Rapid political changes in
Ukraine after the presidential campaign of January 2010 resulted in the
adoption of a number of laws and regulations, which might significantly impact
the business environment in Ukraine. These recent legislative developments can
directly or indirectly affect foreign investments in Ukraine.
Banking and Finance
Lifting Restrictions on Early Repayment of Cross-Border Loans
On 14 May 2010, the President of Ukraine signed a new law which amends a
number of controversial anti-crisis measures introduced in 2009, including the
restriction on early repayment of cross-border loans.
The law repealed the moratorium imposed on Ukrainian borrowers prepaying
foreign currency loans received from foreign lenders. This moratorium arguably
applied both to voluntary prepayment and prepayment resulting from acceleration
of the loan upon the occurrence of an event of default.
The law also reinstated the right of parties to cross-border loan agreements to
amend such agreements, even if such amendment would bring forward the maturity
date or provide for the prepayment of such loan.
At the same time, it should be noted that the other rules on registration of
cross-border loans with the National Bank of Ukraine, including the cost of
funds limitations, still remain in effect. [footnotes omitted]
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Olexiy V. Kostromov
(LL.M. McGill) is a senior associate at the Kyiv Office of Clifford Chance,
where he advises clients on cross-border M&A deals, various aspects of
corporate, commercial, and labour law. Before joining Clifford Chance in January
2009, Mr Kostromov headed the Ukrainian desk at the Warsaw Office of Salans. He
is an author of more than thirty articles on various issues of Ukrainian law.