The Ukrainian Journal of Bussines Law

[http://www.portmone.com.ua/v2/ru/services/periodicals/2533/] Counse link ANTIKA Law Firm 12, Khreshchatyk street, 2-nd floor, Kyiv , 01001 , Ukraine Phone: +38 (044) 390 09 20 Fax: +38 (044) 390 09 21 office@antikalaw.com.ua www.antikalaw.com.ua/en Arzinger 75, Zhylyanska Street., 5th floor, Kyiv , 01032 , Ukraine Phone: +38 (044) 390 55 33 Fax: +38 (044) 390 55 40 mail@arzinger.ua www.arzinger.ua AstapovLawyers ILG Sophia Business Center 6 Rylskiy lane, Kyiv , 01601 , Ukraine Phone: +38 044 4907001 Fax: +38 044 4907002 office@astapovlawyers.com www.astapovlawyers.com Asters Leonardo Business Center, 14th floor, 19-21 Bohdana Khmelnytskoho St., Kyiv , 01030 , Ukraine Phone: +380 44 230 6000 Fax: +380 44 230 6001 info@asterslaw.com www.asterslaw.com ECOVIS Bondar & Bondar Law Bureau 3 Rognidyns'ka street, office 10, Kyiv , 01004 , Ukraine Phone: +38 (044) 537 09 10 Fax: +38 (044) 537 09 10 Kyiv-law@ecovis.com www.ecovis.com/ua Gvozdiy & Oberkovych 19B Instytutska Street, Office 29, Kyiv , 01021 , Ukraine Phone: +38 (044) 581 12 20 Phone: +38 (044) 581 12 21 Fax: +38 (044) 581 12 22 info@golaw.ua www.golaw.ua Ilyashev & Partners 11 Kudryavska Str, Kyiv , 04053 , Ukraine Phone: +38 (044) 494 19 19 Fax: +38 (044) 494 19 99 office@attorneys.ua www.attorneys.ua IMG Partners 1/8 Ihorivska str.,, Kyiv , 04070 , Ukraine Phone: +380 44 201-10-66 Fax: +380 44 201-10-66 office@imgpartners.com.ua www.imgpartners.com.ua International law firm Integrites 15-B Borysohlibska St.,, Kyiv , 04070 , Ukraine Phone: +380†(44) 391 38 53 Fax: +380†(44) 391 38 54 pr@integrites.com www.integrites.com Inyurpolis law firm (ILF) 14-A †Skrypnyka Street,, Kharkov , 61057 , Ukraine Phone: +38†(057)†728 00 00 Fax: +38†(057)†714 06 28 office@ilf-ua.com www.ilf-ua.com Konnov & Sozanovsky 23 Shota Rustaveli Street, Suite 3, Kiev , 01019 , Ukraine Phone: +380 (0) 44 490-5400 Fax: +380 (0) 44 490-5490 info@konnov.com www.konnov.com LCF Law Group 47 Volodymyrska street, Office 3, Kyiv , 01034 , Ukraine Phone: +38 (044) 455 88 87 Fax: +38 (044) 502 55 23 info@lcfgroup.com.ua www.lcfgroup.com.ua/en/ Misechko & Partners 76B Volodymyrska Street, Office 7, Kyiv , 01033 , Ukraine Phone: +380 44 279 3943 Fax: +380 44 287 5480 office@misechko.com.ua misechko.com.ua Sayenko Kharenko 10 Muzeyny Provulok, 7th floor, Kyiv , 01001 , Ukraine Phone: +380 44 499 6000 Fax: +380 44 499 6250 info@sk.ua www.sk.ua Sokolovskyi and Partners Law Firm 25 Klinichna Street, 2nd floor, Kyiv , 03141 , Ukraine Phone: +380 44 495 1928 Fax: +380 44 275 6799 pravo@lex.org.ua www.lex.org.ua CURRENT ISSUE ( December 2014 ) In focus – Banking & Finance International financing has been the main driving force for pursuing business expansion and development projects in Ukraine. Over the years sectoral leaders were permanent actors in cross-border lending and debt capital markets. With the depression of the countryТs national currency, many Ukrainian borrowers are no longer able to meet financial obligations and fall behind with debt payments. At the corporate level, the situation is jeopardizing the operational continuity of companies and hitting certain sectors. Each individual case requires its own response. A new wave of debt restructurings has already been launched in the country. And experts emphasize that not all restructuring tools are available. In its turn, rapidly changing currency regulation is actually hindering the process... With the support of Tax Regulation УOur experience in the area of transfer pricing shows that taxpayers make a number of mistakes when they prepare reports on controlled transactionsФ, Yaroslav Romanchuk, the managing partner of International Legal Center EUCON, says. He argues that such mistakes are generally a consequence of the complexity of legislation, lack of clear regulations, and their lack of experience. However, there were many situations where mistakes were made due to poor control of the price level or the total lack of such control. In such cases, controlled transactions are identified too late and the methods of pricing are chosen and applied incorrectly... Expert