The Ukrainian Journal of Business Law, #11-12, 2021 In focus: Energy by Olga Usenko

EDITOR’S NOTE

Complex Situation

ach and every heating season in Ukraine puts the topic of energy onto the political agenda. The past autumn is no exception, provoking lots of talk regarding the availability of gas and coal at storages, record global gas prices, attempts to put Nord Stream 2 into commercial operation, challenges for generation capacities, emerging electricity imports from Belarus and the possibility of local blackouts. The key issues are the results of Russia’s geopolitical strategy to blackmail Europe. To be fair, a significant chunk of problems come from the Soviet legacy, as energy efficiency in the household sector was not properly reformed. In the final issue of 2021, our contributors have touched upon the issues of green hydrogen, potential of biomethane, and implementation of European regulations on the integrity and transparency of the wholesale energy market, which are known as REMIT. With the rapid increase in renewable energy projects in recent years, we still observe a crisis around the feed-in tariff and the state’s commitments. We discussed the situation on the electricity market, fate of existing renewable projects and restoring the confidence of investors with Ivan Bondarchuk, counsel at LCF Law Group. Given the big presence of the political factor in this issue, Ukraine finds itself in a complex situation, and not for the first time. It means that lots of work needs to be done, while postponements and delays merely equate to wastefulness. Season’s Greetings from the UJBL team!

The Ukrainian Journal of Business Law November — December 2021 Vol. 19 No.11-12 GENERAL DIRECTOR Rustam Kolesnik EDITORIAL

ADVISORY BOARD

Oleksiy Didkovskiy (Asters) Sergei Konnov (Konnov & Sozanovsky) Sergii Koziakov (Sergii Koziakov & Partners) Oleg Makarov (Verkhovna Rada of Ukraine) Alexander Minin (KM Partners)

EDITORIAL TEAM Editor Olga Usenko Deputy Editor Alena Chernyavskaya Copy Editor Peter Dutczyn Observer Christina Chovgan Designer Mykola Tytarenko Photos Evgeniy Korol Advertising Vadim Shpachuk

Translation Task Force Translation Agency 10 Hoholivska Street, Kyiv, 01054, Ukraine Tel.: +380 44 495-2727 Fax: +380 44 495-2777 editor@ujbl.info www.ujbl.info

Happy reading, Olga Usenko

Founded and published by Yuridicheskaya Practika Publishing

The Journal (ISSN 1726-3085) is published monthly by Yuridicheskaya Practika Publishing, 10 Hoholivska Street, Kyiv, 01054, Ukraine. Certificate of Registration No.6586 KB of 10 October 2002. Copyright © 2020 by Yuridicheskaya Practika Publishing. All rights reserved. No part of this publication may be reproduced, stored in a retrival system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the publishers. Contents do not necessarily reflect the views of Yuridicheskaya Practika Publishing. Circulation: 1,000. Recommended retail price in Ukraine is UAH 100. Printed in Ukraine. The publisher and contributors are not responsible for the results of any actions (or lack thereof) taken on the basis of information in this publication. Readers should obtain advice from a qualified professional when dealing with specific situations. All translations are unofficial. Украинский журнал предпринимательского права. Учредитель и издатель — ПрАТ «Юридическая практика» (на английском языке). Український журнал підприємницького права. Засновник та видавець — ПрАТ «Юридична практика» (англійською мовою). Друк: ТОВ «РВС-ПРИНТ». юридична адреса: вул. Ялтинська, 5б, м. Київ. Замовлення № 18-2901. Підписано до друку 3 грудня 2021 року.

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November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

November — December 2021 Vol. 19 No.11-12

CONTENTS

THE LEGAL GUIDE FOR FOREIGN BUSINESSMEN IN UKRAINE!

What do you expect from your law firm? wolftheiss.com

IN RE

EXPERT OPINION

Sergii ZHEKA

The Legal Manual for Using the Window of Opportunity in the Ukrainian Energy Sector

COVER STORY

Maryna HRITSYSHYNA

Maksym SYSOIEV, Volodymyr OMELCHENKO

SUBSCRIBE ON-LINE E-MAIL: zakaz@pravo.ua WEB: www.ujbl.info

Legal Regulation of Green Hydrogen in Ukraine

Ukraine’s Huge Biomethane Potential — What Potential Exporters should Know

Natalia HUTAREVYCH

Implementation of REMIT into Ukrainian Legislation

BIZ LUNCH

LCF LAW GROUP

Commitment to Stabilization

Timely Questions

November — December briefing 4 5 6 8 10 12

Deals Cases Draft Law Digest News of the American Chamber of Commerce Biznews

CRUX

Legal Digest

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

DEALS NOVEMBER — DECEMBER

Baker McKenzie advised the shareholders of Depositphotos

Baker McKenzie has advised the shareholders of Depositphotos, a stock photo content marketplace, on the sale of 100% of the shares in Depositphotos, including its subsidiary Crello, an online graphic design editor, to VistaPrint, a global printing, design and marketing service provider. The sale was completed for a total price of USD 85 million. Viacheslav Yakymchuk Baker McKenzie’s multijurisdictional M&A core team for this transaction included partners Viacheslav Yakymchuk (Kyiv) and Lisa Fontenot (Palo Alto), along with associate Gwen Karanadze (New York) and counsel Andrii Moskalyk (Kyiv), supported by the lawyers from the Employment, IP and Tax Practice Groups from the Kyiv, Palo Alto, San Francisco and Los Angeles offices. Kyiv partner Oksana Simonova and senior associate Olga Mikheieva secured merger control filing in Ukraine.

AVELLUM advised MHP on investment into Foodz

AVELLUM acted as the legal counsel to its long-standing client MHP in connection with investment in Ukrainian food-tech start-up Foodz. As a result of two rounds of funding, MHP received a minority stake in Foodz. AVELLUM provided legal support to MHP in structuring the deal and drafting the transaction documents. Mykola Stetsenko MHP is a leading poultry producer in Europe and one of the biggest grain producers in Ukraine. The company specialises in the production of chicken and the cultivation of cereals and other agricultural activities. AVELLUM team was jointly led by counsel Andriy Romanchuk and associate Yuliia Chelebii-Kravchenko with support from associate Yelyzaveta Kashyna and under the general supervision of managing partner Mykola Stetsenko. Senior associate Anastasiya Voronova advised on the financial matters of the deal.

Baker McKenzie advised First Ukrainian International Bank

The Kyiv office of Baker McKenzie acted as legal counsel to First Ukrainian International Bank (FUIB) in connection with the structuring, negotiation and entry into a conditional purchase agreement for the shares in Idea Bank from its sole owner, Polish financial group Getin Holding. If completed, the deal will strengthen FUIB’s

retail banking business line by the synergy from adding the existing Idea Bank consumer lending business and its digital platform. Partner Viacheslav Yakymchuk and counsel Andrii Moskalyk led the transaction team. The team also included associates Hanna Smyrnova and Mariia Gorokh , Mykyta Stebliuk and Artem Sinelnikov, Dmytro Skydan, Anna Stepanowa and Andrii Levchenko.

Sayenko Kharenko advised Getin Holding S.A.

Sayenko Kharenko has acted as lead legal counsel to Getin Holding S.A., in relation to the sale of 100% of the share capital of the group of Romanian companies operating under IDEA brand: Idea Bank Romania, Idea Investment, Idea Leasing IFN and Idea Broker de Asigurare to Banca Transilvania S.A. Sayenko Kharenko providAlina Plyushch ed full-scope legal support of the transaction for the seller, including drafting and negotiating transaction documents, deal implementation, pre-closing and assistance during completion meeting in Bucharest. Sayenko Kharenko corporate and M&A practice team working on the project was led by senior associate Dmitriy Riabikin, supported by associate Anastasiia Yermolenko. Partner Alina Plyushch supervised the project.

Cameron McKenna Nabarro Olswang advised EBRD

CMS Cameron McKenna Nabarro Olswang has advised the European Bank for Reconstruction and Development on its USD 75 million investment in the USD 825 million sustainability-linked bond (SLB) issued by Ukraine’s national power company, Ukrenergo. It is the first sustainabilitylinked bond issued by a UkrainIhor Olekhov ian company and the EBRD’s participation as the anchor investor provided comfort to other institutional investors, further widening the market participation. CMS advised the EBRD on Ukrainian and English law aspects of the transaction. CMS’s advice related to the review of the prospectus and regulatory aspects of the issuance. The CMS team was led by Ihor Olekhov in Kyiv and Rafal Zakrzewski in Warsaw with support from Michael Cavers in London and a team consisting of Khrystyna Korpan from CMS Ukraine, Przemyslaw Karolak from CMS Poland and Kirsty Templar from CMS in London.

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

CASES NOVEMBER — DECEMBER

Dutch Supreme Court rules to review decision obliging Russia to pay USD 50 billion to YUKOS shareholders

The Supreme Court of the Netherlands has upheld the appeal in the arbitration case in the part of a USD 50 billion filed by Russia against former shareholders of the YUKOS oil company. The court ruling stated that the Supreme Court had decided in favor of the Russian Federation on one clause. It considers that for some procedural reasons the Hague Court of Appeal has erroneously ignored the argument filed by the Russian Federation that the shareholders are likely to have committed fraud during arbitration proceedings. Therefore, the decisions of the Court of Appeal cannot be held to be valid. The Supreme Court of the Netherlands dismissed other claims filed by the Russian Federation. This applies, in particular, to the claims filed by the Russian Federation in relation to the interpretation of the provisions of the agreement used by the arbitral tribunal to justify its jurisdiction, and also to the claim on nonfulfillment of its mandate by the arbitral tribunal. The Supreme Court referred the case to the Amsterdam Court of Appeal for reconsideration and assessment. in February 2020, the Hague Court of Appeal, Netherlands, ordered Russia to pay USD 50 billion to YUKOS shareholders. Russia appealed to the Supreme Court of the Netherlands in May 2020. The shareholders filed a claim with the International Arbitration in The Hague back in 2005. In 2007, the court drew the conclusion that in the early 2000s YUKOS suffered a large-scale attack in Russia to force the company’s bankruptcy, seize its assets, and to take out its chairman, Mykhail Khodorkovsky, from political life. In 2014, the European Court of Human Rights in Strasbourg ruled to collect about EUR 2 billion from Russia in favor of former YUKOS shareholders.

