Business news from Ukraine

CABINET OF MINISTERS APPROVES AGREEMENT BETWEEN PHILIP MORRIS AND UKRAINE

The Cabinet of Ministers of Ukraine has approved a draft amicable agreement between Philip Morris and Ukraine, foreseeing the abolishment of the tax notification for the amount of UAH 635.3 million by the State Fiscal Service of Ukraine.
According to the draft government resolution, this agreement should ensure the investment dispute settlement, prevent bringing a claim to international investment arbitration against Ukraine amounting to more than UAH 635 million, avoid significant expenses from the national budget during the arbitration, demonstrate to the partners of Ukraine and foreign investors that the government adheres to commitments to provide incentives and protect foreign investment.
The amicable agreement will be signed between Philip Morris International Inc., Philip Morris Global Brands Inc. (both the United States), Philip Morris Brands Sarl (Switzerland), PrJSC Philip Morris Ukraine and the state of Ukraine.
Acting Head of the State Fiscal Service Oleksandr Vlasov is authorized to sign the amicable agreement, and the State Fiscal Service is authorized to execute it after signing.
As reported, PrJSC Philip Morris Ukraine in March 2015 appealed and received permission from Kharkiv customs office to apply the processing mode in the customs territory of Ukraine for the production of cigarettes and accompanying products and their re-export for the period from April 1, 2015 through March 31, 2016. The company was authorized to conditional exemption from Ukrainian import duties and other import taxes on materials for processing under the terms of re-export.
After Philip Morris Ukraine carried out processing and re-export operations, the main directorate of the State Fiscal Service in Kharkiv region conducted an unscheduled inspection of the company’s compliance with the customs legislation of Ukraine regarding the clearance of goods in the processing mode in the customs territory of Ukraine.
According to the results of the inspection of the main directorate of the State Fiscal Service in Kharkiv region, on June 14, 2016, it approved decision notices that determined the liabilities for paying of import duties, additional import duty and VAT on the import of materials, as well as penalties for the total amount UAH 635.3 million Philip Morris Ukraine. Philip Morris Ukraine said that the actions of the State Fiscal Service are pressure on the company. After that, the parties entered into litigation.

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UKRAINE’S CABINET OF MINISTERS APPROVES LONGEVITY STRATEGY PLAN

Ukraine’s Cabinet of Ministers has approved a plan of implementation of the public policy strategy on the population’s healthy and active longevity until 2022. “The resolution is passed to implement the state policy strategy on population’s healthy and active longevity until 2022, including provisions of the EU-Ukraine Association Agreement, EU, European Atomic Energy Community and their member states, Madrid International Plan of Action on Ageing (MIPAA) and for the creation of favorable conditions for healthy ageing and active longevity, adaptation of public institutions to further demographic ageing and the development of a society of equal opportunities for people of any age,” Ukraine’s Social Policy Ministry said.
Ukraine is among the 30 oldest countries in the world according to the proportion of people aged 60 and over. This figure was 21.8%, and the percentage of people aged 65 and over was 15.5% of the total number of population in 2015.
Ukraine’s demographic forecast notes people aged over 60 will account for 25% of the total population by the year of 2025, and people aged 65 – 18.4%. Same age strata will account for more than 26% and more than 20%, respectively, by the year 2030.
Implementation of the action plan will help solving problems associated with population ageing. Such measures will facilitate protection of the elderly citizen’s rights with the concentration of efforts in priority areas – improvement of the conditions for older citizens’ self-realization and their participation in the society’s development, promoting their health and well-being; and creating of the environment, which is favorable for active living.

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