Legislative news digest: LEGAL HOTLINE 12.12.2019

Deferral of the Law on Misdemeanor Offences

The Law on Misdemeanor Offences was supposed to come into force from the beginning of the next year, but on 03 December 2019, the Verkhovna Rada adopted the Law “On Amendments to Section II “Transitional Provisions” of the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Relating to Simplifying Pre-trial Investigation of Specific Categories of Criminal Offences” dated 22 November 2018 No. 2617-VIII (concerning delay of the effective time). This law deferred the entry into force of the new legislation on misdemeanor offences for another half year – until 01 July 2020.

It should be reminded that misdemeanor offences will include, in particular, driving under the influence of alcohol or drugs, which is now an administrative offence.

Financial Monitoring Law Improvements

The Law “On Prevention and Counteraction to Legalization (Laundering) of the Proceeds from Crime or Terrorism Financing, as well as Financing Proliferation of Weapons of Mass Destruction” was adopted on 06 December 2019.

The law comprehensively improved the national legislation in the field of financial monitoring, in particular, the threshold amount for mandatory reporting on financial transactions was increased to UAH 400 000 (now UAH 150 000), while the number of features of such financial transactions was reduced (from 17 to 4).

In addition, the maximum fine for banks and financial institutions will be 10 million non-taxable minimum incomes (i.e. UAH 170 million) and will be applied for systemic violations. Penalties will be imposed with due regard to the circumstances of the violation and the entity’s financial position.

It is envisaged to reduce the banks’ financial reporting costs by automating the process of providing information and reducing the reporting frequency, as well as by improving the procedures for disclosure of ultimate beneficial owners.

Labour Relations are now Controlled by the Ministry for Development of Economy, Trade and Agriculture of Ukraine

As of today, the Ministry for Development of Economy, Trade and Agriculture becomes the central executive authority in the field of labour, employment, labour migration and labour relations instead of the Ministry of Social Policy. On 05 December 2019, corresponding changes were made to a number of laws, among which are the Labour Code of Ukraine, the Law of Ukraine “On Central Executive Bodies”, “On Mandatory State Social Unemployment Insurance”, “On Employment”, “On External Labour Migration”, “On Remuneration”, “On Collection and Registration of the Single Contribution for Mandatory State Social Insurance”.

In particular, the State Labour Service of Ukraine and the State Employment Service will be controlled by the Ministry for Development of Economy.

The Legal Status of the State Bureau of Investigation has been Changed

On 03 December 2019, the Verkhovna Rada adopted the Law “On Amendments to the Law of Ukraine “On the State Bureau of Investigation” to Improve the Activity of the State Bureau of Investigation”. The SBI will become a state law-enforcement agency and will no longer be the central executive body.

From now on, the SBI Director will be appointed by the President upon the Tender Committee submission, and the Prime Minister’s participation in this appointment is excluded. The SBI Director may be dismissed by the President as well as by the Verkhovna Rada following the review of his report for the calendar year.

The SBI Director shall have the right to make its own decision without sharing the powers with the deputies, as it was before, and to bear full responsibility for the results of the Bureau’s activities. The SBI Director shall have the authority to personally appoint and dismiss his/her deputies without holding a competition.

Due to the adoption of this law, the powers of the SBI Director and his deputies are terminated ahead of schedule.

In addition, a provision was adopted on the investigation of crimes during the Maidan: in order to ensure the continuality of pre-trial investigations, investigators of the prosecutor’s office, prosecutors who conducted investigations or provided procedural guidance in such cases may be transferred, upon their consent, to the SBI without holding a competition.

Abolishment of the State Monopoly on Alcohol Production

The Law “On Amendments to the Law of Ukraine “On the State Regulation of Production and Circulation of Ethyl Alcohol, Cognac and Fruit Alcohols, Alcoholic Beverages and Tobacco Products” Relating to the Liberalization of Activity in the Field of Production and Circulation of Ethyl Alcohol” was adopted on 03 December 2019.

The law provides for the abolition of the state monopoly on the alcohol production and the enabling of economic entities to carry out alcohol production activities possessing a relevant licence. One of the conditions for obtaining a licence will be the establishment of round-the-clock video surveillance systems for production and release of products at the enterprise.

The law stipulates that until 01 January 2024, the importation of ethyl alcohol, rectified grape ethyl alcohol, rectified fruit ethyl alcohol shall be carried out only by state-owned enterprises specifically authorized by the Cabinet of Ministers of Ukraine.

Starting from 01 July 2021, the commissioning and providing permits for the construction of new enterprises for the production of ethyl alcohol, rectified grape ethyl alcohol, rectified fruit ethyl alcohol are allowed.

Until 01 January 2024, production of alcoholic beverages for sale in the territory of Ukraine is carried out using rectified ethyl alcohol, cognac and fruit and grain distillate, rectified grape ethyl alcohol, rectified fruit ethyl alcohol and grape alcohol distillate having the Ukrainian origin under Customs Code of Ukraine.

Residents of the Russian Federation and persons directly or indirectly controlled by its residents or acting in their interests are prohibited from participating in the privatization, leasing of state-owned enterprises – producers of alcohol.

The law will enter into force on 01 July 2020.

Continuation of the Judicial Reform

Last week, a series of draft laws on the judiciary was adopted as a basis.

Thus, the draft Law “On Amendments to Certain Legislative Acts of Ukraine Relating to Expanding the Possibilities of Self-Representation of State Bodies, Authorities of the Autonomous Republic of Crimea, Local Self-Government Bodies, Other Legal Entities, Irrespective of the Order of their Establishment in Court” provides that a legal entity, regardless of the order of its establishment, may be represented in court by a representative on the basis of an employment contract (self-representation).

In turn, the draft Law “On Amendments to the Commercial and Procedural Code of Ukraine, the Civil Procedural Code of Ukraine, the Code of Administrative Proceedings of Ukraine Relating to Improving the Review of Court Judgments on Appeal and Cassation” introduces additional restrictions on cassation appeals in the Supreme Court and creates safeguards for procedural abuses.

In addition, the draft Law “On Amendments to the Final and Transitional Provisions of the Bankruptcy Code of Ukraine” was adopted as a basis, which stipulates that the provisions of the Bankruptcy Code of Ukraine will be applied by commercial courts in the consideration of only those bankruptcy cases opened after the day this Code enters into force.