Google lost case related to fine of EUR 2.42 billion to European Commission

The General Court of the European Union has rejected an appeal filed by Google against a EUR 2.4 billion fine imposed by Brussels on Google for abusing its dominant position on the search engine market. The court dismissed the claim filed by Google against the commission decision as a whole. The commission found that Google had abused its dominant position by favoring its own shopping comparison service over competitors. The court upheld a fine of EUR 2.42 billion imposed on Google. The European Commission imposed a fine on Google in June 2017. The company had to cease relevant activities within 90 days or pay penalties of up to 5% of the average daily turnover of Alphabet, Google’s parent company. Google appealed to the Court of the European Union against the decision of the European Commission in September 2017. In their appeal, Google and Alphabet, its parent company, claimed that the EU “mistakenly interpreted the law, the facts and the economy” in the case against the search engine. The court stated that by preferring its own Google Shopping service over competitors when ranking search and positioning results, Google had essentially moved away from competition. It rejected the argument filed by Google that large online stores have their own online sites by claiming that “these platforms are not in the same market” where users compare purchases. The case is one of three cases initiated against the Internet search engine giant, which is currently dealing with a protracted EU appeals system. Google can still appeal to the EU’s highest court, the European Court of Justice, for a final decision.

German court rejects claim filed against Nord Stream-2 by environmental experts

The Higher Administrative Court in Greifswald rejected a claim filed by the German environmental organization Deutsche Umwelthilfe (DUH) against the construction of the Nord Stream-2 gas pipeline. The claim was filed against the mining authorities of the German city of Stralsund. It was one of the licensing authorities and in 2018 granted permission for the pipe-

line’s construction and operation in German coastal waters. The plaintiff sought to amend the decision on the project approval of 31 January 2018, issued in favor of the Nord Stream 2 AG operating company in relation to the pipeline. At the same time, environmental experts referred to the need to amend the resolution with a regulation on risk assessment of methane emissions during gas supplies, based on the latest results of an American study. During the judgment announcement, the court instance noted that the plaintiff did not have the necessary legal authority to make such amendments as to the sea areas within German jurisdiction, as well as to the land facilities located in Lubmin. Moreover, the pipeline underwent field tests for gas tightness prior to its commissioning in accordance with safety regulations. As for Russia’s onshore gas infrastructure, the claim was deemed admissible but meritless. The relevant facilities were not part of the approved project plan. Finally, during the project’s approval, the impact on the environment was assessed in general, in particular, taking into account methane emissions, the resolution stated.

Russia to compensate USD 1.4 billion for Crimea: Oschadbank appeals to French Court of Cassation

Oschadbank appealed to the Court of Cassation of France against the decision of the Court of Appeal of Paris taken in March, which overturned the decision to reimburse about USD 1.4 billion in favor of the bank by the Russian Federation. The losses incurred by Oschadbank were caused by the illegal seizure of Oschadbank’s investments in Ukraine’s Republic of Crimea. Oschadbank is confident that the Court of Cassation of France will acknowledge and correct apparent errors and omissions in the decision approved by the Court of Appeal of Paris and will thus reinstate the arbitration award made against the Russian Federation, which ruled to compensate Oschadbank for significant losses incurred due to unacceptable actions and disregard for the laws on part of the Russian Federation. Case consideration on obtaining fair compensation for Oschadbank’s assets expropriated by the Russian Federation in occupied Crimea is constantly in the focus of attention of the bank’s management.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

DRAFT NOVEMBER — DECEMBER

Parliament upheld new tobacco taxation mechanism

The tax authority will calculate such shares on a monthly basis. The Budget Committee upheld the document before the first reading but noted the need for its further revision prior to the second reading.

Draft law crucial for timber market adopted in first reading The Verkhovna Rada upheld amendments to the Budget Code in the first reading. These establish the mechanism for crediting tobacco excise taxes to local budgets. Draft Law No. 5719 amends the Budget Code to get it into line with the tax standards set out in tax Draft Law No. 5600. At the same time, the latter is currently “stuck” at the second reading stage. Thus, the document envisages obliging the Treasury to automatically credit the excise tax on retail sales of tobacco products and liquids for e-cigarettes to local budgets pro rata with shares. The share is calculated as the ratio of the cost of goods sold (tobacco and liquids for “e-devices”) in a given area for the reporting month to the total value of these categories of goods as a whole for the reporting month in Ukraine.

The Verkhovna Rada has adopted new regulations on the timber market’s operation in the first reading. The revised Draft Law is designed to make the operations of the timber market’s participants open and public and ensure free competition and sustainable use of forest resources. First and foremost, the Draft sets out clear functions of the forest portal, which is to be created as a tool to increase market transADVERTISEMENT

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

parency, in view of the existing feature set of the Electronic Timber Accounting System. Timber will only be sold at electronic auctions or on the terms of the offer. This will stop the practice of direct contracts, which has been a significant corruption-causing factor. Information on the sale of timber and timber products will be made public and available to all market participants on the forest portal. The sale of timber and timber products will be allowed subject to a declaration of timber processing. Moreover, timber sellers will be liable for refusing to supply buyers with a certain amount and quality of the resource, for which the funds were paid. And vice versa, buyers will be liable for non-compliance with the provisions of the sales and purchase agreement. The Draft also regulates the application of the offer and its acceptance, sets the principles of electronic auctions, the requirements for disclosure of information about auctions that have been held. Following the law’s adoption, the Commission to review complaints about the timber trade to protect market participants will be established. Furthermore, amendments to the Law On Commodity Exchanges take forest resources out of exchange trade, and they will be transferred to electronic auctions.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

LAW DIGEST NOVEMBER — DECEMBER

President Volodymyr Zelensky signed law on energy efficiency

President Volodymyr Zelensky signed the Law On Energy Efficiency, adopted by Parliament on 21 October 2021. The law is the basis for funding government programs on energy efficiency. Thus, the law’s concluding provisions set the following: — The draft law on the state budget for the relevant year annually determines expenditures on energy efficiency programs as being no less than 1% of the expenditure budget; — Instructions to the government to develop and approve state target programs on energy upgrading of the housing stock, enterprises-producers of thermal power, water supply and sewerage companies. The State Agency for Energy Efficiency has already developed a draft decision to extend the State Energy Efficiency Program until 2027. The program sets out an expanded range of measures, namely to support the development of energy efficiency not only at private households but also at centralized heat supply, drinking water, and sewerage systems. The law also lifts technical limitations that have complicated the process of concluding ESCO agreements and gives a push to full-scale development of energy services. This mechanism attracts private investment into the upgrading of state-financed institutions. The average annual savings under implemented ESCO projects is 35%. The important provisions of the law also include the following: — Laws for natural gas distribution services will include information on energy efficiency measures; — Large companies are obliged to conduct an energy audit every 4 years unless a certified energy or environmental management system is introduced. This will promote the optimizing of energy costs; Public authorities and local self-governments should purchase equipment of a high energy efficiency class. The use of such equipment will save more funds in the future than the purchase of energy inefficient equipment.

Bureau of Economic Security will start its operations in full

The Verkhovna Rada has introduced amendments to legislation and determined jurisdiction of the Bureau of Economic Security in relation to economic crimes. The law amends the administrative, criminal and criminal procedure legislation in relation to the status of new subjects of criminal proceedings, their powers, and jurisdiction over criminal offenses. This is necessary so that the Bureau of Economic Security can properly exercise its powers and conduct pre-trial investigations of criminal offenses. As to the Administrative Code, the responsibility of the Bureau of Economic Security employees for administrative offenses under disciplinary statutes is set. The Criminal Code introduces liability for fraudulent actions related to value added tax as a separate type of criminal offense. Such investigations fall within the Bureau’s competence. A number of other elements of crimes have also been amended due to the establishment of the Bureau of Economic Security, such as ensuring its independence and the special procedure for investigating criminal offenses against its employees. The Criminal Procedure Code defines the main and additional jurisdiction of the Bureau of Economic Security. The investigative jurisdiction of the tax police is also excluded. Furthermore, the Bureau’s powers to conduct investigative actions, proper pretrial investigation of criminal offenses under investigative jurisdiction has been set in the Criminal Procedure Code.

