Proposal for a COUNCIL RECOMMENDATION on the conversion of hryvnia banknotes into the currency of host Member States for the benefit of persons fleeing the war in Ukraine
Date: 2022-04-01
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Russia, Ukraine, central bank, credit institution, exchange rate, exchange transaction, forced migration, foreign currency, migratory movement, military intervention

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   EUROPEAN COMMISSION  Brussels, 1.4.2022  COM(2022) 163 final 2022/0106 (NLE)  Proposal for a COUNCIL RECOMMENDATION on the conversion of hryvnia banknotes into the currency of host Member States for the benefit of persons fleeing the war in Ukraine  
 
EXPLANATORY MEMORANDUM 

1. 

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CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

In response to the start of the Russian military invasion of Ukraine on 24 February 2022, the 
European  Council,  in  its  conclusions  issued  the  same  day,  condemned  the  Russian 
Federation’s  (hereafter  Russia)  unprovoked  and  unjustified  military  aggression  against 
Ukraine  in  the  strongest  possible  terms,  underlining  the  gross  violation  of  international  law 
and  the  principles  of  the  UN  Charter  and  the  risk  to  European  and  global  security  and 
stability.  

The  Union  has  shown  and  will  continue  to  show  its  resolute  support  to  Ukraine  and  its 
citizens, faced with an unprecedented act of aggression by Russia. This proposal forms part of 
the Union’s response to people fleeing as a result of the Russian military invasion of Ukraine. 

Since the Russian invasion of Ukraine, more than 4 million people have arrived in the Union 
in the space of just a few weeks. Both the scale and the speed of arrivals are unprecedented. 
These numbers are expected to increase. 
Council  implementing  Decision  (EU)  2022/3821  established  the  existence  of  a  mass  influx 
into the Union of displaced persons who have had to  leave Ukraine as a consequence of an 
armed conflict, and introduced temporary protection for displaced persons from Ukraine.  

Displaced persons enjoying temporary protection or adequate protection under national  law, 
in  accordance  with  Directive  2001/55/EC2  and  Council  implementing  Decision  (EU) 
2022/382 have urgent liquidity needs to cover essential expenses. Many of them have arrived 
with  hryvnia  banknotes,  but  face  extreme  difficulties  in  converting  such  notes  into  the 
currency  of  the  host  Member  State.  The  National  Bank  of  Ukraine  has  suspended  the 
exchange of hryvnia banknotes into foreign cash in order to protect Ukraine’s limited foreign 
exchange reserves. The extreme uncertainty around what a future exchange rate between the 
host  Member  State  currency  and  hryvnia  may  be  de  facto  prevents  credit  institutions 
accepting the exchange of hryvnia banknotes even at a discount. 

Member  States  have  made  considerable  efforts  to  put  in  place  humanitarian  assistance  to 
those fleeing Ukraine. A number of Member States have looked to complement such efforts 
via initiatives to facilitate the exchange of hryvnia banknotes into host Member State currency 
in  order  to  support  displaced  persons  from  Ukraine  in  meeting  their  needs,  in  particular  as 
they travel across the Union.  

The  objective  of  this  proposal  is  to  promote  a  coordinated  approach  for  potential  national 
schemes with a view to offering the displaced persons from Ukraine the same conditions for 
converting  their  hryvnia  banknotes  into  local  currency  independently  of  the  Member  State 
that hosts them.   

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Council Implementing Decision (EU) 2022/382 of 4 March 2022 establishing the existence of a mass 
influx of displaced persons from Ukraine within the meaning of Article 5 of Directive 2001/55/EC, and 
having the effect of introducing temporary protection (OJ L 71, 4.3.2013, p. 1).  
Council Directive 2001/55/EC of 20 July 2001 on minimum standards for giving temporary protection 
in  the  event  of  a  mass  influx  of  displaced  persons  and  on  measures  promoting  a  balance  of  efforts 
between  Member  States  in  receiving  such  persons  and  bearing  the  consequences  thereof  (OJ  L  212, 
7.8.2001, p. 12).  

