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

Bank went bankrupt? It is now allowed to rent its property

The matter of amendments

New procedure for leasing property of a bankrupt bank came into effect.

The decision of the Deposit Guarantee Fund (DGF) “On approval of provision on lease of property of insolvent banks” No. 465 dated 15/02/2018 came into effect on 17/04/2018.

Whom it will affect

Banks, legal entities, individual entrepreneurs and individuals

Consequences

This Provision establishes procedure disclosure for information on property of an insolvent bank, its transfer to lease, creation of proposals, and terms of transfer.

How to prepare / mechanism of the amendments introduction

DGF monthly publishes information on the list and characteristics of property that can be leased on the insolvent bank website. Minimum term of the lease agreement should be not less than 30 days and should not exceed insolvent bank liquidation deadline.

Another portion of improvements in banks’ operation

The matter of amendments

Procedure for carrying out transactions under documentary letters of credit by banks improved

NBU Regulation No. 38 dated 11/04/2018 came into effect on 20/04/2018.

Whom it will affect

Banks, individuals and legal entities (both residents and non-residents), representatives of non-resident legal entities

Consequences

The new Regulation on procedure for carrying out transactions under documentary letters of credit by authorized banks when performing foreign economic transactions, approved by the Resolution of the Board of the National Bank of Ukraine No. 514 dated December 03, 2003 (new title of the document is “Regulation on procedure for carrying out transactions under letters of credit by banks”), as well as changes to the Instruction on cashless settlements in the national currency, approved by the Resolution of the Board of the National Bank of Ukraine No. 22 dated January 21, 2004.

How to prepare / mechanism of the amendments introduction

In transactions under letters of credit:

  • electronic document management was introduced at all stages;
  • number of bureaucratic instructions was reduced;

procedures for banks to carry out such transactions in the national currency were improved.

Additional requirements to property insurance when granting stabilization loans

The matter of amendments

NBU determined additional terms and conditions for acceptance of certain types of property as a collateral or mortgage under stabilization bank loans

NBU Resolution No. 40 dated 17/04/2018, came into effect on 20/04/2018.

Whom it will affect

Banks

Consequences

NBU accepts as collateral/mortgage property stipulated in clauses 12, 13, 15 of Annex 1 to the Regulation on provision of stabilization loans by NBU (this includes real estate, air and sea vessels, other movable property in the form of railway rolling stock), provided that it is insured by the insurer meeting additional criteria:

  • there are no facts of violation of the requirements of the Law “On Prevention and Counteraction to Legalization (Laundering) of the Proceeds from Crime, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction” by the insurer during the last 2 years;
  • there are no decisions of the State Commission for Regulation of Financial Services Markets on temporary suspension (restriction) of the license for the right to carry out insurance activities during the last 2 years;
  • other

How to prepare / mechanism of the amendments introduction

Insurance for certain types of property is carried out upon receiving a conclusion on compliance of the insurer with the established criteria from NBU.

Consolidation of territorial tax inspections

The matter of amendments

Ukrainian district tax offices will be reorganized and become subdivisions of regional tax offices.

Regulation of the Cabinet of Ministers of Ukraine No. 296 dated 28 March 2018 “On reforming the local authorities of the State Fiscal Service”.

The Regulation came into effect on 24/04/2018.

Whom it will affect

Ukrainian business

Consequences

The state tax inspectorates (local tax authorities) will be reorganized to become subdivisions of regional tax authorities. As a result, the local tax authorities will be terminated as legal entities. However, the Large Taxpayers Office will not be affected by this reorganization.

Although the Regulation has already entered into force, the local tax authorities will continue to function as legal entities until the reorganization procedures complete.

How to prepare / mechanism of the amendments introduction

Taxpayers should expect that treasury account details for paying social security contributions will change as these are currently tied to the local tax authorities.

The taxpayers that are registered with the local tax authorities (as opposed to those that are registered with the Large Taxpayers Office) will be re-registered with the regional tax authorities. Such taxpayers will be notified of the re-registration; no action on the side of taxpayers is required to complete the re-registration.

However, the re-registered taxpayers will likely have to conclude new agreements on the recognition of electronic documents (required to file tax returns electronically).

Activity of JSCs is even more transparent

The matter of amendments

National Securities and Stock Market Commission of Ukraine (NSSMC) has adopted amendments to Regulation on Information Disclosure by the Securities Issuers.

NSSMC decision being currently registered with the Ministry of Justice of Ukraine.

Whom it will affect

Companies operating in the form of joint stock companies, as well as other securities issuers

Consequences

The given amendments have been developed to implement provisions of the Law of Ukraine “On Simplification of Business Operations and Attraction of Investments by the Securities Issuers” as of 16.11.2017 No.2210-VІІІ. The amendments provide for the extension of the scope of special information to be disclosed, as well as the scope of interim information (upon quarter results). The amendments also established requirements as to the information disclosure by the foreign issuers being non-residents of Ukraine, securities of which are placed and/or allowed to circulation on the territory of Ukraine (as of today the securities of two foreign issuers are allowed to be traded in Ukraine). In addition, the scope of information to be disclosed by the issuers at their own web-site was extended (the following documents shall be also disclosed: supervisory board reports, executive body reports, auditing commission reports, regulation on remuneration of members of the supervisory board and executive body, as well as minutes on voting results at the general shareholders’ meetings).

