Land

Money Laundering

Notarization

Securities

Specific Sectors of the Economy/Miscellaneous

Taxation

Chronicle of Recent Developments in Ukrainian Legislation

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 like to receive further information or actual legal advice, please do not hesitate email us at chronicle@rulg.com.

Currency and Banking

1) National Bank of Ukraine Resolution No. 54 dated 12 February 2003 "On Approving the Amendments to the Instructions on Moving Ukrainian and Foreign Currency, Bank Metals, Payment Documents, Other Bank Documents and Debit Cards Across the Ukrainian Customs Border". Both Ukrainian resident and nonresident individuals are permitted to export from Ukraine up to 6000 USD (or its equivalent in other foreign currency) if they declare the currency to Ukrainian Customs.

Сustoms

2) State Customs Inspectorate of Ukraine Letter No. 11/2-15-1756-EP dated 7 February 2003. This Letter explains that Article 18 of the Law of Ukraine "On the Foreign Investment Regime" does not allow customs duties exemptions for imports of low value and for fast-wearing goods, raw materials, main and accessory materials, fuel, purchased semi-finished products and components, spare parts, containers, and building and other materials.

Employment and Labor Issues

3) Law of Ukraine No. 490-IV dated 6 February 2003 "On Amending Certain Legislative Acts of Ukraine regarding Vacation". This Law amends Ukraine’s Labor Code and Law “On Vacations”. Holidays and non-working days are excluded from the calculation of vacation time. There is also a new provision granting an additional 7-day annual paid vacation for certain categories of workers.

Intellectual Property

4) Joint Order No. 9/29 of the State Committee on Regulatory Policy and Entrepreneurship and the Ministry of Economy and European Integration Issues of Ukraine dated 17 February 2003 "On Confirming Means of Control over Adherence to the Licensing Terms for Conducting Economic Activity on Export, Equipment and Laser-Readable Disks Import". The Order regulates inspections, processing of inspection results, the commissioning of persons authorized to conduct inspections, control over violations of licensing terms by a licensee and the application process for the licensing authority to annul or suspend a license.

International Trade

5) Cabinet of Ministers of Ukraine Resolution No. 255 dated 25 February 2003 "On Authorizing the Chamber of Commerce and Industry to Issue Certificates of Origin of Goods". The state body authorized to issue certificates of origin for goods exported from Ukraine is the Chamber of Commerce and Industry. The Resolution enters into force on 1 January 2004.

6) State Customs Inspectorate of Ukraine Letter N 11/2-14-2427-EP dated 19 February 2003 "On Designated Bodies to Issue Certificates of Origin in the Countries that Have Entered into Free Trade Agreements". The letter contains the list of state bodies authorized to issue certificates of origin in the countries of the former Soviet Union and Macedonia.

Land

7) Presidential Decree No. 134/2003 dated 17 February 2003 "On Measures Regarding Creation of a Uniform System for the State Registration of Land Plots, Real Estate and Corresponding Rights within the State Land Cadastre". The State Committee of Ukraine on Land Resources performs state registration of land plots, real estate and corresponding rights in the state land cadastre.

Money Laundering

8) National Bank of Ukraine Resolution No. 58 dated 12 February 2003 "On Transferring Funds in Domestic and Foreign Currency in Payment for Works and Services by Nonresidents". Before transferring payment of more than 50,000 Euros to a nonresident for its services, one must obtain an appraisal from Ukraine’s State Information and Analysis Center for Monitoring Foreign Goods Markets, confirming that the contract price for the services accords with market prices. If the appraisal reveals that the contract price exceeds market norms, payment cannot be made without the prior approval of the National Bank of Ukraine.

9) Law of Ukraine No. 485-IV dated 6 February 2003 "On Amending Certain Laws of Ukraine Aimed at Preventing Use of Banks and Other Financial Institutions to Legalize (Launder) Profits Obtained by Criminal Means". Amendments are introduced into the Law "On Banks and Banking Activity" and the Law "On Financial Services and State Regulation of the Financial Services Markets". Banks and financial institutions must identify their clients. Banks may not enter into contractual relations with a client if they suspect that it is acting as an agent for another person. Banks must close all anonymous foreign currency and coded accounts within one month after entry into force of this Law.

Notarization

10) Ministry of Justice of Ukraine Order No. 14/5 dated 18 February 2003 "On Introducing Changes to the Instruction on the Way to Conduct Notary Activity by Notaries of Ukraine". A notary may accept money and securities as a deposit from a debtor to pass them to a creditor. This transaction shall be conducted at the place of performance of the obligation.

Securities

11) State Committee on Securities and the Stock Market Decision No. 61 dated 4 February 2003 "Regarding Repeal of the Decision of the Committee No. 405 dated 26 January 2002". Decision No. 61 abolishes the "Temporary Regulation on Certifying the Signature on the Basis of Bilateral and Multilateral Agreements among Professional Participants in the Securities Market in the Course of the Electronic Circulation of Securities in Ukraine", which had been adopted by Decision No. 405 on 26 January 2002.

12) State Committee on Securities and the Stock Market Decision No. 62 dated 11 February 2003 "Regarding Putting Depository Activity in Order". As of 1 January 2004, in order to be processed by the National Depository System, all securities must contain an international identifying number (code ISIN), issued by the National Depository of Ukraine.

Specific Areas Of Economy/Miscellaneous

13) Law of Ukraine No. 506-IV dated 6 February 2003 "Оn Introducing Amendments to the Law of Ukraine "Оn the Legal Status of Foreigners". This Law contains new provisions on the deportation of foreigners and stateless persons, and on sanctions for evading deportation.

Taxation

14) Cabinet of Ministers of Ukraine Ordinance No. 77-р dated 24 February 2003 "On the List of Offshores". The Ordinance confirms the new list of offshore zones: Guernsey Island, Jersey Island, Isle of Man, Alderney Island, Bahrain, Belize, Panama, Andorra, Gibraltar, Monaco, Anguilla, Antigua and Barbuda, Aruba, the Bahamas, Barbados, Bermuda, British Virgin Islands, US Virgin Islands, Grenada, Cayman Islands, Montserrat, Netherlands Antilles, Puerto Rico, St. Vincent and the Grenadines, Saint Kitts and Nevis, Saint Lucia, the Commonwealth of Dominica, Turks and Caicos, Liberia, Seychelles, Vanuatu, Marshall Islands, Nauru, Niue, Cook Islands, Samoa, Republic of Maldives. Cabinet of Ministers Ordinance No. 53 "Оn the List of Offshore Zones" dated 14 February 2002 and another ordinance, "Оn Addition to the List of Offshore Zones" dated 29 March 2002, are now void. Thus, Cyprus, which was the "most popular Ukrainian offshore", has lost its offshore status under Ukrainian law.

15) Joint Order No. 9/5/59 of the Ministry of Justice of Ukraine and the State Tax Administration dated 7 February 2003 "Оn Registration of Real Estate Tax Bonds". Until the State Register of Real Estate Tax Bonds is set up, registration of tax bonds will be conducted in the State Register of Movable Property on the basis of the Instructions on Registration of Movable Property Bonds.