News (#07-08 July-August 2019)

Law digest

Fees raised for intellectual property rights protection

The Cabinet of Ministers of Ukraine has increased the amount of fees payable for activities related to IP rights protection. The governmentТs decision is aimed at improving the state system for protection of legal intellectual property and at increasing its effect on the enhancement of scientific, technical and economic development of the state of Ukraine.

Filing an application for an invention will cost UAH 1,600, and UAH 2,400 for a utility model.

The annual fee for a utility patent maintenance for each year of its effect from the date of filing will be UAH 600 for the first and second years. This sum will be increased annually in stages, up to UAH 30,400 for the 21st year.

 

Elimination of double certification and test procedures

The Ukrainian Parliament has adopted a Draft Law On the Implementation of the European Union Legislation in the Area of Technical Regulation (No.10183) in the second and final readings. This law eliminates the need to undergo double certification and testing procedures in Ukrainian and European conformity assessment bodies, respectively.

Adoption of the Draft is an essential prerequisite for the implementation of the provisions of the Association Agreement signed between, on the one hand, Ukraine and the EU, the European Atomic Energy Community and their member states and, on the other hand, in particular, of the definitive decision of the Commission on the issue of concluding the Agreement on Conformity Assessment and Acceptance of Industrial Products (ASAA Agreement), under which the results of Ukrainian tests and certification of products will be acknowledged at European level.

 

NBU redefined features of systemically important banks

The National Bank of Ukraine has revised the methodology for determining systemically important banks in view of the European supervisory authority (EBA, European Banking Authority) recommendations and international practices.

The updated methodology establishes expansion of the list of systemically important banks indicators and a two-step process to identify such institutions.

Ч At the first stage, systemically important banks are determined under nine indicators characterizing the size of the bankТs assets, areas of its operations and the degree of their financial interrelations.

Ч At the second stage, only one indicator is applied to characterize the level of concentration of retail deposits secured by the state-run Deposit Guarantee Fund in individual banks.

For systemically important banks in Ukraine, special (enhanced) values of the quick liquidity ratio (at least 30%) and the maximum ratio of the credit exposure per contracting party (up to 20%) have been established.

For these, increased capital requirements have also been set: starting from 2021, they are obliged to ensure the creation of a buffer system of up to 2% depending on the degree of the systemic importance of such banks.

Also, for systemically important banks, the Law of Ukraine On Banks and Banking Activities establishes the development of a plan to restore the activities of a bank pursuant to requirements yet to be established by the National Bank of Ukraine in the near future. The liquidity of such banks will be supported by the NBU on a common basis. The National Bank will publish the list of systemically important banks determined under the updated methodology in the near future. These should be ready to meet the tightened requirements under individual criteria from 1 January 2020. PrivatBank, Ukreximbank and Oschadbank have since 2016 been continually determined as systemically important banks according to the previous methodology.

 

National Bank canceled certain currency restrictions

The National Bank of Ukrainehas canceled certain currency restrictions. In particular, we refer to the following changes:

Ч The limit for financing oneТs own foreign representative offices and other separate units of Ukrainian business has been canceled. Earlier, the transfer of funds to foreign affiliates was restricted by a general limit for legal entities set for investing abroad, namely EUR 2 million per year.

Ч Reinvestment procedures related to foreign investorsТ income received from transactions with Ukrainian securities were simplified.

Non-residents are allowed to transfer funds received from securities registered with a foreign depositary bank, directly from the correspondent account of such an institution to their own account in Ukraine.

The ban on conducting payments in cash foreign currency of consular fees for the legalization of shipping documents in diplomatic missions or consular offices of countries that are not a party to the Hague Convention of 5 October 1961, is canceled.

 

Mandatory sale of currency earnings canceled

On 18 June 2019, the Board of the NBU adopted a Resolution No. 78, which definitively cancels the mandatory sale of currency earnings. A reminder that the requirement for the mandatory sale of 30% of currency earnings on the exchange market was introduced from 1 March 2019. Resolution No. 78 was† †adopted by the regulator within the framework of currency liberalization, which establishes the staged removal of all currency restrictions to improve the macroeconomic conditions in Ukraine. It came into force on 20 June 2019.

 

National Bank canceled limit on repatriation of dividends

The NBU has canceled all restrictions on repatriation of dividends within the framework of implementation of the currency liberalization roadmap. From 10 July the limit on the transfer of dividends abroad or to accounts of non-residents in Ukraine in the amount of EUR 12 million per month per legal entity is no longer applicable to a business with foreign capital.

During the first half of 2019 the business sector transferred dividends abroad totaling USD 1.27 billion, of which USD 1.07 billion Ч at the expense of purchased currency. Such volumes of currency transfer and purchase are, respectively, 20% and 14%, less than those for the same period of 2018.

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