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16.06.2015 Olesya Mykhailenko Studied Mediation Aspects in the Area of the Intellectual Property Law

Olesya Mykhailenko, Associate at Gvozdiy and Oberkovych Law Firm participated in a Round Table Conference named Mediation in the area of the intellectual property law (hereinafter – the IP), which was held on June 11, 2015 by the State Intellectual Property Service of Ukraine together with National Association of Mediators of Ukraine.

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Legal updates as of August 12, 2016

12.08.2016

NBU UPDATED LIST OF RISKY BANKING OPERATIONS

NBU has approved Resolution No. 365 dated 2 August 2016 that amended the List of attributes of risky banking activities approved by Resolution No. 346 of the NBU’s Board dated 17 August 2012.

As of now, the List of attributes of risky banking activities (i.e. activities adversely affecting the interests of depositors or other creditors of banks) to be used for the purposes of financial monitoring was added with the following activities:

- performance by the bank’s customers of financial transactions which economic feasibility is not expressly supported by relevant documents, and/or where the bank is not in the possession of the information as regards the customer’s actual ability to carry financial transactions in question. Another attribute is the inconsistency of a customer’s financial transactions with the bank’s intelligence as regards such customer’s financial or social status;

- the bank’s involvement into financial transactions, the nature or implications of which give grounds to believe that such transactions may be related cashing out of funds or to fictitious business activity;

- use of bank accounts not in accordance with their purposes;

- performance by the bank or its customers of financial transactions supported by stolen/invalid documents;

- recurring transfers of advance payments abroad under foreign economic contracts by the customers if the bank was or could have been aware (in particular, relying on public sources or information obtained from other financial institutions) that receiving counterparties repeatedly violated the terms and conditions of, or defaulted on, such foreign economic contracts.

Based on the above amendments, the National Bank intends to raise the effectiveness of the measures designed to prevent use of banks services for illegal purposes.

 CUSTOMERS LICENSED TO BUY CURRENCY FOR AMOUNT UP TO UAH 150 THOUSAND WITHOUT PASSPORTS

On 2 August 2016, the NBU adopted Resolution No. 364 of the NBU’s Board “On Amendments to Instruction on the Procedure for Organization and Performance of Foreign Exchange Transactions in Ukraine” that simplified the procedure for currency purchase and sale by individuals.

The new rules will be in effect from 10 August 2016, after enforcement of Resolution No. 364.

Up to now, any individual willing to purchase, sale or exchange foreign currency for any amount had to present its personal ID and residence certificate.

 NATIONAL COMMISSION FOR SECURITIES AND STOCK MARKET OPENS ACCESS TO PUBLIC DATABASE CONTAINING OPEN INFORMATION ON SECURITIES MARKET

The Commission has developed and is about to launch trial operation of the open applied programming interface granting access to the securities market database (http://stockmarket.gov.ua).

The open interface will provide a friendly regime of automated copying of data and monitoring such data updates. Any individual will be able to freely copy, publish, and disseminate the data obtained via the open interface, including for commercial purposes, in combination with other data, and to add such data to own products (reference to the source of such data will be mandatory).

Today, the open interface grants access to the details of securities issuers, legal deeds made via stock exchanges or OTC market, and information on administrators of collateralized property (available in the database from 2013), as well as to the information published by rating agencies starting from 2015.

The content of the data accessible via the open interface is in fully consistent to that of the original data submitted by the disclosing entities for storage in the Public Database Containing Open Information on Securities Market. On the other hand, the structure, parameters and presentation format may be modified during the trial operation period.

 LAW ON TEMPORARY REDUCTION ON EXCISE DUTY ON SECOND HAND CARS IN EFFECT

Law No. 1389-VIII “On Amendments to Section 5, Article XX “Transition Provisions” of the Tax Code on the incentives to the development of the second hand vehicles market” took effect on 1 August 2016.

The reduced excise duty rates will apply up to 31 December 2018.

The reduced rates shall not apply to the cars:

- having origin in the country recognized as occupant state according to the laws of Ukraine and/or recognized as aggressor toward Ukraine, or those imported from the territory of such occupant state (aggressor) and/or from the occupied territories of Ukraine defined as such by the laws of Ukraine;

- made before 1 January 2010;

- imported to the customs territory of Ukraine by persons for personal use or in favor of other persons under agreements on purchase and sale, exchange, delivery, deeds of gift, commission, assignment, suretyship agreements, other business or civil contracts, or according to the court award, in the quantity exceeding one car during one calendar year.

