DRAFT

Mediation in tax and customs disputes

The Draft Act On Changes to the Tax Code of Ukraine (on introduction of the mediation procedure) of 28 December 2014, No.1666 has been submitted by Ukrainian MP Andriy Kiseliov. The objective of the Draft is to introduce the procedure of pre-trial mediation in tax and customs disputes between taxpayers and the State Fiscal Service of Ukraine (SFS). The author is of the opinion that such a procedure would enable a reduction in the number of tax and customs disputes in courts, which will reduce the courts' workload, increase revenues through taxes paid by reconciliation, less pressure on business caused by tax notices of SFS. The Draft intends to make changes to the Tax Code of Ukraine and supplement it with the definition of “mediation procedure” and a new Article 561 describing the mediation procedure. It reads that the mediation procedure is applied in the event of an unresolved monetary obligation that is defined in a tax notice-decision or other decision of the supervisory authority that a taxpayer appeals administratively. A taxpayer wishing to settle a dispute with a controlling authority through the mediation procedure, files an appropriate application at the controlling authority that considers the former's complaint. It also introduces changes to the Criminal Code of Ukraine, whereby it stipulates that repayment of monetary obligations as specified in the decision of the controlling authority by reaching an agreement on the taxliabilities would exclude further criminal proceedings against such a taxpayer and/or its officials. The Code of Administrative Offenses will be supplemented with a provision reading that a report of an administrative offense is not compiled if the settlement of a tax dispute between a taxpayer and the controlling authority has been reached in the form of an agreement on tax liabilities.

Fair trial

The Draft ActOn the Right to a Fair Trial No.1656has been submitted by Ukrainian President Petro Poroshenko and duly approved in the first hearing on 13 January 2015. The Draft’s objective is to improve the legal mechanism to ensure an individual’s right to a fair trial, to increase the efficiency of the judicial system, to ensure uniform application of the law, to determine legal and organizational principles of certification and responsibility of judges, and to improve appointment of judges and optimization of judicial self-governance. The Draft amends some legislative acts concerning the judiciary system and justice with the ultimate aim of citizens’ right to fair trial. It expands the rights of citizens as to the equality of citizens before the law and justice, transparency, and openness of trial, binding nature of judgments, and impartial distribution of cases. Information about the court that considers a case, the process of consideration, the venue and time of sessions should be open and made public. The right to be present in an open court session cannot be restricted.

The opinions of the Supreme Court of Ukraine on application of law will be mandatory for government entities, and courts will take them into account to ensure uniform application of law. Executive agencies will have no influence on the procedure of formation of courts and the number of judges. The number of administrative jobs at courts will be reduced, and the number of judges will adjust in line with the actual workload. The Draft clarified and strengthened guarantees of independence and immunity of judges, their rights and obligations; it introduced a new text of oath. The procedure of appointment of judges will become more transparent, including the procedures of pre-selecting candidates, qualification exams, and training of future judges. The Draft standardized the procedure of judges’ election and their appointment and transfer to other courts only on a competitive basis. It regulates independent professional assessment of judges, on the basis of which their subsequent career will depend. It introduces certification to improve the qualification of judges. The Draft contains a clear definition of the grounds and procedure of disciplinary proceedings against judges, introduces eight types of disciplinary actions, clear terms of holding judges accountable and expiry of disciplinary actions. It establishes guarantees of judges’ rights and introduces competitiveness of disciplinary proceedings. The Draft offers changes to the organization and procedure on formation of the Higher Qualification Commission of Judges of Ukraine, which will consist of the qualification and disciplinary chambers. It specifies requirements for members of the Commission, their rights and obligations as well as organization of their work. It increased requirements for members of the Higher Council of Justice and changed the organization of its operation. The Draft simplified organizational forms of judicial self-governance.

Public procurement

The Draft Act On Changes to the Act of Ukraine on Public Procurement (on improving the procurement system and e-procurement), No.1551 of 22 December 2014 has been submitted by the Cabinet of Ministers of Ukraine. Its purpose is to improve the public procurement system, to eliminate conflicts when the Act is applied, to simplify the procedure of procurement for customers and participation in the process, to promote competition, to significantly reduce corruption risks, to determine terms of electronic procurement, to set the time limits to appeal terms of the tender documentation, qualification documentation and the bid. At the same time, the Draft offers to provide for the mandatory e-procurement for a specified range of customers and for the set list of goods if the price threshold does not exceed the price ceiling set by the EU Directives for procurement of the goods.

The Draft proposes the following: to introduce the mandatory procurement of the goods and services designated by the Cabinet of Ministers, if their price does not exceed UAH 2 million, through an open e-bidding procedure and the evaluation with the use of electronic reverse auction; to increase the price threshold for the goods and services under the Act up to UAH 200,000; to increase the price threshold up to UAH 500,000 for the quotation procedure; to simplify participation in the procurement procedures by lifting the requirement to provide the compliance documents stipulated in Article 17 of the Act; to eliminate the legal conflict in terms of amendments to the tender documentation; to resolve the issue of a written confirmation of the documents that are provided by customers for publication; to regulate the appellate procedure in order to prevent intentional blocking of bids; to provide for an opportunity to amend the price quotation requests; to resolve the issue of procurement of centralized heat supplies, centralized water supply and sewer. It also suggests amending the On Procurement Act in specific areas of economic activity by clarifying the concept of exclusive and special rights.