Russian-Ukrainian Legal Group, P.A.
Kiev, Ukraine; Washington, D.C., USA
Chronicle
of Recent Developments in Ukrainian Legislation
MAY 2004
Administrative
Law
Advertising
Currency
Control
Customs
Electronic
Documents
Intellectual
Property
International
Treaties
Land
Non-Banking
Financial Services
Real Estate
Taxes
Use of
Subsoil, Oil and Gas
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.
Administrative law
1) Law of Ukraine No. 1725-IV "On Incorporating into
the Administrative Infringements Code of Ukraine Amendments Regarding the Observance of
the Labor Legislation" dated 18 May 2004. The Law introduces liability for (1) failure to comply with
State Department for Supervision of Observance of Labor Legislation officials'
lawful demands to eliminate violations of the legislation on mandatory state
social insurance; and (2) hindering the activity of the aforementioned bodies.
Said violations are punishable by fines imposed on the officials at fault, in
amounts from 10 to 14 minimum tax-free incomes ("mtfi")
(one mtfi equals 3.19 USD). The same fine amount (from 31.9 to 44.66 USD) is
stipulated for failure to comply with lawful demands to eliminate violations of
the labor legislation, which failure was previously punishable by a fine of
from five to nine mtfi. The Law took effect on 8 June 2004.
Advertising
2) Cabinet of Ministers of Ukraine (the "Cabinet of Ministers") Resolution No.
693 "On Approving a Procedure for Imposing Fines for Violating the
Legislation on Advertising" dated 26 May 2004. The Resolution
establishes a new Procedure for the State Committee of Ukraine for Technical
Regulation and Consumer Policy to assess fines for violations of the
legislation on advertising (the new Procedure replaces the 1997 Procedure). The
new Procedure generally regulates the imposition of the above fines on
advertisers, manufacturers and distributors of advertising. However, it does
not apply to fines for copyright and neighboring rights violations, the
imposition of which fines is reserved to the exclusive authority of the
Antimonopoly Committee of Ukraine. The Resolution took
effect on 26 May 2004.
3) State Committee of Ukraine for Television and Radio Broadcasting
(the "TV Committee") Letter No. 2041/34/5-1
"Concerning the Possibility of Publishing Advertising in Printed Mass
Media in the Russian Language" dated 22 April 2004.
According to the Letter, Russian-language newspapers must print all
announcements, information and advertising in Ukrainian. However, such
Ukrainian-language announcements, information and advertising may also be
duplicated in another language, for example, Russian.
Currency Control
4) State Tax Administration of Ukraine (the "Tax
Administration") Letter No. 7726/7/23-5317 "Concerning the Use of
a Promissory Note Denominated in the National Currency of Ukraine During
Settlements with a Non-Resident" dated 29 April 2004. According to the
Tax Administration, if a foreign-economic contract stipulates payment with a
promissory note between a resident of Ukraine and a resident of one of the
Ruble-zone countries, for goods, and if the payment under the promissory note
is made in UAH, such an operation does not require an individual license of the
National Bank of Ukraine; however, a license does need to be obtained for
similar settlements with residents of other countries.
Customs
5) Cabinet of Ministers Resolution No.
606 "On Incorporating Amendments into the Regulations on Providing the
Customs Authorities of Ukraine with Financial Guarantees of Mandatory Delivery
of Goods to the Customs of Destination" dated 12 May 2004. Ukrainian
Customs will accept financial guarantees such as a bank guarantee, but not a
letter of guarantee. Banks' guarantees are to be presented to Customs directly;
alternatively, they can be used as a financial security of other guarantees,
presented to Customs by independent financial intermediaries. The Resolution took effect on 12 May 2004.
Electronic Documents
6) Cabinet of Ministers Resolution No.
