9 e-points

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We at Evris value your time, so we have developed a unified monthly online newsletter 9 E-points.

9 E-points is monthly e-digest from Evris:

  • 9 legislative novels which business community should be aware of, to react in proper time
  • 9 business and legal events worth attending, to get new ideas
  • 9 points of interest from Evris lawyers who do their job in a talented and passionate way

30.08.2017 –  the Resolution of the National Bank of Ukraine №82 dated 29.08.2017 on Amendments to the Resolution No. 410 “On Regulation of the Situation in the Monetary and Foreign Exchange Markets of Ukraine” came into force.

The matter of amendments

Amendments were made into the Resolution No.410 On Settlement of the Situation at the Monetary and Exchange Markets of Ukraine  regarding the possibility to grant loans  secured by property rights for a monetary contribution.

Whom it will affect

Legal entities and individuals.

Consequences

The increase in amount of granted loans, which will have a positive effect upon business development.

How to prepare / mechanism of the amendments introduction

A norm specifying that the banks are prohibited to provide credits/loans to the customers in national currency (including ones under open credit lines and by prolonging the credits/loans provided earlier) if property rights for the funds in foreign currency placed on the accounts in banks are provided as a security under liabilities under them, is excluded from Resolution No.410.

09.09.2017 – the List of foreign stock exchanges comes into force (the list approved by Regulation of the Cabinet of Ministers of Ukraine No. 675 dated 06.09.2017).

The matter of amendments

The List of Foreign Stock Exchanges has come into force which will allow exemption from taxation in Ukraine of the interests paid by the Ukrainian borrowers-non-residents under the loans and financial credits provided in 2017 and 2018.

Whom it will affect

The Ukrainian business, particularly, agrarian and industrial holdings intending to raise funds from the international capital markets.

Consequences

The List of Foreign Stock Exchanges adopted by the government includes Warsaw Stock Exchange and London Stock Exchange, as well as 19 more stock exchanges, mostly in Europe, Asia and the USA. The approval by the government of the List of Foreign Stock Exchanges allows application of a mechanism for exemption from taxation of the interests paid by the Ukrainian companies under the loans and financial credits to non-residents that, in their turn, raise funds from the international markets of capital, placing debt securities.

How to prepare / mechanism of the amendments introduction

Tax Code of Ukraine immediately specifies the exemption from taxation of the interests for the above operations by a tax from non-residents’ incomes (or as it is sometimes called, by a withholding tax). The application of this preferential taxation is not bound by international conventions regarding the avoidance of double taxation, which eliminates the need for a relevant non-resident to confirm the status of a beneficiary owner of income.

To apply the preferential taxation mode, it is necessary to adhere to the following conditions:

a) a non-resident must attract the funds he/she provided under the loan or finance credit by placing foreign debt securities at the foreign stock exchange included into the list approved by the Cabinet of Ministers Ukraine;

b) a non-resident must attract the funds he/she provided under the loan or a finance credit with the purpose of provision (directly or indirectly) of a loan or a finance credit to the resident;

c) a non-resident whom the interests are paid to, and/or a person authorized by him/her (if the interests are paid through this person) are not the residents of jurisdiction included into the list of states (territories) approved by the Cabinet of Ministers of Ukraine in compliance with subcl.39.2.1.2. of subcl.39.2.1 of cl.39.1 of Article 39 of this Code as of the date of placement of foreign debt securities by the non-resident.

Please note that mode of the exemption from taxation concerns the interests to be paid under the loans and credits provided for the period from 01/01/2017 to 31/12/2018. The rate of the withholding tax in amount of 5% is applied to the interests under the loans and credits provided after the expiry of this period.

13.09.2017 – the Resolution of the National Bank of Ukraine No. 88 “On Amendments to Certain Regulatory Acts of the National Bank of Ukraine” (adopted on 07.09.2017) came into force.

The matter of amendments

Resolution  No. 88 changes the procedure of conducting transactions under loan agreements with international financial organizations.

Whom it will affect

Banks, legal entities and individuals.

Consequences

Simplification of the procedure  of the transactions under loan agreements/credit agreements with international financial institutions where Ukraine is a member, and/or international financial institutions with regard to which Ukraine has undertaken an obligation to assure legal treatment.

How to prepare / mechanism of the amendments introduction

A procedure on performance by the residents – borrowers of the transactions under loan agreements/credit agreements with international financial institutions where Ukraine is a member, and/or international financial institutions with regard to which Ukraine has undertaken an obligation to assure legal treatment provided to other international institutions or residents has become simpler:

– these agreements in foreign currency are released from registration with the National Bank;

– a possibility to implement credit projects under the agreements with International Financial Institutions on special conditions is streamlined: hryvnia is used as a currency of the credit, but factual payments (loan provision/repayment) are effected in foreign currency only;

– performance by residents of cross-border transactions (including at the expense of foreign currency bought) in favor of International Financial Institution under agreements is allowed without any permits from the National Bank (provided registration or individual license is available).

