Capital controls can temporarily change access to money

Legal measures apply to everyone

Capital controls are legal measures. They do not apply only to those who are poorly prepared, but to everyone within the scope of the rules. This article therefore does not advise you to bypass restrictions.

The practical lesson is different. Access and funds are two separate things. You may have money, while withdrawals, transfers or payments are temporarily subject to limits.

For those who live internationally, do business or hold assets, that distinction matters. It matters where you are, which banking relationships you have and which routes are available within the applicable rules.

Cyprus showed how quickly access can change

In Cyprus, banks were closed for almost two weeks in 2013. They reopened on 28 March 2013. On reopening, a withdrawal limit of 300 euros per day applied.

Transfers abroad were also restricted. Travellers were allowed to take a maximum of 1,000 euros in cash. The last restrictions were removed in April 2015.

That course of events shows two things. First, access to banking services can change abruptly. Then normalisation can take a long time. Even when banks are open again, restrictions on withdrawals and transfers may remain.

Greece had restrictions over several years

In Greece, banks were closed from 29 June 2015 for about three weeks. A withdrawal limit of 60 euros per day applied. The banks reopened on 20 July 2015.

That did not mean the situation was fully back to normal. Later, a limit of 420 euros per week applied and transfers abroad were restricted. The last capital controls were not removed until September 2019.

For households and entrepreneurs, that is an important time dimension. Restrictions can last longer than the initial closure of banks. If you have fixed costs, international obligations or family in several countries, you notice such rules beyond the first day.

Ukraine combined limits with domestic payments

On 24 February 2022, the National Bank of Ukraine limited cash withdrawals to 100,000 hryvnia per day. Cash withdrawals in foreign currency were suspended.

The central bank also fixed the official exchange rate and introduced a moratorium on cross-border payments in foreign currency. Cashless payments within the country remained possible without limit.

This example shows that measures do not work in the same way everywhere. Some routes are restricted, others remain open. It is therefore not enough to ask only whether there is money. The better question is: which access route remains available under which rule.

Know your routes in advance

Preparing for capital controls does not mean trying to circumvent rules. It means knowing before a crisis which banking relationships, payment options and authorisations you have within the applicable rules.

This is especially relevant if you are often abroad or hold assets there. Can you meet local obligations? Can you reach people who may act on your behalf? Are documents and login tools available if you are not at your main address?

A practical inventory can remove a great deal of uncertainty. Which accounts do you use for what? Which payments run automatically? Which transfers are international? What arrangements are needed if you temporarily cannot travel or cannot log in?

Limits apply here too. No structure removes legal measures. A route that has been set up and tested in advance can, however, make clear what you can still do within those rules.

Sovaryn helps clients organise and test reachability, power, banking app access and their own digital resources in advance, including internationally. Sovaryn Reserve offers no way to avoid legislation. It can help you know, within the rules, which resources and connections are available if access temporarily changes.