680 "On Approving a Procedure for Certifying the Availability of an
Electronic Document (Electronic Data) as of a Specific Moment in Time"
dated 26 May 2004. The need
to certify the availability of an electronic document as of a specific moment
in time may arise, inter alia, when a digital signature is affixed to an
electronic document; in order to register the moment of transfer of the
electronic document; or in order to determine the time of promulgation of a
version of electronic data (computer software) in an electronic network. Such
certification is especially important to the copyright protection system. The
purpose of the new Procedure for Certifying the Availability of an Electronic
Document (Electronic Data) as of a Specific Moment in Time is to regulate the
above-mentioned relations. Time registration services may be rendered by
accredited key certification centers under contracts. The Resolution took effect on 2 June 2004.
Intellectual
Property
7) Ministry of Education and
Science of Ukraine Order No. 385 "On Amending the Rules for
Coordinating the Incorporation of a Designation Containing the Official Name of
the State of 'Ukraine' into a Trademark for Goods and Services" dated 12
May 2004. Individual entrepreneurs can apply for permission to incorporate
a designation containing the official name of the state of "Ukraine" into a trademark for goods and services. This
right was previously vested only with legal entities. The Order took effect on 8 June 2004.
International Treaties
8) Tax Administration Letter No. 8780/7/12-0117 "On the
Effect of the Convention That Cancels Legalization of Foreign Documents"
dated 17 May 2004. The Tax
Administration has clarified that (1) although the Convention that cancels
legalization of foreign official documents (the "Convention")
is not applicable to relations between Ukraine and Germany, residents of
Germany can use the procedure for issuing tax status references made on
official letterheads of local German tax authorities and, accordingly, for
accepting such references by the State Tax Inspectorate of Ukraine without
consular legalization; (2) US residents can still use residence certificates
(Form 6166), which are official government documents and which are single forms
certifying (US residents') rights to enjoy the provisions of the Convention for
the Avoidance of Double Taxation. Form 6166 has been accepted by the State Tax
Inspectorates of Ukraine for use without consular legalization, and as of today
also do not require an apostille. The Tax Administration Letter also contains a
list of the states, in relations with which the Convention will be applicable
for Ukraine, as well as a list of the effective international
treaties of Ukraine that cancel legalization of official documents and do not require an
apostille on tax status references.
Land
9) Cabinet of Ministers Resolution
No. 677 "On Approving a Procedure for Developing Land Management Projects Concerning Allocation of Land
Plots" dated 26 May 2004. The
Procedure for Developing Land Management Projects Concerning Allocation of Land
Plots has been approved. According to other legislation, such projects must be
drawn up when land plots are granted, transferred, withdrawn (redeemed) or
alienated. The Resolution stipulates the cases in which the aforementioned
allocation projects are not required during alienation of land plots. The
Resolution took effect on 26 May 2004.
10) Tax Administration Order No. 243 "On Amending the
Instructions on the Procedure for Calculating and Collecting the State Fee,
Affirmed Pursuant to the Order of the Main State Tax Inspectorate of Ukraine
dated 22 April 1993 No. 15" dated 24 April 2004. The State fee is to
be collected: (1) during certification of civil-law agreements with respect to
land plots transferred to individuals free-of-charge for farming or personal
rural farming, construction and servicing of a residential house, business
buildings and structures, gardening, country and garage construction; (2)
during certification of contracts for the exchange and grant of land plots
owned by legal entities; (3) during certification of agreements for lease
(sublease) of land plots; and (4) during issuance of a certificate of the right
to inherit a land plot. The Order took effect on 24 May 2004.
Non-Banking Financial Services
11) State Commission for Regulation of
the Financial Services Markets of Ukraine (the "Financial
Services Commission") Ordinance No. 616 "On Approving the
Amendments to the Regulations on the Application by the State Commission for Regulation of the Financial Services Markets of
Ukraine of Measures of Impact" dated 13 May 2004. The
Ordinance stipulates that: (1) the Chairman of the Financial
Services Commission can request any case concerning a possible violation
of the legislation on financial services and instruct that this case be
considered by an authorized person of the Financial
Services Commission; and (2) a case concerning a possible violation of the
legislation on financial services cannot be initiated and a pending case must
be closed if one year ("more than three years" was stipulated
previously) have elapsed since the date of the possible violation. The Ordinance took effect on 7 June 2004.
