Russian-Ukrainian
Legal Group, P.A.
Kiev, Ukraine; Washington, DC, USA
November 2003
Advertising
Intellectual
Property
International
Agreements
Investments
Money Laundering
Oil
& Gas
Subsoil
Taxes
Specific Sectors of the Economy/Miscellaneous
|
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 wish to receive further information or actual legal advice,
please do not hesitate email us at chronicle@rulg.com.
Advertising
1) State Tax Administration of Ukraine (the “STA”) Letter No. 8973/6/15-3416
"On Advertising Information on Business Cards" dated 29 October
2003. The Letter clarifies that, when a firm’s employees’
business cards bear the firm’s logo, details and office phone numbers, this
information constitutes information about a person, distributed in a certain
form, and promotes consumer awareness of, and consumer interest in, the person.
The STA deems such information to be “advertising” subject to the relevant
rules contained in the Law "On Advertising".
Intellectual
Property
2) Ministry of Education and Science of Ukraine (the "MES") Order No. 750 "On
Introducing Amendments to the Rules for Making and Submitting an Application
for an Industrial Design" dated 11 November 2003. The
two-month term established for payment of the application fee for an industrial
design can be extended up to six months (i.e., an additional four months) if
the respective petition is filed and a petition filing fee is paid before the
initial two-month term expires. The amended rules also require that three
photographs (now called "product images") of the industrial design be
presented with the industrial design application. The Order took effect on 9 December 2003.
3) MES Order No. 758 "On Introducing Amendments to the
Rules for Making, Filing and Carrying Out an Expert Evaluation of an Application for Registration of a Qualified
Indication of Origin of Goods and/or the Right to Use a Registered Qualified
Indication of Origin of Goods" dated 14 November 2003. The Order imposes a fee on any person who wishes to
review the materials contained in an application for registration of a
qualified indication of origin of goods and/or an application for the
registration of the right to use a registered qualified indication of origin of
goods. The Order took effect on 12 December 2003.
International Agreements
4) Office of International Legal Assistance of the
International Cooperation Department of the Ministry of Justice of Ukraine Clarifications
"On the Effect of the Convention Abolishing the Requirement of
Legalization for Foreign Public Documents" dated 20 November 2003. The
Hague Convention Abolishing the Requirement of Legalization for Foreign Public
Documents concluded 5 October 1961 will become effective for Ukraine on 22 December 2003. The Convention eliminates the requirement of
consular legalization for public documents of a contracting state, presented in
another contracting state. The only formality that can be required to certify a
document is an apostille, affixed by a competent authority of the state in
which the document was issued. Consular legalization of documents is still
required in relations with Belgium and Germany, two countries that lodged formal objections to Ukraine’s accession to the Convention. As a result of these
objections, the Convention is not applicable to Ukraine’s relations with said countries.
Investments
5) Cabinet of Ministers of Ukraine (the "CMU") Resolution No. 1841
"On Introducing Amendments to the Regulations of the Coordinating Group
for Encouraging Investment Activity" dated 26 November 2003. The
Coordinating Group for Encouraging Investment Activity, which is an advisory
and consultative body of the CMU, is now authorized to assist in pre-trial
settlement of disputes between investors and executive power authorities. The
Resolution will take effect from the moment of its official publication.
Money
Laundering
6) State Commission for Regulation of the Financial Services
Market of Ukraine (the "SCFSM") Order No. 120 "On Approving
the Procedure for the State Commission for Regulation of the Financial Services
Market of Ukraine Imposing Fines for Non-Compliance (Improper Compliance) with
the Requirements of the Law of Ukraine "On Preventing and Counteracting
Legalization (Laundering) of Income Derived by Criminal Means" dated 13
November 2003. The Order describes the procedure for imposing liability for
failure to comply (or improper compliance) with money laundering regulations.
The Order took effect on 8 December 2003.