Opinion Cross-Border Transactions under Pressure from Currency Gabriel P. Aslanian , Iryna V. Pokаnay Driven by the increasing volatility of the hryvnia exchange rate and encouraged by the approval of major international creditors of Ukraine, the National Bank of Ukraine has been gradually toughening the regime of currency operations, a process started back in late 2013. This, predictively, affected those major Ukrainian companies whose business operations have a significant cross-border component. As usual, the regulatorТs attention was focused on limiting the mechanisms of transferring foreign currency abroad. Mandatory sale of foreign currency proceeds The first step came with mandatory sale of foreign currency proceeds in October 2013. With certain exemptions (e.g., made for transactions involving international financial institutions, of which Ukraine is a member) this requirement applies to any foreign currency proceeds belonging to Ukrainian companies... In Re Multi-Currency Loans in Ukraine: How Does it Work? Igor V. Krasovskiy, Oleh P. Zahnitko Loans where funds are made available in more than one currency are referred to as Уmulti-currencyФ facilities. Multi-currency loans are becoming popular among corporate borrowers struggling with the extreme volatility of the exchange rate. Such loans, however, are still only available to Ukrainian borrowers in the simplest of forms, availing little opportunity to tackle the FX risk. This article explains the nature of the multi-currency clause included in cross-border loans and discusses their practical implementation. We also explore alternative multi-currency structures to reduce borrowersТ exposure to foreign exchange risk... Raising International Money Locally Nazar A. Chernyavsky, Marta B. Lozenko It is a perceived wisdom that external financing has been one of the main sources for supporting the Ukrainian economy at all times, including in times of hardship, as we have now. At the same time, all foreign funds, by and large, were coming to the state and private sector, while municipal borrowers have been lagging behind. According to the data of the Ministry of Finance of Ukraine, there were seven loan agreements executed by Ukrainian city councils in 2013 with foreign lenders and only one in 2012. Based on the publicly available information, the number of external local borrowings in 2014 would hardly reach the level of 2013... Restoring Solvency without Recourse to Court Procedures Artem V. Shyrkozhukhov, Anna V. Melnychuk In 2014 Ukraine found itself in a perfect storm with almost anything bad that could happen either has already occurred or is taking place at the moment. The host of these issues makes creditors, either in theory or in the face of already crystallised defaults, start looking at their borrowers from the prism of insolvency. Getting tied up in years of lengthy bankruptcy procedures, often with little chance to recover their debt in full if at all, especially in case of unsecured creditors, is not a very promising prospect. Therefore, creditors are often trying to find working solutions to restructure indebtedness in a mutually acceptable way. The primary goal is for the debtor to survive, to relieve the immediate pressures of some of its obligations and gradually return it to a position of solvency... Hot Issue Restructuring of Restructuring Kseniya V. Ostrovska, Nataliya M. Selyakova The Ukrainian financial market has already experienced several waves of debt restructuring, and as time passes, restructuring tends to become more and more complex and stressful. Initially, debt restructuring was limited to repayment rescheduling and extensions; however, restructuring of restructured debt (as is on the agenda now) becomes more complex. In the current economic and political environment, lenders consider prospective restructuring with a high degree of scrutiny. In addition, yesterdayТs reliable borrowers have been raising funds from all sources available, so now with defaulted facilities, the creditors have to face a line of other creditors standing against the distressed assets not capable of covering