Russian-Ukrainian Legal Group, P.A.

Kiev, Ukraine; Washington, D.C., USA

 

 

Chronicle of Recent Developments in Ukrainian Legislation

 

 
december 2005

 

Consumer Protection

Corporate Registration

Customs

Intellectual Property

Labor Law

Social Sphere

Standardization

Use of Subsoil, Oil and Gas

Taxes

Specific Sectors of Economy/Miscellaneous

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The “Chronicle of Recent Developments in Ukrainian Legislation” is a monthly summary of the most important legislative developments in Ukraine in the area of business and corporate law, and is prepared, published and distributed by the Russian-Ukrainian Legal Group as a free service to our clients. The Chronicle will be distributed only via e-mail, in English and Russian, by the middle of each month, and will summarize the legislative developments of the previous month. The Chronicle is prepared in an effort to capture news of greatest interest to the widest cross-section of our firm’s clientele, without restating all legislation published and drowning our readers in too much information. Due to the winnowing process necessary when preparing the Chronicle, we cannot and do not guarantee that it contains a comprehensive list of all Ukrainian legislation relevant to your business. Finally, please bear in mind that this summary does not constitute legal advice; it is an informational service only.  Should you wish to receive further information or actual legal advice, please do not hesitate email us at chronicle@rulg.com

 

Consumer Protection

 

1)        Law of Ukraine No. 3161-IV "On Incorporating Amendments into the Law of Ukraine "On Protection of Consumers' Rights"" dated 1 December 2005. The Law sets forth a re-stated Law "On Protection of Consumers' Rights", providing the definitions of such concepts as introduction of products into circulation, means of remote communication, consumer credit, service life, forged products, etc. The re-stated Law stipulates consumers' rights when purchasing products on credit, when a contract is entered into outside trading or business premises or remotely, and defines the conditions for offering a "discount", "discounted price" or "sale". The Law forbids dishonest business practices. The Law took effect on 13 January 2006.

 

Corporate Registration

 

2)        Law of Ukraine No. 3235-IV "On the State Budget of Ukraine in 2006" dated 20 December 2005 ("2006 State Budget Law"). Effective 1 January 2006, the statutory minimum wage has been increased from 332 UAH to 350 UAH. Consequently, the statutory minimum amount for the authorized funds of limited liability companies (at least 100 minimum wages) has increased to 3,500 UAH. Effective 1 July 2006, the minimum wage will be further increased to 375 UAH; effective 1 October 2006, it will increase again, to 400 UAH. The Law took effect on 1 January 2006.

 

Customs

 

3)        2006 State Budget Law. The Law stipulates that the Customs Code provision prescribing a fee for the customs clearance of goods and means of transport either (i) located outside customs facilities or (ii) at times other than the customs office's regular working hours, will take effect as of the moment of Ukraine's accession to the World Trade Organization. The Law took effect on 1 January 2006.

 

4)        Cabinet of Ministers of Ukraine ("Cabinet of Ministers") Resolution No. 1198 "On Supplementing Clause 1 of Cabinet of Ministers of Ukraine Resolution No. 65 dated 27 January 1997" dated 15 December 2005. An addendum has been incorporated stipulating that when goods are transported across Ukraine as items-in-transit, no customs duty will be collected for keeping these items under customs control for the entire period while the items remain in Ukraine. The Resolution took effect on 1 January 2006.

 

Intellectual Property

 

5)        Cabinet of Ministers Resolution No. 1165 "On Incorporating Amendments into Cabinet of Ministers of Ukraine Resolutions No. 1698 dated 14 November 2000 and No. 756 dated 4 July 2001" dated 7 December 2005. The licensing body authorized to issue the licenses for the manufacture of laser-readable discs have been changed. Instead of the State Department of Intellectual Property said activities as well as the manufacture of matrices will be licensed by the Ministry of Education and Science. The  Ministry of Economy will be licensing not only the export and import of discs, but  also export and import of matrices. The licensing of the export and import of equipment for the manufacture of discs is no longer required. The Resolution took effect on 7 December 2005.

 

 

 

Labor Law

 

6)        Law of Ukraine No. 3248-IV "On Incorporating Amendments into the Labor Code of Ukraine" dated 20 December 2005. The Law stipulates an employer's responsibility to inform an employee in writing of what sums are owed to the employee in the event of his dismissal and how these sums have been calculated; this must be done before such sums are paid. The Law took effect on 5 January 2006.

 

Social Sphere

 

7)        Law of Ukraine No. 3108-IV "On Incorporating Amendments into Certain Legislative Acts of Ukraine in Connection with the Adoption of the Law of Ukraine 'On Mandatory State Pension Insurance'" dated 17 November 2005. The Law stipulates criminal and administrative liability for violations of the pension insurance legislation. In particular, administrative liability is stipulated for concealing (understating) salaries, non-observance of the procedure established for paying insurance premiums, non-submission or delayed submission of reports, etc. Criminal liability is stipulated for deliberate evasion of the payment of insurance premiums if such actions result in the actual failure to remit significant (or large amounts of) funds to the budget. Under the Criminal Code, significant amounts means sums in excess of 17,000 UAH (approximately 3,400 USD) and large amounts means sums in excess of 51,000 UAH (approximately 10,100 USD). The Law took effect on 13 December 2005.

