Following several years of regression and calm, the situation in transaction practices, especially corporate and banking practices, can be described as the beginning of a recovery, although market participants themselves are still extremely cautious in their assessments. Nevertheless, projects that have not been seen for a long time have begun to appear on the market. Moreover, the personnel market has got brighter, and law firms are starting to recruit staff, apparently, for future projects and to respond to deferred demand
Despite the significant work done by legislators in the reform of corporate law, the imperfect legal framework still acts as a brake on activities in mergers and acquisitions. According to participants of M&A transactions, Ukrainian legislation is still not aimed at protecting the rights of investors. The tax aspects, particular the peculiarities of the country’s tax system, have a significant effect on the structuring of transactions. At the same time, some standard practices used by Ukrainian business for optimization of tax burden today, will soon be ineffective
"We expect a significant increase in the number of successful financial restructuring cases" SERGII PAPERNYK , HEAD OF BANKING AND FINANCIAL PRACTICE OF EVRIS LAW FIRM, SAYS
"The main conditions for successful restructuring are the mutual interest of the parties, the right team and a readiness to compromise" OLEKSANDER PLOTNIKOV, A PARTNER AT ARZINGER LAW FIRM, UNDERLINES
"One of the key challenges is to reduce the political impact on state enterprises" OLEG BONDAR, MANAGING PARTNER AT ECOVIS BONDAR & BONDAR, IS CONVINCED
"Low-cost companies want lawyers to be both universal soldiers and narrow specialists within the confines of the allocated budget" VIKTOR MOROZ, MANAGING PARTNER OF SUPREMA LEX LAW FIRM, CLARIFIES
"Big data commercialization in the absence of proper understanding of the challenges it will entail and protection is far from being the best idea". YURIY KOTLIAROV, PARTNER OF JUSCUTUM LAW FIRM WARNS
The impetus for developing Ukraine’s energy sector is the desire to reduce energy capacity in all areas and step up "green" technologies of power generation. For the time being, however, investors are considering the Ukrainian market with trepidation
Ukraine is committed to integration with the energy markets of Europe. This is stated in the Energy Strategy of 2015 and implemented, in particular, in new sectoral legislation. But the implementation of new mechanisms in the industry is complicated by an ideological gap in understanding the implementation of approaches and principles of the EU and European Energy Community by certain public authorities.
The renewable energy sector is one of the most dynamic and attractive ones from the point of view of prospects for development and attracting investment. Implementation of the Third Energy Package and other innovations in the electricity market regulation gives foreign investors the “green light”
The opening up of markets and introduction of transparent and competitive rules of the game make domestic energy more attractive. Implementation of new infrastructure projects and diversification of energy sources result in the arrival of internationally famous energy companies in Ukraine. At the same time, the guaranteed rate of return on projects in the field of renewable energy sources provides stable demand for “green” projects.
