A new Law on Financial Leasing published
Law of Ukraine No. 1201 “On Financial Leasing” (hereinafter referred to as “Law No. 1201” or “the Law”) was published on March 13, 2021.
The Law will come into force three months after it is officially published, i.e. on June 13, 2021, and will apply to legal relations to arise after it comes into force. Legal relations arising under financial lease agreements, which had been entered into before Law No. 1201 came into force, will be regulated pursuant to the legislation previously in force.
In this regard, the current Law of Ukraine “On Financial Leasing” will become ineffective on June 13, 2021.
According to the explanatory note, the newly adopted Law No. 1201 aims at creating the necessary preconditions for extending the options of using financial lease transactions by business entities for updating the fixed assets, ensuring protection of consumers’ rights, extending the tax base to increase budget revenues.
It is determined by Law No. 1201 that financial leasing is a type of legal relations under which the lessor undertakes, under a financial lease agreement, for a term and in return for a payment determined by such an agreement, to provide one of the following financial lease objects into lessee’s ownership and use:
- property owned by the lessor, which was acquired by the lessor without a prior arrangement with the lessee;
- or property, which was specifically purchased by the lessor from a seller (supplier) pursuant to the specifications and conditions established by the lessee providing, which falls under at least one of the financial lease criteria set by the Law.
Therefore, Law No. 1201 aims at extending the use of lease as an alternative mechanism of long-term financing of the purchase of fixed assets and the respective increase of the competitiveness of Ukrainian enterprises.
A Law on transition to e-employment record books published
Law of Ukraine No. 1217 “On Amendments to Certain Legislative Acts of Ukraine Concerning the Accounting of Employment in Electronic Form” (hereinafter referred to as “Law No. 1217“) was published on March 10, 2021.
According to the explanatory note, Law No. 1217 was developed in order to introduce the accounting of employment in electronic form, as well as to carry out legislative regulation of automatic assignment of old age pension through the electronic account of a person on the official electronic services web portal of the Pension Fund of Ukraine.
Law No. 1217 provides for, inter alia:
- five-year transition period for inclusion of data from paper-based employment record book of an employee into the State Register of Mandatory State Social Insurance (hereinafter referred to as the “State Register“);
- inclusion of employment information into the State Register through the electronic services web portal of the Pension Fund of Ukraine can be carried out both by an employee and employer with mandatory affixing of a qualified electronic signature;
- obligation for an employer, after including the employment information into the State Register, to provide an original paper-based employment record book to an employee against signature and make records in the paper-based employment record book on hiring, transfer and dismissal upon employee’s request;
- introduction of the option to automatically assign pension (without personal application of a person) with the person reserving the right to postpone retirement. If a person postponed retirement and continued employment, the amount of his/her pension will increase by 0.5-0.75% for each full month of pension insurance record starting from the month following the month of achieving the pension age.
Law No. 1217 will come into force three months after it is published. Therefore, the provisions specified above will become effective on June 10, 2021.
Amendments on easing of loans for farmers adopted
By its Resolution No. 189 of March 10, 2021, the Cabinet of Ministers of Ukraine amended the Procedure for Using Funds Allocated in the State Budget for Financial Support of Measures in the Agri-Industrial Complex by Easing of Loans (hereinafter referred to as the “Resolution“).
In particular, the Resolution:
- has excluded the provisions under which compensation of the interest rate under bank loans raised in the national currency was provided to business entities engaged in agri-industrial complex on a competitive basis;
- the list of criteria for providing the compensation has been cut;
- the deadline for the entities to submit applications to authorized banks for obtaining compensation under concluded loan agreements has been determined — by November 1 each year.
It has also been clarified that the amount of compensation provided to the borrowers and their affiliates throughout a budget year under short-term, mid-term and long-term loans shall not exceed:
- for borrowers carrying out activity on livestock breeding, who have used the loan funds for covering expenses related to carrying out the activity on livestock breeding — UAH 15 million;
- for other borrowers — UAH 5 million.
A draft law on electronic document management in criminal litigation registered
Draft Law No. 5246 “On Amending the Criminal Procedure Code of Ukraine on Introducing the Pre-Trial Investigation Information and Communication System” (hereinafter referred to as “Draft Law No. 5246“) was registered on March 15, 2021.
It is proposed by Draft Law No. 5246:
- to introduce the pre-trial investigation information and communication system (“the System”), which will ensure creation, collection, storage, search, processing and transfer of materials and information in criminal proceedings;
- to recognize documents signed and agreed in the System using the qualified electronic signature and their electronic and hard copies as original documents;
- to set the option of integrating the System with other information, information and telecommunication systems in cases provided by law.
According to the explanatory note, Law No. 5246 aims at enhancing the efficiency of criminal proceedings, organizing the relevant procedures, accelerating and improving the interaction between the prosecutor, investigator, defense counsel (subject to his/her consent) and other participants in criminal proceedings.
It is also specified that the ultimate goal of introducing the System is to minimize and as a result fully abandon the paper-based proceedings both at the stages of pre-trial investigation and court proceedings in the future.