News (#7-8 July-August 2021)

Law digest

Ban on plastic bag use set to come into force in December

President Volodymyr Zelenskyi has signed the Law of Ukraine On Restricting the Circulation of Plastic Bags on the Territory of Ukraine adopted by Parliament on 1 June.

The document regulates the circulation of plastic bags and aims to stimulate the development of biodegradable plastic bag production. In particular, the law prohibits the free distribution of plastic bags (with the exception of biodegradable) in retail and food establishments. Plastic bags should only be provided for money. At the same time, retail prices for such bags shall not be lower than the minimum prices set by the Cabinet of Ministers of Ukraine.

ItТs also mandatory to label biodegradable plastic bags and penalties for violating these norms are set.

The law comes into force on the day following its publication and shall be implemented in six months after the date of its entry, except for some separate provisions of it.

Parliament approved banking draft law necessary for cooperation with IMF

The Verkhovna Rada adopted in the second and final readings Draft Law No. 4367 On Improving the Organization of Corporate Governance in Banks, the adoption of which is an important condition under the IMF stand-by financing programme.

The law improves a number of provisions of the Law On Banks and Banking Activity,† in particular, in part on capital requirements for banks; banking supervision; powers of the bankТs board, internal control system and risk management; requirements for acquiring a significant stake in the bank; related parties; creation and licensing of banks; the procedure for opening branches and representative offices of foreign banks on the territory of Ukraine, etc.

Moreover, the adoption of a new capital structure (including capital buffers) is expected, which will strengthen a bankТs ability to absorb losses, as well as additional requirements for members of the bankТs board and management, particularly regarding their collective suitability.

The NBU also gets the right to set individual economic standards for banks, depending on the risk of their activities and the right to demand changes in the personnel of a bankТs board or management if the current composition of these bodies is unable to manage and control the financial institution effectively.

The main purpose of the Draft is, among other things, to strengthen the responsibility of the supervisory board and management of the bank, the system of internal control and risk management.

Law on Mechanisms for withdrawing banks from market adopted

The Verkhovna Rada has adopted in the second and final readings Draft Law† No. 4546 on improving the mechanisms for withdrawing banks from the market and satisfying the requirements of creditors of such banks.

The Draft, in particular, determines the legal grounds for compensation of damages (losses) by a person who caused damages to the bank and creditors of the bank, as well as a person who received property benefits as a result of such actions.

The law improves some issues of compensation for damages (losses) by the persons related to the bank, other persons whose actions or inactivity caused damage (losses) to creditors and/or the bank, in particular by providing for the possibility of the state-run Deposit Guarantee Fund concluding an agreement on voluntary compensation of such damages (losses), the mechanism of return of funds to former creditors of the bank after its liquidation, exemption from court fees, state duties, and state registration fees.

The law also:

Ч improves the procedure and the list of grounds for detecting insignificant legal transactions;

Ч clarifies some issues of legal regulation of the liquidation procedure;

Ч improves the mechanism of legal protection of the FundТs employees and members of its administrative council;

Ч regulates the issues of the FundТs work with secured creditors of the banks that are being withdrawn from the market;

Ч clarifies the issue of payment of court fees and state registration fees.

Launch of special mode for IT industry agreed

The Ukrainian Parliament has passed an industry-specific draft law on the special tax regime for Diia City in the second and final readings. Participation in Diia City is voluntary, and the influence of the state on residents of Diia City is legally minimized. The state issues guarantees to the IT industry that the same conditions will be valid for 25 years.

The law proposes to introduce a special tax regime for residents of Diia City in accordance with tax legislation. The special regime also offers an opportunity to choose the contractual form of the employment contract when registrating labor relations between residents and their employees.

A special form of employment by residents (gig contract) is proposed, which combines social guarantees for employees and the flexibility of civil law relations. At the same time, such a contract does not preclude Diia City residents from hiring sole proprietors and employees via an employment agreement, etc.

Verkhovna Rada passed law on restructuring gas debts in market

At its session on 14 July the Verkhovna Rada approved Draft Law No. 3508-д in its final reading, which proposes a mechanism for restructuring debts arising on the accounts of heat and power utilities, gas distribution companies and regional gas companies for gas, as these debts exceed UAH 100 billion.

The law proposes the following:

Ч to postpone the estimated date of debt settlement from 1 July 2016 to 1 June† 2021;

Ч to allow enterprises to restructure the debt for gas distribution and transportation with the subsequent write-off of the penalty accrued;

Ч to verify and settle, at the expense of the state budget, the debt on the difference in rates for heat, heating, hot water supply, etc., formed before or after 1 January 2016;

Ч to suspend proceedings and measures to enforce debt collection, particularly under agreements with Naftogaz and gas distribution network operators.

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