News (#03 March 2016)

Draft

Protecting the rights of consumers of financial services

Denis Dzenzerskii, a people’s deputy of Ukraine, has initiated two Draft Acts: On Introduction of Amendments to Certain Legislative Acts of Ukraine Regarding Improvement of the Protection of Rights of Financial Services Consumers No. 2456-ä and On Consumer Lending, No.2455.

The purpose of the Drafts is to create an effective system for protection of rights of financial services consumers, to eliminate gaps and inconsistencies in the existing system of regulatory support for the protection of consumer rights and to create an effective mechanism of consumer lending, which will ensure the protection of rights and legitimate interests of both consumers and lenders in this field.

According to the documents, the following major innovations are suggested:

— conducting an assessment of a borrower’s creditworthiness both by banks and by other non-bank financial institutions, whose assessment will place all creditors on an equal footing;

— providing the borrower with complete and transparent information regarding the loan and its actual, real interest rate;

— changing the procedure for discharging claims under a consumer lending agreement: primarily, the amount of overdue debt will be repaid, secondly — the principal loan amount and interest, and thirdly — penalties amounts;

— addressing issues regarding the powers of state agencies;

— establishing the liability of financial institutions for infringement of consumer rights, etc.

Major innovations include:

— Establishing powers of state agencies for them to protect the rights of financial services consumers.

— Introducing identical rules for both banks and non-banking institutions.

— Introducing liability for financial institutions for infringing the rights of financial services consumers.

— Introducing the instituting claims in favor of the general public.

It should be recalled that Draft Act No.2456-ä is one of the Drafts, the adoption of which is provided for by the Comprehensive Program of the Financial Sector of Ukraine Development until 2020. It was registered on 29 December 2015.

 

Introduction of amendments to Criminal Procedure Code

The Committee for Legislative Support of Human Rights Activities of the Parliament of Ukraine accepted for processing the Draft Act On Introduction of Amendments to the Code of Criminal Procedure of Ukraine (regarding peculiarity of the forfeiture to the state of monetary funds, values and proceeds from them prior to a court judgment) of 15 February 2016, No. 4057.

As stated in the explanatory note, according to the information published in the briefing note of the National Institute for Strategic Studies, the assessment of the amount of assets that have been lost by Ukraine as a result of the abuse of power during the last 4 years alone comes to some USD 70 billion.

The Draft Act suggests amending the Criminal Procedure Code of Ukraine by inserting a new chapter, the provisions of which will define the specifics of the forfeiture to the state of monetary funds, currency values and proceeds from them prior to the reading out of a court judgment.

The forfeiture to the state may be carried out in criminal proceedings regarding persons who have committed:

— Corruption-related crimes;

— Money laundering;

— Created a criminal organization.

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