Real Estate
12) Cabinet of Ministers Resolution No. 671
"On Approving a Temporary Procedure for Registering Transactions"
dated 26 May 2004. According to the new Civil Code of Ukraine, title to real
estate arises only as of the moment of State registration of a transaction,
which registration is to be carried out by the public authorities prescribed by
a separate law. However, whereas such a law has not been adopted yet, the
registration procedure was stipulated by a regulation -- the Temporary
Procedure for Registering Transactions. Under that regulation, transactions are
registered by notaries who make relevant entries in the State Register of
Transactions (the "Register"). The Ministry of Justice
of Ukraine (the "Ministry of Justice") has been
identified as the holder of the Register, and the State-Owned Enterprise
"Information Centre" has been identified as its administrator. A fee
of 17 Hryvnias (including VAT) will be charged for making an entry in the
Register, amending an entry and issuing an excerpt from the Register. The Resolution has
not been published yet, and it will take effect only upon being published in an
official publication.
13) Ministry of Justice Order No. 36/5 "On Approving the
Amendments to the Temporary Regulations on the Procedure for Registering Title
to Real Estate" dated 17 May 2004. The
Order establishes the total term for consideration of an application and making
a decision concerning the registration of title to real estate, as well as a
List of the title documents, on the basis of which the registration of title to
real estate facilities is to be carried out. The above title documents should
be accepted by the technical inventory bureau bodies, provided that their State
registration has first been accomplished. However, these rules will take effect
only after the Register is set up. The Order took effect on 28 May 2004.
Taxes
14) Treasury
of Ukraine ("Treasury") and Tax Administration Order
No. 82/245 "On Approving a Procedure for Interaction Between the Bodies of
the State Tax Service of Ukraine and the Treasury of Ukraine During Court
Consideration and Use of Court Decisions Concerning Indisputable Writing Off of
Money from Accounts on Which Value-Added Tax Proceeds to the State Budget of
Ukraine are Registered" dated 27 April 2004. The tax authorities and the respective Treasury of
Ukraine are to serve as respondents in court claims for reimbursement of VAT
budget indebtedness. The tax authorities are responsible for proving, during
court consideration, that a payer has no lawful grounds for reimbursement (or
that only partial reimbursement is in order) under tax returns made for the
periods in question. Also, irrespective of whether grounds for reimbursement or partial
reimbursement exist, the above agencies are instructed to appeal any court
decision, which requires reimbursement of VAT budget indebtedness. The Order
took effect on 4 June 2004.
15) Tax Administration Order No. 261
"On Approving a Form of a Reference Certifying the Payment by an Employer
of the Taxes and Charges Stipulated by the Legislation" dated 6 May 2004.
The form of the reference certifying the payment by an employer of the taxes
and charges stipulated by the legislation has been approved. Such references
are to be issued by the State Tax Service and number among the documents, which
must be presented by an employer to the respective employment centre in order
to receive Ukrainian work permits for foreigners. The Order took effect on 1
June 2004.
Use of Subsoil, Oil and Gas
16) Cabinet of Ministers Resolution
No. 694 "On Approving a Procedure for Holding Auctions to Sell Special
Permits (Licenses) Authorizing the Use of Subsoil" dated 26 May 2004. The Resolution stipulates the procedure for the State
Natural Resources Committee of Ukraine (the "Natural Resources
Committee") to auction off special permits (licenses) authorizing the
use of subsoil. The Natural Resources Committee procedure is as follows: first,
the Natural Resources Committee announces an auction of the permits in the
"Uriadovy Courier" newspaper. for the
requirements for buyers to qualify to bid are to be determined separately for
each particular auction and are to be communicated to interested buyers in
writing, along with information about the specific subsoil areas to be
auctioned. The buyer who offers the highest bid for a permit up for auction,
who enters into a sale-and-purchase contract with the seller and an agreement
concerning the conditions of using the respective subsoil area, wins. The Resolution took effect on 26 May 2004.
