SECTION I. GENERAL PROVISIONS

Article 1. Terms and Notions

The terms and notions used herein shall have the following meaning:

"bank" shall denote a legal entity, which conducts the business on the acceptance of deposits from natural persons and legal entities, keeping of accounts and provision of credits subject to the own conditions on the basis of a license issued by the National Bank of Ukraine;

"banking metals" shall denote gold, silver, platinum, platinum-group metals affinated to the highest mark of assay according to the national standards, both in ingots and as powder, provided with quality certificates, as well as coins made of the precious metals;

"banking regulation" shall denote one of the functions of the National Bank of Ukraine consisting in the establishment of a system of norms regulating the banking business, determine the general principles of the banking business, the procedures of the implementation of the banking supervision, the responsibility for the violation of the banking legislation;

"banking supervision" shall denote a system of the control and active orderly actions of the National Bank of Ukraine aimed at ensuring of the banks' and other financial and credit institutions' compliance with the laws of Ukraine and the established norms in the course of their activities, in order to ensure the stability of the banking system and protect the depositors' interests;

"currency values" shall denote the material objects defined by Ukraine's currency regulation legislation as the means of the currency and financial relations;

"open market" shall denote the market, where the securities purchase and sale transactions are effected between the persons, who are not the primary lenders and borrowers, provided that the proceeds from the sale of securities at such market are received by securities' holders, but not the issuers thereof. As a rule, it should be used by central banks for the purposes of the sale and purchase of the short-term state securities in order to regulate the monetary mass. The investment of funds into the national economy increases as the result of the purchase and reduces as a result of the sale;

"currency position" shall denote the ratio between bank's claims and liabilities in the foreign currency. If they are equal, the position shall be deemed closed, otherwise it shall be deemed open. An open position shall be deemed short, if the amount of liabilities in the sold currency exceeds the amount "of claims, and open, if the amount of claims in the purchased currency exceeds the amount of liabilities;

"monetary and crediting policy" shall denote a set of actions in the sphere of the money turnover and crediting aimed at the regulation of the economic growth, suppression of the inflation and ensuring of the stability of the monetary unit of Ukraine, employment of the population and the equalization of the balance of payments;

"monetary substitute" shall denote any instruments in the form of bank notes different from the monetary unit of Ukraine, issued by a body other than the National Bank of Ukraine and manufactured in order to effect payments in the process of the economic turnover;

"currency exchange policy" shall denote the policy of regulating the currency exchange rate by means of the sale and purchase of the foreign currency;

"discount monetary policy" shall denote the increase or reduction of the rate of interest on credit by the National Bank of Ukraine, in order to regulate the demand for and the supply of the lending capital;

"gold and currency reserve" shall denote Ukraine's reserves indicated in the balance sheet of the National Bank of Ukraine, including the assets recognized as international assets by the international community and designed for the international settlements;

"insider" shall denote a legal entity or a natural person, which has an access to the confidential information on the bank's business due to the official position, the share in the bank's capital, family connections and has an opportunity to use its status to study its own interests;

"last-instance creditor" shall, as a rule, denote the National Bank of Ukraine, to whom a bank or another financial and credit institution may apply for refinancing in case of the exhaustion of other refinancing opportunities. The National Bank of Ukraine shall be entitled, but not obliged, to grant refinancing credits to the bank, unless this is associated with risks to the banking system;

"treasury notes" shall denote debt securities issued by the state in the person of its authorized bodies, placed solely on a voluntary basis among the natural persons and legal entities and confirming the payment of monies by its owners to the budget and entitling them to obtain financial revenues or other interests according to the terms and conditions of their issue;

"metal accounts" shall denote the accounts opened by authorized banks of Ukraine to register transactions with the banking metals;

"general principles of the monetary policy" shall denote a set of the variable financial indicators enabling the National Bank of Ukraine to regulate the money turnover and crediting of the national economy by means of the monetary management instruments (means and methods), in order to ensure the stability of the monetary unit of Ukraine as a monetary pre-requisite to the economic growth and maintaining the high level of employment of the population;

"discount rate of the National Bank of Ukraine" shall denote the percentage commission taken by the National Bank of Ukraine for the refinancing of commercial banks by purchasing bills of exchange prior to their term of payment to be deducted from the nominal amount of the bill of exchange. The discount rate shall be the lowest among the refinancing rates and serve as a reference point for the price for money;

"official publication of the National Bank of Ukraine" shall denote a special printed bulletin designated as official by the National Bank of Ukraine and registered according to the established procedure, where the regulations of the National Bank of Ukraine are published together with the information, analytical, statistical and other materials, reviews of the status of Ukraine's banking system, monetary and financial markets, etc.;

"official exchange rate" shall denote the currency exchange rate officially set by the National Bank of Ukraine as an authorized body of the state;

"balance of payments" shall denote the ratio between the amount of pecuniary revenues obtained by the country from abroad and the amount of payments effected by it abroad during certain period. The balance of payments shall include the settlements related to the foreign trade, services, non-commercial transactions, revenues from the capital investment abroad, trade in licenses, affreigtment and service of vessels, tourism, upkeep of the diplomatic and trade missions abroad, monetary transfers of individuals, payments to other countries under loans, etc. The balance of payments shall include the capital flow: investments and credits;

"reserve position with the International Monetary Fund (hereinafter referred to as IMF)" shall denote the claims of a member country to the IMF, which are defined as a difference between the quota and IMF's assets in the currency of the member country less the monetary assets of the IMF received by a member country in the form of the credits from IMF and the balance on account No. 2 of the IMF, which shall not exceed 0.1 % of the member country's quota;

"refinancing rates of the National Bank of Ukraine" shall denote the percentage commission for credits granted to commercial banks, which is established by the National Bank of Ukraine in order to influence the money turnover and crediting. The National Bank of Ukraine shall establish the discount and pawn rates;

"special drawing rights (SDR)" shall denote the international reserve asset created by the IMF in addition to the existing international reserve assets, which is a basket of five currencies, whose make-up is revised every five years. The value of the special drawing rights is determined on a daily basis;

"financial and credit institution" shall denote a legal entity, which exercises one or several transactions, which are capable of being conducted by the banks, except for the acceptance of deposits from the population;

"price stability" shall denote maintaining the pricing system at a certain level by means of keeping a stable exchange rate of the monetary unit of Ukraine;

"insolvency" shall denote:
- the inability to meet the legitimate claims of creditors within one month;
- the reduction of the amount of own funds to a level, which is less than one third of the amount designated as the minimum required amount by the NBU.

