News (#06 June 2019)

Law digest

Auctions for green energy manufacturers to be introduced in Ukraine

On 25 April 2019 the Verkhovna Rada adopted a Draft Law On the Launch of Auctions for Green Energy Manufacturers.

The Draft establishes that green auctions will start in Ukraine in the ProZorro system from 1 January 2020. Auctions will be held only for projects of more than 20 MW wind power plants (WPP) and for projects of other types of renewable energy sources (RES) with a capacity of more than 10 MW. From 2021, this figure will be reduced to 5 MW for other types of RES.

The document establishes that from 2023 auctions will become mandatory for all more than 3 MW WPP projects (except for projects with one wind turbine) and projects of other types of RES with a capacity of more than 1 MW.

The Draft also envisaged for the reduction of the green tariff for solar power plants by 25% from 2020 and for its further annual decrease by 2.5% over 3 years. For wind power plants, the tariff should be reduced by 10% from 2020 with its subsequent annual decrease by another 1.5% over 3 years.

At the same time, the current system for green tariffs support will be in force until 2030 and will apply to manufacturers that have already obtained a green tariff, as well as to companies that will manage to build and put into operation electric power industry facilities by 1 January 2020.

Besides, the current tariffs are fixed for companies that will sign a preliminary sale and purchase agreement on electric power under the green tariff with SE Energorynok by 31 December 2019 or will build and put into operation the relevant facilities over next two (for SPP) or three years (for other types of RES).

Limit raised on dividend repatriation

The National Bank of Ukraine increased the limit on the withdrawal of dividends from Ukraine from EUR 7 to EUR 12 million per month. The relevant decision came into force on 8 May.

This is the second limit increase in the year. In February, along with the introduction of about 30 other currency liberalization issues, the NBU increased the limit on dividend repatriation from USD 7 million to EUR 7 million per month.

According to NBU Deputy Governor, Oleg Churiy, the increased limit of EUR 12 million per month as such meets the requirements of all foreign-owned companies operating in Ukraine.

The NBU added that, given the favorable macroeconomic conditions, simplification of the dividend repatriation abroad remains one of the priority tasks of the currency liberalization roadmap. The rate of introduction of new currency liberalization issues will depend primarily on the pace of improving the macroeconomic situation and financial market conditions.

Government extended sanctions against Russia

On 15 May the Cabinet of Ministers updated the list of Russian goods prohibited from import into Ukraine and voted to introduce a special type of duty to be levied on Russian products. New restrictions reflect the actions and decisions of the Russian government.

A special duty will apply from 1 August 2019, regardless of other types of the same.

Budget revenues from this duty should be transferred to a special fund and spent on import substitution.

The amount of duty will be calculated as a percentage ratio to the value of goods imported from Russia.

From now on, Portland cement, alumina cement, blast-furnace cement, sulfate-resistant cement, and similar types of water-hardening cement, colored or not, ready to use or in the form of clinkers, as well as glued wood, lamwood panels, veneered panels and similar materials of plywood are all prohibited from import into the territory of Ukraine.

Government tightens up requirements of tour operators towards holidaymakers

On 22 May the Government approved changes to the licensing terms for the conduct of tour operator activities initiated and developed by the Ministry of Economic Development and Trade. From now on tour operators should provide permanent financial guarantees to tourists and act within the legal environment as transparently as possible.

Introduction of a number of important changes to licensing terms for the conduct of tour operator activities was initiated.

In line with the approved changes, the tour operator should provide a financial guarantee to tourists to obtain a license. This guarantee may be provided by a bank or another lending institution. In the event of indemnification of payment to tourists, the tour operator should re-credit its financial guarantee the next business day.

Moreover, the tour operator providing the service related to the transportation of tourists shall be obliged to check information on the time of departure 8 hours and 2 hours before the scheduled departure. In the event of a flight being delayed by for more than 4 hours, the tour operator should publish the relevant information on its own site and inform the licensing authority of this fact by e-mail.

From now on, tour operators should provide information about the travel agents they cooperate with on their own web-sites the name of the individual or the legal entity, the agency agreement duration, bank details of the person providing the guarantee on behalf of the bank or another lending institution, as well as information on the existing travel service agreements, concluded either directly by the tour operator or through travel agents, in which the country of temporary residence is specified.

Tour operators are now obliged to ensure all the necessary conditions for people with limited mobility to have access to their places of residence during their vacation.

The Ministry noted that failure to comply with any of the above-mentioned requirements may entail the cancellation of the tour operators license.

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