LAW FIRM DIRECTORY

Industry Sectors

Economic upsurge

Reforms in business have been pending for three years. Lawyers are not giving up hope that improvements will finally take place considering both domestic needs and external incentives to bring legal regulation of the economy to world standards, despite the failure of the blitzkrieg aimed at business deregulation and eradicating corruption

IRYNA GONCHAR

Agrarian aspirations

The greatest disappointment experienced by farmers was, perhaps, breaching of the promise to open up the land market. On the contrary, the moratorium on sale of agricultural land has been extended until 2018, while Parliament is currently considering the issue of how to completely prohibit the sale of such lands. Farmers continue to rent lands for agricultural purposes, says Oksana Kryzhanovskaya, Partner at ALEXANDROV & PARTNERS Law Firm, specifying that emphyteutic lease agreements are becoming more and more in demand. "Until a few years ago, an agreement of this kind was unknown to many farmers, but today its popularity is growing, since nobody can say with certainty today whether the market will be open in the near future", — says the lawyer.

In terms of increasing the investment attractiveness of the Ukrainian agricultural sector, absence of land market may result in unfair competition and, according to the lawyer, will force farmers to protect their land bank and to slow down the shareholders churn rate.

In addition to the above, Mrs. Kryzhanovskaya points out that in 2016 farmers were able to form the land bank more transparently — with adoption of the new amendments to the Land Code of Ukraine prohibiting lease of certain types of public and municipal lands without holding competitive tenders (or auctions). Amendments to the Law of Ukraine "On Protection of Economic Competition" raising thresholds for consent on concentration obtained from the AMCU, as well as the amnesty applied to concentrations, also had a positive impact on agribusiness leaders.

 

Pharmaceutical business secret

The expectations of pharmacists of legislative impetus to rapid development were not met. The Head of the Legal Department at Farmak PJSC, Dmitriy Taranchuk, points out that the only fulfilled promise was introduction of the simplified procedure of state registration of medicinal products in Ukraine. It is, however, necessary to introduce reimbursement systems, compulsory health insurance and elimination of discrimination on the market.

Elena Khitrova, ILF Associate Partner, believes that simplified registration procedures for some medicinal products approved by the competent authorities of the United States, Switzerland, Japan, Australia, Canada, and the EU, will enter the Ukrainian pharmaceutical market in only a year, after foreign importers have increased competition. The lawyer also refers to a new factor influencing the pharmaceutical market — procurement of medicines through the ProZorro system, which has resulted in reduced corruption and new markets for medicines.

Pharmacists, however, are still looking forward to deregulation. Thus, Dmitriy Taranchuk emphasizes the need to approve new Licensing conditions for economic activities on the production, wholesale, retail trade and import of medicinal products. The work on the new Draft Law of Ukraine "On Medicinal Products" (Parliamentary registration No. 2162-д), which the parliamentary committee recommended for adoption as early as last April, is still in progress. At the same time, Elena Khitrova predicts that the order of the Prime Minister regarding offers on reduction of prices for medicines may result in price regulation (as far as wholesale and retail margins on medicines are concerned), which makes market deregulation rather doubtful.

As for the medical services market, Elena Khitrova says that Parliament and the Government have just laid the groundwork for further transformations. As adopted in the first reading, Draft Law No. 2309а-д on the reorganization of hospitals granting them autonomy in the disposing of assets, can stimulate implementation of public-private partnership projects on the basis of both state and communal medical institutions. But, most of all, the medical community awaits introduction of changes to the financing system and creation of a single medical space, namely a single national purchaser authorized to distribute medical subventions and purchase health services for the population on a competitive basis, which should provide equal rights to private, state and communal hospitals.

 

Transport junction

In the transport sector, the most significant event of 2016 was the establishment of the State Service of Ukraine for Transport Safety (Ukrtransbezpeka) with jurisdiction over all security issues on land, sea and river transport (except for the vessels of the fishing fleet). As explained by Maksim Buhay, Legal Advisor at TNT Ukraine, since April 2016, inspectors of the State Service of Ukraine for Transport Safety have, together with the National Police, been supervising  compliance by carriers with the legislation of Ukraine. "According to Ukrtransbezpeka, within three weeks of active patrol inspections, more than 700 illegal passenger transportation operators were discovered. The total amount of fines to be paid to the budget is about 40 million UAH. Inspectors of Ukrtransbezpeka are now striving hard, when carrying out checks of freight carriers", — says Mr. Buhai.

