Currency solutions

1. marchenkodanevych.com
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.

2. Possible solutions
marchenkodanevych.com
Compensation to importer
Shift to local currency
invoicing
Shift to local currency
transactions
+ control over
prices

3. Compensation to importer (1)
marchenkodanevych.com
Supplier
Distributor
(Subsidiary) 1
Distributor
(Subsidiary) 2
Retailers
Invoice
USD
100*
USD 100***
(purchased for
UAH 3,000)
* currency rate at
the date of invoice:
UAH 20 per 1 USD
** currency rate at the
date of payment from
retailer:
UAH 24 per 1 USD
*** currency rate at the
date of payment from
distributors:
UAH 30 per 1 USD
Credit
note for
USD 33
Payment ~60 days after invoice
UAH 2,000**
+ mark up

4. Compensation to importer (2)
marchenkodanevych.com
• 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

5. Local currency invoicing (1)
marchenkodanevych.com
Supplier
Distributor
(Subsidiary) 1
Distributor
(Subsidiary) 2
Retailers
Invoice
UAH
2,000*
USD 66.6***
(purchased for
UAH 2,000)
* currency rate at
the date of invoice:
UAH 20 per 1 USD
** currency rate at the
date of payment from
retailer:
UAH 24 per 1 USD
*** currency rate at the
date of payment from
distributors:
UAH 30 per 1 USD
Payment ~60 days after invoice
UAH 2,000**
+ mark up

6. marchenkodanevych.com
• 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
Local currency invoicing (1)

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

8. Local currency transactions (2)
marchenkodanevych.com
• 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

9. marchenkodanevych.com
Have questions? Please contact:
Borys Danevych
partner, attorney-at-law
4-B, Ivana Franka str, office 49
Kyiv, Ukraine
Tel: +380 44 220 0711
Borys.Danevych@marchenkodanevych.com