Russian-Ukrainian Legal Group, P.A.
Chronicle
of Recent Developments in Ukrainian Legislation
decemBER 2004
Administrative Law Banking Corporate Registration Customs Intellectual Property Internet Labor Law Land Oil and Gas Taxes Subsoil Use Specific Sectors of the Economy/Miscellaneous |
The “Chronicle of Recent Developments in Ukrainian
Legislation” is a monthly summary of the most important legislative
developments in
Administrative Law
1) Law of
Banking
2) National Bank of
Corporate Registration
3) Law of
Customs
4) Cabinet of Ministers
of Ukraine ("Cabinet of Ministers") Resolution No. 1730
"On Approving the Procedure for Customs Authorities Carrying Out Audits of
Enterprises' Systems for Maintaining Accounts and Records of Goods and Vehicles
Transported Across the Customs Border of Ukraine" dated 23 December 2004.
Audits can be either scheduled or unscheduled. A plan of the audits will be
drafted by the Customs authorities for every quarter, based on the results of
an assessment of enterprises' import and export operations. Enterprises will be
notified of scheduled audits 10 calendar days before the audits are initiated.
Unscheduled audits can be conducted in the cases stipulated in the Resolution.
Customs officials enjoy broad rights during audits, including: to review and
seize documents concerning goods and vehicles transported across the customs
border of Ukraine; to receive other information about companies' business
activities, including calculation and payment of taxes; to receive necessary
written clarifications; to inspect a business's premises if this is necessary
for an audit, as well as to seal them whenever this is reasonably necessary.
The Resolution took effect on
5) The State Export
Control Service of Ukraine ("Export Control Service") Order
No. 355 "On Approving the Instructions on the Procedure for Formalizing
and Using Authorizations in the Sphere of State Export Control" dated 29
November 2004. Goods, the international transfer of which is subject to
export control, can only be exported or imported if the entities involved in
the international transfer of the goods present to Customs a relevant
authorization issued by the Export Control Service. Such goods can be
temporarily imported into (or exported from) the customs territory of Ukraine
or transported as transit goods across the customs territory of Ukraine if
applicants present to Customs conclusions to this effect, issued by the Export
Control Service. The approved Instructions stipulate forms for, and procedures
for formalizing and using, said authorizations and conclusions. The Order took
effect on
Intellectual Property
6) Cabinet of Ministers
Resolution No. 1716 "On Approving the Procedure for Paying Fees for
Actions Associated with Protecting Rights to Objects of Intellectual
Property" dated
7) Ministry of
Education Order No. 888 "On Establishing a Computer Software
Register" dated
Internet
8) Ministry of
Transport and Communication of Ukraine ("Ministry of Transport")
Order No. 1058 "On Approving the Form of the Application for Including an
Electronic Information Resource in the National Register of Electronic
Information Resources" dated 2 December 2004. As we informed in the
March 2004 issue of this Chronicle, pursuant to its Resolution No. 326, the
Cabinet of Ministers initiated the creation of a National Register of
Electronic Information Resources to record information about web-sites,
databases and electronic registers of State-owned legal entities. According to
the Resolution, in order to have an electronic resource included in the
Register, the resource's owner or a person authorized by such owner must submit
the relevant application to the Register's administrator within 30 days after
first granting users access to the resource. The Order
contains a standard form for use in such applications. The Order took effect on
Labor Law
9) Law of
Land
10) State Committee of
Oil and Gas
11) 2005 State Budget
Law. In addition to the information described above in item 3, the Law
increases the rent to be paid by entrepreneurs to the State Budget of Ukraine:
for oil (from 160 to 300 UAH per ton of extracted oil); and for transportation
of oil (from 0.685 to 0.89 USD per ton) and ammonia (from 0.3 to 0.39 USD per
ton per 100 kilometers of distance). Annex No. 9 of the Law introduces the
basic rates of the fee for the use of subsoil for the extraction of mineral
resources in 2005. Also, the rules of the Law "On the Rent Payable for Oil,
Natural Gas and Condensed Gas" (please see the February 2004 issue of this
Chronicle) will be suspended in 2005. The Law took effect on
12) Cabinet of
Ministers Resolution No. 1736 "On Amending the Regulations on Organizing
and Holding Auctions for the
Taxes
13)
2005 State Budget Law. In addition to the information described above in
items 3 and 11, the Law establishes a new procedure for determining the basis
for levying value-added tax ("VAT") in 2005. VAT will continue
to be levied on operations associated with the delivery of goods (works,
services) based on their contract value, as calculated in accordance with free
or regulated prices (tariffs) and subject to other mandatory taxes and charges
(mandatory fees). However, the contract value of goods can no longer be set
lower than the actual cost of manufacturing (acquiring) such goods. The Law
took effect on
Subsoil Use
14) State Commission
for Mineral Reserves of Ukraine Order No. 263 "On Approving the
Instructions Concerning the Classification of Argillaceous Deposits as Mineral
Reserves and Resources of the State Subsoil Fund" dated 2 December 2004.
The Instructions establish the requirements for the degree of analysis of
explored argillaceous deposits (sites); the principles of classifying argillaceous
deposits according to their commercial significance and the degree of their
technical and geological exploration; the principles for counting deposits, for
the geological and economic evaluation of deposits for making state records
based on their commercial significance; and the criteria of readiness for
commercial development of explored argillaceous deposits. The Instructions'
requirements are binding upon enterprises of all forms of ownership involved in
planning, financing and carrying out the prospecting and production of mineral
resources found in argillaceous deposits. The Order took effect on
15) State Committee of
Ukraine for Natural Resources ("Natural Resources Committee")
Order No. 134 "On Approving the Rules for Holding Auctions to Sell Special
Permits (Licenses) Authorizing the Use of Subsoil" dated 3 September 2004.
The approved Rules stipulate in detail the Procedure for Holding Auctions to
Sell Special Permits (Licenses) Authorizing the Use of Subsoil (please see the
May 2004 issue of this Chronicle); establish a procedure for selling, through
exchanges, permits authorizing the use of subsoil; and prescribe the powers of
the Natural Resources Committee, the conditions for buyers' participation in
auctions and procedures for making payments for purchased permits and for
formalizing the documents concerning the results of auctions. The seller can
choose the date and time of an auction, subject to the exchange's approval. The
auction's date and time must then published in the
"Uriadovy Courier" newspaper at least 35 calendar days before the
auction date. To participate, a bidder must pay an auction participation fee to
the Natural Resources Committee prior to the auction, along with a deposit of
10% of the initial price of the permit it intends to bid on. If successful, the
buyer must pay the balance of its winning bid, plus a commission fee of 1% of
the winning bid (up to a maximum of 50,000 UAH).
Specific Sectors of the
Economy/Miscellaneous
16)
Law of Ukraine No. 1771-IV "On Incorporating Amendments into the Law of
Ukraine 'On the Bases of Social Security of Invalids in Ukraine'" dated 15
June 2004; Cabinet of Ministers Resolution No. 1686 "On Incorporating
Amendments into Certain Resolutions of the Cabinet of Ministers of
Ukraine" dated 16 December 2004. Law No. 1771-IV requires every
employer with a payroll of from 8 to 25 employees (compared to the earlier
range of 15 to 25 employees) to create one job designated as to be filled by an
invalid. Resolution No. 1686 now
requires employers with payrolls of more than 8 to register with, and report on
their compliance with Law No. 1771-IV to, branches of the Fund for
Social Protection of Invalids. The
Resolution also establishes a fine for non-compliant employers (with 8 to 25
employees), of 50% of the average annual salary paid by the employer. The Law and the Resolution both took effect
on