the indebtedness outstanding... Argument Customer Due Diligence Online: Ukrainian Realities and Perspective Anna V. Sisetska, Olena V. Nikolenko The Association Agreement signed between Ukraine and the EU (the Association Agreement) keeps on affecting the Ukrainian legal framework. Ukraine is currently challenged to align its domestic financial monitoring laws with the European rules and standards. The issues of customer due diligence conducted by participants of the financial service market in the light of respective European regulation is becoming especially important. Given the above it is worth evaluating legal possibilities and perspectives for modern online business strategies for financial companies to consider in the context of updated Ukrainian-European legislation... Cover Story Demolishing Myths It is obviously a more conventional situation for the Ukrainian legal market when legal players from the capital expand into the regions. However, recent events have brought new challenges for regional law firms, forcing them to weigh up options for staying on board and demolishing myths about the† passivity of local heroes. Serhiy Matviyiv, founding partner of Matviyiv & Partners, has his own vision on the situation... † Venue A Polish Window on Europe International Forum Polish Business Day was held on 6 November 2014 in Kiev. International Legal Center EUCON, International Audit Union and the Polish-Ukrainian Chamber of Commerce under the patronage of the Embassy of Poland in Ukraine and the auspices of the Trade and Investment Promotion Section of the Embassy of the Republic of Poland in Ukraine were the organizers of the event. The Forum attracted the attention of Polish and Ukrainian executive authorities, representatives of the business community as well as leading Ukrainian lawyers... Crux Establishing Due Economic Advantage For many years public procurement and state aid have been used by certain businessmen to get undue economic advantages. With the new parliamentary coalition, these issues are top priorities of pending reforms in the country. The EU Ч Ukraine Association agreement is an anchor for these changes. This month our expert panel discusses recent initiatives, application of best practices and expectations of primary changes. † Deals -Gide Kyiv advised the European Investment Bank- -Baker & McKenzie advised Siemens Ukraine- Draft -Anti-subsidy investigations- -Waste management- Cases -New York-based law firm receives contingency fee of USD 44 million- -Shares in Zaporizhzhya Aluminum Plant returned to the State Property Fund of Ukraine- -Integrites defended Samsung C&T Corporation- -Konnov & Sozanovsky defended Soremartec S.A.- -ECOVIS Bondar & Bondar represented Ukraine International Airlines- -Lavrynovych & Partners defended Väderstad- Law Digest -Carrying currency across the administrative border with the Crimea free economic zone- -Stabilization of foreign exchange market in Ukraine- -Control of goods transported across administrative border of Crimea free economic zone -Promoting debt restructuring- AMCU -AMCU issued mandatory recommendations for PJSC Kyivstar- -AMCU issued its mandatory recommendations to JSC Ukrtelecom- -AMCU supports competition in the market of connections to gas supply networks- Chamber News -Tax Committee Meeting- -Influence of Monetary & Exchange Rate Policy on the Real Sector & Attraction of Foreign Investments - UBA News -Kiev Arbitration Days 2014: Think Big!- -I All-Ukrainian Conference on Criminal Law and Process- Biznews International Monitoring: -Ukraine rises in Doing Business-2015 ranking- -Warsaw opens Hub for high-tech Innovative start-ups- Corruption: -Large corporations bring large corruption to Ukraine- Banking & Finance: -Major international banks to pay fine of USD 3.2 billion- -EY New: 51 jurisdictions agree to automatically exchange financial account information- -Support to banksТ liquidity- Subscribe Subscribe to The Ukrainian Journal of Business Law right now and enjoy the most relevant issues on doing business in Ukraine on your device or in print. 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