How to make investment conditions in the alternative energy sector appropriate to the investor Sergiy Oberkovych, SENIOR PARTNER AT GOLAW, LAWYER
For many lawyers monitoring development of the judicial practice the main question is not exactly what position was taken by the highest specialized courts or Supreme Court in a certain dispute, but will the new court of cassation will adhere to it? In this context, the risks regarding the predictability and stability of judicial practice are high
The category of cases on cancellation of decisions by the National Bank on recognizing banks as insolvent and their liquidation is new for Ukrai-nian practice. It emerged as a response for massive liquidation of banks which was carried out by the NBU as a part of the system’s purification in 2014 and during which the regulator violated its own procedures
"When a foreign jurisdiction delivers a judgment, then, as a rule, nobody risks not to enforce it" ALEXEY IVANOV, MANAGING PARTNER AT KONNOV & SOZANOVSKY, SAYS
"The disposal of mortgage property at an understated price is quite common and does not enable liabilities to creditors to be met in full" OLEKSANDR NAVALNEV, DIRECTOR OF VOLHV LAW FIRM, SHARES HIS OBSERVATIONS
When analyzing the judicial practice, it seems that the principle of "beat the dog before the lion" formed the backbone for making decisions on cases on recovery of debts from the state and state enterprises. It seems that the ultimate goal of these precedents is to protect the state field of assets from claims by creditors. A foreign investor needs to think carefully before entering into contractual relations with the state
"Ukraine took the step of improving quality and enhancing the credibility of the judicial system through the introduction of legal examinations" EVGEN KUBKO, PRESIDENT OF SALKOM LAW FIRM SAYS
The year 2018 is the year of opportunities for the renewed judicial system, which should show the ability to compete with foreign state courts and promote rapidly developing international arbitration
By September 2017, approximately 1 trillion UAH worth of unrecovered loans had accumulated in the domestic banking system. More than a third of this amount (356 billion UAH) is the share owed by state banks, and another 380 billion UAH is a loan portfolio of insolvent banks which is managed by the Deposit Guarantee Fund. On the one hand, such figures are terrifying since they reflect the depth of the crisis in the country’s financial sector. On the other hand, this is promising scope for the joint efforts by the state and private sector, lawyers, and economists to revive the economy and raise capital
The moment of truth for judicial reform came in 2017 as there were many significant events: both legislative events like the adoption of new Laws “On the High Judicial Council” and “On the Constitutional Court of Ukraine” and introduction of comprehensive changes in procedural codes, as well as personnel ones. The most sweeping change is, of course, the competition for the new Supreme Court (the SC). However, in the pursuit of frequency of experiments, they often had to close their eyes on fairness, and for the main “examinees”, representatives of the judiciary, some innovations turned out to be quite painful
"To create a legal state, it is necessary to create incentives for strengthening the bar as an institution" OLEKSIY FILATOV, DEPUTY CHIEF OF THE UKRAINIAN PRESIDENTIAL ADMINISTRATION, COORDINATOR OF THE COUNCIL ON JUDICIAL REFORM, ASSERTS
“The new Code of Commercial Procedure (CCP) is designed for professional representation of the parties to a commercial process by lawyers” ALEXEY KOT, THE MANAGING PARTNER OF ANTIKA LAW FIRM, MEMBER OF THE COUNCIL ON JUDICIAL REFORM UNDER THE PRESIDENT OF UKRAINE
Constitutional changes in 2016 enshrined the exclusive right of attorneys to judicial representation. But contrary to popular belief, the “monopoly” is not a reason for attorneys to relax, because at the same time the requirements will become stringent and the level of their professional responsibility is increased
Legislators tried to refine the face of the law-enforcement system in order not to blush before foreign investors: to add correct traits to it with the help of mechanisms for protecting business from abuses of "power". But lawyers fear that law-enforcement officers will adapt any, even the most stringent, new rules to their old habits
The attorney, who takes to defend an aggrieved person in criminal proceedings, should be prepared to fulfill not only his or her duties, but also the functions of investigator and prosecutor. Moreover, it is also necessary to be able to force law-enforcers to work
"The shift in focus from qualitative investigation to the number of proceedings opened and high-profile processes was the main trend of 2017" VITALIY SERDYUK, ATTORNEY, SENIOR PARTNER OF AVER LEX LAW FIRM, SHARES HIS OBSERVATIONS
"In high-profile cases the task of the defense is to forget about resonance, to focus on the details and to do its work" OLEKSIY MENIV, PARTNER AT SHKREBETS & PARTNERS ATTORNEYS-AT-LAW, EMPHASIZES
At the procedural stage of judicial reform, the main legislative efforts were aimed at the comprehensive improvement of economic, administrative and civil proceedings, embodied in the adoption of the relevant law by the Ukrainian Parliament on 3 October of last year. But almost the greatest resonance in the information space was caused by the innovations, which were proposed for introduction into the Criminal Procedure Code of Ukraine (CPC) by member of parliament Andrii Lozovoi, — with regard to the terms of pre-trial investigation.
Fraud is an increasing concern of the business environment. Reputable companies with leading positions on the market are experiencing attacks on their business and incurring losses. In these circumstances, the competitiveness and the investment prospects of certain branches of the national economy and the state as a whole, deteriorate. Recently, the international companies, running businesses in Ukraine, have also have fallen under the spotlight due to fraud.