Article 2. Legal Basis of Activities of the National Bank of Ukraine

The National Bank of Ukraine (hereinafter referred to as the National Bank) is the central bank of Ukraine, a specific central body of the state administration, whose legal status, objectives, functions, authority and organization principles are determined by the Constitution of Ukraine, this Law and other laws of Ukraine.

The management bodies and the headquarters of the National Bank shall be located in the City of Kyiv.

Article 3. Authorized Capital

The National Bank shall have the authorized capital, which is the state-owned property.

The authorized capital shall amount to UAH 10 million. It may be altered by a decision of the Council of the National Bank.

The sources of the authorized capital of the National Bank shall be the revenues of its estimate and the State Budget of Ukraine, if necessary.

Article 4. Economic Independence

The National Bank shall be an economically independent body, which shall pay the expenses for the account of own revenues within the limits of the approved estimate and, in cases provided for hereby, at the expense of the State Budget of Ukraine.

The National Bank shall be a legal entity with separated property, which is the object of the state property and is in the full economic competence of the National Bank.

The National Bank shall not be liable under the liabilities of the government bodies; the government bodies shall not be liable under the liabilities of the National Bank, except for their voluntary assumption of such an obligation.

The National Bank shall not be liable under the liabilities of other banks: other banks shall not be liable under the liabilities of the National Bank, except for their voluntary assumption of such an obligation.

The National Bank may open its institutions, branch and representative offices in Ukraine, as well as representative offices abroad.

The National Bank, its institutions, branch and representative offices shall have a seal with the National Emblem of Ukraine and their respective names.

Article 5.Revenues and Expenses

The obtainment of the profit shall not be the objective of the National Bank's activity.

The planned revenues and expenses of the National Bank shall be indicated in the estimate of its revenues and expenses. The revenue and expense estimate shall ensure the possibility of National Bank's performance of its functions as established by the Constitution of Ukraine and hereby.

In case of the excess of the estimate revenues over the estimate expenses approved for the current budget year, the National Bank shall include the positive difference covering the budget deficit in the State Budget of Ukraine for the year following the reporting year the excess of expenses over the revenues shall be reimbursed at the expense of the State Budget of Ukraine of the year following the reporting year.

The planning and accounting of revenues and expenses, as well as the formation of funds and reserves of the National Bank shall be carried out according to the Regulations to be approved by the Council of the National Bank of Ukraine.

Article 6. Main Function

According to the Constitution of Ukraine (254k/96-VR), the main function of the National Bank is to ensure the stability of Ukraine's monetary unit.

To carry out its major function, the National Bank shall foster the stability of the banking system and within its competence, the price stability.

Article 7. Other Functions

The National Bank shall carry out the following functions:

1. to determine and pursue the monetary policy in accordance with the General Principles of the Monetary Policy developed by the Council of the National Bank of Ukraine;
2. to issue the national currency of Ukraine on a monopoly basis and to organize its circulation;
3. to issue the national currency of Ukraine on a monopoly basis and to organize its circulation;
4. to establish the rules of conducting banking transactions, accounting and reporting, protection of the information, funds and property for the banks and other financial and credit institutions;
5. to organize and to provide the methodological support to the system of the monetary, crediting and banking statistical information and the statistics of the balance of payments;
6. to organize and to provide the methodological support to the system of the monetary, crediting and banking statistical information and the statistics of the balance of payments;
7. to determine the areas of the development of modern electronic banking technologies, to establish, co-ordinate and control the creation of electronic means of payment, payment system, banking automation and the banking information protection facilities;
8. to exercise the banking regulation and supervision;
9. to keep a Register of banks, their branch and representative offices, currency exchanges and financial and credit institutions, to license banking business and transactions, if provided for by the laws;.
10. to compile, analyze and forecast the balance of payments;
11. to represent Ukraine's interests in central banks of other states, international banks and other crediting institutions, where the cooperation takes place at the level of central banks;
12. to exercise the currency regulation with the competence to be defined by a special law, to determine the procedure of effecting payments in the foreign currency, to organise and exercise the currency control over the commercial banks and other credit institutions which are in possession of a National Bank's license for the transactions with currency values;
13. to ensure the accumulation and custody of the gold and currency reserves and the conduction of transactions with them and the banking metals;
14. to analyze the status of the monetary, crediting, financial, pricing and currency relations;
15. to organize the collection and transportation of bank notes, coins and other values
16. to implement the national policy of the protection of state secrets within the system of the National Bank;
17. to take part in the training of personnel for Ukraine s banking system;
18. to exercise other functions in the monetary and crediting sphere within its competence defined by the law.

SECTION II. MANAGEMENT BODIES OF THE NATIONAL BANK

Article 8. Management Bodies

The highest management body of the National Bank shall be the Council of the National Bank of Ukraine (hereinafter referred to as the Council of the National Bank). The governing body of the National Bank shall be the Board of the National Bank of Ukraine (hereinafter referred to as the Board of the National Bank).

Article 9. Powers of the Council of the National Bank

The Council of the National Bank:

1. shall develop and submit to the consideration by the Supreme Council (Parliament) of Ukraine the General Principles of the Monetary Policy for the information purposes till September 15, according to the National Economic Development Programme and Basic Parameters of the Economic and Social Development of Ukraine, and monitor the compliance with these General Principles;
2. shall analyze the impact of Ukraine's monetary policy on the condition of the social-economic development of Ukraine and develop proposals as to the introduction of the required changes thereto;
3. to make recommendations to the Board of the National Bank within the framework of the developed General Principles of the Monetary Policy:
   • as regards the methods and forms of forecasting the macro-indicators of the economic and social development of Ukraine, as well as the monetary policy;
   • individual monetary and regulatory actions and their impact on Ukraine's economic and social development;
   • the exchange rate formation and currency regulation policy;
   • the development of the banking system and individual regulations on the issues of the banking business;
   • improvement of   the payment system;
   • other issues referred to the competence of the National Bank by law.
4. shall approve the estimate of revenues and expenses of the National Bank and submit to the Supreme Council of Ukraine and the Cabinet of Ministers of Ukraine till September 1 of the current year the projections of the estimate balance to be included in the draft State Budget of Ukraine for the next year;
5. shall establish the forms of the remuneration of the labour of employees of the National Bank in accordance with the laws of Ukraine;
6. shall take decisions on changes in the authorized capital amount of the National Bank;
7. shall appoint the auditing company to audit the National Bank, deliberate on the auditors' opinion and approve the accounting balance sheet of the National Bank publish the annual balance sheet of the National Bank in the official printed media;
8. shall agree upon the Report over the National Bank's Estimate Performance and the Profit Allocation for the reporting budget year on an annual basis till July 1;
9. shall agree upon the Report over the National Bank's Estimate Performance and the Profit Allocation for the reporting budget year on an annual basis till July 1;
10. shall be entitled to use the suspensive veto with regard to individual decisions of the Board of the National Bank on the issues falling within its competence;
11. shall approve the decisions of the Board of the National Bank on the participation in international financing organizations, capital of the banks, financial and credit institutions;
12. shall approve the foreign economic agreements and other contracts, if the liability thereunder exceeds the authorized capital of the National Bank;
13. shall determine for the National Bank on an annual:
    • basis the following requirements to the diversification and liquidity of the assets;
    • quotas of the off-balance liabilities;
    • regulation with regard to the reserve formation, losses covering and the procedure of deducting revenues to the State Budget of Ukraine;
    • requirements to the minimum amount of the gold and currency reserves;
    • other performance indicators characterizing the National Bank's ability to meet its liabilities;
14. shall give the consent to the appointment and dismissal of members of the Board of the National Bank, subject to the submission by the Governor of the National Bank;
15. shall make recommendations to the Cabinet of Ministers of Ukraine as regards the: influence of the state borrowing and taxation policy on the status of the monetary and crediting sphere of Ukraine.