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Consistency with existing policy provisions in the policy area 

This  proposal  is  fully  consistent  with  the  EU  asylum acquis,  in  particular  with  the  Council 
Directive 2001/55/EC of 20 July 2001 on minimum standards for giving temporary protection 
in  the event  of a mass influx of displaced persons  and on measures promoting a balance of 
efforts  between  Member  States  in  receiving  such  persons  and  bearing  the  consequences 
thereof,  and  with  the  Council  Implementing  Decision  (EU)  2022/382  of  4  March  2022 
establishing  the  existence  of  a  mass  influx  of  displaced  persons  from  Ukraine  within  the 
meaning of Article 5 of Directive 2001/55/EC, and having the effect of introducing temporary 
protection.  It  is  also  fully  consistent  with  the  Union’s  objective  of  establishing  an  area  of 
freedom,  security  and justice open to  those who, forced by circumstances, legitimately seek 
protection in the Union. 

The elements  of the proposal  are also  consistent with  the Pact  on Migration  and Asylum of 
September 2020 and the accompanying legislative proposals.  

• 

Consistency with other Union policies 

This proposal is consistent with the Union’s external action, such as EU sanctions and other 
restrictive measures. This proposal is part of a comprehensive set of EU actions responding to 
the Russian invasion of Ukraine. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The  proposal  is  based  on  Article  292  TFEU,  in  conjunction  with,  Article  78(1)  and  (2),  (c) 
TFEU. In accordance with Article 78(1) TFEU, the Union shall develop a common policy on 
asylum,  subsidiary  protection  and  temporary  protection  with  a  view  to  offering  appropriate 
status  to  any  third-country  national  requiring  protection  and  ensuring  compliance  with  the 
principle of non-refoulement. This policy must be in accordance with the Geneva Convention 
of  28  July  1951  and  the  Protocol  of  31 January  1967  relating  to  the  status  of  refugees,  and 
other  relevant  treaties.  Under  Article  78(2)(c)  TFEU,  for  the  purposes  of  paragraph  1,  the 
European  Parliament  and  the  Council,  acting  in  accordance  with  the  ordinary  legislative 
procedure,  shall  adopt  measures  for  a  common  European  asylum  system  comprising  a 
common  system  of  temporary  protection  for  displaced  persons  in  the  event  of  a  massive 
inflow. 

• 

Subsidiarity (for non-exclusive competence)  

The  present  proposal  is  in  conformity  with  the  principle  of  subsidiarity  as  provided  for  in 
Article 5(3) TEU. The proposal promotes a coordinated approach for all Member States with 
a view to offering the displaced persons from Ukraine the same treatment for converting their 
hryvnia banknotes into local currency independently of the Member State that host them, of 
establishing a level playing field for the credit institutions and to prevent eventual speculative 
behaviour on the market.   

• 

Proportionality 

The present proposal is in conformity with the principle of proportionality as provided for in 
Article 5(4) TEU. Neither the content nor the form of this proposed Recommendation exceeds 
what is necessary to achieve its objectives. The commitments Member States would make are 
of a voluntary nature and each Member State remains free to decide whether they wish to put 
in place such potential national schemes.  

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Choice of the instrument 

A Council recommendation is  an  appropriate  instrument  within  the  field.  It  builds  on  the 
existing body of European Union law and is in line with the type of instruments available for 
European  Union  action  in  the  area  of  common  European  asylum  system.  It  lays  down 
measures  to  be  considered  by  Member  States  but  it  provides  flexible  guidance  to  Member 
States with respect to the choice and design of the measures. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Not applicable.  

• 

Stakeholder consultations and collection and use of expertise 

Not applicable. 

• 

Impact assessment 

The proposal offers recommendations for the establishment of national schemes to address the 
challenges of the exchange of hryvnia banknotes by displaced persons who have had to leave 
Ukraine  as  a  consequence  of  Russia’s  invasion  of  Ukraine,  into  the  local  currency  of  the 
Member  State  that  hosts  the  persons.  However,  as  it  provides  flexible  guidance  to  Member 
States  with  respect  to  the  choice  and  design  of  the  measures,  an  impact  assessment  is  not 
required. 

• 

Regulatory fitness and simplification 

Not applicable. 

