Russian-Ukrainian Legal Group, P.A.
Kiev, Ukraine; Washington, D.C., USA
Chronicle
of Recent Developments in Ukrainian Legislation
maRch 2004
Banking
Criminal Law
Currency
Control
Customs
Intellectual Property
Internet
Land
Money Laundering
Mortgage
Oil and Gas
Real Estate
Taxes
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 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.
Banking
1) National Bank of Ukraine ("National
Bank") Resolution No. 22 "On Approving the Instructions on
National Currency Non-Cash Settlements in Ukraine" dated 21 January 2004. The
approved new Instructions will replace similar 2001 Instructions and establish
general rules, forms and standards of national currency settlements carried out
in Ukraine, with the participation of banks, by legal entities,
individuals and other banks. The Resolution took effect on 9 April 2004.
2) National Bank
Resolution No. 54 "On Recognizing Certain Resolutions of the Board of the
National Bank Of Ukraine Null And Void" dated 18 February 2004. Following entry into force in 2004 of certain
legislative acts that regulate financial and credit procedures, the National
Bank has annulled the Crediting Regulations, which stipulated legal grounds for
granting, using and repaying credits. The Resolution took effect on 15 March 2004.
Criminal Law
3) Law of Ukraine No. 1520-IV
"On Incorporating an Amendment into Article 36 of the Law of Ukraine 'On the
Status of People's Deputy of Ukraine'"
dated 19 February 2004. Officials of enterprises, institutions and
organizations, irrespective of their forms of ownership and subordination, can
now be held criminally liable for failing to comply with legitimate demands of
a People's Deputy or for hindering his work, for refusing or evading a request
from a People's Deputy to present necessary information and documents in a
timely manner and for submitting fraudulent information. The Law took effect on
16
March 2004.
Currency
Control
4) National Bank
Resolution No. 61 "On Amending the Instructions on Moving Currency Of
Ukraine, Foreign Currency, Bank Metals, Payment Documents, Other Bank Documents
and Payment Cards Across the Customs Border of Ukraine" dated 18 February
2004. Non-residents are
allowed to import into Ukraine 1000 UAH (per person, irrespective of age) without
needing to show an exportation customs declaration. The total amount that a
non-resident can import, whether or not an exportation customs declaration is
presented, cannot exceed 10,000 UAH (the maximum amount that can be exported
from Ukraine without needing to obtain a one-time currency export
license from the National Bank). The Resolution took effect on 28 March 2004.
Customs
5) Law of Ukraine No. 1495-IV
"On Amending Article 206 of the Customs Code of Ukraine" dated
17 February 2004. Under the new Customs Code, it is now possible to
receive authorization to temporarily import (export) sea vessels and airplanes
for repairs, as well as equipment and materials to be delivered to
non-residents of Ukraine for the construction and repair of said vessels and airplanes with
conditional full tax-exemption. The Law took effect on 20 March 2004.
6) State Customs Service of Ukraine ("Customs Service")
Order No. 172 "On Incorporating
Amendments and Addenda into the Procedure for Implementing the Provisions of
the Customs
Convention on the International Transport of Goods Under Cover of Tir Carnets" dated
5 March 2004. The Order sets forth a restated Procedure for Implementing the Provisions of
the Customs Convention on the International Transport
of Goods Under Cover of Tir
Carnets ("Tir Carnets"). The Order also stipulates, inter alia,
a new form of the Certificate of approval of road vehicles for the carriage of
cargoes under customs seal. The Rules for Filling Out TIR Carnets have been
approved and the Regulations on the procedure for approving road vehicles for
the carriage of cargoes under customs seal under cover of Tir Carnets have been annulled (the relevant rules are now
incorporated into the aforementioned Procedure). The Order took effect on 4 April 2004.
7) Administration of the
State Border Service of Ukraine and Customs Service Joint Order No. 202/163
"On Approving a Procedure for Joint Inspection of Automobile Vehicles Used
for the Carriage of Foreign-Economic Cargoes" dated 28 February 2004. A joint group consisting of
officials of the authorities in charge of protecting the national frontier and
of customs authorities can initiate one of the following inspections of automobile vehicles or
goods: visual inspection of a
vehicle; inspection that involves
opening a cargo compartment of a vehicle without unloading goods; inspection that involves full or
partial unloading of goods, counting their quantity and verifying whether the
goods are those stated; or in-depth inspection
involving special groups and, if necessary, unloading of goods, full or
partial removal of modules and components of the vehicle. The Order took effect
on 4 April 2004.
