9 e-points

Dear colleagues, partners, friends!

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

A few more steps to improve the investment climate

The matter of amendments

Amendments to certain Acts of the National Bank of Ukraine have been made.

Resolution of the Board of the National Bank of Ukraine No. 19 “On Amendments to Certain Acts of National Bank of Ukraine” dated 01 March 2018. The Resolution came into force 03 March 2018.

Whom it will affect

Ukrainian business, foreign investors

Consequences

Firstly, it is allowed to pay dividends in favor of non-residents for 2017 (prior – till 2016 inclusively). Additionally, the limit of dividend repayment is increased – to USD 7 mln. per month regardless of the period for which the dividends are accrued (prior – to USD 5 mln. for 2014-2016, till 2013 –  tol USD 2 mln.).

Secondly, NBU allowed to perform pre-mature payments under loans in foreign currency for the amount up to USD 2 mln. per month for each resident-borrower under loan agreements serviced within the one authorized bank.

Thirdly, the Resolution expanded the number of business operations following which no compulsory sale of 50% of receipts in foreign currency is required. From now on the mentioned requirement does not apply to funds attracted by the company as an external loan for refinancing of its existing debt towards non-residents or authorized banks under other loans.

How to prepare / mechanism of the amendments introduction

Improvement of investment climate resulting from the new opportunity to pay dividends to foreign investors and pre-mature repayment of external loans. Additionally, the given amendments shall also improve business operations allowing to attract funds in foreign currency and allocate them in full to refinance the existing debts

The rules of games for joint-stock companies are in progress

The matter of amendments

Some norms that related to privatization and corporate legislation have been changed.

The Law of Ukraine “On Privatization of State and Municipal Property” No. 2269-VIII  came into force in March 08, 2018.

Whom it will affect

Joint stock companies

Consequences

Except for provisions on privatization, it also provides for amendments to corporate legislation, namely, to the Law of Ukraine “On Joint Stock Companies”. The Law postponed the date (till 01 May 2018) of entry into force of certain provisions of the Law of Ukraine “On Introduction of Amendments into Certain Legislative Acts of Ukraine Concerning Simplification of Business Operations and Attraction of Investments by the Securities Issuers” No. 2210. It concerns, in particular, provisions regarding exclusive competence of the general shareholders meeting, election of the supervisory board members, provisions concerning procedure of entering into material deals.

How to prepare / mechanism of the amendments introduction

Such amendments provide JSCs with additional time for bringing their activities in line with the provisions of the Law No. 2210.

Additionally, due to a number of changes to the Law No. 2210 coming into force from 01 May 2018, JSCs will have to conduct one more shareholders meeting this year in order to amend the charter and internal provisions of the company.

Are you planning a non-horizontal concentration? Read new AMCU recommendations

The matter of amendments

AMCU gave some explanations regarding non-horizontal concentrations.  

AMCU Recommendation No. 13-рр issued on 16 March 2018. The Act came into force from the moment of its publication on the official web-site of the AMCU.

Whom it will affect

Companies planning to apply to AMCU for permit for concentration

Consequences

AMCU establishes criteria of non-horizontal (vertical, conglomerate) concentrations assessment, i.e. concentrations parties whereto do not compete with each other on any commodity market. The adopted Recommendation also includes provisions regarding market share calculation as well as analysis of the possible anticompetitive effect of non-horizontal concentrations.

How to prepare / mechanism of the amendments introduction

The issued Recommendation is aimed to increase the level of transparency of the AMCU activity. In addition, this shall also provide the companies with an opportunity to perform their own preliminary assessment of the contemplated concentration to verify its compliance with the antimonopoly laws of Ukraine.

Credit register of the NBU to protect depositors and bank lenders

The matter of amendments

Establishment and maintenance of the Credit Registry by NBU will strengthen protection of interests of depositors and other bank creditors, as well as will facilitate monitoring of credit risk concentration.

The Verkhovna Rada approved, and the President signed Law No. 2277-VIII of 06 February 2018 “On Amendments to Certain Laws of Ukraine on Establishment and Maintenance of the Credit Registry of the National Bank of Ukraine and Improvement of Bank Credit Risk Management”, which became effective from 04 March 2018, except for certain provisions.

Whom it will affect

Banks, lenders, borrowers

Consequences

Efficient assessment of risks by banks and fast decision-making in respect of lending, improvement of investment and business climate, conditions for active lending.

How to prepare / mechanism of the amendments introduction

Banks must submit to the Credit Registry information about their lending transactions made after 01 April 2018.

In whose hands is the financial monitoring in banks now?

The matter of amendments

Requirements to employees responsible for bank’s financial monitoring have been changed.

The NBU Resolution No. 20 of 01 March 2018 came into force on 08 March 2018.

