Law digest

Foreign companies now allowed to open accounts in Ukrainian banks

In order to assist the gradual transition of Ukraine to free movement of capital, the National Bank now provides an opportunity to open accounts for new subjects of the financial market of Ukraine — legal entities-non-residents, including foreign investment funds and asset management companies, acting on behalf of such investment funds.

For this purpose the National Bank has updated the Instruction on the procedure for opening and closing the customer accounts of banks and correspondent accounts of resident and non-resident banks.

It regulates, in particular, the opening/closing of banks accounts of clients-residents and non-residents (individuals and legal entities); correspondent accounts of banks-residents and non-residents; the accounts of international financial organizations, fiduciary management of assets under an agreement.

“The simplification of the procedure for opening customer accounts, as provided for by these Rules, will have a positive impact on the business conditions in Ukraine due to such innovations: cancellation of the submission of cards with sample signatures by customers of banks when opening accounts — from now on an account will be ordered on the basis of the list of persons who, according to the law, have the right to do so, and this does not require notarization; changing the name of the legal entity does not provide for the closure of existing accounts,” the message reads.

NBU introduced control over non-bank financial institutions

The National Bank has introduced control over non-bank financial institutions and postal operators.

In particular, control was introduced over non-bank financial institutions and postal operators for providing information to the NBU on: refusal to conduct currency exchange operations to persons found on sanctions lists, to which sanctions “blocking of assets” or “stopping financial operations” are applied; refusal to transfer funds without opening accounts on behalf of, or in favor of, persons specified in sanctions lists.

The document came into force on 30 March 2019.

Deregulation in construction industry

On 3 April 2019, the Ukrainian Government approved the Resolution On Amendments to the List of Central Executive Bodies which Powers Include the Issue of Regulation in Construction. Its implementation will streamline, systematize and thereby accelerate the review of outdated industry standards in construction — construction norms and rules (SNiPs) relating to the design of production facilities in various industries, particularly industry and the transport infrastructure.

The Draft Resolution was developed by the Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine. In Ukraine, there are still about 60 effective industry building rules and regulations that were approved in Soviet times.

It is expected that these changes will streamline and systematize the revision of such outdated industry building regulations.

List of compensation for employers hiring persons with disabilities extended

On 10 April 2019 the Government of Ukraine established a funding mechanism for promoting the employment of persons with disabilities at the expense of the Fund of Social Protection of the Disabled.

The Cabinet of Ministers established that the amount of administrative and economic sanctions and penalties for non-compliance with the standard related to employment of persons with disabilities can be used to finance indemnification to employers: of the Unified Social Tax for hiring unemployed persons with disabilities, including those who are not competitive enough in the labor market; for the remuneration of labor for all hired unemployed internally displaced persons with disabilities (but not above the average salary rate established in the relevant region over the past month); for retraining and professional development of all hired unemployed internally displaced persons with disabilities.

New figures join sanction lists against Russia

On 21 March  2019, a Presidential Decree came into force enforcing the decision of the National Security and Defense Council on the revision and introduction of new restrictive measures (sanctions) to the appropriate list of subjects for a three-year term.

New sanctions lists issued by Ukraine are now in line with new sanctions against the Russian Federation introduced by Canada and the United States and include entities, against which the mentioned countries imposed sanctions in March 2019.

The new list contains 848 individuals. At the same time, from the list of individuals subject to sanctions introduced in 2018 (containing 1,759 items), three persons were excluded and information about one person was changed (specified). The new sanction list of legal entities has 294 entities on it. Eight legal entities were excluded from the list of legal entities subject to sanctions introduced in 2018 (containing 786 items), and information about 2 of them was specified.

Code on Bankruptcy Procedures signed into law

Ukrainian President Petro Poroshenko has signed the Code on Bankruptcy Procedures into law. A reminder that the Ukrainian Parliament approved the Code of Bankruptcy Procedures on 18 October 2018 (Draft Law No. 8060). One of the document novelties is the possibility for individuals — conscientious borrowing entities — to initiate a bankruptcy procedure in the case of a difficult economic situation and to get released from such a debt obligation, while the creditor is deprived of such a right. The approved document also sets out the procedure for the sale of bankrupt property via the ProZorro.Sales electronic auctions platform.