FOREIGN EXCHANGE RESTRICTIONS AND THEIR MEANING IN THE CONDITIONS OF THE LEGAL REGIME OF MARTIAL STATE

Author
, Postgraduate student of the Department of Financial Law, Ukraine, Kharkiv

In heading

 Law;

Signed print

 19.12.2024

Issues number

 2024 - №4 (59)

Page

 98-112

Type of articles

 Scientific article

Code UDK

 347.73:339.74]:342.9»364»

ISSN print

 2411-5584

Abstract

 Problem setting. The issue of establishing currency restrictions is currently in the focus of attention of both the scientific community and practitioners. The adoption on November 19, 2024 by the Board of the National Bank of Ukraine of the Resolution «On Amendments to the Resolution of the Board of the National Bank of Ukraine dated February 24, 2022 No. 18» No. 136 confirms the shift in emphasis from the liberalization vector, which was implemented with the adoption of the Law of Ukraine «On Currency and Currency Operations», towards strengthening currency restrictions. It is considered appropriate to study the content of the aforementioned regulatory legal act in order to outline the main changes in the context of currency restrictions and determine the consequences and significance of such restrictions.
Recent research and publication analysis. Scientists consider and define currency restrictions in various aspects, such as: an instrument (administrative and direct) of currency regulation, which is designed to ensure the stability of the monetary unit; a system of rules established by legal norms aimed at applying restrictive regulations on transactions with currency values; regulatory measures designed to achieve the goals of currency policy; a set of legislative or administrative prohibitions, limitations or regulation of transactions of residents and non-residents with currency values.
Paper objective. The purpose of this work is to analyze the currency restrictions introduced by the National Bank of Ukraine, characterize their consequences and significance.
Paper main body. The Resolution of the NBU Board «On Amendments to the Resolution of the Board of the National Bank of Ukraine No. 18 of February 24, 2022» dated November 19, 2024 No. 136 outlines the following list of changes that will apply to the following areas:
I. Transfer of funds to fulfil obligations under import contracts.
II. Settlements under international technical assistance projects.
III. Repatriation of dividends abroad.
IV. Use of foreign currency loans to purchase securities denominated in foreign currency.
The introduction of new currency restrictions along with the abolition of existing ones is a consequence of the implementation of currency policy through currency regulation. New currency restrictions can be characterized as: firstly, anti-crisis, secondly, temporary, because they are provided for the period of the legal regime of martial law in the territory of Ukraine. For their purposes, the analyzed currency measures are aimed at ensuring price stability, financial stability, which, in turn, includes the stability of the banking system and the currency system. In addition, the analyzed currency restrictions are discriminatory precisely due to the fact that the redistribution of currency values is carried out in favour of the state and large enterprises.
Conclusion of the research. The analyzed currency restrictions in the conditions of a full-scale war and, accordingly, economic, financial and political instability, are quite justified. They are designed to ensure the equalization of the balance of payments, manage gold and foreign exchange reserves, ensure the stability of the monetary unit, price and financial stability, and the stability of the banking system, ensure the equalization of the balance of payments, maintain stable exchange rate dynamics and concentration of currency values in the hands of the state in the form of reserves.
Short Abstract for an article
Abstract. In this paper, the author aims to study the currency restrictions introduced by the National Bank of Ukraine in November 2024, to determine their consequences and to outline the significance of such currency restrictions. In order to achieve this goal, the author analysed the provisions of the Resolution of the Board of the National Bank of Ukraine ’On the operation of the banking system during the period of martial law’ No. 18 dated 24.02.2022 and the Resolution of the Board of the National Bank of Ukraine ’On Amendments to the Resolution of the Board of the National Bank of Ukraine No. 18 dated 24 February 2022’ No. 136 dated 19.11.2024 and outlined the main currency restrictions introduced on 20.11.2024. Along with the study of the provisions of legal acts, the author examined the views of scholars on the subject of their study of currency restrictions, their consequences and significance. As a result, the author in this paper derives the significance of currency restrictions as an instrument of currency regulation in the national legal system.
The study was carried out using such methods of scientific cognition as formal legal, logical and legal methods, methods of description and comparison, as well as methods of structural and functional analysis.
As a result, the author identifies the main currency restrictions imposed by the National Bank of Ukraine, outlines their consequences and significance, and emphasises the controversial nature of the issue of efficiency and effectiveness of such currency restrictions. The latter is logically a future subject of scientific research through the study of law enforcement practice.

Keywords

 currency regulation, currency restrictions, currency regulation instrument, currency legal relations, legal prohibitions.

Reviewer

External reviewer

Article in PDF

 Economic Theory and Law, 2024-4-98-112

Bibliography

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Code DOI

 https://doi.org/10.31359/2411-5584-2024-59-4-98

This post is also available in: Ukrainian

19.12.2024