Whom it will affect

Banks

Consequences

A responsible employee of a bank – legal entity:

  • shall be a member of a bank’s board;
  • shall be a head of the intrabank system for the prevention of laundering of proceeds from crime/terrorism financing;
  • a candidate shall be approved by the NBU;
  • shall have at least 3 years of work experience in the field of prevention of laundering of proceeds from crime/terrorism financing in the banking system, or at least 1 year as a head of a bank;
  • chairman of a bank’s board/head of a foreign bank, chief accountant of a bank/foreign bank branch and his/her deputies, head of a bank’s unit or a foreign bank branch cannot qualify.

How to prepare / mechanism of the amendments introduction

Term of work experience in financial monitoring shall commence on the date of appointment to respective position as documentally confirmed. 

How can we repay a loan if the bank is liquidated?

The matter of amendments

The Resolution on the procedure for restructuring of the loan debts of individuals has been approved.

The Resolution has been put into effect on 23 March 2018 by Decision of the Deposit Guarantee Fund of Ukraine No. 372 of 05 February 2018.

Whom it will affect

Individual borrowers and Banks

Consequences

Restructuring terms will be equal for all banks being liquidated by the Deposit Guarantee Fund. For the period of restructuring, principal amount of a loan will be repaid at first place, and interest rate shall be set at the level of 0.01% per annum

How to prepare / mechanism of the amendments introduction

Art. 48 of the Law of Ukraine “On the System of Guaranteeing Deposits of Individuals” stipulates that restructuring period cannot exceed the term of bank liquidation, hence, after completion thereof, all material terms shall be set pursuant to terms and conditions of a loan agreement as in effect before restructuring.

Credit intermediaries’ activities have been somewhat simplified

The matter of amendments

Requirements to banks’ credit brokers have been simplified.

By its resolution, the NBU approved amendments to the Regulation on setting of requirements to banks’ credit brokers and their activity related consumer credit No. 23 of 05 March 2018, which became effective on 07 March 2018.

Whom it will affect

Banks, individuals, credit brokers

Consequences

Requirements in respect of publication on a bank’s website of photographs of a credit broker employees, as well as details of each brokerage contract – have been cancelled;

Requirements to employees of credit brokers who service customers have been reduced; a bank has been granted opportunity to discretionary verify/control compliance by individual employees of a credit broker of the set requirements.

How to prepare / mechanism of the amendments introduction

Banks must submit to the NBU information about brokerage contracts entered into with credit brokers related to consumer credits on banking services market.

Is there an economic responsibility for non-registration of TI in the URTI?

The matter of amendments

Supreme Court disallowed customer’s claim for damages where supplier failed to register tax invoice in electronic register

The ruling of the Supreme Court sitting as the Cassation Commercial Court was delivered on 12 March 2018 in case No. 918/216/17

Whom it will affect

Ukrainian businesses

Consequences

Customer’s input VAT depends on the supplier registering a tax invoice in the electronic register. If the tax invoice is not registered, customers try to seek compensation from their suppliers in commercial courts.

The Supreme Court sitting as the Cassation Commercial Court ruled that a failure to register a tax invoice is an issue subject to tax regulations but not a breach of commercial rules by the supplier.

Even if the parties to a commercial agreement stipulate that the supplier must provide the customer with a tax invoice, the Supreme Court is of the opinion that such an arrangement does not replace tax relations with commercial ones, i.e., it does not create grounds for seeking compensation.

In the end, the Supreme Court confirmed the lower court’s rulings to dismiss the customer’s claim for consequential damages (lost profits).

How to prepare / mechanism of the amendments introduction

Because the registration of a tax invoice may be suspended or technical issues on the side of the tax authorities may prevent the proper registration, the supplier is not always the blame for customer’s input VAT problems.

This Supreme Court’s ruling may serve as an additional argument for suppliers that, due to their weaker negotiation position, agreed to include in an agreement with the customer a clause punishing the supplier for troubles with the registration of tax invoices.

There will be less bureaucracy in the oil industry

The matter of amendments

Amendments to some legislative acts of Ukraine that regulate oil industry, have been made  

On 29 March 2018, the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Concerning Deregulation in Oil Industry”

was reintroduced to the Verkhovna Rada having been signed by the President of Ukraine. Currently, the document is pending publication. It will become effective the day following its publication.

Whom it will affect

Entrepreneurs engaged in oil industry

Consequences

It is anticipated that this law will simplify bureaucratic procedures for obtaining the right to use land plots for oil and gas enterprises and ensure the increase in natural gas production.

How to prepare / mechanism of the amendments introduction

Application of provisions of the Law requires no prearrangements.

Summary
Evris newsletter #7 in English
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Evris newsletter #7 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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