Some 253 lawmakers supported the bill / Photo from UNIAN
Under the law, everything which is not forbidden will be allowed on Ukraine's forex market.
Ukraine's Verkhovna Rada has approved the presidential draft law on currency, which will cancel the decree on currency regulations and ensure free forex operations.
Respective bill No. 8152 "On Currency" passed the first reading with 253 lawmakers' votes in its favor and with the required minimum of 226 votes.
Presenting the bill, presidential envoy in parliament Iryna Lutsenko said that the current legislation is outdated and is not in line with current practice of currency regulation.
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"The draft law proposes the cancellation of the outdated decree on the system of currency regulation and the introduction of the principle that 'Everything which is not forbidden is allowed.' The adoption of the law will allow the elimination of inefficient restrictions. In particular, investing abroad within limits will no longer require individual licenses. Currency control for transactions exceeding UAH 150,000 (US$5,725 at the current forex rate as of May 17) will be replaced with currency supervision, and transactions below UAH 150,000 will not be subject to supervision. It will not be necessary to register loans from nonresidents," she explained.
Lutsenko also noted that the adoption of the law would improve the legislative framework and bring it in line with the best European practices on the free movement of capital, expand the ability of residents to develop foreign economic activities and increase exports, create favorable conditions for investing capital in the Ukrainian economy.
In turn, the author of alternative bill No. 8152-1, Member of Parliament Lena Sotnyk noted that the presidential bill proposes repealing the decree, but does not offer real currency liberalization.
"It gives full discretion to the National Bank to determine all the restrictive measures on the market. Moreover, this contradicts to the Constitution, since no responsibility is determined. The National Bank will be able to let or not to let some entities work. Therefore, we proposed an alternative bill. It clearly defines such a notion as a free flow of capital and clearly states that restrictive measures can be applicable for no longer than six months during one year. It does not limit financial settlements in foreign currency. We introduce clear responsibility so that businesses could be aware what they will pay fines for," she said.
The explanatory note to bill No. 8152 defines currency regulations, establishes general provisions for conducting foreign exchange operations on the territory of Ukraine, gives details of the implementation of currency transactions (with exceptions for settlements that can be carried out in the territory of Ukraine in foreign currency), forex trading, cross-border transfers and movement of currency values.
The draft also establishes rules for the licensing of professional activities in providing services for currency transactions. It outlines specifics of currency supervision (rights and obligations of entities involved in the activity) and information exchange between currency exchange entities, including currency supervision entities. Besides, it gives details about sanctions for the violation of currency regulations.
Also, the rights and obligations of residents and nonresidents in the sphere of currency transactions are regulated in detail, including the obligation to submit documents and information to the agencies and agents of currency supervision.
"To ensure the country's economic security and to follow the principle of consistency in the process of liberalization of the forex market, the bill leaves the minimum necessary powers with the National Bank of Ukraine, which will help it to prevent a sudden outflow of short-term capital and related excess pressure on the forex rate, as well as the destabilization of the forex market," the document says.