7) SCFSM Ordinance No. 121 "On Introducing Amendments to
the Regulations Concerning Financial Monitoring by Financial Institutions,
Approved Pursuant to State Commission for Regulation of the Financial Services
Market of Ukraine Ordinance No. 25 dated 5 August 2003" dated 13 November
2003. The Regulations Concerning Financial Monitoring by Financial
Institutions, the approval of which we discussed in the August issue of this
Chronicle, no longer regulate liability for
non-compliance with money laundering regulations. The Regulations now contain
updated requirements for identifying clients of financial institutions. The
Order took effect on 8 December 2003.
8) SCFSM Ordinance No. 122 "On Introducing Amendments to
the Procedure for Performing Inspections for Preventing and Counteracting
Legalization (Laundering) of Income Derived by Criminal Means, Approved
Pursuant to State Commission for Regulation of the Financial Services Market of
Ukraine Ordinance No. 26 dated 5 August 2003" dated 13 November 2003.
The Procedure, the approval of which we discussed in the August issue of this
Chronicle, no longer contains rules for applying measures of impact. The
Ordinance clarifies that inspections should be carried out on the basis of
inspection warrants (a term replacing the previously-used term, “written
authorizations”). The Ordinance took effect on 8 December 2003.
Oil & Gas
9) Law of Ukraine No. 1344-IV "On the State Budget of Ukraine for 2004" dated 27 November 2003. The Law
requires subjects of business activity that transport natural gas, oil and
ammonia remit rent to the State Budget of Ukraine at the following rates: for
transit transportation of natural gas, 1.67 UAH per 1000 cubic meters of gas
per 100 kilometers; for transportation of oil by trunk pipelines, an amount
equivalent to 0.685 USD per ton of transported oil; for transit transportation
of ammonia, an amount equivalent to 0.3 USD per ton per 100 kilometers. The Law
will take effect on 1 January 2004.
10) CMU Resolution No. 1782 "On Introducing Amendments to
Cabinet of Ministers of Ukraine Resolution No. 1457 dated 16 September
2003" dated 20 November
2003. Pursuant to CMU Resolution No. 1782, foreign
economic contracts for export operations with oil products have been deleted
from the Regulations on Registration of Foreign Economic Contracts (Agreements)
Concerning Export Operations with Oil and Oil Products, approved by CMU
Resolution No. 1457 dated 16 September 2003 (the adoption of which was
mentioned in the September issue of this Chronicle). The Regulations are
currently effective with respect to contracts for export operations with oil in
accordance with Ukrainian Classification of Goods of Foreign Economic Activity
(“UCGFEA”) 2709009000. The Resolution took effect on 20 November
2003.
11) Ministry for Fuel and Energy of Ukraine (the "Energy Ministry") Order No.
653 "On the Procedure for Approving Foreign Economic Contracts
(Agreements) for Export Operations with Oil and Oil Products" dated 11 November
2003. In order to receive approval of a foreign economic
contract, a subject of foreign economic activity should file with the Energy
Ministry an application letter for approval, a copy of the contact and a
certificate or other document that certifies the origin of the oil and/or oil
products; and copies of its founding documents or charter. A letter granting or
refusing approval shall be issued to the applicant within three working days
after the day on which a complete set of application documents was filed. The
Order took effect on 25 November 2003.
Subsoil
12) Supreme Rada of Ukraine Resolution No. 1310-IV "On the
Status of Observance of the Requirements of Environmental Protection
Legislation in the Course of Carrying Out Activities Associated with the Use of
Subsoil in Ukraine" dated 20 November 2003. The activity of the CMU in
the sphere of subsoil use has been found wanting. The Supreme Rada has
determined that new legislation is needed to improve state regulation in this
sphere. Specifically, the Supreme Rada is instructing the CMU to accelerate finalization
of a new draft of the Subsoil Code of Ukraine and additional draft implementing
regulations for the Law of Ukraine "On Production
Sharing Agreements". The Resolution took effect on 13 December
2003.