Parliament adopted a new law on the insurance market

On 18 November the Ukrainian Parliament passed a new law on insurance, which changes the requirements for licensing insurers, assessing their solvency and liquidity, corporate governance and risk management,

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

termination of companies, transfer of the insurance portfolio, and more. Insurers must have transparent ownership structures, disclose information on all owners of substantial shareholding and key company members. The founders and owners are obliged to have an impeccable business reputation and a satisfactory financial and property status. The NBU will approve the owners of substantial shareholding. During registration, insurance companies will also have to provide business plans for three years. Moreover, they will be subject to corporate governance requirements, which will depend on the company’s value. Under the law, top managers of insurance companies and persons holding positions of responsibility will have to meet the qualification requirements for professional suitability and business reputation, and the NBU will approve them for their positions. The law establishes a differentiated approach to the minimum size of the insurers’ authorized capital. For life insurance companies, insurers licensed for such classes as liability insurance, loans, sureties, and reinsurance activities, the authorized capital should amount to UAH 48 million, for non-life ones — UAH 32 million. There will also be new requirements for insurers’ solvency, which will be introduced in stages. Another change for insurers is the possibility to get one license instead of many for each type of services rendered. Thus, the NBU will move from licensing certain types of insurance to licensing by class. The insurance company will also be able to change the licensing scope — to add new classes or, conversely, to narrow the scope of licensing. The law sets five classes within life insurance and 18 classes within non-life insurance. The combining of areas is impossible. As for changes for consumers, the law sets mandatory registration of intermediaries and requirements for their training and level of expertise, avoiding conflicts of interest, expanding the list of information to be disclosed to consumers, etc. For the first time, a clear mechanism for terminating the activities of insurers will be set out in Ukrainian legislation. The possibility to introduce a provisional administration in an insurance company to protect the interests of clients has also been set. The law enters into force on the day following its publication and comes into full force two years later.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

THE CHAMBER

American Chamber of Commerce Presents the 2021 Thanksgiving Award to Ukraine’s Healthcare Professionals

The American Chamber of Commerce in Ukraine presents the 2021 Thanksgiving Choice of the Business Community Award to Ukraine’s healthcare professionals for demonstrating great courage and empathy, being at the frontline, and saving people’s lives in times of the global COVID-19 outbreak. Since March 2020, in times of global turbulence and uncertainty, Ukraine’s healthcare professionals have demonstrated high responsibility and dedication in saving people’s lives. “I am grateful to all the frontline workers for their selfless dedication in saving lives and all the crisis-response leaders of AmCham member companies for their commitment and constant support of employees, hospitals, doctors, vulnerable people, and communities. It is incredible to see all the well-coordinated efforts of doctors and the business community that help to save thousands of lives”, said Andy Hunder, President of the American Chamber of Commerce in Ukraine. The American Chamber of Commerce in Ukraine has many people it is grateful to, people who are changing Ukraine every day. Thanksgiving is a time to thank all those making Ukraine a better place to do business. In 2020, AmCham Ukraine presented the Thanksgiving Choice of the Business Community Award to Mykhailo Fedorov, Deputy Prime Minister, Minister of Digital Transformation of Ukraine, for embracing country-wide digital transformation, making Ukraine a better place to live and do business. The business community also acknowledged

Paul Niland, Founder of Lifeline Ukraine, for creating Ukraine’s first national suicide prevention hotline, Lifeline Ukraine, to save people’s lives, focused first and foremost on helping Ukraine’s military veterans. In 2019, AmCham Ukraine presented the Thanksgiving Choice of the Business Community Award to the National Bank of Ukraine for pursuing a credible monetary policy, continuing the cleaning-up of the banking sector, defending NBU independence, and contributing to macroeconomic stability. The business community also acknowledged Mr. Brian Bonner for delivering Ukraine’s news in English to global audiences through his dedicated service as Chief Editor of the Kyiv Post. In 2018, the business community acknowledged Oksana Markarova, Acting Finance Minister (November 2018 — March 2020), for strengthening Ukraine’s macroeconomic stability. Other Awards went to UkraineInvest — Ukraine Investment Promotion Office and National Investment Council of Ukraine for promoting Ukraine as an investment destination. In 2017, AmCham Ukraine presented the Thanksgiving Choice of the Business Community Award to the Acting Minister of Health of Ukraine, Doctor Ulana Suprun (August 2016 — August 2019), for the development of the healthcare system in Ukraine. The American Chamber of Commerce in Ukraine also presented the Awards to Valeria Gontareva and National Bank of Ukraine for exceptional efforts in cleaning up and developing Ukraine’s banking system; Jaroslava Johnson, Western NIS Enterprise Fund for shaping the future of Ukraine — for The Ukrainian Leadership Academy; and Invictus Games Team Ukraine for an incredible debut of the Ukrainian team at the Invictus Games in Toronto. And a special Presidential Award

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

for ten years of outstanding leadership and dedicated service promoting U.S. — Ukrainian business relations was received by Morgan Williams, President of the U.S.Ukraine Business Council. In 2016, the awards were received by the U.S. Secretary of Commerce Penny Pritzker and the team at the United States Department of Commerce for the strong and continuous support of Ukraine; Business Ombudsman Council — for fighting corruption, simplifying bureaucracy, and improving the business climate; Oksana Drozach, PwC — for her contribution to the introduction of the Authorized Economic Operator concept in Ukraine. As the ceremony’s highlight, members expressed their most sincere gratitude to the Ukrainian Paralympic Team for their unbelievable will to win. In 2015, during the first Thanksgiving Black Tie Dinner, AmCham Ukraine presented the Thanksgiving Choice of the Business Community Awards to Natalie Jaresko, Minister of Finance (December 2014 — April 2016), for delivering fiscal and financial stability; Aivaras Abromavicius, Minister of Trade and Economy (December 2014 — April 2016) for introducing ProZorro, a public eprocurement system that has made government procurement more transparent and competitive; 3G Ukraine mobile operators — lifecell, Kyivstar, and MTS/Vodafone — for the launch of 3rd generation mobile communications in Ukraine; European Bank for Reconstruction and Development for boosting investment into the Ukrainian economy; Olga Kudinenko, Founder of Tabletochki Fund, for establishing the Tabletochki Fund that helps kids to fight cancer, and promoting social responsibility and awareness; Eka Zguladze, First Deputy Minister of Internal Affairs of Ukraine (2014-2016), for the launch of National Police of Ukraine.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

BIZNEWS NOVEMBER — DECEMBER

Banking & Finance EBRD to invest USD 75 million in Ukrenergo Eurobonds to repay “green” debts

The EBRD will invest USD 75 million in bonds worth USD 825 million issued by NPC Ukrenergo, intending to resolve a payment storm that has brewed over the country’s renewable energy sector. These are the first sustainability bonds issued by a Ukrainian company and the EBRD has, as a major investor, ensured comfort to other institutional investors, thus expanding the market share. Proceeds will be allocated to pay off all arrears in payments to renewable energy companies. This investment is designed to restore confidence in the Ukrainian renewable energy sector and increase the confidence of private investors and financiers by raising the much-needed investment to support the country’s green transition.

Internet Yahoo, as well as LinkedIn earlier, cease operations in China

Yahoo, the American company, announced the termination of access to its services in Mainland China due to the “increasingly complex business and legal environment”. From 1 November, the company stopped providing access to its content to users from Mainland China. Over the past few years, Yahoo has significantly reduced its presence in China. Until 1 November a weather app and several pages featuring news articles in foreign languages were still accessible in China. Earlier, Linkedin ceased its operations in China. Microsoft will replace LinkedIn, the social professional network, with InJobs, a job search engine, — and Microsoft blames the strengthening of Internet censorship in China.

M&A Americans to acquire Depositphotos developer

VistaPrint, the American company, has acquired a Ukrainian company that develops photo stock Depositphotos and online editor Crello. The deal amounted to USD 85 million, thus becoming the largest deal in the Ukrainian IT market in the last few years. VistaPrint acquires 100% of the company stock, including all projects: Depositphotos, Crello, Lightfield, Bird In Flight, and WAS. Dmytro Sergeev, the company founder, gives up his management role and will leave the company. Vadym Nekhay, a senior executive, will remain with the company and join Vista as a vice president of VistaCreate (Crello) and Depositphotos, and will continue team management under the direction of Florian Baumgartner, Vista International Business President. VistaPrint is a large US design and marketing company, part of Cimpress, which is traded on the Nasdaq. Its departments deal with content for Facebook, Instagram, TikTok, and other social networks, develop logos, websites, and other branded materials, print promotional materials.

Google invested USD 1 billion in CME Group

Google invested USD 1 billion in the share capital of CME Group, the stock-exchange operator, and signed a separate agreement to accelerate the stock exchange’s migration to the cloud. Under the terms of a 10-year partnership entered into by Google and CME, the Chicago-based stock-exchange operator will start the migration of its technology infrastructure to Google Cloud next year. The deal with CME marks a triumph for Google’s cloud business, which competes with Amazon.com Inc and Microsoft Corp for large, profitable contracts with Fortune 500 companies. The deal also enables Google to gain a foothold in the financial services sector, where companies have started to invest heavily in cloud services.

Aviation Ukraine and EU signed long-awaited Treaty on Open Skies

Ukraine and the European Union have signed a long-awaited Common Aviation Area Agreement, known as the Treaty on Open Skies. The Treaty on Open Skies is intended to equalize the rights of Ukrainian and European airlines, lift the monopoly on certain routes established by bilateral agreements, facilitate new routes launch between Ukrainian and European cities, and, ultimately, reduce ticket prices. One of the consequences of signing the Treaty should be new low-cost airlines entering the Ukrainian market and increasing the tourist attractiveness of Ukraine. The Treaty was initialed back in 2013 but has not yet been signed due to a British-Spanish dispute over who Gibraltar belongs to.

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

BIZNEWS NOVEMBER — DECEMBER

Investment This year companies around the globe raised a record amount of USD 600 billion at IPO

In 2021, about 2,850 companies worldwide raised a record amount of USD 600 billion at initial public offerings (IPO). With six weeks to go till 2022, the global IPO market has broken two records at once — the number of transactions and their volume. The last high was recorded in 2007 when companies managed to raise about USD 420 billion in investment. Such indicators are due to the record growth of the stock market against the background of support on part of global central banks. At the same time, the recovery of economies after the pandemic, along with incentive schemes, have contributed to growth in company revenues. At the same time, Bloomberg named Rivian, the American electric car manufacturer, the world IPO market leader, which in November raised almost USD 12 billion, with the company valued at about USD 77 billion. During the first days of trading, the company’s shares rose by 120%, causing high demand on the part of investors who hoped that the startup would become “the new Tesla”. In Asia, the highest IPO was made by China Telecom, the Chinese cellular operator, which raised CNY 54 billion (USD 8.4 billion). The best result in Europe was shown by InPost SA, a Polish parcel delivery company (EUR 2.8 billion or USD 3.2 billion).

