Legal Hotline, July 5 2018

05/ 07/ 2018

Listen to online Stop   The Law on Limited Liability Company (LLC) and Additional Liability Company (ALC) has come into force The Law of Ukraine On Limited Liability Companies, which introduces fundamental changes in the regulation of the activity and management of the LLC and the ALC, came into force on June 17, 2018. At the same time the provisions of the Law of Ukraine On Business Associations became invalid in the part concerning limited liability companies and additional liability companies. The provisions of the companies’ statutes, in the part regulated by the law as of June 17, 2018, would still be in force witin one year after the day of this law became valid. However, the statutes will still need to be brought in line with the new regulation.   The Law of Ukraine On the Foreign Currency has been adopted. The law provides for a significant liberalization of the foreign exchange market in Ukraine and the abolition of certain foreign currency restrictions. The law enters into force from the day following the day of its publication, and is put into effect seven months after its entry into force. The most significant changes to the Law are the abolition of a number of regulations that implied the establishment of foreign currency restrictions, in particular: Decree of the Cabinet of Ministers of Ukraine On the system of foreign currency regulation and foreign currency control (hereinafter - the Decree), which implied the possibility of transferring foreign currency abroad, in particular for investment purposes, only on the basis of individual licenses of the NBU; Law of Ukraine On the procedure of settlements in foreign currency, which established the maximum term of settlement in foreign currency for foreign economic operations to be 180 days; Decree of the President of Ukraine On the regulating the procedure of obtaining loans, foreign currency loans by residents from non-residents and application of penalties for violations of foreign currency legislation, which implied mandatory registration of foreign loans and loans by At the same time, in accordance with the provisions of the new Law, NBU still reserves the right to impose certain restrictions in the event of a threat to the stability of the banking and/or financial system of the state, in particular, NBU has the right for the term of 6 months to set the maximum terms for settlements for operations related to export and import of goods, make specific regulations as for the operations related to the movement of capital; to introduce permits and/or limits on certain foreign currency transactions. In case these measures do not stabilize the situation on the foreign currency market, NBU has the right to extend the term of such measures, but for a period not exceeding 6 months.   The procedure for the approval of banks’ internal regulations on the assessment of credit risk has become operative On June 20, 2018, the Procedure for the approval of banks internal regulations on the assessment of assets and calculation of the amount of credit risk in the part of approaches to determining the values ​​of the coefficients of default probability of the debtor/counterparty came into force. The Procedure sets up the list of documents, as well as requirements to the internal regulations of the bank, which are submitted to the NBU. It is also noted that the decision on approval, refusal to approve of the internal regulations of the bank or the cancellation of the previously approved regulation is taken by the Committee on Supervision and Regulation of Banks, Supervision (oversight) of payment systems.   NBU has updated the rules for the maintenance, protection, use and disclosure of banking secrecy From now on, banks must provide information on transactions on accounts of a particular legal entity or private person, an individual, registered as business entity for a specific period of time, not only on the request of the prosecutors office, the Security Service of Ukraine, the National Police, National Anti-Corruption Bureau and the Antimonopoly Committee, but also on the request of other authorized state bodies and persons specified in part one of Article 62 of the Law of Ukraine On Banks and Banking.   Sanctions lists against the Russian Federation have been updated Sanctions have been imposed on other 30 legal entities and 14 individuals that are related to the Russian aggression in Ukraine. The updated sanctions list now includes more than 1700 individuals and more than 750 legal entities. The applied sanctions consist in blocking assets, limitation of trade operations, prevention of capital withdrawal from Ukraine, cessation of the issuance of permits, licenses, suspension of fulfilling economic and financial obligations.

The Law on Limited Liability Company (LLC) and Additional Liability Company (ALC) has come into force

The Law of Ukraine “On Limited Liability Companies”, which introduces fundamental changes in the regulation of the activity and management of the LLC and the ALC, came into force on June 17, 2018. At the same time the provisions of the Law of Ukraine “On Business Associations” became invalid in the part concerning limited liability companies and additional liability companies. The provisions of the companies’ statutes, in the part regulated by the law as of June 17, 2018, would still be in force witin one year after the day of this law became valid. However, the statutes will still need to be brought in line with the new regulation.

The Law of Ukraine “On the Foreign Currency” has been adopted.

The law provides for a significant liberalization of the foreign exchange market in Ukraine and the abolition of certain foreign currency restrictions. The law enters into force from the day following the day of its publication, and is put into effect seven months after its entry into force.

The most significant changes to the Law are the abolition of a number of regulations that implied the establishment of foreign currency restrictions, in particular:

• Decree of the Cabinet of Ministers of Ukraine “On the system of foreign currency regulation and foreign currency control” (hereinafter – the Decree), which implied the possibility of transferring foreign currency abroad, in particular for investment purposes, only on the basis of individual licenses of the NBU;
• Law of Ukraine “On the procedure of settlements in foreign currency”, which established the maximum term of settlement in foreign currency for foreign economic operations to be 180 days;
• Decree of the President of Ukraine “On the regulating the procedure of obtaining loans, foreign currency loans by residents from non-residents and application of penalties for violations of foreign currency legislation”, which implied mandatory registration of foreign loans and loans by

At the same time, in accordance with the provisions of the new Law, NBU still reserves the right to impose certain restrictions in the event of a threat to the stability of the banking and/or financial system of the state, in particular, NBU has the right for the term of 6 months to set the maximum terms for settlements for operations related to export and import of goods, make specific regulations as for the operations related to the movement of capital; to introduce permits and/or limits on certain foreign currency transactions. In case these measures do not stabilize the situation on the foreign currency market, NBU has the right to extend the term of such measures, but for a period not exceeding 6 months.

The procedure for the approval of banks’ internal regulations on the assessment of credit risk has become operative

On June 20, 2018, the Procedure for the approval of banks’ internal regulations on the assessment of assets and calculation of the amount of credit risk in the part of approaches to determining the values ​​of the coefficients of default probability of the debtor/counterparty came into force. The Procedure sets up the list of documents, as well as requirements to the internal regulations of the bank, which are submitted to the NBU. It is also noted that the decision on approval, refusal to approve of the internal regulations of the bank or the cancellation of the previously approved regulation is taken by the Committee on Supervision and Regulation of Banks, Supervision (oversight) of payment systems.

NBU has updated the rules for the maintenance, protection, use and disclosure of banking secrecy

From now on, banks must provide information on transactions on accounts of a particular legal entity or private person, an individual, registered as business entity for a specific period of time, not only on the request of the prosecutor’s office, the Security Service of Ukraine, the National Police, National Anti-Corruption Bureau and the Antimonopoly Committee, but also on the request of other authorized state bodies and persons specified in part one of Article 62 of the Law of Ukraine “On Banks and Banking”.

Sanctions lists against the Russian Federation have been updated

Sanctions have been imposed on other 30 legal entities and 14 individuals that are related to the Russian aggression in Ukraine. The updated sanctions list now includes more than 1700 individuals and more than 750 legal entities.

The applied sanctions consist in blocking assets, limitation of trade operations, prevention of capital withdrawal from Ukraine, cessation of the issuance of permits, licenses, suspension of fulfilling economic and financial obligations.