Practice in the field of bankruptcy is profitable and developing at a dynamic rate. However, in 2018 the number of bankruptcy cases may fall be-cause of the intense activities of private bailiffs and application of the law on financial restructuring
In Ukraine, bankruptcy was and remains a way to achieve goals which, as a rule, are not related to restoration of a debtor's solvency. This approach forms the legal culture and law-enforcement practice in this sphere. Since introduction of long-overdue legislative amendments is being successfully blocked in Parliament, the new Supreme Court, consisting of experts who are very familiar with this issue, should impose order in the bankruptcy processes
"Both a debtor and creditors are increasingly aware of the feasibility to resolve a situation peacefully and are inclined towards business decisions" DENIS KYTSENKO, PARTNER OF DINASTY LAW FIRM, REMARKS
Court practice for consideration of bankruptcy cases: negative and positive aspects of the multidimensional positions of higher courts
Global trends in taxation, such as implementation of the provisions of the BEPS plan, set out the vector of development in Ukrainian tax legislation. One of the most dynamically changing ones is the area of transfer pricing. Also, business was concerned this year about tax administration; some legislative proposals, including introduction of the disinvestment tax, arouse extensive discussions. The vast majority of appeals to lawyers regard the settlement of disputes with the tax authorities: the option of administrative appeal is used rather actively along with legal proceedings
"The point of evidence base formation in tax disputes is shifted to consideration of the case on fact" DMYTRO DONETS, A PARTNER, head of PRACTICE OF DISPUTE SETTLEMENT AT PWC LEGAL LAW FIRM, EXPLAINS THE NEW PARADIGM
Although the legislative initiative regarding the imposition of a disinvestment tax was introduced in 2015, the first attempt to implement it actually failed. However, the discussion continues, and if the National Council for Reforms supports the draft law on the imposition of a distributed profit tax developed by the Ministry of Finance, then the implementation of this idea will be possible in the near future
"Actually, even the minimal BEPS plan, which Ukraine joined, had a significant impact on the approaches to international tax structuring" OLEKSANDR MARKOV, COUNSEL, HEAD OF THE TAX LAW PRACTICE AT REDCLIFFE PARTNERS LAW FIRM, SAYS
Disputes on transfer pricing will become even more difficult, and requirements for preparation of documents will get stringent.
"One can have a dispute with the tax agency and it is even necessary, since there might be no other mechanism to improve a situation globally and to protect a business in particular." VADIM MEDVEDEV, COUNSEL AT AVELLUM LAW FIRM, BELIEVES
The year 2017 did not mark a turning point for the intellectual property sphere. IP reform is on the back burner, and though the commencement of the Ukraine’s Association Agreement with the EU promoted IP protection, it also revealed new problems of law- enforcement. The absolute good news is the establishment of the IP court. The first steps towards "intellectual justice" have been made.
"Implementation of judicial reform and establishment of the Supreme Intellectual Property Court will catalyze positive irreversible processes in our state leading to the triumph of the supremacy of law"
ALEXANDER PAKHARENKO, PARTNER AT PAKHARENKO & PARTNERS IP AND LAW FIRM, BELIEVES
The Anti-Monopoly Committee of Ukraine is proceeding with the review of its approaches to law-enforcement, taking into account the latest world trends, with priority given to quality rather than the number of cases. The year 2018 will, in many respects, be indicative of the subsequent transformation of the Committee. The bar has already been raised high.
"Hefty fines are almost always appealed in courts, and the results are not always in favor of the Anti-Monopoly Committee of Ukraine" SERGEY DENISENKO, ADVISOR AT AEQUO LAW FIRM, SAYS
The main challenge both for the country in general and for the Anti-Monopoly Committee of Ukraine in particular was the introduction of a system for monitoring state aid provided to business entities. However, the market has not yet realized the seriousness of this new institution. The Committee is working on changing its role: from a reactive response to violations to active early interventions