Applications for “investment nannies”: 17 have been filed by Ukrainian investors, and 10 — by international companies

UkraineInvest has received 27 preliminary project applications from investors totaling more than USD 2 billion. Of these, 17 have been filed by Ukrainian investors, and 10 by representatives of international companies. Business representatives from Switzerland, Mexico, China, Turkey, Cyprus, Poland, Ireland, and other countries are among the interested investors. Investments are planned in the following areas: — production (11 projects totaling USD 686 million), — agricultural processing (totaling USD 303 million),

— logistics (5 projects totaling USD 487 million), — transport and tourism (totaling USD 159 million). There are also intentions to invest in the Ukrainian aviation industry, production of railway locomotives, and metalworking production.

Facebook to hire 10,000 persons to create a virtual world

Over the next five years, Facebook, the American IT concern, plans to employ 10,000 persons in the European Union to create a virtual world — the so-called metauniverse, which users access and communicate in virtual space. Facebook has already begun testing a new virtual reality application for remote work, which allows users to attend meetings in the form of their avatars using a special headset. In September, Facebook allocated USD 50 million to create a meta-universe, which is already being developed by such companies as Roblox, multiplayer online platform, and Epic Games, the creator of the Fortnite computer game.

Market value of Ukrainian firm Grammarly reached USD 13 billion

Grammarly, a Ukrainian company, attracted a round of financing of USD 200 million, following which its capitalization increased to USD 13 billion. Grammarly is a private company, and during the last round in 2019 its value reached USD 1 billion. Two years later, the value increased 13-fold. Financing worth USD 200 million is the largest round in the company’s history. Baillie Gifford and BlackRock Inc were among those who invested in the company in 2021. The Grammarly start-up was established in 2009 by three Kyivites: Oleksiy Shevchenko, Maksym Lytvyn, and Dmytro Lider. At first, Shevchenko and Lytvyn intended to develop an online service to check students’ works and essays for plagiarism. Nowadays it is an online grammar check service based on artificial intelligence technology.

State Sector The largest state-owned enterprises earned UAH 13 billion in six months

The 14 largest state-owned enterprises of Ukraine earned about UAH 13 billion in the first half of 2021. Of 14 enterprises, 8 were profitable — they earned UAH 14.8 billion in total. The largest profits were generated by Ukrhydroenergo (UAH 6.2 billion), the Gas

Transmission System Operator (UAH 5.6 billion), Energoatom (UAH 1.1 billion), and the Sea Ports Authority (UAH 944 million). Another 6 companies ended the half year in the red — totaling UAH 1.9 billion. Ukrzaliznytsia (Ukrainian Railways) topped the loss rating (UAH -1.4 billion), followed by UkrSATSE (UAH -260 million) and the State Food and Grain Corporation (UAH -87 million).

Motor roads of Ukraine (Ukravtodor) and Boryspil Airport both had UAH 73 million in losses, and Ukrposhta UAH 9.7 million in losses. Most companies attribute their own losses to the limitations due to COVID-19. The list does not include the financial result of Naftogaz, as the NJSC did not submit its Profit and Loss Account to the Ministry of Economy.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

EXPERT OPINION

The Legal Manual for Using the Window of Opportunity in the Ukrainian Energy Sector

he Ukrainian energy sector has been developing steadily over the last couple of years and has seen particularly growing interest from foreign companies wishing to enter the Ukrainian gas and electricity markets. Foreign companies may, of course, participate in the above-mentioned markets without setting up permanent establishments in Ukraine (e.g. trade on the border with Ukraine or store gas in Ukrainian gas facilities). That is what some foreign companies do. However, in order to be more comprehensively and actively involved in the Ukrainian gas and electricity markets, foreign companies, indeed, have to establish their corporate presence in Ukraine, preferably by incorporating a local company (an LLC in most cases). This allows a foreign company greater opportunities to enter into transactions with local market players, supply gas and electricity directly to a broad range of local consumers, trade on local gas and electricity exchanges (e.g. Ukrainian Energy Exchange (UEEX)), enjoy certain tax privileges envisaged by Ukrainian tax legislation, etc.) In this context, this article provides a brief overview below of activities in the Ukrainian electricity and gas markets that are permitted and regulated by local law, what licenses are needed to conduct these activities, what activities can be conducted without a license and what the prerequisites and procedures for obtaining these licenses are.

Electricity — Regulatory Conditions

Electricity-related license types are provided for by the Law of Ukraine On the Electricity Market. According to the Electric-

The Ukrainian energy sector has been developing steadily over the last couple of years

ity Market Law, licenses are to be issued for the following types of activities, which may be relevant for a foreign investor: (i) Production of electricity; (ii) Transmission of electricity; (iii) Distribution of electricity; (iv) Supplying electricity to consumers, and (v) electricity trading. The licensing conditions are approved, and the licenses are issued by the regulator authority, which is the National Energy and Utilities Regulatory Commission (“NEURC”). License applications may be rejected solely on the limited grounds expressly provided in the law. While electricity production, transmission and distribution appear rather

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

Sergii ZHEKA is a senior associate at Wolf Theiss

asset-intensive activities and require lengthy, cumbersome and well-structured preparation (e.g. construction of electricity generating facilities, etc.), supplying electricity and trading it appear as activities that do not require as much investment of time, effort and finance. Hence, it is obviously faster and easier to obtain the electricity supply and trading licenses and, upon doing so, to begin conducting these activities. Importantly, the license for trading activities is required only if an entity holds no other license for activities on the electricity market. The list of documents required to obtain the trading license is similar to that required for the electricity supply license. For this reason and due to the space limitations of this article, below we will discuss the requirements and procedures for the electricity supply license. Only Ukrainian incorporated companies can qualify to receive a power supply license. There is no policy or legislation-based prohibitions against non-state-owned companies or foreign-owned companies obtaining a power supply license. A Ukrainian company that qualifies for a power supply license may be incorporated as a limited liability company or a joint stock company, which are the most popular corporate forms, or in some other corporate form. The same relates to foreign companies, as they are free to incorporate local subsidiaries in the form of a limited liability company or a joint stock company in order to apply for power supply licenses. The law establishes limitation for companies from the Russian Federation: neither Russian residents (companies or individuals), nor Ukrainian or foreign companies controlled by these, can apply for power supply licenses.

EXPERT OPINION ENERGY What do you expect from your law firm? wolftheiss.com

The suppliers of electricity may purchase/sell electricity on the market, export/ import electricity, conclude agreements with various market players and consumers, etc. An application for a power supply license must be submitted to NEURC in either paper or electronic form. The following documents need to be enclosed with the application: (i) copy of the passport of the applicant’s CEO; (ii) information about means of carrying out power supply activities: owned or leased buildings or premises for customers’ reception and service, corporate web site, means of communication of the applicant with customers (telephone and email address); (iii) confirmation that the applicant is not controlled by entities or persons from

Neither Russian residents (companies or individuals), nor Ukrainian or foreign companies controlled by these, can apply for power supply licenses

countries carrying out military aggression against Ukraine (i.e. Russia). Bilateral electricity trading shall take place based on contracts for the sale and purchase of electricity — the parties are free to negotiate many of the terms of such contracts. A licensee involved in the supply of electricity generally operates based on the following contracts: (i) a contract for the purchase of electricity on the wholesale market; (ii) a contract with an electricity distributor, and (iii) a contract for electricity supply with consumers.

Natural Gas — Regulatory Conditions

The legal fundamentals for the operation of the natural gas market are provided for by the Law of Ukraine On the Gas Market. According to the Gas Market Law, the natu-

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

EXPERT OPINION ENERGY ral gas market consists of legal relations related to natural gas purchase and sale, supply, and the provision of the services of transportation, distribution, storage of natural gas and the rendering of LNG facility services. The following activities with natural gas are subject to licensing: (i) transportation, (ii) distribution, (iii) storage, (iv) supply, and (v) rendering of LNG installation services. The distribution of natural gas via state gas distribution systems can be performed only by undertakings belonging to the state sector of the economy. Even though the government is starting the liberalization of transportation and storage of natural gas, these activities are in practice still monopolized by large stateowned companies. As to the rendering of LNG facility services, the licensing conditions for such activity have not been approved yet. Companies that plan to conduct the supply of natural gas should obtain a Gas Supply License issued by NEURC. The Gas Supply License entitles its holder to supply natural gas directly to a consumer at the price agreed with that consumer, except for cases when special duties are imposed by CMU on gas suppliers (generally, state and municipal enterprises) to ensure public interests. Importantly, the import of natural gas into Ukraine and its export, as well as gas trading activities and storage of foreign natural gas in Ukrainian gas storage facilities are not subject to licensing. Only Ukrainian legal entities, such as Ukrainian incorporated companies, qualify to apply for and receive a Gas Supply License. These companies cannot be controlled by residents of the Russian Federation. The same as in the case of the powerrelated licensed activities, there is no policy or legislative based prohibition against non-state-owned companies or foreign owned companies obtaining a Gas Supply License. A Ukrainian legal entity that qualifies for a Gas Supply License may be established in the form of a Ukrainian registered company, for example, as a limited liability company or a joint stock company. A Ukrainian company applying for or holding a Gas Supply License may be established by a foreign company in order to obtain the license, subject to the exception specified above. In this regard,

Procedural rules for

license application review

On obtaining the license, the license holder should, of course, comply with numerous requirements applicable to the relevant type of electricity or gas license

a limited liability company is one of the most convenient corporate forms for local corporations. A public joint stock company or a private joint stock company may also be considered; however, these forms are subject to many securities and capital markets related regulatory requirements, thus, these are fewer flexible entities to operate. Private individuals registered as individual entrepreneurs in Ukraine may in principle also apply for a Gas Supply License, given that they are neither residents of the Russian Federation nor controlled by such residents. An application for a power supply license must be submitted to NEURC in paper or electronic form. The following documents need to be enclosed with the application: (i) a copy of the passport of the applicant’s CEO; (ii) information about means of carrying out power supply activities: owned or leased buildings or premises for customers’ reception and service, corporate Web site, means of communication of the applicant with customers (telephone and email address). A licensee involved in the supply of gas generally operates based on the following contracts (i) a contract for the purchase of gas from a gas owner; (ii) a contract for gas transportation with the operator of the gas transportation system; (iii) a contract for gas supply with consumers; and (iv) a contract for gas storage with the operator of gas storage facilities.

