Opinion: Cement packers inspection may result in AMCU penalty to its initiator
Kyiv. September 14, 2010
initiative to inspect all cement packers in the Ukrainian market may be
interpreted as a sign of anticompetitive concerted actions and lead the
initiation to a material penalty imposed by the Antimonopoly Committee
of Ukraine, supposed Sergii Koziakov, the senior partner of Volkov Koziakov & Partners law firm.
was his comment to Interfax-Ukraine Agency on the relative application
of Ukrcement Association to the Cabinet of Ministers of Ukraine, the
State Committee of Ukraine for Technical Regulation and Consumer Policy
(Derzhspozhivstandard) for conduct of such inspection aimed at detecting
packaged counterfeit cement.
“Should the AMCU admit the violation of
the Competition Law of Ukraine as a part of Ukrcement Association’s
moves, it can decide to impose rather tangible penalty,” Mr. Koziakov
According to him, few applications will be enough for the AMCU to notice the situation.
Sergii Koziakov highlighted, the aforesaid Association’s moves have
signs of anticompetitive concerted actions as envisaged by the Law of
Ukraine "On Protection of Economic Competition". He pointed out that the
Law, inter alia, interdicts the restriction of production or commodity
markets, technological development, crowding out of or restraint of
other business entities’ access into the market.
Koziakov believes such actions should also involve a substantial
restriction of competitiveness of other business entities without
Reportedly, Ukrcement has recently filed to the
Cabinet of Ministers of Ukraine and Derzhspozhyvstandard a request to
inspect all companies packing cement in the Ukraine’s market in order to
detect packed counterfeit cement...
Opinion: Increase in VAT-bonds to turn them into instrument for VAT settlements with state
Kyiv. September 14, 2010
”The government’s desire to continue issuing sovereign bonds (OVGZ) to
redeem overdue payments on VAT refund (VAT-bonds) and impossibility to
refund VAT by hard cash could lead to VAT settlements with the state
through these securities, in particular, settlements on import
operations”, believes Associate of Volkov Koziakov and Partners Ruslan Malinovskyi,
commenting to Interfax-Ukraine on the issue related to another
VAT-bonds issue being up for debate by the government. The latter was
informed by First Deputy Head of Administration of the President Iryna
"After having received VAT-bonds a number of companies decided to sell
their VAT-bonds to accelerate replenishment of their working capital. At
that, discount on such sales attained 19– 22 percent of bonds par
value. At the meantime, other companies are willing to use VAT-bonds as a
payment instrument, i.e. redemption of current VAT-liabilities", Mr.
In his opinion, VAT-bonds could be best used without losses at
discounted sales in case of VAT refunds on import operations. VAT-bonds
may also be used as a financial instrument to repay current loans or as a
pledge on long-term liabilities to banks and investors.
Moreover, Mr. Malinovskyi added that the moves taken by the government
in relation to VAT-bonds issue do not fundamentally address the issue of
cutting the amounts of outstanding VAT refunds.
"The offered mechanism has partially proved its value, and many
companies agreed to get VAT-bonds. However, a monthly increase in
current indebtedness on VAT refund would force the government to
continue issuing them", suggests the Associate...
Associate: Ukraine has right to restrict grain export only in case of deficit
September 13, 2010
Ukraine has the right to restrict grain export with no relevant measures
applied by the World Trade Organization (the WTO) only in case grain is
in short supply as stated to UNIAN by Associate of Volkov Koziakov and Partners ANNA GLADSHTEIN.
"Having acceded the WTO Ukraine undertook to avoid export restrictions.
Any grounds for relevant measures other than the justified conclusion on
the deficit of certain product shall be ruled out", said Ms.
According to her, WTO Agriculture Agreement includes a possibility to
impose restrictions on foodstuff export only by virtue of paragraph
2(à), Article XI of GAAT 1994, addressing to prevent or ease down sharp
deficit of foodstuff or other goods being of high significance for
exporting country. This was the argumentation Ukraine provided before to
justify export restrictions and protection of its interests,
precluding, thus, any sanctions from the WTO and its members.
Moreover, Ms. Gladshtein explained that in case of export ban or
restriction subject to the said paragraph other WTO members may not take
retaliatory actions against Ukraine, as in such case it is envisaged
not a full export prohibition but only interim restraints governed by
the exception under WTO’s rules.
