Legislative news digest: LEGAL HOTLINE 03.10.2019

Law on Stimulation of Investment Activity in Ukraine Adopted

The Law on Amendments to Certain Legislative Acts of Ukraine Regarding Stimulation of Investment Activity in Ukraine was adopted on 20 September 2019, and forwarded to the President of Ukraine for signing on 27 September 2019.
The said Law envisages the following, in particular:

• introduction of a standard to reimburse losses caused to a joint-stock company due to commitment of a related party transaction on terms worse than usual market conditions, jointly by a person interested in commitment of such transaction by the said company, as well as by members of the company’s supervisory council who voted for granting consent to such transaction;
• cancellation of joint participation in the development of infrastructure of a settlement;
• introduction of a new instrument to secure obligations – right of trust ownership. The said security instrument stipulates delivery of title to assets owned by a trustor (debtor and/or other person) to a creditor (trustee) to secure obligations. The trustor reserves the right to use such assets, while the trustee is prohibited to dispose of the said assets until the debtor fails duly to fulfil his/her obligations. Should the debtor fail duly to perform his/her obligations, the trustee shall be entitled to foreclose the trust property by selling such object (to a third party), unless otherwise prescribed by the respective agreement. In case of termination of the trust agreement, the trustee shall deliver the title in the said trust property to the trustor.

Draft Law on Cancellation of Prohibition of Sale of Agricultural Land registered

On 25 September 2019, the Verkhovna Rada of Ukraine registered Draft Law No. 2178 on circulation of agricultural lands.
The said Draft Law, in particular, offers the following:

• to allow acquisition title to agricultural land: to citizens of Ukraine; legal entities established under the legislation of Ukraine; territorial communities; the State;
• a restriction has been established that the total area of agricultural land plots owned by a citizen, a legal entity, including related parties or legal entities established under the legislation of Ukraine that have a joint ultimate beneficial owner (controller): shall not exceed 15 percent of agricultural land within one Oblast or the Autonomous Republic of Crimea; shall not exceed 0.5 percent of agricultural lands of Ukraine.

Also, note that on 27 September 2019, alternative Draft Law No. 2178-1 was registered at the Verkhovna Rada of Ukraine on the introduction of circulation of agricultural lands based on the results of an all-Ukrainian referendum. However, the text of the draft law has not been published yet.

Decree on Separation of Service and Law Enforcement Functions of the State Tax Service adopted

On September 25, 2019, Decree No. 846 of the Cabinet of Ministers of Ukraine was adopted on separation of service and law enforcement functions of the State Tax Service.

The said decree stipulates withdrawal of functions of the State Tax Service to implement the state policy on countering offences in the application of tax legislation, laws on payment of the uniform social security tax and other matters.
The said law enforcement functions will be continued to be performed by the State Fiscal Service, which is liquidated due to reorganization, until all measures to establish a new financial crime investigation agency are completed.