News (#4 April 2018)



Sanctions imposed on four banks

President Petro Poroshenko has signed Decree No. 57/2018, which put into effect the decision of the National Security and Defense Council of Ukraine of 1 March 2018 On Application of Personal Special Economic and other Restrictive Measures (Sanctions).

Corresponding measures are applied to legal entities for a period of one year. Sanctions in the form of preventing withdrawal of capital from Ukraine for the benefit of banks’ affiliated parties are imposed on PJSC Sberbank, Joint-stock commercial industrial investment bank, VTB Bank, and PJSC BM Bank.

The Cabinet of Ministers, in cooperation with the National Bank of Ukraine, should ensure implementation and monitoring of the effectiveness of personal special economic and other restrictive measures (sanctions) stipulated in this decision.

The Ministry of Foreign Affairs of Ukraine will inform the competent authorities of the EU, the USA and other countries about the imposition of sanctions and will raise the question of applying similar restrictive measures by them.



Google prohibited cryptocurrency advertising

Google has announced a ban on advertisements of cryptocurrencies, crypto currency exchanges, crypto wallets and ICO. It is noted that the new rules will come into force on 1 June 2018.

The prohibition also covers announcements about binary options and other high-risk financial instruments.

In addition to the prohibition on advertising in Google search results, restrictions will also affect banners on YouTube.

Google says that this decision is related to protecting consumers from potential losses due to cryptocurrencies and other high-risk instruments.



EU updated blacklist of tax havens

The EU has amended the list of jurisdictions that do not cooperate properly with the EU in the tax field. Three other jurisdictions have also been removed from the list.

In the decision of the EU Council it is stated that Bahrain, the Marshall Islands and Saint Lucia are excluded from the list, while the Bahamas, St. Kitts and Nevis and the United States Virgin Islands are added to it. Thus, 9 countries and territories still remain on the black list of tax havens.

Jurisdictions that are still on the blacklist, in addition to the already mentioned: American Samoa, Guam, Namibia, Palau, Samoa, Trinidad and Tobago. The EU decided to create a single black list after another leak of offshore documents called the Panama Papers.


Ukraine and Netherlands agree double taxation avoidance deal

The Ministry of Finance of Ukraine and the Kingdom of the Netherlands have agreed on avoidance of double taxation and prevention of tax evasion with respect to income and property taxes. A corresponding protocol was signed for this purpose.

The Ministry of Finance noted that the protocol provides for taxation of dividends at a rate of 5% if the actual owner of dividends is a company owning at least 20% of the company capital. The protocol also provides for an increase in the tax on interest from 2% to 5% and a rise in the tax rate on royalties.

The document stipulates a new version of the article on the tax information exchange, which provides for significant expansion of capabilities of parties in this field.

The Ministry believes that the protocol signing is aimed at avoiding double taxation of income of individuals and legal entities in the territories of both countries by dividing the right of taxation, and by recording data on the amount of taxes paid in the territory of one state in the tax obligations of a taxpayer of the other state.

Moreover, the decision will help to prevent tax evasion with simultaneous reduction of pressure on law-abiding taxpayers, eliminating tax discrimination, creating mechanisms for improving cooperation between the tax authorities of the countries and ensuring exchange of tax information.


Trade Policy

USA imposed duties on steel and aluminum

US President Donald Trump has signed a decree on introduction of import duties on steel and aluminum. Imported steel will be taxed at 25%, and aluminum at 10%.

For the time being the duties will not affect Canada and Mexico, with whom the United States continues negotiations on the fate of the North American Free Trade Agreement (NAFTA).

Donald Trump reserves the right to raise or lower tariffs at any time, as well as the right to abolish or introduce duties for individual countries.

Trump said that this decision to introduce duties protects the “national security of the United States”.



Amazon buys startup Ring

American corporation Amazon has bought the startup Ring, whose head office is in California. Ring is the manufacturer of smart bells and surveillance cameras. The entire technological side of products, including image recognition technology, is manufactured by Ring’s team in Kiev. In the company’s R&D center, located in the capital, more than 300 engineers are employed.

Ring had earlier attracted investments to the total amount of USD 209 million.

Although the deal amount is not yet disclosed, it is expected that this will be one of the largest deals in Amazon’s history.


Oil and gas

Well drilling started under UkrGasVydobuvannya order

The Chinese oilfield services company Xinjiang Beiken Energy Engineering Co began drilling a well in Poltava Region under an order from UkrGasVydobuvannya. Well drilling is taking at the Yablunivsky gas condensate field.

A reminder that in September 2017 the said Chinese company signed a contract with UkrGasVydobuvannya on the drilling of 24 wells in Kharkiv and Poltava Regions.
The total value of the contracts signed is UAH 1.93 billion.

In addition to its native China, Xinjiang Beiken provides services in Iran, Iraq, Kazakhstan, Indonesia and a number of other countries. The company has 30 drilling units of eight specifications.

In late October 2016 UkrGasVydobuvannya announced a tender to attract external contractors for drilling operations in Kharkiv and Poltava Regions with a total expected value of up to UAH 13.35 billion (including VAT).

Contracts have been signed with Spetsmehservis LLC, Crosco and Xinjiang Beiken and signing of contracts with Poltava Services is expected.


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