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

The application procedure is identical for all of the above licenses and is stipulated by the Law of Ukraine On the Licensing of Types of Business Activity. The application procedure is based on a paper or electronic application. Once the license application is submitted, NEURC is required to pass its decision within 10 (ten) business days after receiving the license application and the supplementary documents. NEURC may reject the license application without investigating its merits, if: (i) the application file does not contain all the required documents; (ii) the application/at least one of its supplements is signed by a person without the proper authority; (iii) the submitted documents do not comply with statutory requirements; (iv) the application was not submitted in a timely manner; (v) there is no information about the applicant in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Associations (Corporate Register); or (vi) the Corporate Register contains information on the pending liquidation of the applicant. An applicant whose license application was rejected on the above grounds, may reapply to NEURC after removing all the deficiencies revealed by NEURC. NEURC may refuse to grant a license on the following grounds on merits: (i). the applicant does not meet the licensing requirements; (ii). the application package contains inaccurate information; (iii). a court decision exists, which prohibits the applicant from performing the relevant activities. In general terms, the applicant may reapply to NEURC after the licensing conditions have been met (item (i) above) or three months after the application was rejected on the basis of item (ii) above. The license is issued by NEURC for an indefinite term On obtaining the license, the license holder should, of course, comply with numerous requirements applicable to the relevant type of electricity or gas license. The requirements are stipulated, inter alia, in the relevant licensing conditions issued by NEURC. END

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

IN RE Legal Regulation of Green Hydrogen in Ukraine

kraine has incredibly large potential for renewable energy production. According to the atlas of energy potential of renewable energy sources of Ukraine, as prepared by the Institute of Renewable Energy Sources, the potential of installed capacities for renewables in Ukraine is 874 GW, where 688 GW is wind energy and 82.76 GW is solar energy. As for the assessment of green hydrogen production in Ukraine, according to the most basic scenario, Ukraine’s renewable energy potential is 537 GW of installed capacities, though this could rise to 771 GW pursuant to a more optimistic scenario. On the basis of these figures, the potential for green hydrogen production in Ukraine is 505,133 million cubic meters. Taking into consideration the country’s abundant natural resources for renewable energy production, Ukraine can produce green hydrogen not only for its own needs but also for export to other countries.

Ukraine’s place

in EU strategic documents

Green hydrogen plays a key role in the EU’s climate neutrality goals. At the same time, EU countries will not be able to cover internal demand for green hydrogen. For this reason, and due to the renewable energy potential of Ukraine for green hydrogen production, the following strategic documents at EU level contain plans regarding Ukraine: — The Hydrogen Strategy for a ClimateNeutral Europe dated 8 July 2020, where Ukraine is identified as a priority partner; — The Green Hydrogen for a European Green Deal is a 2x40 GW Initiative, according to which Ukraine will have 8,000 MW of electrolyser capacities for green hydrogen and 1,800 MW for ammonia by 2030; — The Green Hydrogen Investment and Support Report, according to which Ukraine requires EUR 20.1 billion in investment to construct capacities for a 10,000 MW electrolyser. All these strategic documents and studies at EU level underline Ukraine’s potential to become an active participant of the EU

Ukraine has incredibly large potential for renewable energy production

Maryna HRITSYSHYNA is a counsel at Sayenko Kharenko

the definition of biohydrogen as hydrogen obtained from biomass and that it’s a type of biogas. The absence of any rules regulating green hydrogen production and transportation in Ukraine through gas pipelines leads to uncertainty for potential investors. Moreover, the lack of legal regulation of green hydrogen is one of the barriers to the development of hydrogen projects in Ukraine.

Hydrogen Ukraine

hydrogen market as an exporter. Moreover, the recent Hydrogen Study of the Energy Community also confirmed that due to the significant renewable resources Ukraine could, indeed, become an exporter of green hydrogen. At the same time, production and supply of green hydrogen from Ukraine are possible only after the implementation of legal regulations at state level.

Existing legal

regulations for green hydrogen in Ukraine

In order to export green hydrogen to the EU, it’s important to have legal regulation of production and transportation in Ukraine. However, legal regulation of Ukraine’s energy sector is based on the implementation of the Third Energy Package. For this reason, the Law of Ukraine On the Natural Gas Market does not contain any regulation for hydrogen and the infrastructure for its transportation. At the same time, the Electricity Market Law and the Law of Ukraine On Alternative Sources of Energy do not contain rules for the use of electricity from renewables for hydrogen production. In other words, the laws of Ukraine do not contain even the definition of green hydrogen. The Law of Ukraine On Alternative Types of Liquid and Gas Fuel includes only

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

strategy in

Policy support for green hydrogen is very important for the development of hydrogen projects in Ukraine. Many countries announced their targets and regulatory framework for green hydrogen through hydrogen strategies. The first hydrogen strategy was announced by Japan in 2017. In 2020, several EU countries developed and approved their hydrogen strategies, including Germany, Spain, Norway and the Netherlands. Ukraine does not have a hydrogen strategy yet. However, according to the decision of the National Security and Defence Council of Ukraine of 30 July 2021, and enacted by the Presidential Decree of 28 August 2021, the Cabinet Ministers of Ukraine shall approve Ukraine’s hydrogen strategy by 31 December 2021 and approve an action plan for its implementation, which should include relevant amendments to legislation. Work on a national hydrogen strategy by the Ministry of Energy of Ukraine is already under way in Ukraine with assistance from USAID and support of the World Bank. On 11 August 2021, the first meeting of a working group on the development of the Hydrogen Strategy of Ukraine was held in the Ministry of Energy together with representatives of the Ministry of Environment and Natural Resources, the State Agency for Energy Efficiency, industry organisations, and experts. It should be noted that taking into account the industry’s novelty, the Hydrogen Strategy of Ukraine should be a dynamic document. However, it is unclear when the Hydrogen Strategy of Ukraine will be approved.

IN RE RENEWABLE ENERGY

According to analysis undertaken by the International Renewable Energy Agency (IRENA) on green hydrogen policies, an effective hydrogen strategy requires extensive work that starts with research and development (R&D) programs, vision documents, and roadmaps. R&D programs have been launched by the Gas Transmission System Operator of Ukraine and Regional Gas Company (RGC). The behaviour of hydrogen and blended hydrogen with natural gas is the subject of study by RGC. The RGC hydrogen project commenced in February 2020 and will continue till 2025. This research project has been conducted at five special landfills: Volyn, Dnipropetrovsk, Zhytomyr, IvanoFrankivsk and Kharkiv Regions. As a result, RGC managed to reproduce gas distribution network conditions at test sites and plans to perform over 180 experiments. The Gas Transmission System Operator of Ukraine has an H2 system readiness project in 20212026 to assess the transmission system of Ukraine as to readiness to accept hydrogen. As for vision documents, IRENA means documents that give answers to the questions “why”, “why hydrogen”, “why this jurisdiction”, and “why now”. In addition to strategic documents at EU level, Ukraine also signed the Joint Declaration of Intent on Establishment of Energy Partnership with Germany in August 2020 to expand cooperation between the two countries in the energy sector. One of the priority issues of this document is development of the “green” hydrogen sector in Ukraine. Ukraine does not have an approved roadmap for the “green” hydrogen sector. However, the Ministry of Energy of Ukraine has, in cooperation with the United Nations Economic Commission for Europe (UNECE), prepared a draft roadmap for hydrogen production and use in Ukraine and a draft Roadmap for the use of hydrogen in Ukraine in road transport. According to the draft Roadmap for hydrogen production and use in Ukraine, the implementation of hydrogen technology can be divided into three stages: at the first stage (2021-2023), assessment of the Ukrainian economy for the “green transition” and launch of the hydrogen economy; at the second stage (2024-2026), policy prioritisation, hydrogen market and supply chain development and demonstration; at the third stage (2027-2029), Smart Portfolio of Policies and Strategic hydrogen project

S. Riabokon

Preparatory work before Hydrogen Strategy in Ukraine

Legal regulation necessary in Ukraine for hydrogen projects

A number of pilot hydrogen projects were recently announced in Ukraine

development, regulatory reform, technological development. Each of the stages contains a list of legislation and economic measures. However, these stages do not comply with the targets for Ukraine set out in the Green Hydrogen for a European Green Deal A 2x40 GW Initiative, which states Ukraine shall have 8,000 MW of electrolyser capacities by 2030. Notwithstanding the fact that roadmaps are still not approved in Ukraine, these documents are important for the development of Ukraine’s Hydrogen Strategy. Alongside strategic documents for the hydrogen economy and for the realisation of hydrogen projects, it is crucial to have regulations for production and transportation of green hydrogen.