13) CMU Resolution No. 1847 "On Approving Differentiated
Rates of the Fee for the Use of Subsoil for the Production of Uranium Ore" dated 26 November 2003. The
Resolution stipulates that the fee for the use of subsoil for the production of
uranium ore is to be charged at different rates depending on the geological
specificities of deposits and conventional units of cutoff grade uranium
contents. The previously established fee of 3% (of the value of extracted
minerals) charged for extracted ore is replaced with a sliding scale fee of
from 0.20 UAH to 1.05 UAH per ton of extracted uranium ore. The Resolution took
effect on 26 November 2003.
14) Ministry of Economy and European Integration of Ukraine Order No. 299 "On Introducing Amendments to the
Instructions on the Development, Approval and Signing of a Production Sharing Agreement" dated 30 October
2003. If a production
sharing agreement is entered into without holding a tender, an investor
can file with the Inter-Departmental Commission: either a feasibility study for
a deposit which is/was operated or a preliminary feasibility study for the
development of an open but under-explored deposit. Under the former version of
the Instructions, an investor had to file both such feasibility studies as a
single set of documents. The Order took effect on 22 November 2003.
15) State Commission For Mineral Reserves Order No. 209 "On
Introducing Amendments and Addenda to the Instructions for Applying the
Classification of Mineral Reserves and Resources of the State Subsoil Fund to
Deposits of Drinking and Technical Underground Waters" dated 10 November
2003. The Order clarifies that deposits of drinking and technical
underground waters are to be classified as commercial development facilities
that are subject to special control by the State. The Order took effect on 5 December 2003.
Taxes
16) STA Letter No. 17331/7/15-1217 "On a Simplified System
of Taxation, Accounting and Reporting" dated 6 November
2003. The Letter deals with the transition by subjects of
business activity that are legal entities to a
simplified taxation system. It also clarifies that a subject of business
activity that has a non-resident (whether an individual or a legal entity) as
its sole founder or as one of its founders cannot use the simplified taxation
system for payment of a uniform tax, regardless of the size of the
non-resident's ownership interest in the subject of business activity’s
authorized fund.
Specific Sectors of the Economy/Miscellaneous
17) Law of Ukraine No. 1328-IV "On Introducing Amendments to the
Law of Ukraine on the State Budget of Ukraine for 2003" dated 25 November 2003. The Law
sets the new minimum monthly salary at: 205 UAH, beginning 1 December 2003; 237 UAH, beginning 1 November 2004; and 262 UAH, beginning 1 January 2005. The Law took effect on 8 December 2003.
18) Presidential Decree No. 1348/2003 "On Improving the
Organization of Drafting Bills" dated 26 November 2003. The
Ministry of Justice of Ukraine will be the principal drafter of legislative bills
that the President of Ukraine and the CMU expect to submit to the Supreme Rada
for consideration. The exceptions to this general rule are those bills which,
pursuant to any law or Presidential decree, are subject to a different drafting
procedure. The Decree will take effect on 21 December 2003.
19) CMU Resolution No. 1844 "On Introducing Amendments to
Certain Resolutions of the Cabinet of Ministers of Ukraine" dated 26 November 2003. The
Resolution stipulates that the tariffs for services relating to the collection,
transportation, processing and disposal of waste, approved pursuant to CMU
Resolution No. 915 "On the Introduction of a System for Collection,
Transportation, Processing and Disposal of Waste as Secondary Raw
Materials" dated 26 July 2001, do not include VAT (i.e., that VAT should
be charged over and above these tariffs). The Resolution took effect on 26 November
2003.
20) Treasury of Ukraine Order No. 617 "On Approving Accounting
Regulations (Standards) No. 27 on ‘Activity To Be
Terminated’” dated 7 November 2003. The
Order sets forth the procedural bases for compiling accounting information
about the termination of any activity of an enterprise, organization, other
legal entities irrespective of forms of ownership (except for budget-supported
institutions). The Order took effect on 28 November 2003.