Intellectual Property
8) Cabinet of Ministers of Ukraine ("Cabinet of Ministers") Resolution No. 253 "On Approving a Procedure for
Legalizing Computer Software Used by Executive Power Authorities" dated 4 March 2004. With the aim of bringing the use of software into
line with the requirements of the copyright legislation of Ukraine, non-licensed copies of computer software used by
the executive power authorities will be replaced with licensed copies (please
note that the current use of non-licensed copies by executive power authorities is officially acknowledged in the
Resolution). Licensed computer software will be purchased on the basis of a
legalization agreement between the Ministry of Education and the relevant
rights holder. The Resolution took effect on 4 March 2004.
9) Cabinet of Ministers Resolution
No. 369 "On Incorporating
Amendments into Certain Resolutions
of the Cabinet of
Ministers of Ukraine" dated
24 March 2004. The Resolution sets
forth restated versions of the Regulations on the Procedure for Manufacturing,
Storing, Selling Control Marks and Labeling Copies of Audiovisual Works or
Phonograms, and of the Rules for Retail Trade in said goods, which documents
will henceforth also regulate the distribution of videograms, computer software
and databases. Government inspectors in charge of intellectual property are
authorized to carry out government supervision of businesses' observance of the
legislation concerning distribution and rental of copies of videograms,
computer software and databases. The control marks to be used for labeling
copies of said goods have been included in the List of the documents that must
be protected by holographic elements. The Resolution took effect on 24 March 2004.
10) Ministry of Education and Science
of Ukraine ("Ministry of Education")
Order No. No. 154 "On Incorporating Amendments into the
Rules for Drafting and Submitting an Invention Application and a Useful Model
Application" dated 26 February
2004. The purpose of the Order is to
bring the Rules for Drafting and
Submitting an Invention Application and a Useful Model Application (the "Rules") into
conformity with the Law "On Protection of Rights to Inventions and Useful
Models" (the "Law"). Pursuant to the Order, the term "declaration
patent" has been deleted from the Rules; the requirements currently
prescribed by the Rules concerning inventions and useful models as legally
protectable items are in line with the Law; an invention application or useful model application can be
submitted by fax; the personal signature required on an application can be
handwritten, made on a printer (as a computer-based printed copy) or made with
a signature stamp; the application can be submitted electronically on a
diskette, CD-ROM. The Order took effect on 28 March 2004.
11) Ministry of Education Order No. 175 "On Approving the Rules
for Coordinating the Use of a Designation Containing the Official Name of the
State 'Ukraine' in a Trademark for Goods and Services" dated 4 March 2004. The approval of the use in a
trademark for goods and services of a designation containing the official name
of the state "Ukraine" will be granted if: (1) such a use is not
contrary to public order or principles of humanity and morality, will promote
the interests of the State and will not mislead the public concerning the
person that manufactures the goods or renders the services; and (2) the goods
and services, on which the trademark will be used, have industrial,
educational, scientific, cultural or artistic value. The Order took effect on 28 March 2004.
Internet
12) Cabinet of Ministers Resolution
No. 326 "On Approving the
Regulations of the National Register of Electronic Information Resources"
dated 17 March 2004. The National Register of Electronic Information
Resources (the "Register") will be created in 2004. The purpose of the Register is to
register, accumulate and store information about electronic information
resources and to satisfy the needs of legal entities and individuals for
information services. The Register will include the websites, databases and
electronic registers of public authorities, bodies of local self-government and
other legal entities of public law, which public authorities, bodies of local
self-government and other legal entities of public law may also use the Register
free of charge. Privately owned information resources will be included in the
Register if contributed voluntarily. The Resolution took
effect on 17 March 2004.
Land
13) Cabinet of Ministers Resolution No. 220 "On Approving a Standard
Contract for Lease of Land" dated 3
March 2004. Following the adoption of a
new version of the Law of Ukraine "On Lease of Land" (please see the October
2003 issue of this Chronicle), a new Standard Form Agreement for Lease of Land has been
approved. Compared to the previous standard form, the new one describes legal
lease relations in more detail while preserving the right of the parties to the
agreement to resolve certain matters upon mutual agreement. The Resolution stipulates that a lease agreement takes
effect after its signing by the parties and its State registration. The Resolution took effect on 17 March 2004.