A number of pilot hydrogen projects were recently announced in Ukraine. In August 2021, Naftogaz of Ukraine NJSC and the German gas trader RWE Supply & Trading signed a Memorandum of Understanding to study the possibilities of cooperation so as to create a complete value chain for green hydrogen, including ammonia, produced in Ukraine. One of the largest green hydrogen pilot projects is the Danube hydrogen valley project, which aims to create an energy cluster in the south of Ukraine in Odesa Region. The project includes 5 GW of wind and solar power plants and 3 GW of electrolysers. It is planned to implement the project by 2025. In addition to these pilot projects, there have also been announcements about the commencement of a hydrogen project by Eco-Optima group and the Green Hydrogen Industrial Cluster by DTEK. However, in order to begin the development of hydrogen projects, it’s important to understand permit requirements. According to information from Hydrogen Europe, the production of 1 kg of green hydrogen via electrolysis requires 8.92 litres of water. However, under Article 48 of the Water Code, the use of up to 5 cubic metres of water per day qualifies as special water use that is subject to payment and is carried out based on a permit for special water use. Taking into account this requirement, it is likely that the

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

IN RE RENEWABLE ENERGY realisation of hydrogen projects will also require a permit for special water use. Hydrogen belongs to the list of individual hazardous substances according to the Cabinet of Ministers of Ukraine Resolution No. 956 About Identification and Declaration of Safety of Objects of Increased Danger of 11 July 2002. At the same time, the production of hazardous substances is high-risk work that can be performed only on the basis of a permit. Taking into account the physical features of hydrogen as an explosive material, a permit for high-risk work will also probably be required. However, these permits apply for all projects in the energy sector and do not include rules for the production of green hydrogen. In general, the laws of Ukraine do not contain any specific regulation for green hydrogen production and its transportation. Moreover, the cost of green hydrogen is currently very high in comparison with other fuels. At the same time, there are a lot of questions regarding feasibility studies for hydrogen projects and off-takers for green hydrogen. Bearing in mind that, according to the Green Hydrogen Investment and Support Report, Ukraine needs to attract EUR

The development of hydrogen projects is important for Ukraine so that it can reach climate neutrality goals together with EU countries

20.1 billion of investment for the construction of 10,000 MW electrolysers, it is vital that Ukraine has transparent and stable regulations in place for green hydrogen projects for investors. Notwithstanding the absence of any regulations on hydrogen production, Ukraine has the following national standards for hydrogen: ADVERTISEMENT

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

— DSTU ISO 14687:2021 (ISO 14687:2019, IDT) Hydrogen fuel quality. Product specification; — DSTU ISO/TR 15916:2021 (ISO/TR 15916:2015, IDT) Basic considerations for the safety of hydrogen systems; — DSTU ISO 22734:2021 (ISO 22734:2019, IDT) Hydrogen generators using water electrolysis. Industrial, commercial, and residential applications. It should be noted that these standards entered into force from 1 May 2021 and were adopted in Ukraine for the harmonisation of national standards with international standards. However, these standards are not sufficient for legal regulation of green hydrogen production. The development of hydrogen projects is important for Ukraine so that it can reach climate neutrality goals together with EU countries. However, to attain the desired results, it is crucial that the Hydrogen Strategy of Ukraine be approved and that the necessary regulations for the development of hydrogen projects in Ukraine be adopted. END

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

IN RE Ukraine’s Huge Biomethane Potential — What Potential Exporters should Know Biomethane Ukraine

prospects in

Thanks to its extensive agricultural sector, Ukraine holds vast resources for the production of biomethane. This green energy source has garnered significant attention by Ukrainian producers and foreign investors, as many countries offer incentives for biomethane to become the green energy alternative to natural gas used in industry. With the high prices for biomethane due to its “green value” in European countries, and the potential in Ukraine for producing and exporting up to 9.7 billion cubic meters of biomethane annually1, biomethane holds great competitive potential for its exporters. Biomethane production potential in regions of Ukraine2.

General

requirements for biomethane access to the grid

Recently Ukraine adopted an essential amendment that recognizes biomethane’s vast potential. The amendment to the Law of Ukraine On Alternative Fuels introduces the definition of “biomethane,” determining it as a biogas, which in its physical and technical characteristics corresponds to the regulations on natural gas. It also provides for a biomethane register, a procedure for verifying biomethane origin, and a procedure for issuing guarantees as to the origin of biomethane and further transactions with them. Under the Law of Ukraine On Natural Gas Market, biomethane producers in Ukraine are entitled to inject biogas into the gas grid provided it meets standards set for natural gas. According to information from the Bioenergy Association of Ukraine. 2 According to information from the Bioenergy Association of Ukraine. 1

Thanks to its extensive agricultural sector, Ukraine holds vast resources for the production of biomethane

Maksym SYSOIEV is a partner at Dentons

Volodymyr OMELCHENKO is a junior associate at Dentons

The Gas Transmission System Code sets out the following requirements for natural gas (Table 1). Based on the requirements, the maximum oxygen molar fraction is 0.02 %, but almost no technology currently on the market can achieve this level in the process of producing biomethane or it would be extremely expensive. Nevertheless, the technical regulation, which is currently being prepared by the Ministry of Energy of Ukraine, should hopefully allow for

Table 1 No.

Characteristics

Value

Methane content (C1), mol. %

≥ 90

Ethane content (C2), mol. %

≤7

Propane content (C3), mol. %

≤3

Butane content (C4), mol. %

≤2

Content of pentane and other heavier hydrocarbons (C5 +), mol. %

≤1

Nitrogen content (N2), mol. %

≤5

Carbon content (CO2), mol. %

≤2

Oxygen content (O2), mol. %

≤ 0.02

Higher heating value (25°C/20°C)

Higher heating value (25°C/0°C)

Lower heating value (25°C/20°C)

Dew point temperature at humidity (°C) at an absolute gas pressure of 3.92 MPa

≤ -8

Dew point temperature for hydrocarbons at a gas temperature not lower than 0 °C

≤ 0°С

Content of mechanical impurities:

Hydrogen sulfide content, g/m-3

≤ 0.006

Mercaptan sulfur content, g/m-3

≤ 0.02

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

min 36.20 MJ/m-3 (10.06 kWh/m-3) max. 38.30 MJ/m-3 (10.64 kWh/m-3) min 38.85 MJ/m-3 (10.80 kWh/m-3) max. 41.10 MJ/m-3 (11.42 kWh/m-3) 32.66 MJ/m-3 (09.07 kWh/m-3) 34.54 MJ/m-3 (09.59 kWh/m-3)

IN RE BIOMETHANE some flexibility in the parameters and a maximum oxygen molar fraction of 1%.

Getting

access to the grid and exporting biomethane — key steps

Producers will need to take the following steps to connect a biomethane facility to a grid as well as to transmit and export biomethane: — Obtain permission to connect to the grid (gas transmission or distribution network). — Enter into a grid connection agreement and technical agreement with the grid owner, formalize rights to the land plot under the gas networks, pay for the connection services, and fulfil the requirements of the connection agreement and laws of Ukraine in order to commence gas injection. — Enter into a gas transmission agreement with the Gas Transmission System Operator of Ukraine LLC (TSO) for access to facilities, gas transmission services, etc. — If planning to store biomethane in the system, the producer must also enter into a gas storage agreement with the gas transmission operator Ukrtrnasgaz JSC. — Order and pay for distribution of capacity and transmission services, provide financial security and fulfil other obligations under contracts and Ukrainian law. — Submit the appropriate nominations/ renominations for gas transmission, submit reports to the energy regulator, etc.

Transmission charges export duties

and

In addition to the construction and operation costs, as well as the cost of connec-

The potential for biomethane production in Ukraine is promising in consideration of the global transition to a lower-carbon and, eventually, net-zero carbon global economy tion services, potential exporters will need to pay for transmission services at the entry/ exit points within Ukraine and at the interstate connections (Table 2).

Table 2 Tariff for entry point

Tariff for exit point

USD per 1,000 cubic meters per day, excl. of VAT

Tariffs at virtual or physical points at interstate connection with Poland

N/A

9.04

General tariffs for gas transmission services for internal virtual or physical points of the gas transmission system (GTS)

101.93

Table 3 For ordering for a For a monthly day in advance period

For a quarterly period

For internal entry/exit points

1.1

1.04

1.02

For entry/exit points at the interstate connections

1.45

1.2

1.1

Various coefficients would apply to the gas transmission services depending on the capacity ordering period (Table 3). Potential biomethane exporters should also be aware of neutral balancing and daily imbalance fees, which may be charged in favor of the TSO or exporter. Biomethane sold by a resident of Ukraine to a non-resident (e.g., to an EU resident company) is subject to 0% VAT so long as the biomethane is exported outside the customs territory of Ukraine in accordance with the customs regime of export, duty-free trade or free customs zone. In addition, an estimated 0% rate of duties would apply on the transmission of biomethane through the customs border. Another aspect of biomethane export concerns how to measure the volume of natural gas. Currently, natural gas in Ukraine is measured in cubic meters, while EU countries use units of energy (kilowatthours). Although this does not affect the ability to export and import gas, there may be issues with variations in the recalculation of natural gas at customs. That said, the Ukrainian Parliament recently adopted a law that sets out the transition for measuring natural gas in units of energy instead of cubic meters. The law, which sets May 1, 2022 as the date to shift measurement from cubic meters to units of energy, is expected to be signed by the president. Thus, the potential for biomethane production in Ukraine is promising in consideration of the global transition to a lower-carbon and, eventually, net-zero carbon global economy.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