How to prepare / mechanism of the amendments introduction

The given amendments shall ensure the compliance with the Law provisions by the securities issuers and shall promote the transparency of activities of the joint stock companies in Ukraine.

From now on, NBU Credit Registry will know even more about debtors

The matter of amendments

Banks are obliged to submit information on credit transactions, indebtedness under which equals or exceeds 100 minimum wages (in 2018 – UAH 372,300), to the Credit Register of the National Bank

Provision of the Law of Ukraine “On Amendments to Certain Laws of Ukraine Regarding the Creation and Maintenance of the Credit Register of the National Bank of Ukraine and Improvement of Bank Credit Risk Management Processes” comes into effect from 01/04/2018.

Whom it will affect

Banks and debtors

Consequences

Pursuant to sub-clause 4 of clause 2 Section I of the aforementioned Law, Article 671 of the Law of Ukraine “On Banks and Banking” is restated to be read in a new wording. Changes refer to creation and functioning of the Credit Register of the National Bank of Ukraine.

How to prepare / mechanism of the amendments introduction

From April 1, 2018, all banks should submit to the Credit Register the following information: 1) data identifying the debtor; 2) terms and conditions of a credit transaction and performance of obligations under a credit transaction; 3) affiliation of a debtor to persons related to the bank; 4) securing performance of obligations under a credit transaction, including suretyship; 5) other information on a debtor – legal entity. The information should be submitted to the Credit Register not later than the eleventh business day of the month following the reporting one.

Moreover, Banks would submit information to the Credit Register without necessity to obtain consent of a debtor – legal entity, but they should notify a debtor – legal entity thereof in writing.

Organic products to become more qualitative and safe

The matter of amendments

Adaptation of internal quality control system for organic products and bringing Ukrainian legislation in this field in line with the European one.

NBU Regulation No. 2412-VIII dated April 19, 2018 “On adoption of the draft law of Ukraine on general principles and requirements for organic production, circulation and labeling of organic products.

Whom it will affect

Operators (manufacturers of products) engaged in production and/or sale of organic products

Consequences

According to Olena Kovalova, the Deputy Minister of Agrarian Policy and Food of Ukraine, consequence of this Law adoption will be, first of all, certification of organic production. Only specific and permitted substances and elements of technology safe for a consumer and environmentally friendly should be used in such production.

How to prepare / mechanism of the amendments introduction

Also, according to the draft law, a register of certifying bodies, organic producers and organic seeds will be created. Moreover, new draft law No. 5448 will establish a system of control (supervision) over production process and manufacturers according to practice of the European Union countries.

Due to production process certification, export technical barriers should be completely removed.

Individual entrepreneurs retired: how to save when paying unified social tax

The matter of amendments

The Supreme Court came to the conclusion that retired individual entrepreneurs are exempt from paying a unified social tax.

Regulation of the Supreme Court No. 805/2195/17-a dated March 20, 2018.

Whom it will affect

Retired individual entrepreneurs

Consequences

The Supreme Court noted that exemption of an individual entrepreneur, who chose a simplified tax system, from paying a unified social tax is possible subject to two conditions:

  • firstly, such a person should have status of a pensioner by age or to be a person with a disability;
  • secondly, he/she should receive a pension or social assistance in accordance with the law.

How to prepare / mechanism of the amendments introduction

Individual entrepreneurs, including those who chose a simplified tax system, are exempt from paying a unified social tax if they are retired by age or disabled, and receive pension or social assistance.

Who will now regulate sale of alcohol?

The matter of amendments

Powers were vested in local self-governments bodies on prohibiting the sale of beer, alcohol and low alcohol beverages and administrative liability was established for trade in beer (except for non-alcohol beer), alcohol and low alcohol beverages and table wines within the time of day prohibited by decision of a relevant local self-government body.

The Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Concerning the Powers of Local Self-Government Bodies to Impose Restrictions on Sale of Beer (Except Non-Alcohol Beer), Alcohol and Low Alcohol Beverages, Table Wines” was adopted on March 22, 2018. On April 25, 2018, it became effective.

Whom it will affect

Entrepreneurs engaged in selling alcohol beverages and beer; consumers of alcohol and low-alcohol beverages and beer

Consequences

It is expected that the implementation of norms of the law will help local self-government bodies independently resolve issues of local significance pursuant to the Constitution and laws of Ukraine, will facilitate increasing the efficiency of measures to limit the harmful effects of alcohol consumption, as well as reducing the number of offences committed at night under the influence of alcohol and observance of silence in public places. 

How to prepare / mechanism of the amendments introduction

Decisions adopted by local self-government bodies should be regularly checked out; employed salesmen should be made aware of provisions of the law, they should be given a prophylactic talk to prevent them from committing an administrative offence due to lack of awareness of the norms adopted

Summary
Evris newsletter #8 in English
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Evris newsletter #8 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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