Anna Gladshtein added that prior to a WTO member imposes export ban or
restriction it shall submit an advance written notification to WTO
Agriculture Committee, which informs about the nature and duration of
such measures. Besides, the country imposing the aforesaid measures
shall be assigned a commitment to carry out consultations in relation to
any issue concerned with any other WTO-member (upon its request) having
substantial interest as an importer...
Terms of negotiations about construction permit may be reduced when Urban Development Code adopted
Kyiv. September 10, 2010
According to Anatolii Chebukin, Senior Associate of Volkov Koziakov & Partners,
implementation of the governmental project on reduction of the term of
preparation of construction permits from 475 to 60 days is expected when
the Urban Development Code is adopted. This will become a solution to
simplify the issuing procedure of such permits locally.
“This project (the Urban Development Code – Interfax-Ukraine) envisages
the harmonizing mechanism for regional and local construction rules,
including the terms of negotiations about construction permits”, - Mr.
Chebukin revealed to Interfax-Ukraine commenting Sergii Tigipko’s, Vice
Prime Minister of Ukraine, construction projects.
As the lawyer stated, the draft Urban Development Code of Ukraine being
currently considered by the Parliament of Ukraine is designed to codify
the urban development & architecture legislation.
For instance, as set forth in the draft code, regional construction
rules are based on typical regional construction rules approved by
central executive government authority for construction, urban
development and architecture issues. In the meantime, procedures
envisaged by local construction rules must comply with regional
construction rules and laws of Ukraine.
As Mr. Chebukin revealed to Interfax Agency, regulation of issuing
procedure of permits refers to the Law of Ukraine On Permit System in
Economic Sector and Other Legislation. This will definitely establish
the unified time period of negotiations about permit for all urban
The lawyer believes that this scheme will allow avoiding difficulties in
implementation of the governmental projects and harmonizing regulatory
acts of constructing communities with further changes in the national
Reportedly, the Cabinet of Ministers of Ukraine intends to reduce the
term of preparation of construction permits from 475 to 60 days...
Lawyer: Recommended procedure for appeal against arbitration courts’ decisions creates legal collision
Kyiv. September 9, 2010
“The procedure for appeal of arbitration courts’ decisions, being on the
anvil in the Verkhovna Rada and should be adopted, would create legal
collision as the recommended amendments into the Code of Civil Procedure
of Ukraine mismatch the provisions of the Code of Commercial Procedure
of Ukraine and the Law “On Arbitration Courts”, Associate of Volkov Koziakov & Partners Mykhailo Spasov
believes."Should the Code of Commercial Procedure not be respectively
amended, there would arise a distorted interpretation of the provisions
of the Law “On Arbitration Courts” that are applicable to competence of
local commercial courts as an instance for appeal against arbitration
courts’ decisions and enforcement documents issue", Mr. Spasov informed
to Interfax-Ukraine, having commented upon the draft law that is based
on by the Parliament in consideration of the procedure for appeal
against arbitration courts’ decisions.
The Associate believes that in
such case a litigant dissenting from a commercial court’s decision
would have good reasons to appeal against such decision and/or an
enforcement document issued by the court, pleading the violation of
Mr. Spasov emphasized that it is possible to
avoid such collisions by means of amendments introduced into the Law “On
Arbitration Courts”. More specifically, it is necessary to provide
local courts with exceptional powers in accepting complaints against
respective arbitration courts’ decisions as well as in issuing
enforcement documents on such decisions.
Today the issues concerning
appeal against arbitration courts’ decisions and issue of enforcement
documents on their decisions are regulated in Ukraine by the Law “On
Reportedly, the Verkhovna Rada of Ukraine supported the draft law,
regulating the issues of appeals against an arbitration court’s decision
and issuance of writs of execution for an arbitration court’s decision,
in the first reading...
Ukraine tries to facilitate tobacco products import to Armenia with WTO’s assistance
Kyiv. July 26, 2010
WTO) and submitted a
consultations with Armenia to WTO Dispute Settlement
Body. According to Ukraine’s
statement published at WTO’s website, Armenia applies
Armenia "On Presumptive
Tax for Tobacco Products" of March 24, 2000 the excise rate is 6,500 drams per
1,000 cigarettes for imported products and 4,750 drams - for domestic products.
