Legislative news digest: LEGAL HOTLINE 03.11.2017

THE PRESIDENT SIGNED THE LAW ON IMPROVEMENT OF ACCOUNTING AND FINANCIAL REPORTING

The Law provides for including a part of the fundamental provisions of the new Directive 2013/34/EU in the Law “On Accounting and Financial Reporting in Ukraine”. Further on, it is planned to gradually ensure implementation of requirements of Directive 2013/34/EU through elaboration, adoption, and implementation of regulatory legal acts, and first of all, by amending the provisions (standards) of accounting.

It is expected that the Law will come into force as of January 1, 2018 (except for provisions related to publication of financial statements, which will come into force on January 1, 2019).

ENTERPRISES CAN CHECK THEIR INCLUSION IN THE COMPREHENSIVE PLAN OF INSPECTIONS FOR 2018 ONLINE

Together with the Ministry of Economic Development and Trade of Ukraine and with the assistance of the Better Regulation Delivery Office (BRDO), the State Regulatory Service of Ukraine has launched a pilot module for planning state supervision (control) measures – IAS SSC: http://ias.brdo.com.ua.

The pilot module was used to automatically draw up the Plan for Implementing Comprehensive Measures of State Supervision (Control) for 2018 based on the proposals made by the state supervisory/controlling bodies themselves.

On the website of the pilot module for planning state supervision (control) measures – IAS SSC (http://ias.brdo.com.ua), one can check (free of charge and without registration) whether a specific economic entity is included in the draft Plan for Implementing Comprehensive Measures of State Supervision (Control) for 2018.
The search is possible by the name of the economic entity or by its USREOU code.

INSTRUCTION ON THE PROCEDURE FOR REGULATING BANK ACTIVITIES WAS AMENDED

Conditions for banks to make investments in connection with financial restructuring of arrears of bank debtors were amended.

In particular, to make such investments, banks now have to comply with the following requirements:

• The term of banking activities is not to be less than three years;
• The amount of the bank’s regulatory capital is to meet the requirements of Chapter 2 of Section II of the Instruction on the Procedure for Regulating Bank Activities in Ukraine (currently, it is UAH 200 million), or the bank is to implement capitalisation program, and the investment will not result in either this bank’s violation of the requirements of Chapter 2 of Section II of this Instruction, or failure to implement the capitalisation program within the terms specified therein;
• The bank is not to be object for enforcement actions (in terms of limiting, suspending, or terminating certain types of transactions).
• The mentioned amendments were introduced by the Resolution of the NBU’s Board “On Amendments to the Instruction on the Procedure for Regulating Bank Activities in Ukraine” No. 104 of October 20, 2017, which takes effect on the day following the day of its official publication.

The amendments will encourage banks to conduct such restructuring and contribute to reducing the amount of non-performing loans (NPL) in the banking system and restoring debtors’ economic activities.

AMENDMENTS TO CRITERIA FOR BLOCKING TAX INVOICE/SETTLEMENT ADJUSTMENT

On October 23, 2017, the Ministry of Finance of Ukraine published the draft Order of the Ministry of Finance “On Approval of Amendments to the Criteria for Assessing the Level of Risk Sufficient to Stop Registration of a Tax Invoice/Settlement Adjustment in the Unified Register of Tax Invoices”.

The Order proposes to introduce two new criteria:

• Availability of a judgment of conviction issued by the court with regard to an official (officials) of economic entity under Articles 205 and 212 of the Criminal Code of Ukraine;
• Settlement adjustment drawn up by the supplier of goods/services for the tax invoice drawn up for the recipient VAT payer, if one expects more than 2X change in the cost of goods/services and/or change of the nomenclature of goods/services (for the codes of goods under the UKT ZED – changing the first four digits of the code, and for the codes of services under the State Classifier of Products and Services – changing the first two digits of the code).

Also, the Order introduces the norm on non-consideration of information provided by the Commission about conducting monitoring.

If one received information about the payer providing false information in accordance with the Table or other tax information indicating the risk of transaction, the SFS Commission has the right to make a decision about non-consideration of information.

However, if such information was automatically taken into account by the monitoring system, then the SFS Commission can make a decision about non-consideration of information, and such information will not be automatically taken into account.

NEW REQUIREMENTS FOR LABOUR PROTECTION OF BUILDERS

By its Order No. 1050 of June 23, 2017 (registered in the Ministry of Justice of Ukraine on September 8, 2017), the Ministry of Social Policy of Ukraine approved the Minimum Requirements for Labour Protection at Temporary or Mobile Construction Sites.

The minimum requirements apply to customers, construction managers, general contractors, contractors, subcontractors, and individuals providing themselves with their own work. However, they do not apply to mining companies.

Also, the Order defines the list of construction works, which constitute an increased risk for lives and health of workers.

The Order came into force on the day of its official publication (i.e., on October 20, 2017).

DRAFT LAW ON THE LIABILITY OF LAW ENFORCEMENT OFFICERS FOR USING UNLAWFUL AND EXCESSIVE FORCE AGAINST ENTREPRENEURS

The draft Law on the liability of law enforcement officers for exerting excessive pressure on entrepreneurs, which was proposed by the Government, should:

• Determine the limits of the proportionality of actions of officials of law enforcement agencies during searches;
• Establish the liability of officials of law enforcement agencies for unlawful activities during investigative procedure and other procedural measures;
• Introduce mandatory video recording of investigative procedure;
• Define clear time limits for pre-trial investigation and other procedural time frames in criminal proceedings, etc.

The next stage will be the consideration and adoption of the draft Law on the Financial Investigation Service, making further decisions about deregulation and transparent privatisation, which will allow for attracting investments and ensure job creation.