The lawyer also draws attention to the coming into force of new licensing conditions for economic activity on transportation of passengers, hazardous cargoes and wastes by road transport, international transportation of passengers and goods by road transport.

For international transportation, one of the most significant changes were amendments passed to the International Convention for the Safety of Life at Sea (SOLAS), 1974. Danil Khristich, lawyer at LeGran.TT, notes that these amendments do not allow containers to be loaded on board a vessel unless the specified gross weight of a packed container, including its cargo (VGM), has been provided. In addition to improving the safety of the personnel and ship, this will also help to avoid any disputes on the quantity and condition of the cargo. Besides, the Ministry of Infrastructure has reduced requirements for the minimum number of crew members on low tonnage ships.

According to Mr. Khristich, another positive innovation is introduction of a Single Window at customs, including automated information exchange and the "silent consent" principle, when customs clearance is completed automatically, if inaction on the part of customs officers exceeds four hours.

Maksim Buhay believes that the question of a carrier's limitation of liability in case of loss/damage of cargo carried within Ukraine remains high on the agenda. This limitation has already established for international shipments, while according to the rules of the Civil and Economic Codes of Ukraine, the carrier shall be liable for damage/loss of the cargo in full. "It is no easy task to calculate the limit and make it economically feasible. But should it be identified, as carriers will be protected and pricing of services will become more transparent," — says Mr. Buhay, adding that it is also necessary to determine the limits of liability for violation of the delivery time, conditions of the carrier's additional liability and grounds providing relief from liability.

Further, Vladimir Zubar, Managing Partner at Yurline Law Firm, points out that demand for huge investment is the main problem of the transport sector. But since promised large-scale privatization has not been launched yet, nobody is eager to invest in the infrastructure (port (river) terminals, railways, roads), which belongs to the state. According to Mr. Zubar, inconsistent actions on the part of the state cannot but cause concerns. For example, after the new legislation on sea ports had entered into force, the Administration of Sea Ports of Ukraine insisted on establishing with stevedores servitudes for use of marine terminals (even through legal proceedings), but as early as 2016 it began to terminate such agreements. Nevertheless, these changes regulated the operation of private terminals, which made it possible by means of investments to increase the transshipment capacity for grain export from Ukraine. Although, Tatiana Titarenko, Director of UK LeGran.TT Law Firm, adds that neither an investment compensation procedure has been approved nor mechanism of PPP operation established.

General business issues are relevant to this industry too. According to Mrs. Titarenko, in 2016, its work was blocked as a result of searches and seizures, when cargoes and transport were detained unreasonably on the basis of fabricated data or court decisions.

 

Heavy metal

Although 2016 was not a watershed year for the steel industry, some substantial changes in the rules on domestic and foreign markets did take place. Ivan Yurchenko, Head of the Department of Legal Support of Foreign Economic Activity at METINVEST HOLDING LLC, considers the Law of Ukraine "On Amendments to Some Laws of Ukraine on Reducing the Deficit of Scrap in the Domestic Market", adopted on July 12, 2016, to be a milestone. This law increased the export duty on wastes and scrap of ferrous metals to 30 EUR per ton for a period of one year (although the market demanded 50 EUR for three years) and annulled the decree on the compulsory state registration of scrap metal export contracts starting from October 5, 2016. "Ukraine, where MMC belongs to one of the most strategic industries, is unwilling to follow the example of other countries and is ready in a year to open up for scrap export (a truly strategic raw material), despite economic benefits derived from its use in the domestic steel industry, particularly in view of the armed conflict in the East of the country, when scrap of ferrous metals is high in demand to ensure the needs of the defense industry and rebuild the infrastructure", — says Mr. Yurchenko,  voicing the hope that in 2017 scrap-collecting businesses will work under more transparent rules, meaning abolition of VAT and personal income tax, which will enable at least some balance of power to be restored.

According to Ivan Yurchenko, the stepping up of free trade is vital for MMC. The market expects accession to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin, enabling Uk­rainian exporters to enter the markets of 42 countries (Ukraine is currently preparing to join it), as well as the agreement on a free trade zone with Turkey, which is actively being discussed now.

