As part of the war, Ukraine imposed a number of bans and abrogated a dozen international treaties. Let’s understand what has changed for companies in the Republic of Belarus and the Russian Federation.
Since February 24, banks have been banned from all cross-border transfers, except in cases provided for by the National Bank of Ukraine. Most exceptions allow transfers in the interest of the government. The only remaining exception for businesses is payment for the import of essential goods and services into Ukraine. The list is determined by a government, and includes:
- energy carriers;
- defense goods;
- goods necessary for industry and agriculture;
- medical material;
- payments for license agreements, including royalties;
- telecommunications services;
- advertising activities;
Important: Delivery of these imports is expected to occur after February 23, 2022.
Banks are also prohibited from carrying out foreign exchange transactions in the following cases:
- if the operation is carried out in Russian and Belarusian rubles;
- the participant in the operation is a legal or natural person who has a location (registered / permanent resident) in the Russian Federation or the Republic of Belarus;
- perform an operation to fulfill obligations to legal or natural persons who are located (registered / permanent residents) in the Russian Federation or the Republic of Belarus.
“foreign exchange transactions” means all payments in foreign currencies, or with non-residents.
The last point blocks most transactions under contractual obligations
However, in the event of, for example, replacement of the creditor or reimbursement of the debt of the guarantor by way of recourse, payments will be made, because the above criteria are lacking.
In addition, the resolution of the NBU of February 24 suspended the implementation of expenditure operations by providing the service of banks on the accounts of residents of the Russian Federation / Republic of Belarus, on the accounts of legal entities (to except banks) whose ultimate beneficial owners are residents of Russia. Federation / Republic of Belarus. There are a number of exceptions to the ban, namely payment of salaries, transfers for the armed forces, insurance payments, payment of bank charges and transfers and others.
The National Bank of Ukraine banned transfers using electronic means of payment issued by participants of international payment systems operating in Russia and Belarus by a resolution of March 1. At the same time, international payment systems such as Western Union and PayPal announced the suspension of international payments. transfers from and to Russia.
As a result, it is impossible to exchange and pay directly.
After February 24, the abolition of agreements with the Russian Federation and the Republic of Belarus intensified in Ukraine. The following agreements and contracts have already been terminated:
- Agreement between Ukraine and Russia on mutual recognition and equivalence of documents on education and academic titles;
- Agreement between Ukraine and Belarus on mutual recognition and equivalence of documents on education and academic titles;
- Agreement between Ukraine and Russia on cooperation in the field of creation and exploitation of space and rocket technology;
- Agreement between Ukraine and Russia on cooperation in the field of fisheries;
- Agreement between Ukraine and Russia for the avoidance of double taxation of income and property and the prevention of tax evasion.
In practice, this means that Ukraine:
- ceases to recognize documents on education, academic titles and diplomas of Russia and Belarus;
- imposes double taxation on residents of the Russian Federation (that is, in case of income, taxes will have to be paid twice – in Ukraine and in Russia);
- refuses to work with the Russian Federation in the field of missile construction and fishing.
Import and export
The denunciation of the double taxation agreement was a step towards the reduction of trade with Russia. It is important that this agreement applies not only to imports / exports, but also to people earning money in a non-resident country. A similar agreement between Belarus and Ukraine has not been canceled.
However, there are a number of general prohibitions on property and resources. Thus, in order to meet the needs of the natural gas market of Ukraine, the Ministry of Energy of Ukraine banned the export of natural gas from the customs territory of Ukraine, by order №99 of 03.03 .2022.
Moreover, since the beginning of the war, it is forbidden to export critical raw materials from Ukraine. Some bans have now been lifted but are still in place for salt, sugar, rye, buckwheat, oats, potash and phosphorus fertilizers.
A number of land customs crossings on the border with the Republic of Belarus and the Russian Federation were closed by order of the Council of Ministers of February 26, 2022. Customs at airports are also not working due to space air closed.
The resolution of the Ukrainian government of April 9, 2022 was an extreme, but not the last, ban on business relations. He banned all imports from Russia. There is no similar resolution for Belarus. But due to closed checkpoints and sanctions for settlements with residents of the Republic of Belarus, it is almost impossible to continue economic relations.
Ukraine is gradually reducing the number of economic and trade ties with the Russian Federation and the Republic of Belarus. The general trend is that the number of bans will only increase.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.