Law on “splitting” financial services regulator adopted
The Ukrainian Parliament has adopted the Law On Improving Functions for State Regulation of Financial Services Markets (on “split”), which envisages the liquidation of the National Commission conducting state regulation in the field of financial services markets (National Financial Services Commission), and the transfer of its functions to the National Bank of Ukraine and the National Securities and Stock Market Commission.
According to the law’s explanatory note, it envisages the transfer of the National Financial Services Commission powers in terms of regulation and supervision over the funded pension system, supervision over the functioning of financial and credit mechanisms and property management in the field of housing construction and real estate transactions to the National Securities and Stock Market Commission.
It is proposed that the remaining powers of the National Financial Services Commission, in particular, the supervision and regulation of the market of insurance, leasing and factoring companies, credit unions, credit reporting agencies, pawnbroker’s offices and other financial companies are to be transferred to the National Bank of Ukraine.
Introduction of the proposed amendments to the draft law will create a legal basis to cease redundancy of functions of national regulators in the field of financial markets, will simplify and make transparent the adoption of managerial decisions in this field, improve the conditions for doing business while enhancing the responsibility of market entities.
NBU lifted currency restrictions for non-residents
Within the framework of currency liberalization, the National Bank canceled a monthly limit of EUR 5 million on the repatriation of funds received by foreign investors from the sale of securities, corporate rights, as well as funds received by them following the reduction of the authorized capital of legal entities, withdrawal from economic entities.
The list of operations allowed to be carried out against non-resident accounts has also been extended. In particular, it is allowed to transfer funds in UAH received as dividends, interest income on securities and other income on property rights items in Ukraine, not related to their alienation, sale, liquidation or reduction of the authorized capital, to the current accounts of individuals who are non-residents.
Such relaxation, along with the previously canceled restriction on the repatriation of dividends, permit non-residents to flexibly manage their own funds both in foreign currency and in UAH.
Simplification of the procedure for return on foreign investments will also contribute to their further inflow into Ukraine.
Moreover, for the avoidance of doubt, the National Bank specified that the current e-limit of EUR 2 million/year for investments made by legal entities-residents abroad shall also apply to the purchase of securities of non-resident issuers and of External Government Loan Bonds of Ukraine.
The amendments came into effect on 10 September 2019.
Parliament upheld decriminalization of fictitious entrepreneurship
The Ukrainian Parliament has adopted Law No.1080 On Amendments to the Criminal Code of Ukraine and the Criminal Procedure Code of Ukraine regarding the Reduction of Pressure on Business.
The Law proposes to exclude Article 205 of the Criminal Code of Ukraine (fictitious entrepreneurship) and increase the amount of fine for tax evasion (from one to three non-taxable minimum incomes of citizens), and following failure to pay, to impose liability under Article 212 of the Criminal Code (evasion of tax, fees and other obligatory payments).
Article 205 of the Criminal Code of Ukraine has long been used to put pressure on business, since the tax authorities use judgements and materials of pre-trial investigations (reports on questioning of the head of a commercial entity) as evidence when imposing liability for violation of tax legislation.
President signed decree on urgent measures in economy
Ukrainian President Volodymyr Zelensky has signed Decree No. 713/2019 On Urgent Measures to Ensure Economic Growth, Stimulate Regional Development and Prevent Corruption.
To accelerate economic development, further decentralization of power and to prevent corruption, the Cabinet of Ministers was entrusted with ensuring the development and registration with Parliament (the Verkhovna Rada) of the following Draft Laws by 1 October 2019:
— on turnover of agricultural land;
— on legalization of the gambling industry in Ukraine;
— on introduction of amendments to certain laws of Ukraine on regulating amber production in Ukraine;
— on introduction of amendments to the Budget Code of Ukraine on improving the efficiency of use of the monetary resources of the State Regional Development Fund.
The Cabinet of Ministers should develop and register the following Draft Laws with Parliament by 1 January 2020:
— on the principles of the administrative and territorial structure of Ukraine;
— on introduction of amendments to certain laws of Ukraine on improving legislation on local elections;
— on introduction of amendments to the Law of Ukraine On the Principles of State Regional Policy on Enhancing the Capacity of Regional Development Agencies;
— on introduction of amendments to the Law of Ukraine On Stimulating the Development of Regions on Enhancing the Competitiveness of Regions;
— on introduction of amendments to certain legislative acts of Ukraine on updating labor legislation.