16.09.2017 –  the Resolution of the National Bank of Ukraine No. 90 on amendments to the Regulation on implementation of financial monitoring by banks came into force.

The matter of amendments

Rules of conducting financial monitoring by banks for the identification and verification of clients have been changed.

Whom it will affect

Banks, legal entities, individuals.

Consequences

A bank will bear responsibility for inappropriate performance of authentication and verification of the bank customers – individuals by the agents in conformity with the requirements of the law in the area of prevention from the legalization of criminal income/terrorism financing.

How to prepare / mechanism of the amendments introduction

A bank is entitled to assign legal entities-residents, individual entrepreneurs-residents and individuals-residents (agents) to perform authentication and verification of the bank’s customers-individuals, on a contractual basis.

A decision concerning the establishment of contractual relations with the agents is to be made taking into account the assessment results of business reputation of these persons performed by the bank in compliance with the requirements specified by c.11 Section III of the Regulation on Establishment of Requirements to Credit Brokers of the Banks and Their Activity in the Area of Consumer Loans.

27.09.2017 –  Law No. 2058-VIII “On Amendments to certain legal Acts of Ukraine regarding removal of barriers for attraction of foreign Investments” (adopted by Verkhovna Rada of Ukraine on 23.05. 2017) came into force.

The matter of amendments

The law aims at establishing favorable employment conditions for foreigners and reception by them of a resident permit by simplifying procedural requirements, opening new possibilities, and a significant reduction of the required documents list.

Whom it will affect

Foreign founders, participants, beneficiaries (controllers) of the Ukrainian companies, as well as foreign highly-paid professionals, university graduates from TOP-100 universities under the world rating, in compliance with the list established by the Cabinet of Ministers of Ukraine, foreign IT-companies, foreign employees involved into creative activity and all other foreigners and stateless persons who are interested in employment in Ukraine and/or possible options of migration to Ukraine.

Consequences

The Law removed many of bureaucratic hurdles in procedures for employment of foreigners and stateless persons and in reception of a resident permit, but not all of them. We expect that the Law will promote migration of highly qualified specialists to Ukraine and the increase of investments into Ukraine.

How to prepare / mechanism of the amendments introduction

The law specifies the following main amendments:

As for the permit to use labor of foreigners and stateless persons:

  •  Cancellation of a demand to submit such irrelevant documents as a certificate that a person does not pay penalty for crime commission and he/she is not under criminal proceedings; a document issued by a health care facility that a future employee is not an alcohol dependent, inhalants dependent, drug dependent or does not suffer from other contagions; copy of diploma (except the cases when a future employee is a university graduate from TOP-100 universities under the world rating, in conformity with the list specified by the Cabinet of Ministers of Ukraine);
  • Cancellation of a necessity to confirm the absence of qualified employees in Ukraine (regions) who meet the requirements of the vacancy;
  • Prolongation of the maximum validity term of a permit from one to three years for particular categories of foreign employees;
  • Specification of the rules for the use of foreigners’ labor under the conditions of a part-time job in two or three Ukrainian companies;
  • Establishment of minimum amount of salary for particular categories of foreign employees.

Regarding the resident permit:

  • Introduction of new legal grounds for foreigners and stateless persons to stay in Ukraine and for them to receive a resident permit, particularly, if: (i) this foreigner or a stateless person is a founder and/or a participant, and/or beneficiary owner (controller) of a Ukrainian company, (ii) he/she directly or indirectly has a capital participation (shares) in a Ukrainian company of face interest rate equal to not less than EURO 100, 000 under the official rate of exchange established by the National Bank of Ukraine as of the date of a foreign investment registration.

http://zakon5.rada.gov.ua/laws/show/2058-19 

27.09.2017 – the Cabinet of Ministers of Ukraine approved bill “On amending of legislation of Ukraine regarding state-owned banks corporate management peculiarities”.

The bill has not been forwarded to Verkhovna Rada yet.

The matter of amendments

It is intended to optimize the corporate management in the state banks in terms of legislation, particularly by reforming a procedure of formation of the Supervisory Board of these banks.

Whom it will affect 

Banking institutions of Ukraine with state participation, the Ukrainian business, foreign investors.

Consequences

The introduction of the mechanisms specified above must assure the exclusion of political influence upon the state banks management, have a positive effect upon the level of competitiveness and efficiency of the latter and promote the development of banking and financial field. Besides, the mechanisms mentioned will be able to enhance investment prospects of the Ukrainian state banks during their further privatization.

The final conclusions can only be made only after the publication of the Draft Law text or its submission to the Verkhovna Rada of Ukraine.

