Business news from Ukraine

UKRAINE’S PARLIAMENT APPROVES AT FIRST READING NATIONAL BUDGET 2019

Ukraine’s Verkhovna Rada has approved a resolution on the conclusions and proposals to a bill on the national budget for 2019 drawn up by the parliamentary budget committee, which means the adoption of the draft national budget at first reading. An Interfax-Ukraine correspondent has reported that a total of 240 MPs backed the budget conclusions of the Verkhovna Rada. In addition, MPs on Thursday approved at first reading bill No. 9084 from the so-called budget package. The bill amends the Budget Code.
According to the Budget Code and the regulations of the Verkhovna Rada, the draft national budget for the next year should be adopted at first reading before October 20, although last year it happened only on November 14. After that, the Cabinet of Ministers, with the participation of the parliamentary budget committee, should, within 14 days, but no later than November 3, submit an updated draft to the Rada, taking into account its budget conclusions with a comparative table and explanations of the reasons for refusing individual proposals of the parliament.
Consideration of the draft national budget for 2019 at second reading should be completed before November 20, and at third reading with final approval – before December 1.

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UKRAINIAN PM EXPECTS PARLIAMENT TO ADOPT DRAFT BUDGET AT FIRST READING THIS WEEK

Ukrainian Prime Minister Volodymyr Groysman has said he expects the Verkhovna Rada to adopt the country’s draft state budget for 2019 at first reading during the current plenary week from October 16 to 19. “This week we are expecting budget conclusions and the first reading of the draft state budget for 2019. People’s deputies have already submitted more than 2,000 proposals,” Groysman wrote on his Facebook page.

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PARLIAMENT RATIFIES AGREEMENT BETWEEN UKRAINE AND TURKEY ON INVESTMENT PROTECTION

The Verkhovna Rada has ratified the agreement between the governments of Ukraine and the Republic of Turkey on mutual assistance and investment protection, which provides Ukrainian and Turkish investors with assistance in use of investments, as well as secures guarantees against illegal expropriation and nationalization. Some 244 people’s deputies supported the corresponding bill with the quorum being 226 votes.
According to the website of the Ministry of Economic Development and Trade, the agreement also provides for the free transfer of payments and the application of internationally recognized dispute settlement procedures.
In addition, the parliament ratified the trade agreement between Ukraine and the Kingdom of Thailand.
The corresponding bill, providing for the creation of a special intergovernmental commission on trade, was supported by 241 people’s deputies.

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PARLIAMENT PASSES UKRAINIAN FOREST PRESERVATION BILL WITH PRESIDENT’S REMARKS

Ukraine’s Verkhovna Rada has passed bill No. 5495 about preserving Ukrainian forests and preventing illegal imports of rough timber with remarks of the Ukrainian president. The bill introduces severe punishment for smuggling of round timber and restricting domestic consumption of rough timber to 25 million cubic meters a year. A total of 246 lawmakers backed the bill with the president’s remarks, removing the clause about firewood export ban.
Head of the parliamentary committee for industrial policy and entrepreneurship Viktor Halasiuk said that the parliament must return to the issue and find a possibility of retaining the ban on exports of firewood, under the disguise of which round timber is exported from Ukraine.
As was earlier reported, on July 3, 234 deputies passed the bill (No. 5495) on making amendments to some laws of Ukraine concerning the preservation of Ukrainian forests and preventing the illegal export of unprocessed timber at second reading.
According to amendments taken into account in the second reading of the document, administrative and criminal liability for illegal logging and its timber exports outside customs control (smuggling) has been significantly strengthened.
The Code of Ukraine on Administrative Offenses, in particular, introduces a clause according to which illegal cutting and transportation, storage of illegally cut trees entail the imposition on citizens of a fine of 15 to 30 nontaxable minimum incomes of citizens (one nontaxable minimum – UAH 17), and on officials – from 75 to 150 nontaxable minimum incomes of citizens.
In case of a repeated offense within a year, the amount of the fine is from 30 to 60 nontaxable minimums for citizens and from 300 to 600 for officials.
In addition, according to changes in Ukraine’s Criminal Code, movement across the customs border of Ukraine outside the customs control or concealment from the uncontrolled control of unprocessed timber or sawn valuable or rare species is punishable by imprisonment for three to five years.
The same actions that have been committed repeatedly or by prior conspiracy by a group of persons or an official using his official position are punishable by imprisonment for a term of five to ten years, with deprivation of the right to occupy certain positions and with confiscation of property.
If these actions are committed by an organized group of individuals or on a particularly large scale, a penalty of imprisonment of ten to 12 years is provided, with deprivation of the right to engage in certain activities for three years and with confiscation of property.
Late July Ukrainian President Petro Poroshenko vetoed the bill and returned it to the parliament with his proposals.

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PARLIAMENT PASSES BILL ON USE OF LARGE TRACTS OF FARMLAND

Ukraine’s Verkhovna Rada adopted draft law in the second reading and in general to resolve the issue of collective ownership of land, improving land use rules and stimulating irrigation. Some 236 lawmakers voted for the bill, 11 more than the required minimum of 226 votes. The bill introduces the concept of tracts of agricultural land. Within such tracts agrarians will have the opportunity to exchange plots, conclude sublease agreements without the consent of landlords, rent field roads and optimize areas for cultivation. Agrarians who own/use more than 75% of the tract will have priority rights over other users of the tract.
The bill also defines the order of inventory of land plots, which is to take place prior to the creation of arrays. As expected, it will contribute to the updating of the State Land Cadastre. Its results will be approved by local authorities.
The document provides for the protection of the rights of farmers who improve and restore hydraulic reclamation systems. In addition, a mechanism of permanent or urgent land easements is being implemented to introduce measures for land reclamation, which can be established both by contract and by a court decision.
Users of land plots on which hydrotechnical reclamation is carried out have the right to claim compensation for the costs of hydraulic reclamation of adjacent land plots from their owners or users. According to the document, lands of collective agricultural enterprises whose activities are terminated shall be transferred to municipal ownership of a local community.

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PARLIAMENT PASSES BILL ON RESUMPTION OF LENDING

Ukraine’s Verkhovna Rada on Tuesday passed at second reading bill No. 6027-d amending some Ukrainian laws regarding resumption of lending. According to a posting on the website of the National Bank of Ukraine (NBU), the adoption of the document would ensure the solving of existing problems creating systemic obstacles for resumption of lending to the economy and bringing additional risks for operations of national and foreign investors.
“In the conditions of the enhanced protection of rights of creditors banks would be able to announce more balanced requirements to borrowers. This, of course, would help to spread lending, cut the cost of borrowed funds and ease the access to bank products for economic entities and natural persons,” the NBU said.
Verkhovna Rada in the middle of May 2018 passed at repeated first reading bill No. 6027-d for resumption of lending. During the finalization of the bill, the requirement was clarified, in particular, regarding the banks’ access to the public register of civil status assets. This access is proposed to be provided with the written consent of the individual concerned.
In addition, the creditor’s deadline for submission of claims to heirs from the date of receipt of a certificate of inheritance was reduced from 12 to 6 months. In this case, this rule excludes the situation when the bank did not know and could not know that the moment the inheritance becomes available.

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