The Council of the National Bank may not give recommendations with regard to the expedience of appointing or dismissing the Governor of the National Bank, members of the Board of the National Bank or give the personal appraisal of the activities of individual officials of the National Bank, except for cases provided for in paragraphs 2 and 3 of this Article.

In case of the multiple non-performance or improper performance of decisions of the Council of the National Bank by the National Bank, which are mandatory hereunder, the Council of the National Bank shall be entitled to inform the Supreme Council of Ukraine and the President of Ukraine of its state and obtain a substantiated reply.

Article 10. Complement and Formation of the Council of the National Bank

The Council of the National Bank shall consist of fourteen persons.

A citizen of Ukraine with the highest economic or financial education or a scientific degree in the field of economics and finance and the experience of the continuous work in the legislative bodies or on the management positions in the central executive bodies of Ukraine or in a banking institution, or the scientific work experience in the field of the economics or finance may be a member of the Council of the National Bank.

The President of Ukraine shall appoint by a relevant Decree seven members of the Council of the National Bank, including the Governor of the National Bank due to his/her official capacity.

The members of the Council of the National Bank shall be appointed by the Supreme Council of Ukraine by means of the adoption of a relevant Resolution.

The candidates to be approved by the Supreme Council of Ukraine shall be discussed at a special open session of the relevant committee of the Supreme Council of Ukraine, which shall provide the Supreme Council of Ukraine with its recommendations.

The subsequent appointment of the members of the Council of the National Bank shall take place not later than three months before the expiry of the powers of the previous complement of members of the Council of the National Bank.

The term in office of the members of the Council of the National Bank shall be seven years, except for the Governor of the National Bank, who shall be appointed for the term of his powers in his office.

The powers of members of the Council of the National Bank shall be terminated due to the expiry thereof or shall be subject to the early termination by the appointing body in case:
- of member's own initiative, subject to an application in writing;
- of the termination of the citizenship or departure from Ukraine to a permanent place of residence;
- of coming into effect of an accusatory court sentence resulting from the commitment of a crime;
- of the death or a court's decision to declare a person dead or missing.

The President of Ukraine shall dismiss the members of the Council of the National Bank appointed by him by a relevant Decree but not earlier than in one year after the date of appointment.

The Supreme Council of Ukraine shall dismiss the members of the Council of the National Bank appointed by it by a relevant Resolution upon the submission of the relevant Committee of the Supreme Council of Ukraine but not earlier than in one year after the date of appointment.

The powers of the Governor of the National Bank as a member of the Council of the National Bank shall be terminated early in case of his/her resignation or dismissal for other reasons hereby.

Members of the Council of the National Bank shall carry out their functions on a voluntary basis. The members of the Council of the National Bank shall be reimbursed for their actual expenses incurred in connection with their duties according to the Regulations of the Council of the National Bank.

The internal issues of the organization of activities of the Council of the National Bank, the records management and other issues shall be determined by the Regulations to be approved at a session of the Council.

The Council of the National Bank shall be accommodated and the organizational/material support thereto shall be ensured by the National Bank of Ukraine for the account of its estimate expenses.

Article 11. Working Procedures of the Council of the National Bank

The sessions of the Council of the National Bank shall be held at least once per quarter.

The extraordinary sessions of the Council of the National Bank shall be convened by the Chairman of the Council of the National Bank upon his/her initiative or by the Council of the National Bank upon the urgent request of at least one third of its total complement. The members of the Council of the National Bank shall be notified of the session at least five days in advance. The Procedure of the preparation to the extraordinary session of the Council of the National Bank shall be determined by the Regulations of the Council.

The sessions of the Council of the National Bank shall be competent in case of the presence of at least eight members of the Council.

The sessions of the Council of the National Bank shall be chaired by the Chairman of the Council of the National Bank or, in case of his absence, by the Deputy Chairman according to the Regulations.

The decisions shall be taken by the simple vote of the majority of the total number of attending members of the Council of the National Bank. Each member of the Council of the National Bank shall have one vote.

Chief administrators of the central government bodies, representatives of the businesses, scientists and other specialists may be invited to attend sessions of the Council of the National Bank.

The members of the Council of the National Bank may take part in the activities of the Board of the National Bank with the right of the deliberative vote.

Article 12. Chairman and Deputy Chairman of the Council of the National Bank

The Chairman and the Deputy Chairman of the Council of the National Bank shall be elected by the Council of the National Bank for a period of three years.

The Chairman of the Council of the National Bank:
- shall organize sessions of the Council of the National Bank and chair the sessions of the Council of the National Bank;
- shall convene extraordinary sessions upon his initiative or upon urgent request of at least one third of the total number of the members of the Council of the National Bank;
- shall carry out other powers and functions according to decisions of the Council of the National Bank.

The Deputy Chairman shall replace the Chairman of the Council of the National Bank in case of his absence or inability to implement his powers, and shall carry out his powers and functions according to decisions of the Council of the National Bank.

The Chairman or the Deputy Chairman of the Council of the National Bank may be dismissed during the term of their powers for the following reasons:
- due to the expiry of the term of powers;
- upon his own initiative, subject to an application in writing;
- in case of the systematic failure to meet his obligations due to the health condition during four months.

In case of the termination of the powers of the Chairman or Deputy Chairman of the Council of the National Bank, the elections to this position shall be held according to the procedure provided for hereby.

