The National Bank of Ukraine (NBU) has responded to pressure from importers and exporters to soften restrictions on letter of credit (L/C) transactions.

The new softer terms do not however apply to import transactions with Russia because the Ukrainian government has extended its embargo on this type of transaction.

Stimulating trade

The central bank has cancelled the requirement to use L/Cs for settlements of import contracts valued at less than US$1 million.

In another move to stimulate imports and exports, the NBU has extended the term for settling payments under export-import transactions from 90 to 120 calendar days

Embargo remains

But the Ukrainian government has extended the embargo on goods supplied from Russian through to 31 December 2017.

The embargo may be lifted earlier if the Russian government removes a similar embargo against Ukraine.

The embargo was imposed on 10 January 2016 in response to restrictions imposed by Moscow against products imported from Ukraine and applies to food products, beverages, insecticides, herbicides and some other goods.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.