#09 September 2013

In focus – Agribusiness

Evidently, the Ukrainian agribusiness sector is considered by many to be the most promising sectorof the Ukrainian economy. Market players stand out for being extremely active in terms of M&A activity, attracting finance from banking and for operating on foreign capital markets…

Expert Opinion

Investment in Ukrainian Agribusiness: How to Prepare for Sale of the Business

Jared Grubb, Nataliya A. Gerus

“Agribusiness and municipal infrastructure are the most prospective sectors for investment in Ukraine”, said Sir Suma Chakrabarti, the President of EBRD, during his visit to Kiev on 5 February 2013. This view is one that is shared by many commentators. While there has been a lot of talk about the potential of Ukrainian agribusiness, current market players need to be aware that investors are no longer simply attracted by hype. The crisis has made investors more cautious. They are looking for real value and want to really understand the risks before investing...

In Re

Competition Law Twists and Turns in the Agricultural Sector

Anastasia A. Usova, Volodymyr B. Solohub

Most large Ukrainian agricultural holdings have undergone substantial group restructuring and/or consolidations in the past 5 years. Many small and medium-size companies were integrated into large agricultural holdings with significant market power. This has led to an appreciable concentration on agricultural markets and, consequently, increased control for competition compliance by agricultural groups on the part of the Antimonopoly Committee of Ukraine (the AMCU)…

Agrarian Receipts: Nature and Novelties

Vitaliy E. Yurkiv

The recent implementation of the concept of agrarian receipts into the legal system of Ukraine deserves special attention from the business community as it introduces, to a certain extent, striking novelties to Ukrainian law. Therefore, in this article we are aiming to contribute to professional discussion on the subject matter which, may be of interest to practical lawyers and the agricultural business community…

Licensing of Plant Breeder’s Rights: Legal and Tax Aspects

Еlena A. Bukuyeva

Article 485 of the Civil Code of Ukraine (Civil Code) and Article 10 of the On Protection of Rights in Plant Varieties Act of Ukraine of 21 April 1993 No. 3116-XII as restated and amended (PVP Act) provide for three types of intellectual property rights which are protected in Ukraine with respect to plant varieties: moral intellectual property rights verified by the certificate on authorship (which are not discussed herein); intellectual property rights verified by patent; and intellectual property right to commercialise plant variety verified by the certificate on state registration of plant variety…

Hot Issue

Secure Grain. Secured by Grain

Oleg P. Zagnitko, Zoya S. Mylovanova

This is almost a philosophical one. How does grain from one field differ from the crop from   another field, when both are in the same silo? Pragmatically, the financier needs to identify its collateral under the pledge agreement if the borrower does not pay.

One of the types of inventory financing is a credit limit to the grain trader (through the short-term loan or revolving facility); the trader pays with these funds to smaller sellers, while using the proceeds from the buyer to repay the loan. The larger trader repeats the financing structure until the grain reaches the processing company or consumer — this is warehouse financing in short…

Cover Story

Trust and Confidence

Yaroslav Romanchuk

With the rapid changes in Ukrainian legislation, rules of doing business undergo the same dynamic mode. This results in necessity to keep a close eye of adopted novelties and examine their application in practice. The UJBL conducted a fruitful discussion with Yaroslav Romanchuk, managing partner of International legal center EUCON and chairman of the Public Council at the Ministry of Revenue and Taxes across sensitive regulatory achievements and current state of play…

Global Legal Update

Protection of Foreign Investors from Local Takeover in Estonia

Leonid A. Tolstov

One of the main concerns for foreign investors who invest in companies that are not publicly traded is how to have an adequate overview of and control over their investments locally. Merely signing a shareholders’ agreement and reading quarterly statements does not guarantee that local shareholders together with members of the management board who are under their control will not misuse their insider position to the prejudice of foreign investors. The Estonian Supreme Court made an important judicial precedent on the protection of (foreign) investors already on 31 March 2010, though it did not come into force until 26 November 2012…

Crux

Expanding Control

Over the last couple of years the Antimonopoly Committee of Ukraine has enhanced its regulatory initiatives. The number of requests from the Committee has risen dramatically, while the sums of fines imposed have exceeded previous records. And the regulator’s activity is likely to expand across all its controlling functions.

 

Mariya Nizhnik

The following trends in antitrust investigations over the last year could be determined:

—    The AMCU still focuses its attention on companies whose activities are related to so-called “social markets”. These markets include production and sale of food, medicines, mobile telecommunication services, agriculture, as well as utility services markets…

 

Eduard Tregubov

Unlike audits routinely carried out by the tax authorities, audits performed by the Antimonopoly Committee of Ukraine bring a new — and often unpleasant — experience. Therefore, it would not be inappropriate to analyse the procedure of such audits set out by the Rules for carrying out the audit of regulatory compliance with economic competition statutes and regulations approved by Resolution No.182-p 5 December 2001 of the AMCU…

 

Antonina Yaholnyk

Who is under radar? The concerted actions are one of the core issues of competition law in general and in Ukraine in particular. The AMCU has recently raised its interest in this area very significantly. Plenty of investigations have been launched. Some of them are even conducted in parallel with authorities in other CIS countries such as Russia and Kazakhstan, some even in cooperation with EU member states…

 

Maksym Nazarenko

The leniency programme implemented by the AMCU more than a year ago has not yet demonstrated the efficiencies the AMCU aimed to achieve in full. In particular, there are no signs of the investigations recently completed by the AMCU which were based upon leniency applications in the media. The same can be seen from the brief summaries on the outcome of investigations published on the AMCU’s website…

 

Oleg Akhtyrskyi

Dealers often use trademarks to promote and sell brands and products that they offer; however, it often happens that dealers are not expressly vested with rights to use such trademarks.

The AMCU has recently started sending enquiries related to the use of trademarks by dealers in light of the Unfair Competition Act and its Articles 4 (Unlawful Use of Signs) and 15-1 (Dissemination of Misleading Information). In its enquiries the AMCU questions the legal grounds on which dealers use trademarks. The law requires dealers to duly respond to AMCU’s enquiries, or they may face severe financial sanctions of the AMCU…

 

Anastasia Usova

Investigations into the anti-competitive practices of public authorities are carried out under the AMCU’s Temporary Rules for Review of Cases on Violations which do not establish any particular procedures regarding public authorities. However, there are important peculiarities in qualification of anti-competitive practices on the part of state bodies. In particular, the criteria for assessment of the anti-competitive nature of conduct in the public sector are significantly lower than in the private one…

 

Oleksandr Fefelov

It is worth noting that the rising number of cases where business entities challenge decisions adopted by the AMCU. Challenges are directly proportional to the enhanced current activity of the AMCU, and its more rigorous approach to deciding cases and imposing more severe sanctions caused more active resistance of the business. In 2012, the AMCU commenced competition law proceedings in 701 cases, it also conducted 1,035 inspections of businesses, which resulted in initiation of 660 cases…

 

Alexander Tretiakov

Due to the fact that current Ukrainian antimonopoly legislation has been based on EU legislation, only minor changes were made during the period of 2001-2013. Surely, current regulations are somewhat outdated and do not correspond with the most recent international practices.

The main problem is the low financial threshold which provides liability to obtain permission for concentration in the AMCU…

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