Publication date: 08.07.2024
Legal regulation of currency control
Currency control is an important component of the financial system of any country. It is aimed at regulating currency transactions and ensuring the stability of the national currency. In this article, we will review the main aspects of legal regulation of currency control in Ukraine, including the regulatory framework, currency control authorities, control procedures and liability for violation of currency legislation.
Legal and regulatory framework
The main legal acts regulating currency control in Ukraine are:
- TheLaw of Ukraine "On Currency and Currency Transactions ", which is the basic law defining the general principles of currency transactions and currency control.
- Resolution of the National Bank of Ukraine (NBU) "On Approval of the Regulation on Currency Supervision" - regulates the procedure for currency supervision and control by the NBU.
- TheLaw of Ukraine "On the National Bank of Ukraine" - defines the powers of the NBU in the field of currency regulation and control.
- Civil Code of Ukraine - contains general provisions on transactions with foreign currency.
- Tax Code of Ukraine - regulates taxation of foreign currency transactions.
Authorities exercising currency control
In Ukraine, several state authorities exercise currency control:
- TheNational Bank of Ukraine (the "NBU ") is the main currency control authority, regulating currency transactions and issuing regulations on currency regulation.
- TheState Tax Service of Ukraine (STS) - controls compliance with tax legislation in the course of currency transactions.
- TheState Customs Service of Ukraine - controls currency transactions when goods are moved across the customs border of Ukraine.
- Financial Monitoring - controls transactions to prevent money laundering and terrorist financing.
Currency control procedures
Registration of currency transactions
One of the main tools of currency control is the registration of currency transactions. All currency transactions carried out by residents and non-residents in Ukraine must be registered in accordance with the established procedure. Registration is performed by the NBU by maintaining relevant registers.
Licensing
Certain types of currency transactions are subject to licensing by the NBU. In particular, this applies to:
- Foreign exchange transactions with foreign currency in the domestic market.
- Transactions ontransfer of currency values outside Ukraine.
- Transactions onimport and export of foreign currency.
Maintaining foreign currency accounts
Residents of Ukraine have the right to open foreign currency accounts in authorized banks of Ukraine. Authorized banks control transactions on such accounts and report to the NBU on all transactions.
Reporting
Currency transactors are required to submit reports on their currency transactions to the NBU. The reports must contain information on the nature of the transactions, amounts, and counterparties. The NBU reviews the submitted reports and takes appropriate measures in case of violations.
Control over compliance with currency legislation
The currency control authorities exercise ongoing supervision over compliance with currency legislation. This includes:
- Inspections - conducting scheduled and unscheduled inspections of currency transactions.
- Monitoring - analysis of financial transactions to identify suspicious transactions.
- Audit - conducting an audit of the financial activities of currency transactions.
Liability for violation of currency legislation
Violations of currency legislation are subject to administrative, financial and criminal liability.
Administrative liability
Individuals and legal entities may be held administratively liable for such violations:
- Violation of the procedure for conducting currency transactions - fines for violation of registration, licensing, reporting requirements, etc.
- Failure to comply with the deadlinesfor settlements under export-import transactions - fines for violation of the deadlines for settlements with foreign counterparties.
- Violation of the rules for maintaining foreign currency accounts - fines for violation of the procedure for maintaining foreign currency accounts and conducting transactions on them.
Financial liability
Financial liability involves the imposition of fines and penalties for illegal currency transactions. This may include:
- Finesfor unregistered transactions - fines for conducting currency transactions without registration or license.
- Confiscation ofcurrency values - confiscation of illegally imported or exported currency values.
- Compensation for losses - recovery of losses caused by violations of currency legislation.
Criminal liability
Criminal liability for violations of currency legislation may arise in the following cases:
- Moneylaundering - conducting financial transactions for the purpose of legalizing the proceeds of crime.
- Terrorist financing - the use of currency transactions to finance terrorist activities.
- Other serious crimes - conducting currency transactions for the purpose of committing other serious crimes.
International cooperation in the field of currency control
Ukraine actively cooperates with international organizations and other states in the field of currency control. The main areas of cooperation are as follows:
- Exchange ofinformation - exchange of information on suspicious financial transactions and currency transactions.
- Joint activities - conducting joint activities to detect and stop illegal currency transactions.
- Unification of legislation - harmonization of national currency legislation with international standards and recommendations.
Challenges and prospects
Legal regulation of currency control in Ukraine faces a number of challenges:
- Shadow economy - a significant part of currency transactions is carried out in the shadow, which makes it difficult to control them.
- Corruption - corrupt practices in the field of currency control reduce the effectiveness of its implementation.
- International sanctions - the impact of international sanctions on the Ukrainian economy and currency transactions.
Prospects for the development of currency control in Ukraine include:
- Improvement of legislation - adaptation of national legislation to international standards and recommendations.
- Increasingtransparency - ensuring transparency of currency transactions and reporting.
- Strengthening control - increasing the efficiency of control over currency transactions through the use of modern technologies and monitoring methods.
Conclusions.
Currency control is an important component of the financial system of Ukraine, which contributes to the stability of the national currency and economic security of the state. The legal regulation of currency control includes registration, licensing, maintenance of foreign currency accounts, reporting and supervision over compliance with currency legislation. Liability for violations of currency legislation may be administrative, financial and criminal. International cooperation in the field of currency control is an important element of combating illegal currency transactions and ensuring financial stability.
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