How are our peers in Ukraine’s treasury and finance profession faring? This is a question we’ve all been wondering as we watch the world news each night, read the latest headlines and, for those of us who are operating outside the warzone, offer a moment of gratitude.
AFP Director of Treasury Services Tom Hunt, CTP, reached out to one of our members in the Ukraine to offer support and hopefully get a firsthand account of the status of operations from someone in the treasury and finance spectrum. Treasury Manager Vasyl Andrishak graciously took the time to answer our questions. The following is based on his answers.
Operations have understandably shifted, and in many cases, ceased — at least temporarily — in the Ukraine. In the case of the business Andrishak works for in the Ukraine, it is dependent on port facilities (Black and Azov Seas), both of which are currently blocked and probably will remain closed until Russia’s invasion ends; therefore, their company had to suspend its business in Ukraine. The company evacuated its personnel to the Western Ukraine and Romania, and remains operational. “We will be able to restore our operations quite quickly,” said Andrishak.
The world has changed. COVID-19 has been followed by a horrific war in Ukraine. Financial Planning & Analysis has emerged as a crucial and powerful role to navigate ongoing uncertainty. But how are FP&A pros responding? AFP’s Bryan Lapidus answers discusses with DataRails. Read the LinkedIn post here.Management of the EMEA region did not change for Andrishak following the invasion. He moved from Kyiv to the western part of Ukraine to be with his parents, and otherwise things remained the same. That said, he did make a plan, listing out all of his responsibilities, accesses and ongoing projects and their status and third-party contact details and assigning each one to a member of his team located in other EU countries — “just in case he’s not able to carry out his professional duties.”
Another possible concern in this environment is Forex Volatility. Because Ukraine is currently operating under martial law, the FX market is not working, reported Andrishak. Domestic households and international companies in Ukraine may purchase foreign currency (FCY) under the restriction of paying for critical imports only. They are able to sell any amount of FCY to the National Bank of Ukraine (NBU) at the official rate set up by NBU, however.
In terms of cash planning and liquidity, credit liquidity is no longer available to clients as the banks in Ukraine froze all of their credit facilities. Also, most of the local households stopped delivering goods\rendering services on open accounts (credit) and began asking for prepayment.
The military aggression of the Russian Federation against Ukraine served as the basis for the introduction of martial law by presidential decree (No. 64), starting at 5:30 a.m. on February 24 for a period of 30 days. What followed was a declaration of force majeure by the Chamber of Commerce and Industry of Ukraine. Covering natural and unavoidable catastrophes such as natural disasters and extreme weather, e.g., hurricanes and pandemics, as well as human actions such as acts of war and armed conflicts, force majeure is a clause included in contracts that removes liability for such “unavoidable” events. The terms comes from French law and declares that such events must meet three tests: it must be unforeseeable, external and irresistible.
“Given this, the Chamber of Commerce and Industry of Ukraine confirms that these circumstances from February 24, 2022 until their official end are extraordinary, inevitable and objective circumstances for business entities and/or individuals under the contract, certain tax and/or other obligations, the fulfillment of which occurred in accordance with the terms of the agreement, contract, treaty, legislative or other regulatory acts and the fulfillment in accordance with which became impossible within the prescribed period due to the occurrence of such force majeure circumstances," the Chamber said on Facebook.
In order to simplify the procedure of certifying force majeure circumstances for Ukraine businesses, the Chamber of Commerce and Industry posted on its website a general official letter on the force majeure certificate, which can be printed out.
We’ve all been wondering how we can help our colleagues in the Ukraine. Here is a roundup of organizations you can support who are directly aiding the people of Ukraine.