Ukraine is often called a country with a difficult legal environment for business operations, presenting both opportunities and risks. Speaking generally, though business in emerging markets can provide lucrative opportunities, their business environments pose sanctions and fines for illegal commercial conduct. In the mindset of business leaders and in their market strategies harm to reputation may sometimes even exceed financial losses.
Selection of the most appropriate strategy to ensure compliance reveals that there is no one-size-fits-all solution. Compliance is named a risk-based process that sensitizes a broad understanding of a local context coupled with industry insights and global trends…
According to the rules of the Tax Code of Ukraine, tax control in the sphere of transfer pricing is undertaken by monitoring and inspecting the calculation of completeness and of payment of income tax in controlled transactions.
Such information, obtained during monitoring of economic activities, is the basis for decision adoption as of inspections conduct. According to Yaroslav Romanchuk, managing partner of International Legal Center EUCON, individual taxpayers have already evaluated the effectiveness of monitoring measures, because those who carried out controlled transactions, but did not report them, have already received letters from the SFSU with a request to provide the appropriate explanations. Having analyzed information received from a taxpayer the inspection is usually carried out and in case of confirmation of the conduct of controlled transactions, the company shall have to pay a fine..
Olga B. Vorozhbyt, Oleksandr M. Frolov
It is universally recognized that an internal probe is an effective mechanism for attaining a great variety of goals, the most important of which are to terminate illegal practices, and to identify and bring to justice persons guilty of illegal activities. These inquests into the activities of a company and its officials are also frequently conducted with a view to ascertain facts such as, for example, whether a particular employee has: breached a non-compete clause, taken part in corrupt practices or stolen data/CRM databases, and also help to determine the level of losses resulting from corruption and other illegal activities…
Pavlo B. Loginov, Serhiy M. Shershun
Compliance has been on top of the agenda recently in Ukraine. Everyone wants to be in compliance and everyone talks about it, but few have seen it. Competition compliance is no exception, and recent legislative changes bring certain optimism with respect to its future. In particular, in the light of changes to merger control regulations and published “guidelines” related to fines calculations — companies (Ukrainian and international) have again became concerned about implementing competition compliance...
Alexander V. Bondar
The topic of Anti-Corruption compliance in Ukraine seems to have changed its status from “being a popular topic for headlines and speeches of government officials” into “must-do activity” for business entities.
The On Prevention of Corruption Act of Ukraine of 14 October 2014 (hereinafter — the Act) has introduced a significant number of changes in this sphere, inter alia, for example, the necessity to establish the National Agency for Prevention of Corruption and establishing the obligation for some legal entities to have an Anti-Corruption Program (Policy) and an Authorized Person (Compliance Officer) on staff who would be responsible for the Anti-Corruption Program implementation, determining some new limits regarding gifts to government officials, etc.
Redcliffe Partners advised on extension of secured facility to Kernel
AVELLUM advised Allergan Inc
Asters advised International Finance Corporation
AEQUO — legal counsel to EBRD
Luc Besson ordered to pay for film plagiarism
Founder of Carlo Pazolini arrested in absentia in London
Court orders Sonders Trading K/S Cî Ltdto pay Ukrainian grain trader
Oschadbank filed lawsuit against Russia
Court overturns penalties applied to Ukrnafta
Act on ID-Passports was signed
NBU simplified currency exchange for the population
Ukraine and Malaysia signed anti-offshore agreement
Ratification of the Paris Agreement
Electronic document management for banks in cases of purchase and transfer of currency
Draft on tax reform
Compulsory health insurance proposed
Draft Act on Environmental Impact Assessment
International judicial cooperation
On 29 July the American Chamber of Commerce in Ukraine brought together representatives of different branches of government, Ukrainian and international business representatives, Chamber member companies, at the Round Table Reforms in the Agro-Industrial Complex of Ukraine: Priorities for Agrarian Industry Development to discuss challenges the agricultural sector is facing today...
Prospects for improving economic competition protection
Patenting inventions in the field of biotechnology
Fairfax Financial Holdings Ltd decided to purchase 9.99% shareholding in Astarta
Walmart buys startup Jet.com
Berlusconi sold football club AC Milan
EU bound Apple to pay EUR 13 billion in taxes
Accession to Pan-Euro-Med Convention
Ukraine signed free trade zone agreement with Canada
AMCU approved clarification on calculation of fines
Attention to compliance steps taken by Ukraine is growing around the world. The subsequent laws cross borders, ensuring their global reach. Along with facilitation of domestic laws and regulations, business is challenged to secure its reputational risks and avoid sanctions. As international investigations gain momentum, Ukraine is coming under the spotlight of foreign regulatory authorities. Ario Dehghani, counsel and recent newcomer to Redcliffe Partners, anticipates that Ukraine will “go global”, and very soon corporate leaders will generate “big ticket” tasks for the compliance practice of law...
