Legislative news digest: LEGAL HOTLINE 09.08.2018

Banks to Disclose Information Subject to Banking Secrecy to Foreign Exchange Oversight Authorities

Resolution of the Board of the National Bank of Ukraine No. 82 dated 20 July 2018 amended the Rules of Storing, Protecting, Using and Disclosing Information Subject to Banking Secrecy approved by Resolution of the Board of the National Bank of Ukraine No. 267 dated 14 July 2006.

Specifically, it is prescribed that banks may disclose information subject to banking secrecy for the purpose of foreign exchange oversight, including in case the National Bank implements protection measures in accordance with the Law of Ukraine “On Currency and Currency Transactions.”

Thus, the National Bank of Ukraine and the State Fiscal Service of Ukraine may have access to information subject to banking secrecy.

The above changes will enter into force on 7 February 2019, at the same time as enactment of the Law of Ukraine “On Currency and Currency Transactions.”

Advertisement on Supports Banned

On 26 July 2018, the Law of Ukraine “On Amendments to the Law of Ukraine “On Advertising” Regarding the Use of Amenities and Overhead Contact System in Advertising Activities” entered into force.

Article 8 of the Law of Ukraine “On Advertising” was supplemented with Part 7 banning the placement of advertisement and/or advertising materials on supporting, bearing and other elements of the overhead contact system, on equipment and facilities (including supports) of the external lighting system.

New Procedure for Increasing (Decreasing) Authorized Capital of Joint-Stock Companies Approved

On 4 August 2018, Resolution of the National Securities and Stock Market Commission No. 385 dated 12 June 2018 approving the Procedure for Increasing (Decreasing) Authorized Capital of Joint-Stock Companies entered into force.

The new Procedure applies to any joint-stock companies intending to increase (decrease) the authorized capital of the joint-stock company from the date of entry of this Resolution into force.

Important changes include the following:

• possibility of converting monetary obligations into company shares by placing additionally issued shares of the current par value with predetermined parties (other than banks);
• possibility of conversion of convertible bonds into company shares by placing additionally issued shares of the current par value among holders of convertible bonds (other than banks);
• improved securities issuance procedure and requirements for issuing a prospectus in case of public offer of securities and specification of exceptions that do not require issuing a prospectus;
• introduction of a mechanism for the general meeting of shareholders of a joint stock company to decide on non-exercise of the pre-emptive right of shareholders to purchase additionally issued shares.

At the same time, the issue of validity of Resolution of the National Securities and Stock Market Commission No. 822 dated 14 May 2013 approving the Procedure for Increasing (Decreasing) Authorized Capita remains unsolved.

State Labour Inspectorate Explained Exact Meaning of the Term “Denial of Access to Labour Inspector”

The Main Department of the State Labour Inspectorate in Lviv region published an explanation, according to which the denial of access to a labour inspector refers to:

1. refusal to grant access for the purpose of conducting an inspection visit;
2. failure to provide any information necessary for inspection visit or non-visiting inspection;
3. obstructions in exercise of other rights provided for in Clause 11 of the Procedure for Exercise of the State Supervision over the Observance of Labour Legislation approved by Resolution of the Cabinet of Ministers of Ukraine No. 295 dated 26 April 2017.

It should be noted that in accordance with Clause 11 of the above Procedure, labour inspectors have the following rights, including but not limited to:

1. to be granted access to any production, office, administrative premises of the visited entity where hired labour is used during the inspection visits for the purpose of identification of unregistered labour relations, independently and at any time of the day, taking into account the requirements of the labour legislation;
2. to review any books, registers and documents required by the labour legislation, which contain information/data on issues inspected by the inspection visit, non-visiting inspection in order to verify their compliance with the rules and regulations and to receive their copies or extracts certified by the visited entity;
3. to interview the head and/or the staff of the visited entity on issues related to the labour legislation, either in private or in the presence of witnesses, and receive oral and/or written explanations on the above issues;
4. to be provided a workplace that allows conducting confidential interview with employees regarding the purpose of the inspection visit;
5. to record the inspection visits for the purpose of identification of unregistered labour relations by means of audio, photo and video equipment.

According to Article 265 of the Labour Code Ukraine, in case of denial of access to a labour inspector to conduct an inspection visit for the purpose of identification of unregistered labour relation, the employer shall be liable to a fine of one hundred times the minimum wage established by the law at the time of detection of violations.