If a car imported under the reduced excise duty rate regime, stipulated by the Law, is alienated within 365 days following the day of its registration, the taxpayer shall pay for such vehicle the duty applying the rates stipulated by Article 215 of the Tax Code.

ELECTRONIC DOCUMENT FLOW BETWEEN BANKS AND THEIR CUSTOMERS DURING FOREX TRANSACTIONS IMPLEMENTED

The NBU gives to the banks and their customers the opportunity to make use of contemporary communications technologies and e-documents, including soft copies of documents, during purchase and transfers of foreign currency.

Authorized banks will be able to purchase, exchange and transfer foreign currency for the benefit of their customers both based on original documents and their copies. The customers will be able to submit to the banks either electronic or paper originals or their copies subject to their own discretion.

The soft copies of the original documents will be created by the customers via scanning of the paper originals, certified by electronic digital signature and submitted to the bank via Client-Bank, Client-Internet-Bank or other respective solutions.

The requirement to present only original documents was preserved only in respect of the documents supporting the sources of origin of UAH submitted by non-resident individuals.

Furthermore, the banks are released from the duty to make marks on the original documents underlying the transactions on purchase or transfer of foreign currency and on the copies of such originals. Instead, the banks will independently oversee the volumes of the purchased currency and approve their own procedures for such oversight.

Respective amendments were approved by Resolution of the NBU’s Management Board No. 366 “On Amendments to Certain Regulations of the National Bank of Ukraine” dated 4 August 2016.

 UKRAINE’S SUPREME COURT EXPLAINED SPECIFICS OF NULLIFICATION OF LEGAL DEEDS EXECUTED BY LEGAL ENTITY’S GOVERNANCE BODY EXCEEDING ITS POWERS

Nullification by court of resolution on the scope of powers of a company’s director taken by such company’s general meeting per se cannot be used as sole ground for nullification of any agreement made by the director.

This conclusion was made by the Court in its Resolution on Case No. 6-62цс16 dated 27 April 2016.

Taking into account provisions contained in Articles 92, 203, 215 of the Civil Code of Ukraine, an agreement made on behalf of a legal entity by its executive body (director) with a third person may be nullified based on violation by such governance body of the restrictions of powers as regards representation of the legal entity to the extent that respective restrictions were current as of the moment of execution of the disputed agreement.

In case of nullification by court of resolution of the general meeting of a company specifying scope of powers of its governance body, such resolution shall be null and void from the moment of its approval.

At the same time, part three of article 92 of the Civil Code of Ukraine provides an exception from the general rule of determination of legal implications of execution of a legal deed by a representative exceeding his/her powers. Restrictions of powers to represent a legal entity, including the powers of a company’s executive body, generally do not have any legal effect for a third person that made an agreement with such legal entity notwithstanding existence of respective restrictions as of the moment of execution of the agreement.

Given the above, recognition by court of resolution taken by a company’s general meeting as null and void per se cannot be used as a sole ground for nullification of an agreement. Such agreement may be nullified referring to the above reasons if it is established that such third person, i.e. the counterparty of the legal entity under such agreement, acted not in good faith and unreasonably.

 THE CABINET OF MINISTERS OF UKRAINE PUBLISHED DRAFT RESOLUTION ON TEMPORARY CANCELLATION OF OVERSIGHT OVER PRICES FOR GOODS AND SERVICES IN THE AREAS OF PRODUCTION AND SALE OF FOOD PRODUCTS

These amendments were initiated by the Ministry of Economic Development that offers to temporarily cancel excessive administrative regulation of food products pricing to assess the impact of the cancelation on pricing.

Tentatively, the administrative regulation of food products pricing will be cancelled for 3 months starting on 15 August 2016. The Ministry will use this period to monitor the movements in the retail prices of goods subject to regulation. Based on the bottom line of the initiative, the Ministry will analyze the effectiveness of such measures and take resolution on permanent cancellation or renewal of the prices regulation procedures.

The draft resolution was submitted for adjustment and approval to the central government agencies.

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