14) Cabinet of Ministers Resolution No. 266 "On Approving a Standard
Contract for the Development of a Land Management Project Concerning Allocation
of a Land Plot" dated 4 March 2004. Under the Land Code of Ukraine, land lots are allocated to
legal entities for permanent use on the basis of decisions of bodies of
executive power and bodies of local self-government under the relevant plot
allocation projects. The conditions and terms of development of said projects
are stipulated in a contract made by and between the customer and the performer
of the works in accordance with a standard contract, the form of which has been
approved by the Resolution. A project received
as a result of fulfilling a contract is defined under the approved standard
contract as being the property of the customer. The Resolution
took effect on 4 March 2004.
15) Cabinet of Ministers Resolution No. 427 "On Approving A Procedure For Selecting Land Plots for
Facilities" dated 31 March
2004. The Resolution
stipulates a mechanism to be used by legal entities to select land plots for
facilities. It is established that a legal entity interested in the allocation
of a land plot should file a petition with the village, town, city council,
district or Kiev or Sevastopol city administration that is competent to resolve
issues relating to the selection of a land plot. The Resolution
establishes a list of the grounds for refusing to allocate land plots for
facilities. The Resolution took effect on 31 March 2004.
Money Laundering
16) State Commission for Regulation of
the Financial Services Markets of Ukraine ("Financial Services
Commission") Ordinance No.
85 "On Amendments to State
Commission for Regulation of the Financial Services Markets of Ukraine
Ordinance No. 120 dated 13 November 2003" dated 19 February 2004. The procedure for imposing fines
for failures to comply with the requirements of the legislation concerning
counteracting money laundering
(please see the November 2003 issue of this Chronicle) now applies not only to
the financial institutions, the activity of which is supervised by the Financial Services Commission, but also to legal
entities that do not have the legal status of financial institutions but that
nonetheless render financial services. The Ordinance
took effect on 24 March 2004.
Mortgage
17) Cabinet of Ministers Resolution No. 410 "On Approving a Temporary
Procedure for the State Registration of Mortgages" dated 31 March 2004. The Law "On Mortgage" (please see the June
2003 issue of this Chronicle) requires the State registration of mortgages. For
this purpose, a State Register of Mortgages has now been created. The Ministry
of Justice of Ukraine ("Ministry of Justice") will maintain the Register,
and the State-owned enterprise "Information Center" of the Ministry of Justice will administer the Register. The
Register will contain information about real estate items encumbered by
mortgages or changes in the conditions of the encumbrances. The Resolution permits an individual or a legal entity
to access all information in the Register via a single computer database. The Resolution took effect on 31 March 2004.
Oil and Gas
18) Law of Ukraine No. 1578-IV
"On Amendments to the Law of Ukraine 'On Oil and
Gas'" dated 4 March
2004. The terms of validity of
special permits authorizing the use of oil- and gas-bearing subsoil have been
revised; certain aspects of the use of oil- and gas-bearing subsoil have been
described in greater detail. The maximum area of a single granted for
geological research of oil- and gas-bearing subsoil still generally cannot
exceed 500 square kilometers; however, as far as Black Sea sites are concerned, the maximum area is 1000 square kilometers. It has
also been stipulated that, the areas of such sites can be set by the Cabinet of
Ministers when entering into production-sharing
agreements. The Law establishes that the rules of the Law "On Oil and Gas" prevail
over the rules of the Subsoil Code of Ukraine. The Law took effect on 30 March 2004.
19) Cabinet of Ministers Resolution No. 255 "On Amendments to Resolution No. 256 of the
Cabinet of Ministers of Ukraine Dated 22 March 2001" dated
4 March 2004. The definitions of "tank natural gas" and
"stable gas condensate" have been deleted from the Procedure for
Calculating and Depositing Oil Rent with the National Budget of Ukraine. At
present, the Procedure regulates the depositing of rent paid for oil, natural
gas and gas condensate. The Resolution stipulates
that no rent will be charged for the oil (accompanying) gas extracted and
realized by enterprises. The Resolution took
effect on 4 March 2004.
Real Estate
20) Ministry of Justice
Letter No. 31-41-37 "On Determining a Procedure for the State Registration
of Transactions Made with Respect to Real Estate" dated 9 March 2004. The new Civil Code of Ukraine requires the State
registration of certain transactions (e.g., rental of permanent structures for
a term of more than one year, sale and purchase of real estate, transfer of
real estate against payment of rent, etc.). However, there is no prescribed
list of which agencies are responsible for conducting such registrations.