 

Implementation of procedure

April's changes made to the Procedure for Issuing Special Permits for Subsoil Use and the Procedure for Holding Auctions on Purchase of Special Permits for Subsoil Use are truly regarded as being a key factor in reducing corruption and attracting investors to the natural resources industries. "These changes shortened the list of grounds for the issue of special permits without an auction by one third. The rules, allowing owners or tenants of integral property complexes and companies with a state-owned stake in their charter capital exceeding 25% to obtain special permits without holding auctions, have been omitted", — says Alexander Burtovoy Partner at Antika Law Firm.

Among other changes, Mr. Burtovoy points to the expanded and specified list of grounds for rejecting applications for participation in auctions, grounds for refusal to issue or extend special permits and the obligation to give clear and distinct reasoning for rejection; clarification of renewal and amendment of permits, as well as reduction in the list of grounds for suspension of permits and the number of bodies that can initiate suspension.

According to Alexander Burtovoy, these changes were a significant step taken by the government towards liberalization and transparency of subsoil use: "In our view, to attract investments in such a regulated branch of economy as mining, it is not enough to create transparent conditions for granting licenses. It is also necessary to create the conditions for proper functioning of extractive enterprises and to reduce government pressure on them."

 

Communication difficulties

Progress on the telecommunication services market is fraught with challenges and difficulties. Thus, Managing Partner at Suprema Lex Law Union Victor Moroz and its Junior Lawyer Alexander Rozdorozhny note that in 2016 many companies were not able to enter the Ukrainian 3G-communications market due to the excessively high requirements set by the regulator. Excessive regulations and bureaucracy have led to monopolization of the market and, as predicted by lawyers, they may keep away Ukrainian users from introducing such new technologies as 4G. Due to non-conformity with obsolete standards, innovative companies can't get a license. The situation on the market became even more complicated after the National Commission for State Regulation of Communications and Informatization approved a new form of reporting on the main performance indicators of the operator and service provider.

 

Trademark

The main force that is driving changes in the legal regulation of trade, as claimed by experts, is the Agreement on Free Trade Area (DCFTA), which is part of the EU-Ukraine ­Association Agreement. Thus, Ekaterina Kovalchuk, Senior Legal Advisor at the Department of Legal Support of the Legal Department Operations, Fozzy Group, points out that during its implementation acts were developed and adopted introducing new procedures for production of various types of products (for example, organic food production), changing rules on the  selling of certain products in the market (electrical goods, measuring equipment), conditions for ensuring the quality of domestic and imported products, approaches adopted by the authorities when performing their oversight functions.

But, as Mrs. Kovalchuk explains, business entities often encounter the position of the regulatory agencies, which is based on outdated rules for production and trade.

Viktoriya Melnychenko, Head of the Legal Department at Avon Cosmetics Ukraine & Georgia, also emphasized the DCFTA's positive effect on companies importing most of their products from Europe, as well as the cut in the ECB rate and abolition of import tax. Mrs. Melnychuk hopes that the Technical Regulation on the Safety of Perfumery and Cosmetic Products, based on EU Regulation No. 1223/2009, which will enable the harmonization of Ukrainian standards with European ones in the field of production and sale of cosmetic products, will be adopted in the near future.

At the same time, the problem of grey imports has not been solved yet, which interferes in the activities of representatives of world brands in Ukraine. According to Anna Zharova, Legal and Compliance Manager at Philips Ukraine LLC, the importation of goods by unofficial representatives is gradually gaining momentum. Grey imports are detrimental to official importers as much as it is unprofitable for the state and consumers. It is not so much the price of products, but the unavailability of instruction manuals in Ukrainian, warranty and post-warranty support," —Mrs. Zharova points out. The lawyer proposes to legislate the principle of national exhaustion of rights, in which case the trademark rights would be of a territorial nature allowing trademark holders and official importers to pursue gray sellers, consumers will be allowed to purchase official products, while the state will enjoy economic growth.

 

Let food be

Commitments to European standards proved to be a stimulator of changes to the regulation of the food industry. Natalia Lysa, Head of the Foreign, Corporate and Legal Affairs of Danone in Ukraine, draws attention to the Resolution adopted by the Cabinet of Ministers of Ukraine (CMU), which is supposed to bring the procedure of regulation of the food products market closer to EU standards and reduce administrative pressure on business. This will prevent the line of so-called social products not to be reduced and will enable their sale at affordable prices.