Article 13. Decisions of the Council of the National Bank and the Suspensive Veto

The materials of sessions of the Council of the National Bank shall be issued in the form of Minutes of Meeting and Decisions and signed by the chairman of the session.

The decisions of the Council of the National Bank on the issues covered by paragraphs 1, 4-12 of Article 9 hereof shall be mandatory for the Board of the National Bank.

The recommendations of the Council of the National Bank shall be considered by the Board of the National Bank within five working days On the basis of such consideration, the Board of the National Bank shall be obliged to send a substantiated reply to the Council of the National Bank

The Council of the National Bank shall not be entitled to interfere in the operations of the Board of the National Bank

Should the Council of the National Bank apply the suspensive veto to an individual decision of the Board, such a decision shall become effective only if confirmed by two thirds of the total number of members of the Board of the National Bank not later than within five days after the date of the veto Should such a decision not be confirmed by two thirds of the total number of the member of the Board of the National Bank within the specified term, it shall be considered as failed to become effective If a decision of the Board of the National Bank has become effective prior to the application of the suspensive veto with regard thereto, such a decision shall be suspended from the moment of the veto until the confirmation by two thirds of the total number of the members of the Board of the National Bank within the specified term.

The decisions of the Council of the National Bank shall be subject to publication, unless these decisions contain national, banking or service secrets under the law

Members of the Council of the National Bank shall be prohibited from disclosing the national, banking and service secrets, of which they have become aware in connection with the exercise of their powers under the Regulations.

Article 14. Functions of the Board of the National Bank

According to the General Principles of the Monetary Policy, the Board of the National Bank shall ensure the implementation of the monetary policy by means of relevant monetary instruments and other means of the banking regulation, organize the performance of other functions in accordance with articles 6 and 7 hereof and manage the activities of the National Bank.

Article 15. Powers of the Board of the National Bank

The Board of the National Bank:

1. shall take decisions:

• on economic means and monetary methods required to implement the General Principles of the Monetary Policy according to the decisions of the Council of the National Bank taken with regard to these issues and the necessity to ensure the stability and the purchasing power of the national currency;
• on the emission of Ukraine's currency and the withdrawal of bank notes and coins from the circulation;
• on changing the interest rates of the National Bank;
  on establishing economic performance indicators for the banks, financial and credit institutions;
• on the amount and procedure of the formation of mandatory reserves for the banks, financial and credit institutions;
• on the application of sanctions to the commercial banks, financial and credit;
• on setting the limits to transactions on the open market effected by the National Bank;
• on the list of securities and other values qualifying as guarantee under the credits of the National Bank;
• on the conditions of the acceptance of the foreign capital in Ukraine s banking system;
• on the establishment and liquidation of enterprises and institutions of the National Bank;
• on the participation in the international financing organizations, in the capital of banks, in financial and credit institutions, subject to co-ordination with the Council of the National Bank;
• on the submission of international agreements and other contracts to the Council of the National Bank for approval, if the liability thereunder exceeds the authorized capital of the National Bank;
• on the purchase and sale of the property to support the activities of the National Bank.
2. shall submit the annual report of the National Bank, the draft estimate of revenues and expenses for the next year, other accounting and statistical information about the activities of the National Bank and Ukraine's banking system to the Council of the National Bank for consideration, if requested by the Council of the National Bank;
3. shall determine the organizational principles and structure of the National Bank, approve the regulations on structural subdivisions and institutions of the National Bank, Charters of its enterprises, the procedure of the appointment of managers of subdivisions, enterprises and institutions;
4. shall approve the staffing schedule of the National Bank;
5. shall specify the procedure of granting licenses for banking transactions, as well as of other licenses in cases and according to the procedure provided for by the law;
6. shall issue the regulatory documents of the National Bank;
7. shall approve the Regulations of the Board of the National Bank;
8. shall carry out functions provided for by Articles 3, 23, 28, 60 and 64 hereof, as well as other functions ensuing from the main objective of the National Bank.

The Board of the National Bank shall be chaired by the Governor of the National Bank.

The complement of the Board of the National Bank shall be approved by the Council of the National Bank subject to the submission by the Governor of the National Bank.

Deputy Governors of the National Bank shall be members of the Board of the National Bank due to their official capacity.

The procedure of organizing and holding sessions of the Board of the National Bank shall be determined by its Regulations

The Governor of the National Bank shall be appointed by the Supreme Council of Ukraine subject to the submission by the President of Ukraine by the majority of the constitutional complement of the Supreme Council of Ukraine for the period of five years.

Should the Supreme Council of Ukraine fail to appoint the candidate proposed by the President of Ukraine, the issues of managing the National Bank and the procedure of introducing a new candidate shall be regulated by the Law of Ukraine "On Temporary Discharge of Obligations of Officials Appointed by the President of Ukraine upon Consent of the Supreme Council of Ukraine or by the Supreme Council of Ukraine subject to the Submission by the President of Ukraine" (709/97-VR). The same candidate may not be proposed more than twice.

The Governor of the National Bank shall be dismissed by the relevant Resolution of the Supreme Council of Ukraine in the following cases:

1. expiry of the term in office;
2. coming into effect of an accusatory court sentence resulting from the commitment of a crime;
3. resignation for political or personal reasons submitted in writing to and accepted by the President of Ukraine;
4. death or a court's decision to declare a person dead or missing;
5. termination of the citizenship or departure from Ukraine to a permanent place of residence;
6. upon request of the President of Ukraine within his constitutional competence.

The Governor of the National Bank:

1. shall manage the operations of the National Bank;
2. shall act on behalf of the National Bank and represent its interests without the power of attorney in relations with the governmental bodies, banks, financial and credit institutions, international organizations, other institutions and organizations;
3. shall chair the sessions of the Board of the National Bank;
4. shall sign Minutes of Meetings of the Board of the National Bank, executive orders and instructions, as well as agreements concluded by the National Bank;
5. shall distribute duties among Deputy Governors of the National Bank;
6. shall issue administrative acts mandatory for all officials, enterprises and institutions of the National Bank;
7. shall take decisions on other issues related to the operations of the National Bank, other than those falling within the exclusive competence of the Council of the National Bank and the Board of the National Bank hereunder;
8. shall bear the personal responsibility toward the Supreme Council of Ukraine and the President of Ukraine for the operations of the National Bank.

The Governor of the National Bank shall have one first deputy and two deputies to be appointed and dismissed by the former subject to the consent of the Council of the National Bank.