According to the Ministry of Justice, until the Verkhovna Rada of Ukraine adopts the respective law, the registration of
titles to real estate will be carried out by Technical Inventory Bureaus on the
basis of the Interim Regulations on the Procedure for Registering Titles to
Real Estate.
Taxes
21) Presidential Decree No. 259/2004 "On Separate Checking
Accounts to be Used for the Collection of Value-Added
Taxes and Turn-Over of the Tax" dated 1 March 2004. After 1 July 2004, VAT collection for the State budget and VAT
turnover will be effected through separate taxpayer checking accounts in banks.
The Decree took effect on 15 March 2004.
22) Presidential Decree No. 281/2004 "On Amendments to the
Decree of the President Of Ukraine Dated 1 March 2004 No.
259" dated 5 March
2004. The introduction of separate
VAT checking accounts was postponed
until 1 April 2004. The
Decree took effect on 24 March 2004.
23) Cabinet of Ministers and National Bank Joint Resolution No.
407 "On Amending Cabinet of Ministers and National Bank Joint
Resolution No. 359 Dated 23 March 2004" dated 31 March 2004. The introduction of separate VAT checking accounts was further postponed until
1
May 2004. The Resolution
took effect on 1 April 2004.
24) Cabinet of Ministers Resolution No. 359 on "Certain Issues Concerning Collection of Value-Added
Taxes" dated 23 March
2004. The Resolution approved a
Procedure for collecting VAT for the State budget and effecting VAT turn-over
through separate taxpayer checking (opened in banks) and/or registration
(opened in the offices of the Treasury of Ukraine ("Treasury")) accounts that are to be governed
by a special method of use. The following are some of the principal provisions
of the Procedure: after 1 May 2004, VAT payments should be made only through
VAT accounts; VAT reimbursement for taxpayers, whose export turnover last year
was at least 250 million UAH and whose balance-sheet value of capital assets is
at least 100 million UAH, will be effected automatically; money available on
VAT accounts can be transferred by the taxpayer only to another account of this
taxpayer or to the seller's VAT account, or to the Ukrainian Budget as
repayment of outstanding amounts of other fees, if there is a reference issued
by the State Tax Inspectorate certifying the absence of VAT indebtedness
(including to repay debts under loans guaranteed by the State) or to the
Pension Fund of Ukraine; if payments are made in non-monetary form (barter,
promissory note, etc.) the taxpayer must remit the money from the checking
account to the VAT account. The Resolution took effect on 24 March 2004.
25) Treasury Order No. 58 "On Approving a Procedure for
Opening in the Offices of the Treasury of Ukraine Separate Registration Accounts and Effecting VAT Turn-Over
Through These Accounts" dated 30 March 2004. VAT payers serviced by the Treasury must open separate registration
VAT accounts in the Treasury offices that service them. The Order approves the
procedure for opening and operating such accounts. The Order took effect on 11 April 2004.
26) National Bank Letter No.
25-118/464-2835 "On Opening Accounts to Be Used for VAT Payments"
dated 24 March 2004. VAT payers must indicate in contracts with their
contracting parties the numbers of their separate VAT checking accounts.
Specific Sectors of the
Economy/Miscellaneous
27) Cabinet of Ministers Resolution No. 380 "On Amending the Rules for Formalizing and Issuing
Ukrainian Citizen Passports for Trips Abroad and Child Travel Documents, Their
Temporary Detention and Withdrawal" dated 24 March 2004. The Resolution stipulates the
possibility of formalizing a second foreign passport when Ukrainian citizens
make regular trips abroad. In such cases, it is necessary to have relevant
entry visas made in good time. The Resolution took effect on 7 April 2004.
28) Ministry of Justice Order
No. 20/5 "On Approving the Instructions on the Procedure for Carrying Out Notarial Actions By Notaries of Ukraine" dated
3 March 2004. The new Instructions concerning the procedure for
carrying out notarial actions by notaries of Ukraine has been approved. The Instructions stipulate a list
of the transactions that must be notarized and a procedure for notarization. In
particular, the Instructions define new notarial actions that can be carried
out by public notaries. The list of the notary actions that cannot be carried
out by private notaries has been revised. The Order took effect on 14 March 2004.