Is it possible to carry out import operations under foreign economic agreements without importing goods to the territory of Ukraine and what is the term and conditions of completion of such operation during the martial law?

Article 1 of the Law of Ukraine № 959-XII as of 16.04.1991 “On foreign economic activity” with changes and amendments stipulates that import (import of goods) is a purchase of goods (including non-monetary payment) by Ukrainian subjects of foreign economic activity from foreign economic entities with or without import of these goods to the territory of Ukraine, including purchase of goods intended for own consumption by institutions and organizations of Ukraine located abroad.

Paragraph 21 Section II of Regulations on measures to protect and determine procedure for certain operations in foreign currency, approved by Resolution № 5 of the Board of the National Bank of Ukraine (hereinafter – NBU) as of 02.01.2019 with changes and amendments, stipulates that deadlines for payments for export and import of goods are 365 calendar days.

Sub-paragraph 3 Paragraph 6 of Instruction on the procedure of currency supervision of banks on residents’ observance of deadlines of settlements on export and import of goods, approved by Resolution № 7 of the Board of the NBU as of 02.01.2019  with changes and amendments (hereinafter – Instruction № 7), stipulates that bank supervises currency compliance with resident’s deadlines for settlements on the resident’s import operation, if on the date of payment for goods by resident [and in case of settlements in the form of a documentary letter of credit – on the date of bank’s payment in non-resident’s favor (date of debiting the bank account)] import operation without import to Ukraine has not been completed or the bank has no information about completion of import operation without importing goods to Ukraine.

Sub-paragraph 5 Paragraph 9 Section III of Instruction № 7 stipulates that bank completes currency supervision of residents’ compliance with payment deadlines in case of import of goods without importing them to the territory of Ukraine after crediting funds from non-resident to current resident’s bank account in case of sale of goods to non-resident in full outside Ukraine (including funds transferred by resident from own account opened abroad, if payments for sale of goods to non-residents outside Ukraine were made through resident’s account opened abroad and if resident submitted documents from  foreign bank confirming crediting funds from non-resident for goods) or submission of documents confirming resident’s use of goods outside Ukraine on the basis of agreements (contracts), other forms of documents used in international practice and may be considered as an agreement.

At the same time, according to the Decree of the President of Ukraine№ 64/2022 as of 24.02.2022, the martial law was imposed on the entire territory of Ukraine.

Work of banking system of Ukraine during the martial law is regulated by Resolution of the Board of the National Bank of Ukraine № 18 as of 24.02.2022 “On the work of banking system during the martial law” (hereinafter – Resolution № 18).

Paragraph 14 Note 2 of Resolution № 18 stipulates that for a period of the martial law deadlines for settlements on export and import of goods are 90 calendar days and are applicable to operations carried out from 05.04.2022.

At the same time, Paragraph 14 Note 3 of Resolution № 18 determines that deadlines for settlements specified in Paragraph 14 Note 2 Resolutions № 18:

1)are not applicable to export, import of goods (including incomplete settlements for operation), amount of which (equivalent to the official exchange rate of UAH to foreign currencies set by the NBU on the date of carrying out operation) is less than amount, determined in Article 20 of the Law of Ukraine №361-IX as of 06.12.2019 “On prevention and counteraction to legalization (laundering) of proceeds from crime, terrorist financing and financing of proliferation of weapons of mass destruction”, except for fragmentation of export operations or fragmentation of foreign exchange operations;

2)are applicable taking into account exceptions and (or) features for certain goods and (or) sectors of economy set by the NBU at the request of the Cabinet of Ministers of Ukraine according to the Second clause of Part 1 Article 13 of the Law of Ukraine № 2473-VІІІ as of 21.06.2018 “On currency and currency transactions”.

As follows, current legislation does not prohibit implementation of import operations without import of goods to the territory of Ukraine under foreign economic agreements during the martial law.

More information is in the “Knowledge Base” of public information and reference resource