Law digest

Law expanding AMCU powers in force now

On 4 March  Law No. 1219-IX On the Powers of the Antimonopoly Committee of Ukraine as an Appellate Body in the Field of Public Procurement came into force.

The AMCU received additional powers:

To create commissions to consider complaints about violations of the legislation in the field of public procurement. The commission consists of three people — authorized persons to be appointed and dismissed by the AMCU Chairman on the basis of competition results. There are 10 such authorized persons in total. Their work is paid at the level of AMCU state-authorized persons. These authorized persons are not civil servants.

— To determine the number of such commissions.

— To approve and publish a standardized complaint handling practice.

— To approve and promulgate the commission’s operating procedure.

— To approve and promulgate commission guidelines.

— Dismissal of the AMCU Chairman

The AMCU Chairman may be dismissed from office if he/she:

— committed a crime;

— cannot perform his/her duties for health reasons.

He/she has the right to declare such dismissal to the Verkhovna Rada.

Termination of the powers of the AMCU Chairman does not entail resignation by:

— state authorized persons of the committee;

— authorized persons dealing with complaints of violations of legislation in the field of public procurement.

The powers of the permanent administrative panel (panels) to consider complaints about violation of legislation in the field of public procurement are vested in the commission (commissions) dealing with complaints about violation of legislation in the field of public procurement from the date of its (their) creation.

Until the appointment of authorized persons to consider complaints about violations of legislation in the field of public procurement and also, where appropriate, their powers are performed by AMCU state-authorized persons.

 

Projects with significant investment: who can count on government support

On 13 February Law No. 1116-IX  On State Support of Investment Projects with Significant Investments in Ukraine came into force.

The law defines the organizational, legal, and financial grounds of state support provided for investment projects to create favorable conditions for attracting significant investments (both internal and external) to Ukraine.

State support will be provided in the following forms:

— exemption from payment of certain taxes and fees;

— exemption from payment of import duty on new equipment (machinery) and component parts thereto required for the project;

— securing the preemptive right to land use of a land plot in state or communal ownership, granting a land plot for use (lease) involving the investor’s preemptive right to acquire such land plot into ownership;

— provision, at the expense of state, local budgets, and other sources not prohibited by law, of funds for the construction of adjoining infrastructure facilities (roads, communication lines, heat, gas, water and electricity supplies, engineering communications, etc.) necessary for the implementation of an investment project with significant investments.

Moreover, the state will assist the investor in ensuring connection to heat, gas, water, and power supply networks, engineering communications owned by monopolists.

Support will be provided to the account of investor taxes.

The total amount of state support consists of the funds the investor has to pay as taxes and fees. However, under the terms thereof, there will be no special investment agreement.

If a land plot is provided for use (lease) involving payment for land that comes to less than the amount established by the local government for the relevant category of lands, the relevant difference is taken into account when determining the total amount of support.

The total amount of support should not exceed 30% of the planned volume of significant investments for an investment project with significant investments.

An investment project with significant investments should comply with all the following requirements:

1) an investment project with significant investment is implemented on the territory of Ukraine in the following areas:

— processing industry (except for the production and turnover of tobacco products, ethyl, cognac and fruit alcohol, alcoholic beverages);

— extraction for the purpose of further processing and/or enrichment of minerals (except for hard coal and lignite coal, crude oil and natural gas);

— waste management;

— transport;

— warehousing;

— postal and courier activities;

— logistics;

— education, scientific activities, scientific and technological activities, art, culture, sports, tourism, resort and recreation activities;

— in the field of health care.

2) an investment project with significant investments provides for the construction, modernization, technical and/or technological re-equipment of investment objects, acquisition of the necessary equipment, and may also provide for the construction of the necessary adjoining infrastructure facilities at the expense of the investor;

3) creation of at least 80 new jobs where the average salary of employees is at least 15% higher than the average salary for the corresponding type of activity in the region where the project is being implemented for the previous calendar year;

4) the size of significant investments in investment objects exceeds an amount equivalent to EUR 20 million;

5) the implementation term for an investment project with significant investments does not exceed five years.

The support does not apply to investment projects that meet the characteristics of a public-private partnership and to investment projects implemented in accordance with product distribution agreements. Neither is it provided for business entities to fulfill their investment obligations related to the privatization of state and municipal property.

Support for the preparation and implementation of investment projects with significant investments, as well as assistance in the implementation of special investment agreements by the state and local authorities (in the case of state support by such bodies) is carried out by an authorized institution.

Its functions are as follows:

— attracting potential applicants for the implementation of investment projects with significant investments;

— provision of organizational, informational, and advisory assistance, in particular on the part of the preparation and filing of applications, other documents free of charge;

— interaction with state authorities, local self-government bodies on issues related to issues of support in the preparation and implementation of investment projects with significant investments;

— preparation and filing of periodic (quarterly and annual) and operational reports (upon the request of the authorized body) on the project support status to the authorized body;

— development of proposals, recommendations, action plans aimed at improving the process of preparation and implementation of investment projects with significant investments.

An applicant intending to implement an investment project with significant investments and to receive state support prepares and files the following to the authorized body:

— application;

— documents confirming the applicant’s compliance with the requirements of the Law;

— a feasibility report of an investment project with significant investments (with the obligatory explanation of the social effect following its implementation);

— draft of a special investment agreement.

According to the Law, Ukraine guarantees the stability of conditions for carrying out economic activities when implementing investment projects with significant investments and provision of support.

 

New import duty rates on light industry products will apply from 1 July

Law of Ukraine No. 1261-IX On Amending Section XI of the Customs Tariff of Ukraine for Unification of Import Duty Rates on Light Industry Products has been made public and will come into effect on 1 July 2021.

The document sets new import duty rates on light industry products to accelerate the customs clearance of such goods and promote development of the light industry.

The Ukrainian Parliament adopted the document at its session held on 19 February.

The law sets out the new wording for groups 50-59 in the Customs Tariff of Ukraine, establishing:

— preferential rates of import duty in the amount of 0% on raw materials not produced in Ukraine (yarn, cotton, threads, group 50-53 of the Ukrainian Customs Commodity Classification Codes for Foreign Trade);

— preferential rates of import duty in the amount of 1% to 8% on finished products — fabrics, felt, woven nets, twine, and cords.

At the same time, the full amount of import duty rates was increased up to 10% for light industry products under sub-categories of the Ukrainian Customs Commodity Classification Codes for Foreign Trade, where such rates are less than 10%.

 

Cabinet of Ministers approves measures to resolve non-compliance with court decisions where state authority is debtor

The Cabinet of Ministers of Ukraine has approved the developed Regulation On Approval of the Action Plan for the Implementation of the National Strategy for Solving the Problem of Non-Compliance With Court Decisions Where the Debtors are a State Body or State Enterprise, Institution, Organization for the Period till 2022.

The strategy is aimed at:

— solving the issue of non-compliance with court decisions, where the debtors are a state body or a state enterprise, institution, organization for the period till 2022;

— bringing the legislation of Ukraine and the practice of its application into line with the standards of the Council of Europe in the field of enforcement of court decisions.

The action plan for the implementation of the National Strategy contains specific measures to address the issue related to identified executors (state bodies) and deadlines for implementation thereof. A reminder that the National Strategy was approved by the Cabinet of Ministers of Ukraine Regulation of 30 September 2020.

Implementation of this action plan will enable Ukraine to reduce the number of cases of non-compliance with court decisions, repay public debt related to non-fulfilled court decisions, stop appealing to the ECHR with such complaints and increase public confidence in state institutions.