END

IN RE Implementation of REMIT into Ukrainian legislation

n 2015, Ukraine introduced a new natural gas market model based on the European Union model. In 2019, a new electricity market model was launched in line with EU rules. At the same time, Ukrainian energy market models have their specifics, which have been caused, among other things, by a desire to mitigate the impact of dramatic changes in energy market rules on the least protected participants and consumers. Legislation governing energy markets is constantly evolving. To meet international obligations under the Association Agreement with the EU, Ukraine strives to bring it closer to European legislation. In addition, Ukraine is a Contracting Party of the Energy Community, within the framework of which a number of obligations to implement European rules into national legislation should also be fulfilled. One such obligation within the Energy Community is the implementation of the adopted Regulation (EU) No. 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency. The EU Regulation is also known as “REMIT” or “REMIT full” and it establishes rules for preventing and combating abuses (manipulation, improper use of insider information) in the wholesale energy (electricity and gas) market. REMIT was adapted by the Decision of the Ministerial Council of the Energy Community D/2018/10/MC-EnC of 29 November 2018. The adopted by the Energy Community version of REMIT is also known as “REMIT light”. The deadline for the obligation to transpose and implement REMIT light was set for Contracting Parties (including Ukraine) on 29 May 2020. Due to the fact that REMIT light was neither transposed nor implemented into Ukraine’s national legislation, on 25 March 2021, the Energy Community Secretariat initiated ex officio dispute settlement procedure against Ukraine. It should be noted that an official translation of REMIT into Ukrainian appeared in February 2021. At the same time, there is no official translation of the adopted version of REMIT, which does not help to accelerate

In 2019, a new electricity market model was launched in line with EU rules

its implementation in Ukrainian law, as also noted by the Ministry of Justice. Overall, REMIT light provides: — prohibition of abuse in the wholesale energy market; — monitoring of wholesale energy market; — requirements to wholesale energy products; — cooperation of regulatory, competition and other relevant authorities; — prohibition of insider trading; — obligation to publish inside information; — prohibition of market manipulation; — registration of market participants;

Natalia HUTAREVYCH is a senior associate at Sayenko Kharenko

— obligation to ensure that the regulator has the necessary authority to investigate and enforce requirements on insider trading/information and market manipulations and the relevant regulator decisions can be appealed; — obligations of persons professionally arranging transactions; — professional secrecy; — liability (penalties). The REMIT version adopted by the Energy Community for Contracting Parties (the so-called REMIT light version) provides for exclusion of some rules of REMIT full (e.g. requirements for the collection and exchange of data, reporting on wholesale energy markets, interaction with the Agency for the Cooperation of Energy Regulators (ACER). A list of draft laws has been developed to implement REMIT in Ukraine. It is interesting to note competition in the initiative to prepare and submit the listed draft laws between two Ukrainian parliamentary committees — the Committee on Economic Development Issues (D. Natalukha, L. Buimister) and the Committee on Energy and Utilities Issues (A. Herus). All developed draft laws generally contain the basic requirements of REMIT light. However, they do not implement all its 100% provisions — as they contain some additions

Draft laws on implementation of REMIT Registered in Ukrainian Parliament Draft Law on Amendments to Certain Legislative Acts of Ukraine Concerning the Implementation of the Provisions of European Union Legislation on Integrity, Transparency, and Prevention of Competition Distortion in Wholesale Markets Draft Law on Amendments to Certain Laws of Ukraine Concerning Prevention of Abuse in the Wholesale Energy Markets

Draft Law on Amendments to Certain Legislative Acts of Ukraine for Implementation of the Adapted Version of Regulation (EU) No 1227/2011 of 25 October 2011 on Wholesale Energy Market Integrity and Transparency

Published on the NEURC’s website 21 September 2020 and 18 February 2021

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

№4503 dated 16 December 2020 Initiated by MP L. Buimister №4503-1 dated 31 December 2020 Initiated by MP A. Herus №4503-д dated 08 June 2021 Initiated by MPs D. Natalukha, L. Buimister, etc. №5322 dated 01 April 2021 Initiated by MPs A. Herus, etc.

№5322-1 dated 19 April 2021 Initiated by MPs L. Buimister, etc.

Draft Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine Concerning Prevention of Abuse in the Wholesale Energy Market(s)

IN RE and/or amendments to the provisions of REMIT regulations. National Energy and Utilities Regulatory Commission (the “NEURC”) — Ukrainian Regulator in the energy sector, supports the Draft Law No. 5322, as it is based on the draft law of 18 February 2021 developed by the NEURC. Therefore, based on the Draft Law No. 5322, NEURC has developed a roadmap for elaborating key regulations for transposition and implementation of REMIT. NEURC plans to develop and approve the bylaws necessary for the operation of REMIT instruments within six months of entry into force of the respective legislative amendments. These regulations are the following: — Procedure for registration of wholesale energy market participants; — Procedure for investigating abuses on the wholesale energy market; — Requirements for wholesale energy market integrity and transparency; — Procedure for providing information on the performance of business and trade operations with wholesale energy products; — Procedure (methodology) for determining penalties; — Requirements for the surveillance systems of persons professionally arranging transactions with wholesale energy products; — Procedure for acquiring, suspending and terminating the status of a person providing information on behalf of wholesale energy market participants; — Procedure for determining limit fee for the services of persons providing information on behalf of wholesale energy market participants. A feature of REMIT itself and the draft laws on its implementation is the lack of a clear list of prohibited and permissible actions. This means that manipulation can involve a very wide range of market activities, while the regulatory framework merely sets out a general description of the purpose (intention) of those activities and consequences whereby abuses can be identified. Experienced European experts point out that it is not possible to determine abstractly whether an action is a form of abuse, e.g., manipulation, without considering all the surrounding circumstances of a specific case. The difficulty here is that there is a high probability of subjectivity in deciding whether or not market behaviour constitutes abuse, which requires a high level of independence from the regulatory authorities when making decisions. At the same time, it allows participants to use a wide range of tools to prove the legitimacy of their behaviour.

S. Riabokon

REMIT

A feature of REMIT itself and the draft laws on its implementation is the lack of a clear list of prohibited and permissible actions

It is worth mentioning the amount of liability envisaged by the draft laws for abuses on energy markets. According to REMIT, penalties are determined at the national level and must serve a number of functions: they must be effective, dissuasive, and proportional to the violation — i.e. reflecting the nature, duration and seriousness of the violation, as well as taking into account the damage caused to consumers and the profits obtained from the violation. Draft Laws No. 4503-д, No. 5322-1 establish the following penalties: — UAH 850,000 — 1.7 million for violation of restrictions on the use of inside information; — UAH 1.7 — 2.55 million for market manipulation;

— UAH 340,000 — 850,000 for non-disclosure/disclosure of inside information in violation of established requirements. In case of manipulation or illegal use of inside information, the Regulator may additionally decide on the return of income obtained as a result of the offense. Draft Law No. 5322 provides for the following penalties: — up to UAH 102 million for violation of restrictions on the use of inside information, market manipulation, attempt to manipulate; — up to UAH 51 million for non-disclosure/disclosure of inside information in violation of established requirements. Penalties may not exceed 10% of the annual income — the total value of product (goods, works, services) sale. The amount of penalties for REMIT breaches in European countries varies. For example, the highest penalties are imposed by the UK regulator OFGEM (EUR 42.5 million fine imposed in March 2020). Fines imposed by the French regulator are also calculated in the millions of euros, while fines in other countries are many times lower, amounting mainly up to EUR 150,000. Some elements of REMIT are already present in Ukrainian legislation. The Law of Ukraine On Capital Markets and Organised Commodity Markets establishes the concept of wholesale energy products along with the procedure for cooperation between the NEURC, the National Securities and Stock Market Commission, and the Antimonopoly

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IN RE REMIT Committee of Ukraine. In addition, Ukrainian legislation already provides for administrative and criminal liability for abuses in the wholesale energy market. Administrative liability is provided for in the form of a fine, while criminal liability is provided for in the form of a fine and deprivation of the right to hold certain positions or engage in certain activities. Hopes of actively combating energy market manipulation are pinned on legislation implementing REMIT. Manipulations are often mentioned in the context of the electricity market (January, October 2020, May, July 2021). Based on these cases, NEURC is already developing the practice of clarifying what market behaviour is manipulative. Thus, in June 2021, NEURC issued a statement that manipulation in the electricity market, as opposed to legitimate trading, is the sale of electricity volumes production of which is not confirmed. The transmission system operator (Ukrenergo) monitors all trading transactions and the origin of the volumes that are put up for sale. However, given the experience of other European countries, prosecution under

The process of REMIT implementation will only begin with the adoption of the necessary legislative changes

REMIT is based on ex-post analysis and is a lengthy process that sometimes takes years. It can therefore be seen from recent cases that in 2021, national regulators held market participants liable for actions that the latter committed in 2019 (OFGEM in the UK) decision of 24 August 2021 in breach of Art. 5 of REMIT “Prohibition of market ma-

COMBATING ABUSE IN ENERGY MARKETS: current Ukrainian regulations Law on Capital Markets: articles 145, 146, 148; Law on Commodity Exchanges: art. 20;

Manipulations, use of inside information, insider trading

Code of Ukraine on Administrative Offenses: articles 163-8, 163-18, 163-19, 244-18; Criminal Code of Ukraine: articles 222-1, 222-2, 232-3; Market rules (electricity market); NEURC Regulation No 766 dated 08 August 2020 as amended “On Actions of the Electricity Market Participants During the Period of Quarantine and Restrictive Measures Related to the Spread of Coronavirus Disease (COVID-19)”.

