News (#12 December 2019)


Parliament upheld draft law on financial monitoring in first reading

The Ukrainian Parliament approved Draft Law No. 2179 On Preventing and Countering Legalization (Laundering) of Proceeds of Crime, Financing of Terrorism, and Financing of Proliferation of Weapons of Mass Destruction in its first reading.

It is noted that the Draft Law establishes minimization of time spent on business — the number of transactions mandatory for reporting by the entities of primary financial monitoring (banks, insurers, credit unions, pawnshops, exchanges) is reduced from 17 to 4, and reporting will be performed on a case basis.

Moreover, this means a simplification of reporting, as the number of financial transactions subject to mandatory financial monitoring is increased from UAH 150 thousand to UAH 400 thousand, and the reporting deadlines are extended from 3 to 5 business days.

The digitalization of processes is also stipulated — simplification of access to financial services through digital identification, which will enable remote verification of the transactions holder.

New rules on imposition of fines on banks are also being introduced.

Moreover, the draft law envisages improving the performance of the entities of primary financial monitoring and protection of citizens of Ukraine.

It is noted that adoption of this draft law will also allow Ukraine to fulfill one of the key conditions for granting the second tranche of macro-financial assistance from the EU in 2019 to the tune of EUR 500 million.


Step taken towards abolishing state monopoly on alcohol production

The Ukrainian Parliament has adopted Presidential Draft Law No. 2300 On the Abolition of the State Monopoly on Alcohol Production from 1 January 2020 in its first reading.

The Draft establishes the possibility for economic entities of any type of incorporation producing alcohol, subject to obtaining the relevant license, as well as full liberalization of alcohol exports from Ukraine.

At the same time, the Draft stipulates that by 1 January  2022 the import of alcohol can be carried out only by state-owned enterprises authorized by the Cabinet of Ministers to protect domestic commodity producers.


Land market set to start operating in 2020

The Ukrainian Parliament has voted in favor of Draft Law No. 2178-10 On the Land Market in the first reading, which was actually supported only by the Servant of the People faction in Parliament.

The head of the parliamentary committee on agrarian policy, Mykola Solsky, claimed that the Draft  will be substantially amended for the second reading. According to him, the current draft law includes controversial standards. In particular, the basic standard is that foreigners will not be able to participate in the purchase of agricultural land. This is subject to approval in a national referendum. These amendments are set to be introduced and are currently supported by a significant part of the committee.


Draft law on cryptocurrency legalization submitted

The Draft Law On Amendments to the Tax Code and other Laws of Ukraine on Taxation of Transactions with Crypto Assets has been registered with Parliament.

The Draft was developed by the blockchain community Blockchain4Ukraine, an interfactional parliamentary association,  BRDO Office of Effective Regulation and the Ministry of Digital Transformation team.

The document defines terms like “virtual asset”, “cryptoasset”, “cryptocurrency transaction”, “blockchain”, “token” and “token asset”.

The Draft also includes clauses on taxation:

— 5% — rate on personal income tax for investment income from the sale of cryptoassets for a period of 5 years;

— investment income from cryptocurrency transactions is calculated as a positive difference between the taxpayer’s income from the sale of a cryptoasset and the latter’s value as determined by the amount of documented expenses for acquisition of such cryptoasset and/or creation of such a cryptoasset;

— transactions on the sale of cryptoassets are not subject to value added tax.


Plastic bags to be banned from 2022

Parliament upheld Draft Law No. 2051-1 in the first reading, which proposes to ban plastic bags starting from 2022. The Draft envisages a ban on the sale of plastic bags up to 50 microns thick in retail and restaurant facilities from 1 January 2022. Moreover, the restrictions will not apply to biodegradable bags, ultralight bags up to 225 mm wide (without side folds), up to 345 mm deep (including side folds), up to 450 mm long (including handles).

Also, restrictions do not apply to bags used for packaging and (or) transportation of fresh fish and meat, as well as bulk products, ice, which are distributed in retail facilities, if they are primary packaging of such items.

It is also proposed to introduce a ban on the sale of oxodegradable plastic bags, mandatory labeling of biodegradable bags according to DSTU from 1 January 2022.

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