The Directors of departments of the National Bank shall be appointed and dismissed by the Governor of the National Bank according to the laws of Ukraine on labour.

SECTION III. ORGANISATIONAL BASIS AND STRUCTURE OF THE NATIONAL BANK

The structure of the National Bank shall be built upon the principle of centralization with the vertical subordination.

The system of the National Bank shall comprize the central headquarters, branch offices (regional departments), settlement chambers, the Mint, the Bank Note Paper Factory, the State Treasury of Ukraine, the Central Storage, specialized enterprises, banking educational establishments and other structural units and subdivisions required to guarantee the operation of the National Bank.

Within the limits imposed by law, the National Bank shall independently solve the issues of the organization, establishment, liquidation and re-organization of structural subdivisions and institutions of the National Bank, its enterprises, and approve their respective charters and regulations.

For the purposes of the collection and protection of values and facilities, the National Bank shall have the intra-agency security service armed with combat guns.

The branch offices (regional departments) of the National Bank shall not enjoy the legal entity status and may not issue regulatory documents, they shall act on behalf of the National Bank within the framework of the powers granted by the latter The tasks and functions of the branch offices of the National Bank shall be determined by the Regulations to be approved by the Board of the National Bank.

SECTION IV. MONETARY POLICY

The general principles of the monetary policy shall be based upon the basic criteria and macroeconomic indicators of the national economic development programme and the Major Parameters of the Economic and Social Development of Ukraine for a period in question, including the projected indicators of the gross domestic product, the inflation level, the state budget deficit and sources of its compensation, the balance of payment and trade, all as approved by the Cabinet of Ministers of Ukraine.

Annually, the National Bank shall inform the Supreme Council of Ukraine about the major lines of the monetary and currency policy developed by the National Bank for the next year and a longer term.

The major economic means and methods of the monetary policy shall be the regulation of the monetary mass through:

1. the specification and regulation of the mandatory reserve norms for the commercial banks, financial and credit institutions;
2. interest policy;
3. commercial bank refinancing;
4. management of the gold and currency reserves;
5. transactions with securities in the open market;
6. regulation of the capital import and export.

The National Bank shall establish the mandatory reserve norms for the banks and other financial and credit institutions. At that:

1. the amount of mandatory reserves shall be established at a uniform rate for the banks and other financial and credit institutions as the percentage of the total amount of deposits accepted by a bank in the national and foreign currency;
2. for various types of liabilities, different mandatory reserve norms may be established;
3. the decision to increase the reserve norms shall become effective not earlier than in 10 days after its publication.

The National Bank shall establish the procedure of determining the discount rate and other interest rates for its transactions.

The National Bank shall provide for the management of the gold and currency reserves of the state by effecting currency intervention by means of the purchase and sale of the currency values in currency markets in order to influence the exchange rate of the national currency with regard to foreign currencies, as well as the total demand for and supply of money in Ukraine.

The purchase/sale of treasury notes, own liabilities of the National Bank (deposit certificates), as well as the commercial bills of exchange designated by the Board of the National Bank, other securities and debt liabilities shall be the open market transactions of the National Bank.

According to Ukraine's legislation on the foreign economic business and the system of the currency regulation and currency control, the National Bank shall regulate the import and export of the capital.

The Cabinet of Ministers of Ukraine shall be obliged to keep the funds of the State Budget of Ukraine and those of the extra-budgetary funds with the National Bank on accounts of the State Treasury of Ukraine.

The conditions and procedures of servicing the funds of the State Budget of Ukraine shall be determined by an agreement between the National Bank and the State Treasury of Ukraine.

SECTION V. MANAGEMENT OF THE CASH TURNOVER

The monetary unit of Ukraine shall be hryvnia equivalent to 100 kopecks.

The issue and circulation of other monetary units and the use of monetary substitutes as a tender in the territory of Ukraine shall be prohibited.

No official ratio between hryvnia and gold or other precious metals shall be established.

In order to organize the cash turnover, the National Bank shall provide for:

1. manufacturing and storing the bank notes and coins;
2. establishing the reserve stocks of bank notes and coins;
3. setting the face-values, protection systems, payment indications and the design of bank notes;
4. establishing the procedure of the replacement of damaged bank notes and coins;
5. establishing the rules of the issue to the circulation, storage, transportation, withdrawal and collection of the cash;
6. establishing the procedure of effecting cash transactions for banks, other financial and credit institutions, enterprises and organizations;
7. setting the requirements towards the technical condition and the organization of the protection of premises of banking institutions.

The exclusive right of the issue (emission) of hryvnia and small change, the organization of the turnover thereof and their withdrawal from the turnover shall be vested in the National Bank. The cash shall circulate in the form of paper bank notes and metal coins. The total amount of the issued bank notes and coins shall be indicated in the liabilities side of the National Bank's accounts.

Bank notes and coins shall be unconditional liabilities of the National Bank and guaranteed by all its assets.

The hryvnia (bank notes and coins) as the national currency shall be the only legal tender on the territory of Ukraine; it shall be accepted by all natural persons and legal entities without any limitation on the whole territory of Ukraine for all modes of payment, as well as for crediting the accounts, deposits, letters of credit and for the transfers.

The National Bank shall establish and publish the official exchange rate of hryvnia to the foreign currencies.

In order to regulate the exchange rate of hryvnia to foreign currencies, the National Bank shall use the gold and currency reserve, purchase and sell securities, establish and change the refinancing rate and utilize other instruments of regulating the circulating monetary mass.

The conditions and the procedure of conversion (exchange) of hryvnia for the foreign currency shall be established by the National Bank in accordance with currency regulation laws of Ukraine.

The National Bank may not restrict the rights of the members of the currency market to effect transactions with the foreign currency guaranteed to them by the law.

The worn-out and damaged bank notes of Ukraine shall be accepted and exchanged free of charge for the new bank notes by the National Bank and commercial banks of Ukraine without any limitation of the amount and term of such a replacement.

The specific features and the procedure of determining the validity of the bank notes, as well as the procedure of the exchange of the worn-out and damaged bank notes shall be established by the National Bank.

The National Bank, commercial banks of Ukraine shall be obliged to withdraw the counterfeit, faked and invalid bank notes and coins.

The procedure of withdrawing such bank notes shall be established by the National Bank and regulated by relevant regulatory acts.

The National Bank and commercial banks shall not be obliged to reimburse for the destroyed, lost, counterfeit, faked and invalid bank notes and coins.

The National Bank shall officially notify of the withdrawal of bank notes and coins of Ukraine from the circulation through the mass media.

