The National Bank of Ukraine (NBU) has responded to more pressure from international traders to further ease the requirement for letters of credit (L/Cs) to be used for imports.

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

Requirement eased

The central bank has cancelled the requirement that L/Cs must be used for settlements of import contracts valued at more than US$1 million.

In its place, the NBU has issued a new requirement that L/Cs need to be used for imports with a transaction value of more than US$5,000.

Exceptions

Last year, the central bank responded to pressure from traders when it cancelled a very tough requirement to use L/Cs for settlements of import contracts valued at less than US$1 million (DC World News, 26 August 2016).

Ukraine's mandatory L/C requirement does not apply to imports of oil, natural gas, non-irradiated fuel elements, electricity, gasoline, fuel oil, diesel fuel oil or military goods and services.

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