Russian-Ukrainian Legal Group, P.A.
Kiev, Ukraine; Washington, D.C., USA
Chronicle
of Recent Developments in Ukrainian Legislation
SEPTEMBER 2004
Banking
Corporate Registration
(Incorporation)
Customs
International Treaties
Land
Money Laundering
Oil and Gas
Secured Transactions
Tax
Treaties
Specific Sectors of the Economy/Miscellaneous
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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
Banking
1) National Bank of Ukraine ("National
Bank") Resolution No. 323
"On Approving Amendments to the Rules for Carrying Operations on the
Inter-Bank Currency Market of Ukraine" dated 15 July 2004. Among
other things, the amendments include a corrected List of the documents, on the
basis of which banks and financial institutions can purchase foreign currency
on the inter-bank currency market of
Ukraine in order to meet their obligations under residents' currency
transactions associated with capital flow, credits against goods, transactions
that secure obligations and related foreign currency payments (interest,
commissions, penalties, etc.), as well as investment transactions. This List
now also applies to currency purchases made by non-residents in order to
perform on such obligations. The Resolution took
effect on 18 September 2004.
2) National Bank Resolution No.
437 "On Approving Amendments to the Regulations on the Procedure for
Ukrainian Banks Carrying Out Deposit Operations with Legal Entities and Individuals"
dated 15 September 2004. Among other
things, the amendments permit paying a depositor income on his deposited funds
in a form other than interest (see point 3 below for the meaning of "a
form other than interest"). The Resolution took
effect on 12 October 2004.
3) National Bank Letter No. 18-111/3249-8378 "On
Certain Aspects of the Application of the Civil Code of Ukraine to Banking Activity" dated 18 August
2004. When a bank deposit is opened, the parties to the
bank account agreement may contract to have interest on the deposit paid, and
the deposit's principal repaid, in any form acceptable to the parties and
permitted by the Civil Code of Ukraine. For example, payment/repayment could be
made in the form of bank metals, securities, other pieces of property, rights,
results of works (services), results of intellectual and creative activity,
information and other tangible and intangible valuables.
Corporate Registration (Incorporation)
4) State Committee of Ukraine for Regulatory Policy and Entrepreneurship ("State
Entrepreneurship Committee") Letter No. 5591 "On Providing
Clarifications Concerning Various Aspects of the State Registration" dated
17 August 2004. In respect to the State registration of legal
entities and individual entrepreneurs, the State Entrepreneurship Committee has
clarified that: (1) the registration fee for the State registration of a legal
entity is ten minimum tax-free incomes; for the State registration of
amendments to the founding documents of a legal entity, the fee is 30% of the
fee charged for the State registration of the legal entity; (2) the date that a
legal entity submits a registration card will be considered the date of its
State registration; (3) Ukrainian law does not require payment of a
registration fee when submitting a registration card certifying a legal
entity's identification data, nor does it require payment of any fee for the
replacement of a State Registration Certificate.
Customs
5) State Customs Service of Ukraine ("Customs
Service") Order No. 658 "On Approving the Regulations Concerning
the Involvement of Subjects of Public Discussion in the Preparations for Works
Relating to the Adoption of Customs Operation Regulations" dated 10
September 2004. Businesses can
participate in making decisions in the sphere of customs operations, in
particular by submitting to the Customs Service their proposals to have new
regulatory acts promulgated or old ones revised, their involvement in drafting
such new or revised regulatory acts and their presentation of comments and
proposals on proposed regulatory acts and revisions thereto. The Order took
effect on 9 October 2004.
6) Customs Service Letter No. 25/4-14-34/11541-ЕP
"Whether it is Lawful to Levy an Import Duty on Bank Metals Imported Into
the Customs Territory of Ukraine" dated 22 September 2004. Ukrainian law prescribes a list of the types of
currency that are exempt from customs duties. The list includes currency per
se (both Ukrainian and foreign) and securities, but does not specifically
include bank metals. Whereas the Customs Code of Ukraine sets forth distinctive
definitions of "currency" and "bank metals", the Customs
Service concludes that during customs clearance of bank metals, import customs
duties should be paid .
International
Treaties
7) Law of Ukraine No. 1985-IV "On Ratifying the International
Labor Organization's 1947 Labor Inspection Convention No. 81" dated 8 September
2004. Following the ratification of the International
Labor Organization's (the "ILO") Convention No. 81 (1947), Ukraine commits itself to setting up a system of labor
inspections in industry and trade. Inspectors will have broad rights, in
particular, the right to have unhindered access, without prior notice and at
any time of day or night, to the premises (place of business) of any place that
is subject to inspection, and to implement any checks, supervision and
investigations that they deem necessary in order to obtain convincing evidence
that Ukrainian law is being complied with. The Convention will become effective
twelve months after the date of registration of Ukraine's ratification documents by the ILO.