 

Energy effect

Perhaps the most significant changes occurred in regulation of the energy industry. It is too early, however, to speak of their sufficiency. Tatiana Tarasyuk, Director of Legal Affairs at Kyivoblenergo PJSC, points out that following three years of discussions pursuant to the requirements of the EU Third Energy Package, on September 22 2016, Parliament adopted the Draft Law "On the Electricity Market of Ukraine" (No. 4493). The key idea is to legally and structurally separate the distribution and transmission of electricity from other types of activities in order to enable economic competition on the market. Besides, instead of a single purchaser (represented by State Enterprise Energorynok), there are plans to establish several markets, namely: bilateral contracts market (direct contracts signed with power generation companies), day-ahead market, intra-day market, balancing market, and ancillary support services market.

Tatiana Tarasyuk emphasizes adoption of the Law of Ukraine "On the National Commission for State Regulation of Energy and Public Utilities" (NCREPU), which, as analysts hope, will ensure the regulator's independence. In the meantime, the unreformed NCREPU has adopted the Procedure of Ensuring Quality Standards for Electricity Services, introducing guaranteed quality standards for services provided and procedure for receipt of compensation should they be violated.

The decrease in rent payments associated with gas production had a positive impact on the gas sector. "This made it possible for the industry to survive despite falling gas prices. However, for the industry to develop lower rates and the possibility to pay taxes after gas has been sold, rather than recovered, are necessary", — says Maksim Sysoyev, Lawyer at Dentons International Law Firm. Furthermore, Mr. Sysoyev points out that the changes made to the approach in defining the basis for calculation of rent payments: instead of the price fixed by the regulator, an average import gas price for the reporting period (month) was used in 2016. A great deal of attention has been given to the gradual reduction in safety stock for gas suppliers — up to 10% (according to the amendments dated September 22, 2016 to the Law "On the Natural Gas Market"). 

However, changes to the Customs Code allowing validation of backhaul (virtual reverse), made as early as last February, have not yet come into effect, since negotiations with the operators of gas transmission systems from neighboring countries are currently under way.

Sergey Oberkovich, Senior Partner at GOLAW also highlights the law on the electricity market adopted in the first reading, which is important in terms of the NCREPU's obligation to develop a standard form of agreement for electricity purchase and sale at green tariffs and approval of the procedure for the conclusion of such agreements. Power Purchase Agreements (RRA) already offer opportunities to attract investments in the alternative energy industry all over the world. "In Ukraine, the conclusion of PPA is not yet a common practice. To enter into contractual relationships with the SE "Energorynok" (the only guaranteed purchaser of green power), a manufacturer shall obtain a license for the production and sale of electricity, the approved (by NCREPU) size of the green tariff and join the Wholesale Electricity Market", — says Mr. Oberkovich. In other words, it is impossible to sign a PPA for future use being at the planning stage for construction of an alternative power generation facility. And that is precisely what foreign investors are extremely concerned about.

 

Aviation

Leading FIRMS

 

1

 

1.

Ilyashev & Partners

 

2

 

2.

ECOVIS Bondar & Bondar

 

3

 

3.

Ante Law Firm

 

4

 

4.

Asters

 

5

 

Sayenko Kharenko

 

 

NOTABLE PRACTITIONERS

 

Oleg BONDAR

( ECOVIS Bondar & Bondar)

 

Andriy GUCK

( Ante Law Firm)

 

Oleksiy DEMYANENKO

(Asters)

 

Roman MARCHENKO

( Ilyashev & Partners)

 

Viktor MOROZ

(Suprema Lex)

 

Agribusiness

Leading FIRMS

 

1

 

1.

