplification of foreign exchange controls while exporting services. When working out draft law №4496, which became the basis of the relevant law, we have faced a similar situation, related to the undue bureaucratization of the export of goods. It turns out that excessive control by the National Bank does not simplify the life of entrepreneurs. In turn, it encourages them to use payment systems, which bypass the existing regulations. Although, despite the convenience, such systems lead to significant transaction costs even when transferring small amounts of money. It is unfavourable for microentrepreneurs, who export hand-made and similar products.

What should we do? High cost minimization can be achieved by opening direct accounts in foreign banks without the need to obtain NBU license. To do that, it is necessary to update the Decree of the Cabinet of Ministers ‘On the System of Currency Regulation and Currency Control’. I consider it worth noticing, that the NBU understands the importance of liberalization of currency regulation. So, we hope that this rule will be reflected in the new law on currency regulation, which is being worked out. At least, the National Bank declares its readiness, if not immediately, to cancel licenses for opening accounts abroad. And it should be the next logical step in the deregulation of small and middle businessmen` export activities.

Read the full text [in ukrainian]