Land
8) State Entrepreneurship Committee Letter No. 5160
"On Considering Letter No. 6/512 Dated 12.07.2004 (Re: Lease of Land
Plots)" dated 29 July 2004. In the
opinion of the State Entrepreneurship Committee, an agreement to lease a land
plot made for a term of less than five years should be notarized if one of the parties thereto so desires, while an agreement to lease a
land plot for a term of more than five years is subject to mandatory
notarization. An agreement to sublease a land plot should be notarized if one
of the parties thereto so desires.
Money Laundering
9) Presidential Decree No. 1144/2004 "On the State
Committee of Ukraine for Financial Monitoring" dated 28 September
2004. With the aim of strengthening anti-money laundering
efforts, the President of Ukraine has reorganized the State Department for
Financial Monitoring into the State Committee of Ukraine for Financial
Monitoring, making it now a central body of executive power with special
status. The State Committee of Ukraine for Financial Monitoring is the legal
successor to the liquidated State Department for Financial Monitoring. The
Decree will take effect on 1 January 2004.
10) Cabinet of Ministers of Ukraine ("Cabinet
of Ministers") Resolution No. 1250 "On Setting Up a
Coordination Council Concerning the Operation of the Uniform State Information
System in the Sphere of Preventing and Counteracting Legalization (Laundering) of Income Received by Criminal Means and Financing of Terrorism" dated 22
September 2004. The special
Coordination Council will be a standing working body, created by the Cabinet of
Ministers to coordinate the activity of Ukraine's executive agencies in
operating the Uniform State Information System in the Sphere of Preventing and Counteracting Legalization (Laundering) of Income Received by Criminal Means (please see the December 2003 issue of this
Chronicle). The Resolution took effect on 22 September 2004.
Oil and Gas
11) Cabinet of Ministers Resolution No. 1196
"Certain Aspects of Selling Oil and Condensed Gas at Auctions" dated 11 September
2004. Auction sales of oil and condensed gas have been
suspended again until 31 December 2004 (please see the May and July 2004 issues of this
Chronicle). The Resolution took effect on 11 September 2004.
Secured Transactions
12) Cabinet of Ministers Resolution No. 1253 "On
Nullifying Certain Resolutions of the Cabinet of Ministers of Ukraine" dated 22 September 2004. The Law
"On Securing Creditors' Claims and Registering Encumbrances" calls
for the registration of all encumbrances against movable property in the
relevant uniform State Register. Following the creation of the Register (please
see the July 2004 issue of this Chronicle), the existence of the separate State
Register of Pledges of Movable Property is no longer justified. Therefore, the
Cabinet of Ministers has nullified it. The Resolution took effect on 22 September
2004.
Tax Treaties
13) Law of Ukraine No. 2035-IV "On Ratifying the Convention
Between the Government of Ukraine and the Government of the Kingdom of Thailand
for the Avoidance of Double Taxation and Prevention of Tax Evasion Concerning
Income Taxes" dated 22 September 2004. Ukraine has ratified the Convention with Thailand for the avoidance of double taxation, signed in Bangkok on 10 March 2004. The Convention regulates such taxes as: (a) for Thailand: profit tax; income tax levied on oil; (b) for Ukraine: enterprise profit tax; individual income tax. The
Law has not been published yet, and will take effect ten days after its
publication in an official bulletin.
Specific Sectors of the
Economy/Miscellaneous
14) Law of Ukraine No. 1992-IV "On Incorporating Amendments into
the Law of Ukraine "On Forensic Examination"" dated 9 September
2004. The Law establishes a state monopoly over forensic
activity associated with criminalistic, medical forensic and psychiatric
forensic examinations. Said examinations may only be carried out by the
scientific-research forensic institutions of the Ministry of Justice, Ministry
of Health Care, and expert services of the Ministry of Internal Affairs,
Ministry of Defense, Security Service and State Border Service. Forensic
experts also have the right to perform contract-based forensic research on
matters requested by legal entities and individuals. The Law took effect on 5 October 2004.
15) Ministry of Justice of Ukraine Order No. 104/5 "On Approving the Form of the
Register of Permanent Arbitration Tribunals" dated 10 September
2004. The Law "On Arbitration Tribunals" (please
see the May 2004 issue of this Chronicle), which took effect only recently,
stipulates that permanent arbitration tribunals must undergo State
registration. This order approves the relevant register form to enable the
implementation of said rule. The register of permanent arbitration tribunals
will store data about the registration dates and registration numbers, names
and locations of permanent arbitration tribunals, their founders, the dates of
approval of their regulations and rules, their self-government bodies, and
copies of amendments to any of their documents. The Order took effect on 21 September
2004.