The manufacture of counterfeit bank notes for the purposes of their issue into the circulation or their issue into the circulation shall carry the penalty according to the legislation of Ukraine.

SECTION VI. ORGANISATION OF SETTLEMENTS AND ACCOUNTING

Article 40. Regulation of Settlements

The National Bank shall establish rules, forms and standards of settlements of the banks, other legal entities and natural persons in the economic turnover of Ukraine by using both paper and electronic documents and cash, co-ordinate the organization of settlements, issue permits to effect clearing transactions and settlements by means of electronic documents.

The National Bank shall ensure the implementation of inter-bank settlements via its institutions, grant permits to effect the inter-bank transactions by means of direct correspondent relations of commercial banks and their own payment systems.

Article 41. Regulation of Accounting

The National Bank shall establish standards and rules of accounting and reporting complying with requirements of the legislation of Ukraine and mandatory for the banks and other financial and credit institutions.

SECTION VII. TRANSACTIONS OF THE NATIONAL BANK

Article 42. Types of National Bank's Transactions

In order to carry out its functions, the National Bank shall effect the following transactions:

1. granting credits to commercial banks and other financial and credit institutions to maintain the liquidity at the rate not lower than the refinancing rate of the National Bank and in accordance with the procedure specified by the National Bank;

2. granting credits to the Guarantee Fund for natural persons’ deposits under collateral in securities at the rate not lower than the inflation index for the term of 5 years; (Part 1 of Article 42 is supplemented with p.2 in accordance with Law N 2740-111 (2740-14) of 20.09.2001)

3. effecting discount transactions with bills of exchange and cheques according to the procedure specified by the National Bank;
4. purchasing and selling securities on the secondary market according to the procedure provided for by the legislation of Ukraine;
5. opening own correspondent and metal accounts with foreign banks and keep accounts of the correspondent banks;
6. purchasing and selling the currency values for the purposes of the monetary regulation;
7. keeping the banking metals, as well as purchasing and selling banking metals, precious stones and other jewels, memorable and investment precious-metal coins on the domestic and foreign markets without quotas and licensing;
8. placing the gold and currency reserves independently or through banks authorized by the National Bank to effect currency transactions, effecting transactions with gold and currency reserves of Ukraine with the banks, whose rating according to the classification of the international rating agencies complies with requirements to the first-class banks of not lower than category A;
9. accepting for keeping and management of the state securities and other values;
10. issuing guarantees and sureties according to the regulations approved by the Council of the National Bank;
11. keeping the account of the State Treasury of Ukraine free of charge and without charging the interest;
12. effecting transactions related to the service of the state debt, those related to the floatation of the state securities, their repayment and the payment of the revenues thereunder;
13. keeping personal accounts of employees of the National Bank;
14. keeping accounts of international organizations;
15. effecting the indisputable withdrawal of funds from accounts of its clients according to the legislation of Ukraine on the basis of a court's decision.

The National Bank shall also be entitled to effect other transactions required to ensure the performance of its functions.

The National Bank shall be entitled to take part in the formation of capital and activities of international organizations under international treaties, to which Ukraine is a party, as well as according to agreements between the National Bank and foreign central banks.

SECTION VIII. ACTIVITIES OF THE NATIONAL BANK WITH REGARD TO TRANSACTIONS WITH CURRENCY VALUES

The National Bank shall act as an authorized state body in the course of the enforcement of the laws of Ukraine on the currency regulation and currency control.

The following issues shall fall within the competence of the National Bank in the field of the currency regulation:

1. issue of regulations on the currency transactions;
2. issue of regulations on the currency transactions;
3. setting of limits of the open currency position for banks and other institutions involved in the purchase and sale of the foreign currency.

The National Bank shall determine the structure of the currency market of Ukraine and organize the trade in currency values thereon according to the laws of Ukraine on the currency regulation.

The National Bank shall pursue the discount monetary policy and the currency exchange policy and apply the currency restrictions, if necessary.

The National Bank shall pursue the discount monetary policy by altering the discount rate of the National Bank to regulate the flow of capital and to balance the payment liabilities, as well as to adjust the exchange rate of Ukraine's monetary unit to the foreign currencies.

The National Bank shall pursue the currency exchange policy on the basis of the regulation of the exchange rate of Ukraine's monetary unit to the foreign currencies by means of the purchase and sale of the foreign currency on financial markets.

To ensure the internal and external stability of Ukraine's monetary unit, the National Bank shall have the gold and currency reserve comprising the following assets:
- banking gold;
- special drawing rights;
- reserve position with IMF;
- foreign currency in bank notes and coins or funds on accounts abroad;
- securities (except for shares) paid in the foreign currency;
- any internationally recognized reserve assets, provided that their reliability and liquidity is ensured.

The gold and currency reserves shall be replenished by the National Bank by means of:

1. purchase of the banking gold and the foreign currency;
2. obtainment of revenues from transactions with foreign currencies, banking metals and other internationally recognized reserve assets;
3. acceptance of currency funds from international financial organizations, foreign central banks and other creditors by the National Bank.

The gold and currency reserve shall be utilized by the National Bank for the following purposes:

1. sale of the currency on financial markets to pursue the monetary policy, including the exchange rate policy;
2. expenses under transactions with foreign currency, monetary metals and other internationally recognize d reserve assets.

The utilization of the gold and currency reserves for granting credits guarantees and other liabilities to residents and non-residents of Ukraine shall be prohibited.

The National Bank of Ukraine shall be the sole custodian of the national gold and currency reserve, as well as of precious metals, stones and jewelry owned by the state.

The revenues and losses of the National Bank related to the re-evaluation of assets and liabilities represented in the form of the banking gold and foreign currency, special drawing rights, due to changes in the foreign currencies exchange rate and the price for gold, shall be taken into consideration and set off as follows:

1. net currency revenues and losses shall be offset against a corresponding amount on a special reserve account of the re-evaluation of currency reserves on the balance sheet of the National Bank;
2. the specified net revenues and losses shall not be taken into consideration, when calculating the annual income of the National Bank.

SECTION IX. RELATIONS WITH THE PRESIDENT OF UKRAINE, THE SUPREME COUNCIL OF UKRAINE AND THE CABINET OF MINISTERS OF UKRAINE

The National Bank shall be accountable to the President of Ukraine and the Supreme Council of Ukraine within their constitutional powers.