 

Standardization

 

8)        Law of Ukraine No. 3164-IV "On Standards, Technical Rules and Procedures for Assessing Conformity" dated 1 December 2005. The Law defines the responsibilities of manufacturers and suppliers of products that are subject to technical rules (mandatory requirements concerning products or their methods of production, for example, the terminology, designations, packaging and labeling used on products , which requirements are established by Ukrainian laws or acts of the Cabinet of Ministers). The Law also establishes a procedure for releasing information about technical rules, standards and procedures for assessing conformity, and control over the observance of the rules. The Law took effect on 11 January 2006.

 

Use of Subsoil, Oil and Gas

 

9)        2006 State Budget Law. In addition to the information set forth above in items 2 and 3, the Law increases the rent payable by entrepreneurs to the State Budget of Ukraine for oil, natural and condensed gas. It also increases the export duties to be collected on various types of gas. No VAT will be charged for the importation of natural gas into Ukraine under contracts made in observance of the international treaties of Ukraine. The Law suspends the Law "On the Rent to Be Collected for Oil, Natural and Condensed Gas", as well as certain Articles of the Law "On Oil and Gas" (regarding the conditions for granting special licenses authorizing the use of subsoil). The Law took effect on 1 January 2006.

 

10)      Ministry of Ukraine for Protection of the Natural Environment Order No. 349 "On Approving the Procedure for  Reformulating and Issuing Duplicates of Special Permits (Licenses) Authorizing the Use of Subsoil in 2005" dated 4 October 2005. The new Order has replaced the 2004 Order (please see the June 2004 issue of this Chronicle for details on the 2004 Order) and stipulates additional grounds for reformulating  subsoil use licenses when the information contained in a license changes (e.g. regarding the licensee's official name, address, controlling stakeholder, etc.). As before, licenses are reformulated  on the basis of subsoil users' applications, accompanied by the supporting documents stipulated by the Order. Under the 2004 Order, a license was "reformulated " for the same term of validity as for the original license (e.g. a five-year license would be reformulated  for a new five-year term, starting on the date of reformulation ). The 2005 Order establishes that reformulation  is for the time remaining under the original term of validity only (e.g. a five-year license originally issued on 1 January 2000 and reformulated  on 1 January 2003, will  be valid through 1 January 2005 only -- and not through 1 January 2008, as would be under the 2004 Order). The Order took effect on 20 December 2005.

 

11)      Cabinet of Ministers Resolution No. 1304 "On Approving the List of the Goods, the Export and Import of Which are Subject to Licensing, and the Quotas for the Year 2006" dated 30 December 2005. In 2006, the export of crude oil of Ukrainian origin is subject to licensing. Licenses will be issued upon the approval of the Ministry for Fuel and the Power Industry. Customs authorities are required to submit data concerning export volumes to the Ministry of Economy monthly. The Resolution took effect on 1 January 2006.

 

Taxes

 

12)      2006 State Budget Law. In addition to the information set forth above in items 2, 3 and 9, the Law reduces the social funds fees to be remitted by employers to the state budget from their salary funds. However, the Law increases the taxable salary amount. The net result will be that, in 2006, employers' deductions from their salary funds and remittances to the state budget will increase. The Law took effect on 1 January 2006.

 

Specific Sectors of Economy/Miscellaneous

 

 

13)      Law of Ukraine No. 3262-IV "On Access to Court Decisions" dated 22 December 2005. The Law stipulates that court decisions should be posted on official websites of Ukraine's judicial authorities and should be freely accessible round-the-clock. Court decisions can also be published in printed media and/or distributed in electronic form, subject to the requirements of the Law. The Law will take effect on 1 June 2006.

 

14)      Cabinet of Ministers Resolution No. 1174 "On the Body Authorized to Carry Out Governmental Regulation of the Activity of Credit History Bureaus" dated 7 December 2005. In observance of the Law "On Formation and Circulation of Credit Histories" which will take effect on 30 January 2006 (please also see the information concerning the adoption of the Law contained in the July 2005 issue of this Chronicle), the Resolution stipulates that the Ministry of Justice is the authorized body that will regulate the activities of credit history bureaus and its powers. The Resolution took effect on 7 December 2005.

 

15)      Cabinet of Ministers Resolution No. 1285 "On Creating an Agrarian Exchange" dated 26 December 2005. An Agrarian Exchange will be created in Ukraine, and the Cabinet of Ministers has approved its Charter and the members of its supervisory council. The Agrarian Exchange is a legal entity, set up to improve Ukraine's "foodstuffs security". Its principal activity is rendering services to entrepreneurs associated with entering into Exchange contracts concerning agricultural products, product derivatives -- the basic assets of which are agricultural products, mortgage certificates and mortgages, as well as payments and clearings. The Resolution took effect on 26 December 2006.