• 

Fundamental rights 

This  proposal  respects  fundamental  rights  and  observes  the  principles  recognised,  in 
particular,  by  the  Charter  of  Fundamental  Rights  of  the  European  Union,  as  well  as  the 
obligations  stemming  from  international  law,  including  the  Geneva  Convention  of  28  July 
1951 on the status of refugees, as amended by the New York Protocol of 31 January 1967. 

4. 

BUDGETARY IMPLICATIONS 

This proposal for a Recommendation does not require resources from the EU budget. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Not applicable. 

• 

Explanatory documents (for directives) 

Not applicable.  

Detailed explanation of the specific provisions of the proposal 

• 
§ 1 indicates the objective and scope of this Recommendation. 

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The  aim  of  this  Recommendation  is  to  facilitate  the  exchange  of  hryvnia  banknotes  by  the 
displaced  persons  enjoying  temporary  protection  or  adequate  protection  under  national  law 
within the meaning of Article 2 of Council Implementing Decision (EU) 2022/382, into the 
local currency of the Member State that hosts the persons.  

§ 2 recommends to Member States to establish national schemes to facilitate the conversion of 
hryvnia  banknotes  into  the  national  currency.  The  schemes  should  provide  for  maximum 
limits  of  10  000  hryvnias  per  person,  without  charges,  at  the  official  exchange  rate  as 
published  by  the  National  Bank  of  Ukraine.  The  duration  of  the  schemes  should  be  for  a 
minimum of 3 months.  

§  3  recommends  Member  States  to  make  the  best  use  of  a  network  of  participating  credit 
institutions  for  the  implementation  of  the  scheme,  and  to  agree  with  participating  credit 
institutions on how to record and check the identity of each displaced person that utilises the 
scheme. 

§ 4 recommends Member States to agree with the National Bank of Ukraine the modalities for 
a future exchange of the hryvnia banknotes. 

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2022/0106 (NLE) 

Proposal for a 

COUNCIL RECOMMENDATION 

on the conversion of hryvnia banknotes into the currency of host Member States for the 
benefit of persons fleeing the war in Ukraine 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 292, in conjunction with Article 78(1) and (2), point (c) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

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Since the Russian invasion of Ukraine, more than 4 million people have arrived in the 
European  Union  in  the  space  of  just  a  few  weeks.  Both  the  scale  and  the  speed  of 
arrivals are unprecedented.  
Council  Implementing  Decision  (EU)  2022/3821  established  the  existence  of  a  mass 
influx  into  the  Union  of  displaced  persons  who  have  had  to  leave  Ukraine  as  a 
consequence of an armed conflict, and introduced temporary protection for displaced 
persons from Ukraine.  

Displaced  persons  enjoying  temporary  protection  or  adequate  protection  under 
national  law,  in  accordance  with  Council  Directive  2001/55/EC2  and  Implementing 
Decision (EU) 2022/382 have urgent liquidity needs to cover essential expenses. Many 
of  them  have  arrived  with  hryvnia  banknotes,  but  face  extreme  difficulties  in 
converting such notes into the currency of the host Member State. 

The National Bank of Ukraine has suspended the exchange of hryvnia banknotes into 
foreign cash in order to protect Ukraine’s limited foreign exchange reserves.  

Credit institutions in the Member States are not willing to carry out the exchanges due 
to the limited convertibility of hryvnia banknotes and exposure to exchange rate risk.  

Some  Member  States  are  considering  putting  in  place  national  schemes  that  support 
the conversion of a limited amount of hryvnias per displaced person at a fixed rate.  

The conversion of hryvnias into local  currency of the host Member States should be 
facilitated in order to support persons displaced from Ukraine in meeting their needs, 
in particular as they travel across the Union.  

A coordinated approach for national schemes put in place by Member States should be 
promoted  with  a  view  to  offering  the  displaced  persons  from  Ukraine  the  same 

Council Implementing Decision (EU) 2022/382 of 4 March 2022 establishing the existence of a mass 
influx of displaced persons from Ukraine within the meaning of Article 5 of Directive 2001/55/EC, and 
having the effect of introducing temporary protection (OJ L 71, 4.3.2013, p. 1).  
Council Directive 2001/55/EC of 20 July 2001 on minimum standards for giving temporary protection 
in  the  event  of  a  mass  influx  of  displaced  persons  and  on  measures  promoting  a  balance  of  efforts 
between  Member  States  in  receiving  such  persons  and  bearing  the  consequences  thereof  (OJ  L  212, 
7.8.2001, p. 12).  