How to prepare / mechanism of the amendments introduction

The Draft Law specifies that the tender сommittee consisting of 6 persons, formed from the representatives of the President of Ukraine and the Cabinet of Ministers of Ukraine on 50/50 basis, will appoint Supervisory Board Members. The Supervisory Board will include 5 independent members, as well as 2 representatives of the government authorities – 1 from the President of Ukraine and 1 from the Cabinet of Ministers of Ukraine. An internationally recognized recruiting agency having experience in recruitment for senior management level of the world banks will make a preliminary selection of the candidates for the independent members. The Draft Law specifies clear requirements of determination if the candidates meet the independence criterion. Besides, it is necessary to mention that 3 steering committees will be formed as a part of the Supervisory Board, one of them –  the Audit Committee – will be formed of independent members only.

http://www.kmu.gov.ua/control/uk/publish/article?art_id=250303400&cat_id=244276429 

28.09.2017 – the Law of Ukraine “On Education”, adopted by Verkhovna Rada of Ukraine on 09.05.2017, came into force.

The matter of amendments

A completely new Law of Ukraine On Education, which changes essentially current regulation in this field has been adopted.

Whom it will affect

All the pupils, students, teachers, directors of educational institutions and other employees in the area of education.

Consequences

The Law is to introduce a range of reforms under a general title of “The New Ukrainian School” which specifies, particularly, the introduction of 12-year school education.

How to prepare / mechanism of the amendments introduction

The reform of secondary education is designed for four years. Special attention will be paid to the training of future teachers, their wages should be significantly increased. Position of the director will become elective. According to the plan, young and talented specialists will have advantage. Therefore, if you have desire to teach or manage the learning process at a kindergarten, school or university, welcome to the contest!

According to the Decree of the President of Ukraine dated 29.09.2017. No. 299/2017, the Supreme Intellectual Property Court is established.

The matter of amendments

Supreme Court on the Issues of Intellectual Property is to be established.

Whom it will affect

The parties in dispute regarding the intellectual property and unfair competitiveness, including with the participation of individuals.

Consequences

Supreme Court on the Issues of Intellectual Property has to settle the disputes regarding the rights for an invention, useful model, industrial prototype, trademark (symbol for goods and services), commercial names and other rights of intellectual property, including with regard to the prior common law right; cases in disputes with regard to registration, record of the intellectual properties rights, recognition invalid, early termination of the patents, certificates, other acts certifying these rights or on the grounds of which they arise; cases on recognizing a trademark to be well-known and other cases in the area of intellectual property.

We hope that the creation of the specialized court on the issues of intellectual property will accelerate the consideration of cases related to the disputes in the area of intellectual property and will guarantee  more protection rights for the parties in the relevant category of cases, that will be a consequence of selection of highly professional  judges to the composition of Supreme Court on the Issues of Intellectual Property.

How to prepare / mechanism of the amendments introduction

Proper work of court should be expected after the adoption by People’s Deputies of the amendments to the Procedure Codes, which clearly specify the authorities of the Supreme Court on the Issues of Intellectual Property and a procedure for individual court applications to it.

03.10.2017  – draft law on amendments to the Commercial Procedural Code of Ukraine, the Civil Procedural Code of Ukraine and the Code of Administrative Legal Proceedings of Ukraine was adopted. The law will come into force after being signed by the President of Ukraine. 

The matter of amendments

The amendments to the Code of Commercial Procedure of Ukraine and the Code of Administrative Court Procedure of Ukraine have been adopted.

Whom it will affect 

All the persons participating in litigation process.

Consequences

Adoption of Draft Law No.6232 provides many innovations, but not all of them can be assessed unambiguously. Aiming at copying the best “western” practices in the area of procedure, the authors of the law have created many collisions and discrepancies with the current legislation, as well as have put into practice some innovations, which afford grounds for an abuse of right.

How to prepare / mechanism of the amendments introduction

The Draft Law offers to introduce amendments to some standards specified by the Code of Laws of Ukraine On Labor, Code of Ukraine on Administrative Offenses, Criminal Code of Ukraine, Domestic Relations Code of Ukraine, Civil Code of Ukraine, Civil Executive Code of Ukraine, Laws of Ukraine On Reestablishing Debtor’s Solvency or Bankrupt Recognition, On Notaryship, On International Commercial Arbitration, On Forensic Inquiry, On Banks and Banking Activity, On Access to Court Decisions, On Court Fee, On Enforcement Procedures etc. The list is quite long, that is why litigators should start learning future innovations now for new rules of the games not to become surprises for them.

http://search.ligazakon.ua/l_doc2.nsf/link1/GH4T400A.html

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Evris newsletter #1 in English
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Evris newsletter #1 in English
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Monthly Digest by Evris. Here you will find the 9 most important changes in the legislation of Ukraine for the current month.
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Evris
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