The accountability shall mean the following:

1. the appointment and dismissal of the Governor of the National Bank by the Supreme Council of Ukraine subject to the submission by the President of Ukraine;
2. the appointment and dismissal of the Governor of the National Bank by the Supreme Council of Ukraine subject to the submission by the President of Ukraine;
3. the appointment and dismissal of the half of the complement of the Council of the National Bank by the Supreme Council of Ukraine;
4. the report of the Governor of the National Bank to the Supreme Council- of Ukraine on the activities of the National Bank;
5. the provision of the information on the status of the national monetary and credit market to the President of Ukraine and the Supreme Council of Ukraine twice a year.

The National Bank and the Cabinet of Ministers of Ukraine shall hold reciprocal consultations on the issues of the monetary policy, the development and implementation of the National Economic and Social Development Programme.

Upon request of the Cabinet of Ministers of Ukraine, the National Bank shall provide the information as regards the monetary processes.

Upon request of the National Bank, the Cabinet of Ministers of Ukraine, ministries and other central executive bodies shall provide the information affecting the status of the balance of payments

The National Bank shall support the economic policy of the Cabinet of Ministers of Ukraine, unless it contradicts to ensuring the stability of the monetary unit of Ukraine.

The Governor of the National Bank or, upon his instruction, one of the Deputy Governors may take part in sessions of the Cabinet of Ministers of Ukraine with the deliberative vote.

In sessions of the Board of the National Bank, members of the Cabinet of Ministers of Ukraine may take part with the deliberative vote.

Any interference of the legislative and executive bodies or their officials in the exercise of functions and powers of the Council of the National Bank or the Board of the National Bank other than in limits specified hereby shall be prohibited.

The National Bank shall be prohibited from granting direct credits both in the national, and in the foreign currency to finance the expenses of the State Budget of Ukraine.

SECTION X. BANKING REGULATION AND BANKING SUPERVISION

The major objective of the banking regulation and supervision shall be the security and financial stability of the banking system, protection of interests of depositors and creditors

The National Bank shall exercise the functions of the banking regulation and the supervision over the business of banks, as well as other financial and credit institutions within the limits and according to the procedure provided for by the legislation of Ukraine.

The National Bank shall exercise the permanent supervision of the compliance of banks and other financial and credit institution with the banking legislation, regulations of the National Bank and the economic norms.

The National Bank shall issue regulations on the issues falling within its competence, which shall be mandatory for the governmental and self-administration bodies, banks, enterprises, organizations and institutions irrespective of the ownership forms, as well as for natural persons.

The regulations of the National Bank shall be issued in the form of resolutions of the Board of the National Bank, as well as in the form of instructions, statutes, and rules to be approved by regulations of the Board of the National Bank They may not contradict to laws and other legislative acts of Ukraine or be retroactive, unless they alleviate or cancel the responsibility under the law.

The regulations of the National Bank shall be subject to the mandatory state registration with the Ministry of Justice of Ukraine and come into effect in accordance with the legislation of Ukraine.

The regulations of the National Bank may be appealed against according to the legislation of Ukraine. .

To exercise its functions, the National Bank shall be entitled to obtain free of charge the information from the banks and other financial and credit institutions about their business pursuant to the granted license and explanations with regard to the obtained information and effected transactions.

For the preparation of the banking and financial statistical data, the analysis of the economic situation, the National Bank shall be entitled to obtain the necessary information from the governmental and self-administration bodies and businesses of all ownership forms.

The obtained information shall not be disclosed, except for cases provided for by the legislation of Ukraine.

In order to protect interests of depositors and creditors, and ensure the financial reliability of the banks and other financial and credit institutions, the National Bank shall establish the mandatory economic norms according to the procedure specified by it. These norms shall ensure the exercise of control over the risks related to the capital, the liquidity, the credits to shareholders and insiders (associated persons), the large credits, capital investments, as well as the interest and currency risk.

The National Bank shall officially notify of the subsequent changes in the norms and the methods of the calculation thereof not later than one month prior to their coming into effect.

The National Bank shall determine the amount, the procedure of formation and utilization of reserves of the banks and other credit institutions for the coverage of eventual credit losses, the reserves for the coverage of currency, interest and other financial risks of the banks.

The reserves for the coverage of the eventual financial risks, as well as fund of the guarantee of citizens' deposits shall be formed at the expense of the pre-tax income according to the legislation of Ukraine.

By its regulations, the National Bank shall specify the qualification requirements to the managers of executive bodies, chief accountants of banks and financial and credit institutions, and shall be entitled to require the dismissal of persons, which fail to meet the established qualification requirements to the said positions.

If a bank, another financial and credit institution or an employee required to resign do not agree with such a requisition, they may appeal against it to the court within two weeks. In this case, the performance of such a dismissal requisition shall be suspended till the court's passing the decision.

The supervisory and regulatory functions of the National Bank specified hereby may be exercised by it either directly, or through a banking supervision authority established by it.

The National Bank shall exercise its supervisory and regulatory functions by means of the following powers:

1. to carry out all types of on-site inspections of the banks, other financial and credit institutions in Ukraine (except for inspections and audits of the financial and business activities), as well as the verification of the information provided by legal entities and natural persons in the course of the registration of banks, other financial and credit institutions and the licensing of banking transactions;
2. to require banks and other financial and credit institutions to hold general shareholders' (partakers') meetings and to determine the issues, on which the decisions should be taken;
3. to take part in the shareholders' (partakers') meeting, sessions of the supervisory council, board and the auditing commission of a bank or another financial and credit institution with the deliberative vote.

The National Bank shall set requirements to holding mandatory audits of banks and other financial and credit institutions, obtain the opinions of independent auditors on the results of activities of the banks and other financial and credit institutions.

Should a bank or another financial and credit institution violate the banking legislation, regulations of the National Bank, effect high-risk transactions endangering their solvency and interests of depositors and creditors, the National Bank shall apply sanctions adequate to the committed violation according to the law in order to protect creditors and depositors.

In case of the failure to comply with the request to eliminate the violations within the term specified by the National Bank, the latter shall be entitled to apply the following sanctions:

1. to impose fine on managers of banks and other financial and credit institutions in the amount of up to one hundred non-taxable minimum incomes of individuals;
2. to impose fines on banks and other financial and credit institutions according to regulations approved by the Board of the National Bank; however, the amount of such fines shall not exceed one per cent of the amount of the registered authorized fund;
3. to suspend the management (chairman of the board and chief accountant) from the management of a bank or another financial and credit institution and appoint the temporary administration;
4. to suspend the license for certain banking transactions for a period of up to one year.

In case of the violation of laws or other regulations, which resulted in the considerable loss of assets or revenues or the insolvency of the bank or other financial and credit institution, or brought about substantial damage to interests of the clients, in case of concealment of any invoices, other documents or assets, the National Bank shall be entitled to revoke the license for all the banking transactions end take a decision to re-organize or liquidate the bank, and to appoint the liquidator.

