BIZNEWS:

BANKING & FINANCE:

Restructuring of consumer loans in foreign currency

A memorandum on settlement of restructuring of consumer loans in foreign currency has been proposed by banks with the largest portfolio of loans in foreign currency. It provides for restructuring of consumer loans in foreign currency that were received through mortgage, where the balance does not exceed UAH 2.5 million at the official exchange rate of the National Bank of Ukraine (NBU) as of 1 January 2015.

The banks’ obligation to implement provisions of the Memorandum arises solely subject to a number of conditions, most of which have already been met.

The most important instrument for practical implementation of the Memorandum was the On Changes to the Tax Code of Ukraine (concerning restructuring of loan obligations in foreign currency) Act of Ukraine signed on 5 May 2015 by the President of Ukraine.

Changes to the Tax Code exempt individuals from the tax on personal income gains arising when part of a debt is forgiven by the creditor. It cancelled 22% of the personal income tax in the case when a part of the foreign currency loan is forgiven when the loan is converted into Hryvnas. This forgiveness applies to all foreign currency loans except for those issued to bank employees.

There is another requirement for implementation of the Memorandum. In particular, changes have been introduced to some regulations of the NBU  lifting sanctions against the banks that violated norms during restructuring of foreign currency loans and/or forgiving (canceling) a part of debt, and violations concerning further qualification of such loans, accounting of loans, etc.

The Memorandum was signed by the following banks: PJSC UPB, PJSC Alfa-Bank Ukraine, JSC Bank Nadra, JSC Bank Mikhaylovsky, JSC Privatbank, PJSC BANK GRANT, JSC Region-Bank, JSC Delta Bank, JSC FIDO Bank, JSC Platinum Bank, PJSC CREDIT AGRICOLE BANK. Other banks with large portfolios of individuals’ loans in foreign currency are considering whether to join the Memorandum in the near future.

TRADE POLICY:

Russia filed WTO lawsuit against Ukraine and EU regarding duties

Russia has filed a lawsuit with the World Trade Organization (WTO) against Ukraine for the latter’s duties on ammonium nitrate. In July 2014 Ukraine increased its duty for imports of ammonium nitrate from Russia from 11.91% to 36.03% and extended it for another five years. This decision was made on a basis of the statement of the Ostchem Company, which belongs to Group DF owned by Dmytro Firtash. They asserted that gas prices for Ukrainian chemical plants and Russian producers differ significantly. Russia also filed another lawsuit against WTO with the EU in relation to anti-dumping measures against Russian welded pipes and ammonium nitrate.

OIL & GAS:

Gazprom has decided to start construction of Turkish Stream

Gazprom has decided to start construction of the offshore part of the Turkish Stream pipeline.

Gazprom chief Alexey Miller and Turkish Energy and Natural Resources Minister Taner Yildiz agreed to commission the Turkish Stream and begin gas supplies in December 2016.

M&A:

Archer Daniels Midland Co to buy terminals on the Black Sea

Archer Daniels Midland Co (ADM), one of the largest grain traders in the world, has announced an agreement reached with North Star Shipping and Minmetal on acquisition of full ownership of two Romanian export terminals in the Black Sea. This will increase the company’s capacity to export grain from Eastern Europe. The assets that the company acquires include 10 berths, a warehouse for 330,000 tons of grain, export terminals with an annual capacity of 6 million tons, 2 floating cranes for re-loading grain to ocean-going vessels from barges, as well as mobile shore cranes and other equipment.

UKRAINE — EU:

Ukraine  receives EUR 1.8 billion of macro-financial support from EC

The Memorandum of Understanding and the Credit Agreement between Ukraine and the European Union was signed in Riga on 22 May on the third macro-financial package of the EU support to Ukraine in the amount of EUR 1.8 billion. The purpose of the new package of financial support is to stabilize the financial system of Ukraine, improve the balance of payments, and to implement reforms.

Together with the new program, the amount of financing for Ukraine by the EU totals EUR 3.41 billion, which is the largest financial support for a country that is not an EU member within a short period of time. The first tranche of the third package of the macro-financial support in the amount of EUR 600 million will be provided to Ukraine in the second half of June 2015 after the Memorandum is ratified by the Verkhovna Rada of Ukraine and the IMF’s Board of Directors approves the first review of the increased funding program.

ANTIMONOPOLY COMMITTEE OF UKRAINE:

Yuri Terentiev appointed Chairman of AMCU

On 19 May 2015 in accordance with Сlause 12, Article 85 of the Constitution of Ukraine, the Verkhovna Rada of Ukraine appointed Yuri Terentiev the new chair of the Antimonopoly Committee of Ukraine. His appointment was supported by 266 votes from Ukrainian MPs.

Yuri Terentiev has worked as the deputy to the general legal advisor at the PJSC ArcelorMittal Kryvy Rih since April 2012. The previous chairman of the Antimonopoly Committee, Vasil Tsushko, was dismissed by a decision of the Verkhovna Rada of Ukraine of 26 March 2014. Mykola Barash served as acting chairman of the Committee from March 2014.

AMCU reveals cartel collusion between retail chains

The AMCU has reviewed a case of cartel collusion between major retail chains Silpo, Fora, Furshet, Velyka Kyshenia, Eco Market, Caravan, Billa, Novus, Spar, Bimarket, Metro, Auchan, ATB, Perekrestok, Kray ta Kraina, and research company ASNilsen Ukraine.

The AMCU says that the cartel led to restriction of competition in the market of retail trade of food products in non-specialist stores in the city of Kiev, resulting in unfavorable conditions for producers and suppliers, creating barriers to investments, innovation and for small and medium businesses. This also resulted in a significant rise in prices for consumer goods.

The AMCU exercised moderate sanctions. Total fines came to UAH 203.616 million.

It obliged ASNilsen Ukraine LLC and the retail chains to halt violations of the law on protection of economic competition within 2 months of the receipt of the decision by bringing their activities of receiving and disseminating information in conformity with legislation on protection of economic competition. The retailers have been obliged to stop violating legislation on protection of economic competition within 2 months of receipt of the decision by bringing its activities, including contractual relations with suppliers and/or producers of goods and pricing, into conformity with legislation on protection of economic competition. Compliance with the requirements would release resources for the economy equal to UAH 20 billion annually.