 

2

 

Dentons

 

3

 

Asters

 

4

 

ALEXANDROV & PARTNERS

 

5

 

Sayenko Kharenko

 

 

OTHER NOTABLE PRACTITIONERS

 

Dmytro ALEXANDROV

(Alexandrov & Partners)

 

Eugene BLINOV

(ETERNA LAW)

 

Oleg BOICHUK

 

Alexander BORODKIN

( Vasil Kisil & Partners)

 

Danylo GETMANTSEV

( Jurimex Law Firm)

 

Andrii ZABLOTSKYI

(Sayenkо Kharenko)

 

Ivan KASYNYUK

(AGA Partners)

 

Oksana KRYZHANIVSKA

(Alexandrov & Partners)

 

Denis LYSENKO

(AEQUO)

 

Ihor MEHEDYNYUK

(Dentons)

 

Ihor MELNYK

(IMG Partners)

 

Alexander MININ

( WTS Tax Legal Consulting/ KM Partners)

 

Mykola ORLOV

(OMP)

 

Olena PEREPELYNSKA

(Integrites)

 

Andriy ROMANCHUK

(MORIS GROUP)

 

Serhiy SILCHENKO

(ILF)

 

Mykola STETSENKO

(Avellum)

 

Aminat SULEYMANOVA

(AGA Partners)

 

Yaroslav SVERDLICHENKO

( OMP)

 

* — Listed in alphabetical order UKRAINIAN LAW FIRMS 2016. A HANDBOOK FOR FOREIGN CLIENTS

 

Pharmaceuticals / Medicine & Healthcare

Leading FIRMS

 

1

 

Arzinger

 

2

 

1.

« Legal Alliance Company

 

3

 

Marchenko Danevych

 

4

 

Baker & McKenzie

 

5

 

2.

OMP

 

Leading INDIVIDUALS

 

1

 

Borys DANEVYCH

(Marchenko Danevych)

 

2

 

Lana SINICHKINA

(Arzinger)

 

3

 

Illya KOSTIN

( Legal Alliance Company)

 

4

 

Mykola ORLOV

( OMP)

 

5

 

Andrii GORBATENKO

( Legal Alliance Company)

 

OTHER NOTABLE PRACTITIONERS

 

Dmytro ALESHKO

( Legal Alliance Company)

 

Oleksii BEZHEVETS

( Legal Alliance Company)

 

Timur BONDARYEV

(Arzinger)

 

Tetyana GAVRYSH

(ILF)

 

Olha DEMIANIUK

(Baker & McKenzie)

 

Galyna ZAGORODNIUK

(DLA Piper)

 

Irina KIRICHENKO

( Ilyashev & Partners)

 

Mariana MARCHUK

(Baker & McKenzie)

 

Igor OGORODNIYCHUK

( Law Offices of OMP)

 

Viktoriya PODVORCHANSKA

( Egorov Puginsky Afanasiev & Partners Ukraine)

 

Energy & Natural Resources

Leading FIRMS

 

1

 

CMS Cameron McKenna

 

2

 

Baker & McKenzie

 

3

 

Asters

 

4

 

Dentons

 

5

 

Sayenko Kharenko

 

Leading INDIVIDUALS

 

1

 

Vitaliy RADCHENKO

(CMS Cameron McKenna)

 

2

 

Olexander MARTINENKO

(CMS Cameron McKenna)

 

3

 

Armen KHACHATURYAN

(Asters)

 

4

 

Olyana GORDIYENKO

( Baker & McKenzie)

 

5

 

Myron RABIJ

(Dentons)

 

OTHER NOTABLE PRACTITIONERS

 

Oleg ALYOSHIN

( Vasil Kisil & Partners)

 

Daniel BILAK

(CMS Cameron McKenna)

 

Alexander BORODKIN

( Vasil Kisil & Partners)

 

Alexander BURTOVOY

( ANTIKA)

 

Yevheniy DEYNEKO

(EVERLEGAL)

 

Taras DUMYCH

(Wolf Theiss)

 

Maryna ILCHUK

(Arzinger)

 

Mikhail ILYASHEV

( Ilyashev & Partners)

 

Alexey KOT

( ANTIKA)

 

Oleksandr KURDYDYK

(DLA Piper)

 

Denis LYSENKO

(AEQUO)

 

Oleh MALSKYY

(ETERNA LAW)

 

Sergiy OBERKOVYCH

(GOLAW)

 

Ihor OLEKHOV

(Baker & McKenzie)

 

Yaroslav PETROV

(Asters)

 

Serhiy PIONTKOVSKY

(Baker & McKenzie)

 

Vladimir SAYENKO

(Sayenko Kharenko)

 

Maksym SYSOIEV

(Dentons)

 

Nazar CHERNYAVSKY

(Sayenko Kharenko)