News (#03 March 2017)

Law Digest

Agreement with European Organization for Justice ratified

The Verkhovna Rada of Ukraine has ratified the  Agreement on Cooperation with the European Organization for Justice (Eurojust). The corresponding Agreement was signed on 27 June 2016 in Brussels (Belgium).

The purpose of the Agreement is to create a legal basis for cooperation between Ukraine and the European Organization for Justice in the fight against serious crime, particularly against organized crime and terrorism. It is noted that the competent authority in Ukraine for implementation of this Agreement is the Prosecutor General’s Office of Ukraine.

Articles 7 and 8 of the Agreement stipulate regular consultations with Eurojust with the purpose of implementing it as well as to provide an opportunity for representatives of the competent authority of Ukraine to participate in operational and strategic meetings at invitation of the President of College of Eurojust and with the consent of the appropriate National Members.

Since information exchange within the framework of cooperation between Ukraine and Eurojust will also lead to provision of information about individuals, Articles 9-18 regulate issues related to information exchange, including information transfer procedure and personal data processing, protection, correction and destruction of personal data, compensation for damage related to data transmission, and also confirm the rights of data subjects to have access to data related thereto.

Conclusion of this Agreement does not require introduction of any changes to current Ukrainian legislation.


Control over payment systems stepped up

Resolution of the National Bank of Ukraine No.11 of 13 February 2017, enhancing oversight over the activities of payment systems, their participants and operators of payment infrastructure services, came into force on 17 February.

The Resolution introduces new requirements for payment systems: they are obliged to monitor performance of their rules by system participants, to keep a register of points for cash collection and cash payment, to store information about every transaction on transfer of funds.

The Resolution also expands the list of grounds for application of enforcement actions to payment systems by the NBU. Furthermore, the regulator received more opportunities to conduct scheduled and unscheduled inspections of payment systems.

Moreover, the grounds for application of enforcement actions to oversight objects by the NBU were extended. Enforcement actions may be applied in relation to international sanctions over the period of their duration, starting from the day of official publication (promulgation) of information on their application.

The NBU will continue to carry out assessment of payment systems both on entry to the market and after acquisition of the status of significant payment systems taking into account new requirements.


Ukraine and USA signed FATCA agreement

An intergovernmental agreement to improve tax rules performance and application of provisions of the US Law On Tax Requirements for Foreign Accounts (FATCA – Foreign Account Tax Compliance Act) was signed in Kyiv. Around 60 countries already acceded to the Agreement, including EU states.

The Act contains requirements to foreign financial institutions, in particular, as to conclusion of a special agreement with the United States Revenue Service (IRS), as well as to monitor the presence of accounts opened by US taxpayers in Ukrainian financial institutions, and informing the United States Revenue Service about them.

Financial institutions of partner countries will be exempted from: compulsory tax withholding on payments from other tax agents; fulfillment of requirements to withhold tax on transit payments to other financial institutions within partner country or to another partner country; fulfillment of requirements to close an account, whose owner does not comply with FATCA requirements; compulsory tax withholding at the rate of 30% from payments to such account owners.

With a view to implementation of FATCA provisions, the Ministry of Finance of Ukraine will initiate introduction of amendments to several laws of Ukraine, development and approval of information exchange procedures and reporting forms, as well as development of software for information collection and transfer.

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