Denys I. Beregovyi
Patent or copyright disputes between large vendors are sometimes just like the TV/Netflix series — season 1 (the initial litigation) is either striking and fascinating or a total disaster (so you don’t spend more of your time). Season 2 (the appellate stage), however, becomes decisive — it will either enable producers to launch a long-lasting series or will probably cut the series to its end (glorious or boring — does not really matter). So far, it seems that the Oracle v Google battle over 37 Java API packages has already become a successful series — we have seen 4 seasons already with at least one more to come soon…
Zoya H. Burbeza, Volodymyr V. Bogatyr
The Worldwide Freezing Order (“WFO”), formerly known as a “Mareva Injunction”, has become an increasingly common feature of international trade disputes. In this article we examine some frequently asked questions about this useful tool, as we regularly advise clients on WFOs and on the committal proceedings which can result from disobeying one…
The past summer was marked by important regulations of the National Bank of Ukraine that simplify the exchange of foreign currency cash, use electronic documents, copies of documents in electronic form when purchasing and making payments with foreign currency; and extremely important regulations of the Antimonopoly Committee of Ukraine which approved new Fining Guidelines. Ukraine continued its integration efforts and joined the Pan-Euro-Med diagonal cumulation area. The Government represented a new Draft of tax reform and submitted an initiative to provide compulsory state social health insurance. These issues became the subject for analysis by our experts...
Evgeniy VazhynskiyDuring the last few months the National Bank of Ukraine adopted a number of regulations aimed at gradual relaxation of the currency control regime. The most noteworthy changes include the decrease of foreign currency proceeds mandatory sale from 75% to 65% and lifting the ban on repatriation of dividends from Ukraine accrued for 2014 and/or 2015, the total amount of which to be repatriated shall not exceed the higher of the equivalent of USD 1,000,000 and 10% of the total accrued amount (but in any event not more than USD 5,000,000) per month…
Bohdan DmukhovskyyWith Regulation No.366 of 4 August 2016, and effective as of 12 August 2016, the National Bank of Ukraine continues its foreign currency liberalization initiatives, which are important for the revival of Ukrainian economy. The Regulation removes requirements to provide original paper documents or certified paper copies of documents (contracts, invoices etc.) by the banks’ clients in order to purchase and transfer foreign currency. Instead, electronic documents or electronic copies of paper documents are allowed…
Anzhela MakhinovaAll countries try to deepen trade liberalization by concluding free trade agreements (FTAs), usually eliminating all tariff and non-tariff trade barriers. In order to enjoy the said privileges, goods should originate in one of the countries that is a party to the FTA and be directly transported between such parties. Use of imported raw materials and components in the products may considerably influence their origin status under the FTA...
Iurii RybakThe Cabinet of Ministers of Ukraine recently adopted Resolution on establishing the Interregional Customs Office within the system of the State Fiscal Service of Ukraine. The Government’s goal in such a measure consisted of strengthening control over places of customs clearance along with reducing the level of abuse in the customs field…
Yuriy ZaluskyyThe proposed Draft Act could hardly be considered comprehensive tax reform. Most of the proposals are aimed at perfecting the existing administration of taxes or rectifying deficiencies and inaccuracies. The ultimate goal of the Draft appears to be the relocation of powers from the State Fiscal Service to the Ministry of Finance. In particular, the Ministry’s remit would extend to administering taxes, issuing tax rulings and maintaining databases, which are presently carried out by the State Fiscal Service…
Yaroslav RomanchukA taxpayer’s electronic account has been functioning in test mode for some time, but all the alleged functionality has still not been implemented in full. Strategically, an electronic account should become a full service, by which taxpayers shall manage their payments, be able to check them at any time, as well as to receive relevant information from the tax authority in real time mode. All interactions between economic entities and fiscal authorities should take place through the electronic account...
Oleksandr VoznyukThe updated AMCU Fining Guidelines demonstrate more than just the AMCU’s approaches to the calculation of fines. The Committee is striving to build a more precise and accurate model of calculations in order to ensure that the circumstances of each individual case are duly considered and that the amounts of fines properly reflect the consequences of the infringement for the public. Such an approach is highly welcomed despite the criticism of the alleged increase of the AMCU’s discretion, though time will tell whether this model is sufficiently efficient…
Yevhen FilonenkoThe On Banks and Banking Activity Act of Ukraine expressly enshrines the principle that banks must create a system of risk management and moreover that they are not allowed to carry out risky activities that threaten the interests of depositors or other creditors of the bank. It is for the sake of the development of the legislation that the National Bank of Ukraine adopted Resolution No.369 on 15 August 2016, which approved the Regulations on the Procedure for the Analysis and Verification by Banks of Documents (information) on Financial Transactions and their Participants...
Olena KhytrovaCompulsory health insurance is not a panacea that can work for any country. Its implementation should be preceded by tax reform and transformation of medical service providers. In Ukraine, salaries often come in “envelopes”, with relations between employer and employee remaining legally unregulated. These “off the book” payments will contribute nothing to CHI. There is a distinct possibility that the Compulsory Health Insurance Fund will suffer the same fate as the Pension Fund…
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