The National Bank shall not be entitled to require banks or other financial and credit institutions to effect transactions or commit other actions, which are not provided for by laws of Ukraine and regulations of the National Bank.

SECTION XI. OFFICIALS OF THE NATIONAL BANK

Conditions of the employment, dismissal, remuneration of labour, provision of vacations, duties and rights, the system of disciplinary sanctions, issues of the social protection of employees of the National bank shall be determined by the Law of Ukraine "On Public Service" (3723-12).
The employees of the National Bank shall be officials and attendants of the National Bank. The officials of the National Bank shall be deemed the persons directly involved in the exercise of the functions of the National Bank and occupy positions provided for by the Staffing Schedule. Officials of the National Bank shall be public servants, to which the norms of the Law of Ukraine "On Public Service" shall apply, unless otherwise provided hereby. The issues of functioning of the public service in the National Bank and those of the classification of positions shall be resolved by the Board of the National Bank according to the laws of Ukraine.

The ranks of public servants of the National Bank, which correspond to the positions of the 1st category, shall be awarded by the President of Ukraine. Other ranks shall be awarded by the Governor of the National Bank.

Attendants of the National Bank shall be the employees, whose duties are not directly related to the exercise of the functions of the National Bank.

The labour remuneration of officials of the National Bank shall be established by the Board of the National Bank according to provisions of the Law of Ukraine "On Public Service".

The labour remuneration of attendants of the National Bank shall be established by the Board of the National Bank according to the provisions of the labour remuneration legislation.

The Governor of the National Bank, deputy governors, members of the Board of the National Bank, other officials of the National Bank belonging to the list of positions approved by the Board of the National Bank may not be people's deputies (members of parliament) of Ukraine, member of the Government of Ukraine, to be engaged in the business activities, to work on apart-time basis, except for the teaching, scientific and other creative activities.

Officials of the National Bank shall be prohibited from becoming members of managing bodies or shareholders of the commercial banks and other financial and credit institutions.

The Governor of the National Bank, deputy governors, members of the Board of the National Bank and other officials of the National Bank shall be prohibited from accepting loans from any other credit institutions, except for the National Bank.

Officials of the National Bank shall be prohibited from disclosing the information, which constitutes the service secret or is of confidential nature and has become known due to their performance of the service duties even in case of the resignation from the National Bank except for cases provided for by the laws of Ukraine.

SECTION XII. ORGANISATION OF THE BANKING STATISTICS AND THE STATISTICS OF THE BALANCE OF PAYMENTS

In order to exercise the regulatory and supervisory functions, the National Bank shall define the forms and procedures of reporting to be mandatory for all the business entities, including:

1. banks and financial and credit institutions located on the territory of Ukraine (both residents and non-residents) for monetary, crediting and banking statistics procedures;

2. all business entities (residents and non-residents) for the compilation of the statistics of the balance of payments and the exercise of the currency contr.

The information provided by banks and other business entities shall not be disclosed, except for cases provided for by the legislation of Ukraine.

The requirements of this article shall not apply to the aggregate statistical information, which is subject to the open publication by the National Bank.

Article 68. Publications

In order to ensure the transparency in the banking business and the statistics of the balance of payments, the National Bank:

1. shall publish the annual and quarterly balance sheets of the National Bank in printed media of the Supreme Council of Ukraine and the Cabinet of Ministers of Ukraine;
2. shall issue a monthly statistical bulletin and the magazine "National Bank of Ukraine Herald' (Visnyk Natsional'noho Banku Ukraymy);
3. shall publish the current banking information, the information on the issues of the monetary, credit and banking statistics in official media, provided that this information does not belong to the state and banking secrets;
4. shall provide for the publication the information on the issues of the monetary, credit and banking statistics and the statistics of the balance of payments pursuant to the international treaties.

The composition of the data to be published in the mass media shall be determined by the State Statistics Committee of Ukraine in accordance with the legislation of Ukraine.

The National Bank shall be the owner of the aggregate information on the monetary, crediting and banking activities and specify the regime of the access thereto in accordance with the legislation of Ukraine The use of the official banking information by other bodies for the open publications shall be possible only on the basis of an authorization of the National Bank or with a reference to the source of its official publication.

SECTION XIII. AUDIT OF THE NATIONAL BANK

Article 69. Internal Audit

The National Bank of Ukraine shall control the activities of its structural subdivisions by means of performing the internal audit to be carried out by the auditing department of the National Bank directly subordinated to the Governor of the National Bank.

The comprehensive inspections of the economic and financial activities of structural subdivisions of the National Bank shall be carried out at least once a year.

Article 70 External Audit

The Council of the National Bank, not later than on November 1 of the reporting year, shall take a decision on the audit of the National Bank and appoint an auditing firm, which has the relevant work experience, to check the annual balance sheet and submit the auditor's opinion According to a contract concluded with the auditing firm, the National Bank shall be obliged to provide reports and information required to perform the audit.

As far as the flow of funds of the State Budget of Ukraine and the analysis of the compliance with the estimate are concerned, the financial inspection of the National Bank shall be carried out by the Chamber of Accounts.

SECTION XIV. SPECIAL PROVISIONS

Article 71. Restrictions on Business

The National Bank shall be prohibited from:

1. being a shareholder or partaker of banks and other enterprises or institutions;
2. effecting transactions with real estate, other than those related to supporting the activities of the National Bank and its institutions;
3. being engaged in the trade, manufacturing, insurance and other activities, which do not correspond to the functions of the National Bank

The restrictions specified in Part 1 of this Article shall not apply:

1. to the purchase of any rights and assets for the purposes of covering the debt of the National Bank, provided that they are alienated as soon as possible;
2. to the cases provided for by Article 42 hereof;
3. to partaking in the capital of other enterprises and institutions supporting the activities of the National Bank.

Article 72. Taxation Procedures

The National Bank shall pay taxes in accordance with taxation laws of Ukraine

SECTION XV. FINAL PROVISIONS

1. This Law shall come into effect from the date of its publication.
2. The Council of the National Bank shall be formed within two month upon this Law's coming into effect During the formation of the Council of the National Bank, its functions as regards the monetary policy shall be exercised by the Board of the National Bank
3. The following shall be deemed invalid:

Resolution of the Presidium of the Supreme Council of Ukraine "On the Charter of the National Bank of Ukraine" (1605-12) of October 7, 1991.

President of Ukraine
L.Kuchma
City of Kyiv, May 20,1999
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