Thus, the regime for Ukrainian products is less favorable than for like domestic
paragraphs 1, 2 and 4 of
Article III of the General Agreement on Tariffs and Trade 1994 (GAAT 1994)
envisaging the establishment of national regime of internal taxation and
regulation in relation to imported products.
Moreover, under the Law of
Armenia "On Excise Duty” of July 7, 2000, Armenia imposes excise tax on alcoholic beverages
(Customs commodity codes: 2203, 2204, 2205, 2206, 2207, 2208) in violation of
its commitments before the WTO as it protects national producers via
discrimination of the products imported from Ukraine.
Earlier similar things
with Ukrainian products occurred in the Georgian market. Ukraine
saw discrimination in that excise duty on imported tobacco products was one and
a half times higher than for domestic cigarettes. The Ministry of Economy of
Ukraine conducted nonofficial
consultations to protect interests of Ukrainian producers. As
Parliament decided to set the unified excise rate.
nonofficial consultations were held with Armenian representatives;
unsatisfactory outcome for Ukraine. Hence, this
the reason for Ukraine to request for consultations
within the WTO.
Koziakov and Partners
Ukraine-Georgia consultations pass properly than mutually agreed solution will
be made. Otherwise, if the parties fail to agree within due term set for
consultations than Ukraine could call for a Panel to
settle the dispute.
Ms. Gladshtein added that under Article 4.3 of the WTO
Understanding on Rules and Procedures on Dispute Settlements, Armenia
has to respond to the request not later than 10 days from the moment of its
receipt, unless otherwise provided, and come into consultations not later than
30 days after the receipt of the request for consultations.
Opinion: Procedure of tax clarifications in draft Tax Code hard to apply
Kyiv. June 30, 2010
The provisions of the draft Tax Code stipulate no binding nature of
enforcement by taxpayers of tax and customs clarifications, and
contradictions in practices of imposition of value-added tax (VAT) on
export of services could trigger forfeit of price competitiveness of
Ukrainian service suppliers on world markets, suggest the lawyers
interrogated by Interfax-Ukraine.
"The draft Tax Code sets out that tax consultations and tax
clarifications given by controlling authorities under the proper
procedure are not binding for taxpayers. As such, a taxpayer is not
obliged to fulfill and put them into practice", reported Associate of Volkov Koziakov & Partners Ruslan Malinovskyi.
According to him, the draft of new Tax Code contains new procedure for
the state tax and customs services to provide tax consultations and
clarifications on the issues of practical application of certain
provisions of the tax or another legislation, the enforcement of which
shall be controlled by these authorities. In case where a taxpayer
dissents from tax clarifications, such clarifications may be challenged
in a judicial procedure.
At that, as Mr. Malinivskyi pointed out, consultations and
clarifications are not legal acts by their nature so may not be appealed
through the courts.
"In practice one may appeal to the court only with decisions and actions
of tax or customs authorities, which entail respective legal
consequences", explained the Associate.
Mr. Malinovskyi believes that without detailed determination of the
procedure of provision of the said clarifications and clearer wording of
the provisions stipulating the practical application of such
clarifications one may witness the confusion, conflict of interests of
different structures, or the procedure will no go...
Lawyer offers to acknowledge eligible recurring general meeting of economic associations with 50 percent of voting shares
Kyiv. June 11, 2010
“The recurring general meeting of LLC (JSC) should be regarded eligible
even though its members (shareholders) hold just 50 percent of voting
shares instead of over 50 percent, as stipulates respective government
draft law,” suggests a counsel from Volkov Koziakov and Partners Nataliia Isakhanova.
This was her comment to the Interfax-Ukraine Agency on the Draft Law “On
Amendments to Some Laws of Ukraine with regard to the reduction of
quorum needed to conduct recurring general meetings of the Economic
Association” (No.6504), which had been recently registered with
"According to the pattern, the problem of blocked general meetings of
members (shareholders) by means thereof regards both JSC (LLC), in which
minority members (Shareholders) hold, in general, 40 percent of voting
shares, and JSC (LLC), the body of which includes two
persons/entities holding voting shares in halves," Ms. Isakhanova said.
She also explained that in case one of the members (shareholders) in
such companies does not visit the meeting, whereby putting obstacles in
the way of decisions affecting their economic activity, it seems
unfeasible to hold the meeting.
