News (#09 September 2019)


Fiscal Service proposes to fine legal entities for violating currency legislation

The Cabinet of Ministers has published its Draft Resolution On Approving the Procedure for Imposition of Penalties on Legal Entities (Except Authorized Institutions) by the Supervisory Authorities as Enforcement Actions for Violation of the Currency Legislation Requirements on the State Fiscal ServiceТswebsite. The Draft was developed according to the Law On Currency and Currency Transactions† to set the procedure for applying penalties, as well as to establish the sums of such penalties. Thus, it is planned that supervisory authorities carry out currency control over legal entities (except authorized institutions) by conducting documentary due diligence as detailed in the Tax Code and regulations.

It is stipulated that the supervisory authorities will have the right to apply penalties for violation of the following:

Ч Article 5 of the Law regarding the procedure on settlements under foreign exchange transactions within the territory of Ukraine;

Ч Article 6 of the Law regarding the procedure on currency trading;

Ч Article 7 of the Law regarding the procedure on cross-border transfer of currencies;

Ч Article 8 of the Law regarding the procedure on cross-border movement of currencies;

Article 12 of the Law regarding the procedure on carrying out foreign exchange transactions subject to protection measures implemented (except for violation of established deadlines for settlements under transactions on export and import of goods).

The Draft stipulates that in the event that the aforementioned violations are discovered, the supervisory authorities will apply fines totaling 25% of the amount of the transaction conducted with violation of currency legislation to be transferred in UAH at the official exchange rate of the National Bank as of the day of such transaction for each violation (for repeated actions during the year Ч totaling 50% of the transaction amount).

Fines will not be applied if the amount of a transaction conducted with violation of currency legislation when converted into Ukrainian currency at the official exchange rate of the NBU as of the day of such transaction is less than the amount established for financial transactions subject to mandatory financial monitoring (currently Ч UAH 150,000), and if the conduct of such transactions has not resulted in reducing the taxable item during the period when the violation was committed.

Ministry of Health proposes to prohibit animal testing of cosmetic products

The Ministry of Health has put forward for public discussion a revised Draft Resolution of the Cabinet of MinistersOn Approval of the Technical Regulations for Cosmetic Products.

Once this Resolution comes into force, it is expected that the quality of cosmetic products will improve. It is also expected to harmonize the technical regulation of cosmetic products in Ukraine with European legislation and remove legal, administrative and technical barriers to trade with EU countries.

It is proposed to supplement and expand the list of prohibited ingredients from 400 to 1,383 items.

Moreover, the Draft establishes the use of only approved dyes, preservatives and UV filters.

It is specified that the requirements for Ukrainian and foreign manufacturers will be the same.

A transitional period of 18 months is set for companies without capacities to correspond to the new standards. This also applies to the prohibition on testing cosmetics on animals.

Ministry of Regional Development proposes new requirement for rebuilding of Khrushchev era buildings

The Ministry of Regional Development has developed a new Draft Law, in which it proposes to establish a new requirement for the consent of house residents to carry out reconstruction Ч at least 75% of owners of apartments and another real estate within the city bloc (residential district).

This will enable the process of renovating old residential property in Ukraine to be initiated in practice.

The current law from 2006 regarding the rebuilding of old residential property establishes mandatory consent of 100% of housing residents.

Moreover, the reimbursement rate for old residential property is 1.5. In other words, when you move to a new house you should be provided a 50% bigger apartment. This became the main reason why the renovation of old residential property in Ukraine could not start in practice.

The consideration of the reconstruction issue will be terminated in the event of disagreement by 25% of owners. Such a building will be excluded from the investment project, and the relevant decision will be communicated to residents via written notification.

Besides, the new Draft takes into account the possibility of rebuilding an old residential property with several number of floors in the building, not only buildings up to the 5th floor, and determines the executive bodies of the village, town and city councils as ordering parties for such rebuilding projects.

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