17) Cabinet of Ministers Resolution
No. 711 "On Certain Aspects of Selling Oil and Gas Condensate Through Auctions" dated 28 May 2004. Auction
sales of oil and gas condensate have been suspended until 1 September 2004. The Resolution
took effect on 2 June 2004.
18) Cabinet of Ministers Resolution
No. 712 "On Amending the Annex to Cabinet of Ministers of Ukraine Resolution No. 1548
dated 25 December 1996 " dated 28 May 2004. The
Council of Ministers of the Autonomous Republic of Crimea, oblast, Kiev and
Sevastopol City State Administrations are authorized to regulate the marginal
levels of retail prices of diesel fuel and motor gasoline sold through gas
stations, after receiving the approval of the Ministry for Fuel and Power of
Ukraine (the "Fuel Ministry") and the Ministry of Economy of
Ukraine (the "Ministry of Economy"),. The
marginal levels of wholesale selling prices of said fuel, sold on the domestic
market (except for products sold at gas stations), will be established by the
Fuel Ministry with the approval of the Ministry of Economy. The Resolution took effect on 2 June 2004.
19) Cabinet of Ministers Resolution
No. 713 "On Incorporating Amendments into Cabinet of Ministers of Ukraine Resolution No. 1996
dated 24 December 2003 " dated 28 May 2004. The lists
of the goods, the export and import of which are subject to licensing in 2004,
have been amended to require the licensing of the export of certain kinds of
oil and oil products in 2004. The licenses can only be issued with the approval
of the Fuel Ministry. The Resolution took
effect on 28 May 2004.
Specific Sectors of the
Economy/Miscellaneous
20) Presidential Decree No. 589/2004 "On Incorporating
Amendments into Presidential Decree No. 503 dated 10 June 1997 " dated 28 May 2004. Decree
No. 589/2004 states that there are two types of official publications: those
which publish (1) laws and other acts of the Ukrainian Rada and (2) regulations
only. A regulation, which can be published in either type of publication, takes
effect immediately upon being published in either type of official publication.
The Decree took effect on 14 June 2004.
21) Law of Ukraine No. 1701-IV "On Arbitral Tribunals" dated 11 May 2004. Arbitral
tribunals' activities are now regulated by this Law, rather than by an annex to the Civil
Procedural Code of Ukraine. According to the Law, an arbitral tribunal is a
non-governmental independent body, which is set up upon agreement or pursuant
to a decision of individuals and/or legal entities. Permanent arbitral
tribunals and ad hoc arbitral tribunals can be set up. An arbitral
tribunal can accept any dispute arising out of civil-law and economic
relations, except for when the contrary is stipulated by the Law. The Law has
not been published yet, but it will take effect upon its publication in an
official publication.
22) Law of Ukraine No. 1703-IV "On Amending Certain Legislative
Acts of Ukraine" dated 11 May 2004. The Law
covers the protection of State secrets and confidential information and amends
several Codes and Laws of Ukraine. It significantly expands the powers of the
Security Service of Ukraine (permitting inspections of persons and of items and
seizure of contraband items and documents). A violation of the legislation on
information may result in disciplinary, civil-law, administrative and criminal
liability. The Law also describes the legal status of confidential information
that belongs to the State. The Law took effect on 9 June 2004.
23) TV Committee Order No. 141 "On Approving the
Regulations on a Public Expert Council on the Protection of Public Morals"
dated 14 May 2004. With the
aim of implementing the rules of the Law "On Protecting Public
Morals" (the adoption of which was discussed in the 2003 December issue of
this Chronicle) a Public Expert Council on the Protection of Public Morals has
been created. The Expert Council's responsibilities include, inter alia,
monitoring TV and radio programs to supervise broadcasters' observance of their
license conditions concerning protection of public morals. The Council also has
the right to demand the production of certain kinds of documents and
information from State agencies and mass media organizations, as well as copies
of films, audio and video recordings of TV and radio broadcasts and print
media. Additionally, the Council has the right to review legislative bills and
regulations affecting the
protection of public morals. The Order took effect on 13 June 2004.