The Law of Ukraine

On Top-Priority Measures for Preventing Negative Consequences of
the Financial Crisis and Amendments to Some Pieces of Legislation of Ukraine

Date of entry into force:
November 5, 2008

The present Law shall aim at supporting the constitutional rights of citizens, guaranteeing economic security of the country and minimizing possible losses for the economy and the financial system of Ukraine from the financial crisis that has covered the major part of industrially developed countries.

According to Article 2 of the present Law, the state in the person of the Ministry of Finance of Ukraine may participate in forming and/or increasing authorized capital of banks (hereinafter referred to as the capitalization of banks) by way of purchasing shares of the primary issue (stocks in the authorized capital) of a bank or shares of an additional issue (additional contributions) of banks in exchange for government bonds of Ukraine and/or purchasing the above-mentioned shares for the funds of the State Budget of Ukraine. Such government bonds of Ukraine shall be subject to mandatory redemption by the National Bank of Ukraine, including at the expense of appropriate targeted loans provided by international financial organizations, at their nominal value within five banking days from the date of receiving the proposal to redeem them. The decision on the participation of the state in the capitalization of banks shall be made by the Cabinet of Ministers of Ukraine on the basis of proposals of the National Bank of Ukraine.

Employees of the Ministry of Finance of Ukraine who were selected by the Ministry of Finance to resolve the issues related to the participation of the state in the capitalization of a bank shall be under the protection of the law:
  • financial responsibility, including for damages incurred as a result of a professional mistake, life and health of such employees shall be insured according to the legislation;
  • employees shall not be responsible for actions and inaction, if they acted conscientiously, according to the legislation and within the limits of their official duties and responsibilities. Claims filed against such individuals shall be considered claims filed against the Ministry of Finance of Ukraine;
  • insult of such an employee, resistance, threat, violence, and other actions that prevent such an employee from fulfilling their tasks shall entail responsibility specified by the law.

Article 3 of the present Law shall stipulate that, in the instance of reducing authorized capital of a bank for the purpose of carrying out its capitalization, it shall not be necessary to apply provisions of the legislation related to:
  • the need to inform all creditors of the bank about reducing the banks authorized capital;
  • the prevention of a reduction in the banks authorized capital, if there are objections of the banks creditors;
  • the right of the banks creditors to demand pre-term termination or fulfillment by the bank of its obligations and compensation of losses;
  • the need to liquidate the bank, if the size of its authorized capital becomes lower than the minimum size of the authorized capital of a bank stipulated by the law;
  • the need to compensate losses of shareholders related to reducing the banks authorized capital;
  • restrictions related to the minimum nominal value of shares.

According to Article 3-1 of the present Law, at the time when a caretaker administrator implements measures envisaged by the program for financial recovery of a bank, including in the instance of cession of a legal claim, assignment of a debt or reorganization, it shall not be necessary to apply provisions of the legislation related to:
  • the procedure for terminating a legal entity as a result of transformation;
  • the need to notify and to receive agreement of debtors, creditors and shareholders;
  • the right of creditors to demand a security for the fulfillment of obligations by way of concluding contracts of deposit or contracts of guarantee, pre-term termination or fulfillment of obligations and compensation of losses in connection with the transformation;
  • the impossibility to complete such transformation before the satisfaction of claims filed by creditors.

The present Law shall introduce amendments to the Law of Ukraine On Value-Added Tax, the Law of Ukraine On Enterprise Profit Tax, the Law of Ukraine On Banks and Banking, the Law of Ukraine On the National Bank of Ukraine, and so on.

Amendments to the Law of Ukraine On Value-Added Tax shall establish that a resident carrying out business activities in the area of agriculture, as well as forestry and fishery may choose a special tax treatment.

According to such a special tax treatment, the amount of value-added tax calculated by an agricultural enterprise upon the costs of agricultural goods (services) delivered thereby shall not be subject to payment to the budget and shall fully remain at the disposal of such an agricultural enterprise for the reimbursement of the amount of tax paid (calculated) to the supplier upon the production factors and, in the presence of a residue of such an amount of tax for other production purposes. The above-mentioned provision shall not apply to producers of excisable goods, except for enterprises of primary wine making supplying wine materials.

The certificate of registration of an agricultural enterprise as a subject of a special tax treatment shall be subject to cancellation in the instance when:
  • the agricultural enterprise submits an application on taking it off the register as a subject of a special tax treatment and/or an application on its registration as a payer of the relevant tax on general grounds;
  • the agricultural enterprise is subject to registration as a payer of the relevant tax on general grounds;
  • the agricultural enterprise is being terminated by way of liquidation or reorganization;
  • the agricultural enterprise has not been submitting tax reports on the relevant tax over the last twelve consecutive reporting tax periods.

Amendments to the Law of Ukraine On Enterprise Profit Tax shall establish that gross revenues of a payer that is registered as a subject of a special tax treatment shall include a positive difference between the amounts of value-added tax calculated by such an agricultural enterprise upon the price of agricultural goods delivered thereby during the reporting period or periods preceding the reporting period and the amounts of value-added tax paid (calculated) thereby during the reporting period upon the price of production factors.

Amendments to the Law of Ukraine On Banks and Banking shall stipulate that, in the instance of reorganization of a bank based on the results of the procedure for caretaker administration, the decision on granting the relevant banking license shall be made by the National Bank of Ukraine within a three-day period from the date of receiving the full package of the necessary documents.

In the instance when the National Bank of Ukraine appoints caretaker administration of a bank, reorganization of such a bank and the issue of the banks shares shall be carried out based on the decision of a caretaker administrator according to the procedure to be set forth by the National Bank of Ukraine. Such a caretaker administrator shall have the right to appoint, by their decision, a supervisory board and a board of management of the relevant bank after reorganization and/or the issue of shares of the bank has been carried out.
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