Russian-Ukrainian
Legal Group, P.A.
Kiev, Ukraine; Washington, D.C., USA
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FEBRUARY – MARCH 2007
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Banking
Insurance
Licensing
Non-Banking
Financial Services
Taxes
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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
1) National Bank of Ukraine Resolution ¹ 31 “On Approving the Procedure for Building up Reserves for Securities Operations at
Ukrainian Banks” dated 2 February 2007. The Procedure gives the
terms and conditions for calculating and building up securities reserves. The
Procedure took effect on 16 March 2007.
In addition to the Procedure, the NBU approved amendments to the
"Instruction on the Procedure for Regulating Banking Activities in Ukraine" pertaining to the size of a bank's capital required by law. These
amendments shall take effect on 5 May 2007.
2) Decision of the Fund for Guaranteeing the Deposits
of Individuals No. 1 “On Increasing the Amount of Compensation for Deposits”
dated 14 February 2007. This Decision increases the
amount of individuals' deposits, including interests on them, guaranteed by the
government against a bank's default. Deposits are now guaranteed up to 25,000
UAH in value. The Decision also covers depositors of JSCB Rostok Bank, JSB
Allonzh, JSCB Premierbank, JSCB Intercontinentbank, OJSC Joint-Stock Commercial
Bank Garant and LLC Kiev Universal Bank, each of which is currently undergoing
liquidation. The Decision took effect on its publication date.
3) State Commission for Regulation of the Financial Services Markets Ordinance
No. 6817 “On Approving the Procedure for Insurers Publicizing Information about
Insurance Contracts Effected within the System of Non-governmental Pension
Insurance” dated 15 February 2007. This Ordinance
establishes the procedure for insurers to publish information about life
pension insurance contracts, disability, and death benefits insurance contracts
of participants in non-governmental insurance funds effected within the system
of non-governmental pension insurance. The Procedure also requires that such
information be published annually by 1 June of the year following the
accounting year, as part of the insurers' annual financial reporting. This
information may be either published in periodicals, distributed as a separate
printed publication, or posted on the insurer's website (if available). The
Procedure shall take effect on 1 January 2008.
4)
Ministry of Finance Order No. 292 “On Adopting the Procedure for Approval of
Issuance of Export Licenses for Goods Specified in Schedule 1 to Cabinet of
Ministers of Ukraine Resolution No. 1852 dated 29 December 2006” dated 28
February 2007. The
Order establishes the procedure for issuing licenses for the export of precious
metals, waste and scrap, as well as for precious and semiprecious stones. The
Procedure took effect on 27 March 2007.
5) State Commission for Regulation of the Financial
Services Markets Ordinance No. 6882 “On Approving Amendments to the Regulations
on Financial Rules for the Activities of Credit Unions and Joint Credit Unions”
dated 1 March 2007. The amendments concern the refunding of fees and dues, paid by credit
union members, upon termination of membership, as well as for the build-up of
credit union capital. The amendments also require that separate rules for
financial activities shall be established for each management regime group into
which credit unions are divided, depending on the risk inherent in their
activities, the volume and the nature of transactions, and the existence of separate
subdivisions. The Ordinance shall take effect on 1 January 2008.
6) Ministry of Finance of Ukraine Order No. 255 “On Adopting the Forms for Documents Used to Grant
Medium-Term Interest-Free Loans” dated 23 February 2007. This Order approves a model Medium-Term
Interest-Free Loan Contract, Medium-Term Interest-Free Loan Application Form,
Medium-Term Interest-Free Loan Sum Registration Form, and Medium-Term
Interest-Free Loan Order to the State Treasury of Ukraine. The Order took
effect on 3 April 2007.
7) State Commission for Regulation of the Financial
Services Markets Ordinance No. 6793 “On Approving the Procedure for
Confirmation by Reinsurance Brokers of Reinsurance Conducted by a Non-Resident
Ceding Insurer, the Financial Reliability (Stability) Rating of which Meets the
Established Requirements” dated 1 February 2007. The Ordinance
applies to reinsurance brokers, including permanent representative offices of
non-resident brokers, through which or through an intermediary of which
resident insurers enter into agreements with non-resident reinsurers.
Reinsurance brokers must submit information about reinsurance conducted by
non-resident reinsurers, the financial reliability (stability) of which meets
the Requirements for rating the financial reliability (stability) of
non-resident insurers and reinsurers. The Ordinance took effect on 27 February 2007.
8) State Commission for
Regulation of the Financial Services Markets Ordinance No. 6832 “On Approving
the Procedure for Preparing and Submitting Reports by Credit Institutions to
the State Commission for Regulation of the Financial Services Markets of
Ukraine” dated 19 February 2007. The Ordinance establishes
the Procedure for credit institutions, including state-owned financial
institutions, to prepare and submit
reports, as well as the general requirements for filling out accounting data
forms and the terms for their submission. The Procedure took effect on 27 March 2007.
9) Cabinet of Ministers of Ukraine Resolution No.
454 "On Introducing Amendments to the List of Products for Medical
Purposes, Transactions Involving the Sale of Which are
Exempt from VAT" dated 14 March
2007. The Resolution's title is self-explanatory. The amendments took effect on 15 March
2007 .
10) State Tax Administration
of Ukraine ("STA") Letter No. 2131/7/16 – 1417
“On Considering a Letter” dated 5 February 2007. The Letter addresses certain
issues with respect to VAT calculation and payment, in particular, the origin
of the right to a tax credit.
12) Supreme Rada of Ukraine Committee on
Finance and Banking Activities Letter No. 06-10/10-38 “On Taxation of
Individuals’ Income” dated 12 February 2007. The Letter
interprets the rights of individual income taxpayers to tax credits when paying
interest on a mortgage.
13)
STA Order No. 50 “On Approval of a Tax Clarification Reflecting on the
Application of Provisions of Article 43 of the Law of Ukraine “On the 2007
State Budget of Ukraine” dated 5 February 2007. The Order explains how to apply Article 43 of
the Law of Ukraine “On the 2007 State Budget of Ukraine”. Ordinarily, when the
legal address of a taxpaying business changes, certain mandatory taxes and
levies payable upon registration shall continue to be paid at the place of
previous registration till the end of the then-current budget period. The
budget period is defined as a calendar year starting on 1 January of each year
and finishing on 31 December of the same year. The clarification lists certain
categories of taxpayers to which Article 43 of the Law does not apply.