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(9) 

(10) 

(11) 

conditions for converting their hryvnia banknotes into local currency independently of 
the  Member  State  that  host  them,  of  establishing  a  level  playing  field  for  the  credit 
institutions and to prevent eventual speculative behaviour on the market.   

The National Bank of Ukraine has approached a number of Member States in order to 
put in place such schemes to buy hryvnia banknotes at the official exchange rate.  

In accordance with  Articles 1 and 2 of Protocol No 21 on the position of the United 
Kingdom and Ireland in respect of the area of freedom, security and justice, annexed 
to the Treaty on European Union and to the Treaty on the Functioning of the European 
Union, and without prejudice to Article 3 and 4 of that Protocol, Ireland is not taking 
part in the adoption of this Recommendation and is not subject to its application. 

In  accordance  with  Articles  1  and  2  of  Protocol  No  22  on  the  position  of  Denmark, 
annexed to the Treaty on European Union and to the Treaty on the Functioning of the 
European Union, Denmark is not taking part in the adoption of this Recommendation 
and is not subject to its application,  

HAS ADOPTED THIS RECOMMENDATION:  

OBJECTIVE AND SCOPE 

1. 

The aim of this Recommendation is to facilitate the exchange of hryvnia banknotes 
by  displaced  persons  entitled  to  temporary  protection  or  adequate  protection  under 
national law within the meaning of Article 2 of Council Implementing Decision (EU) 
2022/382,  into  the  local  currency  of  the  Member  State  that  hosts  those  displaced 
persons.  

RESPECTING  NATIONAL  COMPETENCES  AND  HAVING  REGARD  TO 
NATIONAL CIRCUMSTANCES AND PRACTICES,  

RECOMMENDS:  

CORE RECOMMENDATIONS 

2. 

Member  States  should  establish  national  schemes  to  facilitate  the  conversion  of 
hryvnia banknotes into the national currency, having the following characteristics: 

(a) 

each  displaced  person  presenting  evidence  of  being  entitled  to  temporary 
protection  as  provided  for  in  Directive  2001/55/EC  or  adequate  protection 
under  national  law  as  referred  to  in  Implementing  Decision  (EU)  2022/382, 
such  as  that  referred  to  in  the  Communication  from  the  Commission  2022/C 
126 I/013 should be able to convert hryvnias banknotes into the currency of the 
Member  State.  In  case  of  displaced  unaccompanied  minors,  the  conversion 
should be made by the representant provided for in Article 16(1) of Directive 
2001/55/EC; 

(b)  maximum limits per person should be established; taking into account national 
circumstances,  such  maximum  limits  should  be  at  or  below  10  000  hryvnias 
per person; 

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Communication  from  the  Commission  on  Operational  guidelines  for  the  implementation  of  Council 
Implementing Decision 2022/382 establishing the existence of a mass influx of displaced persons from 
Ukraine within the meaning of Article 5 of Directive 2001/55/EC, and having the effect of introducing 
temporary protection (OJ C 126 I, 21.3.2022, p. 1). 

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(c) 

(d) 

such conversion should be allowed without charges; 

the applicable exchange rate should be the official exchange rate as published 
by the National Bank of Ukraine;  

(e) 

the duration of the scheme should be for a minimum of three months.  

ADDITIONAL RECOMMENDATIONS 

3. 

4. 

With  a  view  to  guaranteeing  effective  access  to  the  conversion  scheme,  Member 
States  should  strive  to  make  the  best  use  of  a  network  of  participating  credit 
institutions  for  the  implementation  of  the  scheme.  With  a  view  to  ensuring  the 
respect  of  the  maximum  limit  per  displaced  person  in  particular,  Member  States 
should  consider to  agree with  participating  credit institutions on how to  record  and 
check the identity of each displaced person that utilises the scheme. 

With  a  view  to  guaranteeing  sound  financial  governance  and  where  necessary, 
Member  States  should  envisage  to  agree  with  the  National  Bank  of  Ukraine  the 
modalities for a future exchange of hryvnia banknotes. 

Done at Brussels, 

For the Council 
The President 

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