1. and how to deal with them. Possible solutions for foreign suppliers*
Currency issues
and how to deal with them.
Possible solutions for foreign suppliers*
May 20, 2015
* Please note that this presentation is not a legal advice, but a general overview. Any particular situation shall be consider on a case by case basis.
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2. Possible solutions + control over prices Compensation to importer
Shift to local currency invoicing
Shift to local currency transactions
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3. Compensation to importer (1)
Payment ~60 days after invoice
Retailers
UAH 2,000**
+ mark up
Invoice
USD 100*
USD 100***
(purchased for
UAH 3,000)
Distributor (Subsidiary) 1
Supplier
Distributor (Subsidiary) 2
Credit note for
USD 33
* currency rate at the date of invoice:
UAH 20 per 1 USD
*** currency rate at the
date of payment from
distributors:
UAH 30 per 1 USD
** currency rate at the
date of payment from
retailer:
UAH 24 per 1 USD
marchenkodanevych.com

4. Compensation to importer (2)
Relatively attractive to distributors
In most cases it is possible (and legal) to limit all distributors (on non-discriminatory basis) with mark-up level and to provide credit notes only after confirmation of relevant mark-up application
No need to change format of invoicing and payments
The currency deficit issue remains unsolved
Retrospective discounts (credit notes) are under close focus of Antimonopoly Committee
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5. Local currency invoicing (1)
Payment ~60 days after invoice
Retailers
UAH 2,000**
+ mark up
Invoice
UAH 2,000*
USD 66.6***
(purchased for
UAH 2,000)
Distributor (Subsidiary) 1
Supplier
Distributor (Subsidiary) 2
* currency rate at the date of invoice:
UAH 20 per 1 USD
*** currency rate at the
date of payment from
distributors:
UAH 30 per 1 USD
** currency rate at the
date of payment from
retailer:
UAH 24 per 1 USD
marchenkodanevych.com

6. Local currency invoicing (1)
Attractive for distributors
Usual currency of payments
In most cases it is possible (and legal) to limit all distributors (on non-discriminatory basis) with mark-up level
The currency deficit issue remains unsolved
Unusual format of invoicing
No direct control over mark-up level
marchenkodanevych.com

7. Local currency transactions (1)
Payment ~60 days after invoice
Retailers
UAH 2,000**
+ mark up
Invoice
UAH 2,000*
UAH 2,000 ***
Distributor (Subsidiary) 1
Supplier
Distributor (Subsidiary) 2
* currency rate at the date of invoice:
UAH 20 per 1 USD
*** currency rate at the
date of payment from
distributors:
UAH 30 per 1 USD
** currency rate at the
date of payment from
retailer:
UAH 24 per 1 USD
marchenkodanevych.com

8. Local currency transactions (2)
Very attractive for distributors
No issues with currency deficit
Speeding up of all payments
It is possible either to exchange received UAH to another currency at receipt, or to transfer UAH to Ukraine (in case of established RepOffice here)
Necessity to open UAH account abroad (not all banks do it, although some do, including Citibank, UBS etc.)
Unusual format of invoicing and payments
No direct control over mark-up level
marchenkodanevych.com

9. Have questions? Please contact:
Borys Danevych
partner, attorney-at-law
4-B, Ivana Franka str, office 49
Kyiv, Ukraine
Tel:
marchenkodanevych.com