Legal Hotline | Digest of the main legislative changes in Ukraine 21.01.2021

Financial Institutions are Given More Time for Adjusting the Financial Monitoring Process

The National Bank has postponed the adjustment and automation of the financial monitoring process for banks and non-banking institutions by six months. From now on, the deadline is no later than June 30, 2021.

As suggested earlier, banks and non-banking institutions were to align their processes with the financial monitoring requirements by December 31, 2020. However, due to the introduction of quarantine measures and the entities’ need for extra time for developing the software, the National Bank changed the time frame to adjust the specified processes.

Thus, the banks and payment systems, which carry out online funds transfer, must adjust the system for automating the financial monitoring processes. For the rest of non-banking financial institutions, the availability of the automation system is merely recommendatory.

Identification by E-passport in “Diia” Application and Currency Liberalization

By Resolution of the Management Board No. 3 of January 15, 2021, the National Bank allowed to use e-passports in “Diia” (literally translated as “Action”) mobile application for international money transfers both outside Ukraine and from abroad. Banks and non-banking financial institutions will be able to conduct such transactions based on e-passports provided that they have the required technological facilities.

Furthermore, by the specified resolution, the National Bank took steps on currency liberalization, namely:

• legal entities have been allowed to conduct foreign currency sale transactions on “forward” terms (currency transaction, which fixes the client’s liability to purchase/sell foreign currency at a certain time and on certain conditions in the future at the fixed rate);
• individuals have been allowed to conduct transactions on purchasing and selling foreign currency for UAH on “forward” terms, as well as transactions on purchasing and selling foreign currency and bullions based on margin trading conditions;
• individuals have been allowed to make settlements in foreign currency when purchasing securities nominated in a currency;
• resident individuals have been allowed to conduct transactions on “swap” conditions, which is purchasing foreign currency based on exchange for the national currency with a subsequent repurchase.

Procedure for Granting an Immigration Permit to Foreign Investors was Simplified

On January 13, 2021, the Government approved the decision under which the procedure for granting an immigration permit to foreign investors was simplified.

In particular, a relevant petition may be filed with the State Migration Service of Ukraine based on documents confirming the transfer of investor’s own funds in foreign currency to a current account of an enterprise established by it in Ukraine.

Earlier, foreign investors, which wished to immigrate to Ukraine, were to transfer the funds to an investment account with a Ukrainian bank and then from such a bank account to the account of their own enterprise.

At the same time, then in force provision shall not be canceled, and foreign investors can use any of the available options.

The Law on Obligatory Service Provision in Ukrainian

Article 30 of the Law of Ukraine “On Ensuring the Functioning of Ukrainian Language as the State Language” came into force on January 30, 2021. From now on, all the service providers, irrespective of the form of ownership, must provide services to consumers and provide information about goods and services in the state language.

The obligation to provide service and information in Ukrainian shall apply to enterprises, institutions and organizations of all forms of ownership, individual entrepreneurs, other business entities, which provide services to consumers and provide information about goods (services), including via the online stores and online catalogs. Such a requirement shall apply not only to the trade industry. It also concerns the educational services, healthcare, provision of social services, etc.

Information of the price tags, instructions, labeling, tickets, menu, technical specifications of goods must be provided in Ukrainian. At the same time, all this information may be duplicated in other languages, but in all cases along with the Ukrainian version.

In case of infringement of the rights to receive information and services in Ukrainian, the Commissioner for the Protection of the State Language (hereinafter referred to as the “Commissioner”) or their representative shall draw up a report on the results of controlling the use of the state language and shall issue a warning to a violator and a requirement to eliminate the violation. For a violation repeated within one year, the Commissioner shall impose a penalty of 300 to 400 tax-exempt minimum incomes of citizens (UAH 5,00 — 6,800) on business entities.

The Cabinet of Ministers Updated the Procedure for Normative Monetary Evaluation of Agricultural Land

By Resolution No. 6 of January 5, 2021, the Cabinet of Ministers provided an opportunity to the owners of agricultural lands to update the technical documentation on land plot evaluation. Last time the full normative monetary evaluation was conducted throughout Ukraine in 2018. The specified changes are primarily due to the need for bringing the valuation of lands in conformity with their actual condition and soil properties, which change over time.

The Procedure for Nationwide (All-Ukrainian) Standard Monetary Evaluation of Agricultural Lands and Procedure for Maintaining the State Land Cadastre shall be amended by specified Government Resolution.