"It makes sense to amend the draft law No. 6504 in a part of the number
of voting shares necessary to conduct a recurring general meeting of the
members (shareholders). To wit, a recurring general meeting should be
regarded eligible even if participating members (shareholders) holding
just 50 percent of voting shares, and not over 50 percent, as it is set
out in the reading of document registered with the parliament," Ms.
AMCU likely to acknowledge requirement to serve state enterprises in state banks as anticompetitive
INTERFAX-UKRAINE. Kyiv. April 13
The requirement of the Ministry of Industrial Policy of Ukraine to transfer the state enterprises under its control to servicing by state banks has signs of the competition violation. Therefore, the Antimonopoly Committee of Ukraine (the AMCU) is likely to decide against the Ministry, Senior Partner of Volkov Koziakov & Partners Sergii Koziakov believes.
"Actually, in interpretation of the Law of Ukraine “On protection of economic competition” such Ministry’s requirements could be acknowledged “anticompetitive actions of government bodies," Mr. Koziakov informed to Interfax-Ukraine, commenting on the Ministry’s relevant order released on its website.
According to Mr. Koziakov, as defined in the Law “such actions include: taking any acts (decisions, orders, instructions, regulations, etc.), issuing written, oral directions, entering agreements, or any other acts or omissions by bodies of power, bodies of local self-government, administrative self-control bodies and bodies of administrative management and control (a collegial body or an official), which have led or may lead to denial, elimination or distortion of competition”.
"The order stipulates the transfer of accounts to Ukreximbank and Oschadbank. These banks may benefit the thing that is defined by the Law as "favour of unlawful advantages in competition". In other words, as Mr. Koziakov explained, this is the case when a bank attracts clients as a result of unfair competition and, moreover, under the order issued by the government body.
In addition, according to him, the situation arises when state enterprises cannot be serviced by other banks offering, perhaps, rather better conditions of servicing.
"Analysis of AMCU decision practice gives some cause for hope that in such situation the committee, most likely, will take a decision against the Ministry of Industrial Policy,” Mr. Koziakov said.
Reportedly, the Ministry of Industrial Policy in an order No. 160 of March 30, 2010 demanded that state enterprises belonging to its administration area to move to servicing by the state banks until April 30, 2010.
The Association of Ukrainian Credit-Bank Union (KBS) applied to the AMCU with a request for rapid measures to stop anticompetitive actions of bodies of power allowed for by the Ministry’s order.
Canada establishes fact of dumped imports of Ukrainian steel
INTERFAX-UKRAINE Kyiv. January 11
Canada has established the fact of dumped imports of carbon and high
strength low alloy steel plates originating in Ukraine, has reported
Canada’s authorized agencies
The respective information has been posted at the official web-site of
the Canada Border Services Agency (CBSA) on January 4, 2010.
According to this information, margin of dumping – amount to which the
normal value of the product in the country of origin exceeds the export
price of the product for Canada – for Azovstal Metallurgical Complex
(Mariupol, Donetsk region), which is a part of the Metinvest Group, as
well as for other group companies, amounts to 15 percent, and for all
other Ukrainian exporters – to 21.3 percent.
Here until February 2, 2010 the determination will be made of whether
or not there exists an injury caused to the Canadian domestic producers
of the like product by the Ukrainian dumped imports.
"In case the fact of injury is not proved the investigation may be
terminated without application of anti-dumping measures. If according
to the results of the Canadian domestic industry analysis the existence
of the mentioned fact is proved, the final anti-dumping duty will be
imposed. Yet, the latter scenario is more probable," reported a counsel
of Volkov Koziakov and Partners Viktoriia Kotsiubska to the Interfax-Ukraine agency on Monday.
She explained that in accordance with provisions of Anti-dumping
Agreement executed as a part of accession to the WTO by Ukraine, a
final anti-dumping duty may be imposed only in case if both the fact of
dumping and the fact of injury caused to domestic producer by the
imports are proved.
V. Kotsiubska mentioned that by virtue of the WTO rules, the final
anti-dumping duty cannot exceed the magnitude of the margin of dumping.
In other words, for Azovstal and the Metinvest Group that will total 15
percent, and 21.3 percent as for all other producers, but may also be
lower, in case it is enough to cover the losses suffered by the