Venue (#10 October 2014)

Association in Practice

On 24 September Kiev hosted the EU-Ukraine International Legal Forum held by Yuridicheskaya Practika Publishing. The preeminent practical dedication of the recently ratified Association Agreement drew the attention of the heads of central state authorities, partners of leading law firms, in-house counsels of large enterprises in Ukraine, representatives of international and Ukrainian business associations, scientists.

The sessions covered a wide spectrum of issues, like reform of the legal system, free trade area, European future of Ukrainian business (agribusiness and food industry, IT, telecommunications, E-commerce, banking and finance), regulatory integration (intellectual property, harmonization of regulation environment, competition and public procurement), dispute settlement.

European standards and Ukrainian realities

After the opening remark by Nataliya Mykolska, counsel at Sayenko Kharenko, who touched upon postponement of application of the EU-Ukraine Agreement in the trade section, Valeriy Pyatnitsky, state representative on European integration, explained that the trade section of the Agreement is merely the system of trade rules on European market which makes up only 2% of the whole document of the Agreement. In her turn, Olena Zerkal, deputy Minister of Foreign Affairs of Ukraine on European integration issues, highlighted that application of standards according to Ukrainian legislation is voluntary. This problem is artificial and fictitious, she said.

Sergii Koziakov, senior partner of Sergii Koziakov & Partners, advised the participants to use a more careful approach to the study of European law, as there are no free specialists in the market at the present moment, while signing of the Agreement has created a huge amount of work for the next 30 years.

Free trade opportunities

Taras Kachka, member of the Negotiating Group to the EU, vice-president of strategic development, ACC in Ukraine, briefly described provisions with tariff liberalization and stopped at the unilateral trade preferences in the Agreement. Anna Shtepa, senior lawyer of Baker & McKenzie, in the framework of presentation Obtaining quota permits: EU experience depicted the procedure for confirming the origin of goods and informed participants about the peculiarities of importing goods from Crimea and Sevastopol. Gleb Bialyi, counsel, international trade and customs practice head, dispute resolution practice co-head of Egorov Puginsky Afanasiev & Partners, described the steps that should be taken to minimize the risks upon applying safeguard measures on imports into the EU. The speaker mentioned that European legislation is based on the norms and principles of the WTO, and the most applicable to the Ukrainian import retains an anti-dumping investigation. The panel further acquainted with opportunities and ways of strengthening economic cooperation between Poland and Ukraine in the context of the EU-Ukraine free trade report made by Oleg Dubish, vice-president, Polish-Ukrainian Chamber of Commerce.

Sectoral insights

The prospects of the Ukrainian banking system became the subject of first concurrent section of the European Future of Ukrainian Business panel. Anna Zhulidova, head of department of adaptation of banking legislation to EU legislation, National Bank of Ukraine, shared the prospects of the Ukrainian banking legislation development in the light of European integration. She said that not all Ukrainian banks are willing to comply with strict European regulatory requirements.

Ruslan Chorny, editor-in-chief of the FinMaidan project, shared his opinion on the reasons of foreign banks exit from Ukraine and the prospects for their return. One of the main reasons is non-payment of loans and different business environment in Europe and in Ukraine. The speaker is confident that only changes in the business environment can stimulate the return of foreign banks to our country.

Arsen Soroka, director of legal department of Universal Bank, underlined that despite all problems that are in sight the prospects of working with the Europeans are still present in the banking sector.

The European future of agribusiness and food industry the participants discussed in the framework of the second concurrent section.

Nazar Chernyavsky, partner of Sayenko Kharenko, focused on support of agricultural producers from the point of view of EU countries experience. In particular, he noted that from next year support will be provided to the entire sector as a whole, without preferences for certain industries and advised to pay special attention to the development of those agricultural sectors which must comply the general policy of the EU.

Yacek Austen, consultant of ILF law firm, spoke about credit facilities for agrarian producers in Ukraine. Taking into account the example of Poland, he recommended to create a special body, which will support the Ministry of Agriculture in the development of branch in general as well as assists with agricultural markets. Lana Sinichkina, partner of Arzinger, stressed on the importance of harmonization of the whole legislation in the agricultural sector. In her view, it is important to analyze the Agreement for a particular company separately as analyze of the entire industry cannot depict the complete picture of a definite company.

During the last section devoted to IT, Telecommunications and E-commerce, Denis Dovgopoliy, president of business accelerator, GrowthUp, outlined expectations of innovative business from the state. The less the government interferes in the market, the better the market, underlined Denis on the example of Russia where half-dead projects receive a lot of support and in the end it turns out low-quality product. Nikolay Gayday, adviser to the Minister for Economic Development and Trade of Ukraine, touched upon the primary deregulation initiatives in IT as there are 29 initiatives in this sector to be implemented by 2020. Among the primary initiatives the speaker singled out the permit of company registration as well as the opening of bank accounts abroad. The head of Samsung Electronics Ukraine legal department, Andrey Kovalev, upon describing the prospects of Ukrainian IT companies in light of implementation of the EU-Ukraine Agreement came to the conclusion that such an Agreement will help to protect the consumers rights from gray imports. Among the prospects for Ukrainian companies he listed the accessibility of IT technologies, wide access and improvement of network security, coordination of policy in the field of electronic service, etc.

Viktor Dovhan, managing partner of Dovhan & Partners, acquainted the participants with legal aspects of E-money in Ukraine and the EU.

Dispute settlement

Speaking about Ukrainian judicial systems availability to dispute settlement with foreign element, a judge of the Supreme Court of Ukraine, Vasiliy Gumenyuk, complained on the complexity of the judicial system. The country in which to enforce the decision of the international commercial arbitration one should apply in four instances for several years hardly attracts foreign investors, noted the judge. According to Mr. Gumeyuk the important place in protection of citizens rights belongs to the independence of judicial power as it is rather difficult to consider cases when the judge is checked under the law of lustration, which was adopted in September.

The problems of trade disputes (EU-Ukraine) in international arbitration were described in her speech by Yuliya Chernykh, arbitrator of International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry and partner of ARBITRADE law firm. She stressed that the relative density of such disputes in various arbitration institutions is different. For example, the Stockholm Arbitration Court considers 18% of trade disputes, while Ukrainian ICAC about 88%. The latter awards about 300-350 decisions on trade disputes annually.

Describing recognition of judicial awards within EU-Ukraine relations, Oleg Malinevskiy, partner of FCLEX, believes that speaking about European integration is possible at the time when Europe permits Ukraine to execute the decisions of its courts in the EU and vice versa. While Nikolai Kovalchuk, managing partner of L.I.Group, spoke about property rights protection in light of Euro-integration where he underlined that protection of property rights is the first thing that will evaluate the foreign investor when entering Ukrainian market. Such an investor has to be sure that the products that he gains will be protected.

Concluding the session, the chairman of the Expert Council of the Ministry of Justice, adviser to the Minister of Justice, Georgiy Logvinsky, stressed that there are a lot of problems in our country. It is impossible to change the situation in one day as we need to develop mechanisms for solving these problems, Mr. Logvinsky summed up.

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