APPLICATION of REMIT in the EU Guidance on the application of Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency 6th Edition (Published: 22 July 2021);

ACER

Guidance Notes: Guidance Note 1/2019 – Layering and Spooﬁng (Published: 22 March 2019); Guidance Note 1/2018 – Transmission Capacity Hoarding (Published: 22 March 2018); Guidance Note 1/2017 – Wash Trades (Published: 19 June 2017).

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nipulation” in market participants’ actions starting from March 2019). Therefore, REMIT instruments cannot be identified as the quickest way to address the issue of manipulation in energy markets. The introduction of hardware and software infrastructure to collect and analyse information on market participant behaviour, as well as to report, is one of the key problematic issues discussed in the context of REMIT implementation. Draft laws No. 4503-д and No. 5322-1 establish the concept of “market management system” — a software and information complex, which includes a number of subsystems that ensure management of all necessary databases, registries and calculations, as defined by market rules. These draft laws also provide for periodic auditing of the market management system by the Regulator. However, they do not specify who operates the system, for what purposes, or in what order. Also, draft laws No. 4503-д, No. 5322-1 provide for the operation of a system to detect violations in the wholesale energy market by the market operator, the transmission system operator, and persons professionally arranging transactions in wholesale energy products. For EU energy markets, ACER uses the ARIS system. However, it is not available for the Ukrainian energy market. At the same time, the relevant Ukrainian system needs to be comparable with the European system to bring these energy markets closer together. Systematic analytical work of ACER to prepare clarifications and recommendations based on information on the behaviour of European wholesale energy market participants should also be noted. Furthermore, Draft Law No. 5322 provides that Regulator has the right to apply ACER recommendations on the REMIT application. In conclusion, it would be symbolic that the adoption of legislation on the implementation of REMIT in Ukraine was back-to-back with the tenth anniversary of REMIT adoption in the EU. However, there is a current lull in the process of REMIT implementation in Ukraine. Therefore, it is important to optimise and increase the efficiency of legislative drafting work, where the work is done with a minimum number of drafts, but in a systematic and continuous manner. The process of REMIT implementation will only begin with the adoption of the necessary legislative changes. END

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

LCF LAW GROUP

COVER STORY

Commitment to Stabilization The regulatory developments surrounding the establishment of the electricity market in Ukraine and commitments undertaken by the Government towards the renewable energy investors are part of a long-lasting, ongoing battle on all fronts involving stakeholders and the state. We discussed the situation with new and existing investment projects with Ivan Bondarchuk, counsel, head of energy and natural resources at LCF Law Group, as well as the state’s performance to stabilize the situation and relaunch the confidence of investors.

UJBL What trends could you single out

on the energy market of Ukraine? Ivan Bondarchuk: Generally, the first two years since the launch of the electricity market could be described as the pending battle for cash flow between existing power generation stakeholders, traders and the state, with its political interests. Therefore, the market was unstable, full of trading manipulations and abuses. This situation resulted in the current situation when a ‘winter energy crisis’ is highly foreseeable.

UJBL How would you comment on the developments around competition on the electricity market? I. B.: Competition on the electricity market could be assessed as low. Until recent times, state-owned nuclear and largescale hydrogeneration (Energoatom and UkrHidroEnergo) did not efficiently participate in the market serving the supplying of low-cost electricity for households under the PSO mechanism. Additionally, state-owned Tsentrenergo (CHP operator) and Energoatom were suspected of carrying out discounted electricity sales of electricity for the benefit of privately-owned traders. In this scenario traders competed with other generating companies in their attempts to set the most favorable price for electricity.

Traders affected the day-ahead electricity market with unsecured bids, causing dumping on the electricity market. In response to that, power-generation units (specifically, private CHPs) reduced their sales in this segment, moving to the balancing market (where electricity is more expensive) or to bilateral PPAs executed with affiliated entities.

UJBL What were the regulatory respons-

es from by the National Energy and Utilities Regulatory Commission? I. B.: The Regulator has permanently made efforts to stabilize the market. First of all, the National Energy and Utilities Regulatory Commission (NEURC) has installed price caps for the balancing market — low cap (sales cap) at the level of 55% of the day-ahead market price, and high cap (purchase cap) of 115% of the dayahead market price. This regulation has not been very efficient. Particular market players dumped the day-ahead market, forcing the power generation unit to sell electricity at the low balancing market cap. The NEURC has responded and cancelled the low cap. The next series of market abuse happened in spring 2021. In response to the low market price, power generation has left the day-ahead segment and moved to the balancing market (where electricity is more

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

expensive) or to bilateral PPAs executed with affiliated entities. In response, the regulator ordered mandatory minimum salling on the dayahead market amounting to 10% of the producer’s load. Additionally, the Regulator has prohibited power generation companies from selling more than 50% of their load to affiliated utilities. However, all these responses are tactical. In order to ensure competition on the electricity market the NEURC shall build up efficient cooperation with the Antimonopoly Committee of Ukraine to investigate such abuses. Implementation of REMIT legislation could be also helpful. Draft law No. 4503 provides for implementation of regulations on the wholesale energy market for its integrity and transparency. In particular, it envisages a list of violations and abuses which could be committed by stakeholders of the electricity market, including insider trading, unsecured bidding and manipulative behavior and strict sanctions applicable thereto.

UJBL Over the last couple of years, we saw the so-called crisis around the feed-in tariff and state commitments before investors. Do you see any stabilization in this area? I. B.: This issue has still not been resolved by the Government. However, we see their commitment to stabilizing the

LCF LAW GROUP

LCF LAW GROUP Year of establishment: 2009 Location: Kyiv, Ukraine Number of partners/lawyers: 9/61 CORE PRACTICE AREAS Dispute Resolution Banking & Finance Bankruptcy & Restructuring International Arbitration Corporate, M&A, and Antitrust Tax Law Cross-Border Litigation Intellectual Property White-Collar Crime Energy & Natural Resources GR and Constitutional Law

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

LCF LAW GROUP

COVER STORY

At the same time, we’ll be able to speak about stabilization of the industry once new projects appear. At this point the industry requires clear and transparent conditions for the development and elimination of policy and regulatory risks. For instance, there is currently ongoing discussion on the implementation of ‘feed-in’ premium (FiP) support mechanism for existing projects. Generally, market players assess FiP as a reasonable opportunity. However, FiP should be available as an alternative to the ‘feed-in’ tariff. Mandatory replacement of the feed-in tariff with FiP could be regarded by the investors as another breach of state guarantees and investment expectations.

UJBL Could you please explain the cur-

In the last few months the Government made significant progress on debt repayment — the Cabinet of Ministers and NEURC approved state guarantees for the Green Bonds to be issued by NEC Ukrenergo to repay the debt owed to the SE Guaranteed Buyer industry. At first glance, the criterion for assessment are pretty obvious — i.e. performance of the commitments undertaken by the Government before the renewable energy industry under the Memorandum of Understanding signed on 10 June 2020. The most critical provisions of the MoU provide for repayment of the ‘feed-in’ tariff debts by the end of 2021 and avoidance of subsequent hostile actions against renewable energy projects. In the last few months the Government made significant progress on debt repayment

— the Cabinet of Ministers and NEURC approved state guarantees for the Green Bonds to be issued by NEC Ukrenergo to repay the debt owed to the SE Guaranteed Buyer. This demonstrates the dedication of the Government towards its commitments and adds trust in the eyes of the investors. The investors also succeeded in protecting themselves from the initiative to implement additional excise tax for renewable energy, which could, in fact, result in additional 3.2% fall in revenue of these projects.

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rent situation around domestic and foreign investment projects in the renewable sector in Ukraine? Basically, there were several high value project finance deals and entry by some of the biggest international developers. I. B.: Sure. Over the last year we have observed several high-value investments. The most prominent and famous are, probably, the acquisition by Nebras of majority shares in the projects developed by UDP Renewables, and purchase of Ukrainian solar portfolio by Total Eren. This demonstrates the trend of the market — acquisition of operating projects. The most important reason for this is simple. The conditions for the new development of renewable energy projects remain unclear. The second aspect is that the acquisitions are driven in the main by big international investors who enjoy significant financial resource and could sustain turbulent times. These stakeholders are ready to purchase the projects if there is a local developer willing to exit the business at a reasonably low price.

UJBL You are highly active in the com-

munity of investors and developers. How would you comment on the mood of investors towards implementing new renewable energy projects and constructing new facilities? Does it affect the incoming requests from your clients? I. B.: In the second half of 2021 the most active investors began their search for new projects specifically in wind energy. The rise in prices on the electricity market creates additional incentives for that. In October the average price for electricity on the day-ahead market reached UAH 2,516.91

LCF LAW GROUP

COVER STORY

per 1 MW*hour. In the first days of November the price index exceeded UAH 3,000.00. In other words, today the electricity market offers the investor more than the Government under the feed-in tariff. Such pricing policy creates an opportunity for the development of new generation facilities under the Corporate PPA (C-PPA) scheme. That is, for a long-term direct power purchase agreement between the offtaker (trader or industry-scale consumer) and the producer. At the same time, C-PPA, as a marketbased agreement, requires additional services for efficient trading to mitigate price hedging and the pike shaping risks of the unstable electricity market. Therefore, the development could be accelerated if the Government implements additional incentives like FiP, contract for difference or green certificates.

UJBL We know about your growing GR

work in the sector. In particular, your team was a legal counsel to the Ukrainian Association of Renewable Energy in mediation with the Government on review of the feed-in tariff, and coordinated protection of its members during consideration by the Constitutional Court of Ukraine. Could you explain the specifics of GR practice in the highly-regulated energy sector? I. B.: The GR practice on the energy market is highly dependent on the fact that it involves a variety of stakeholders and affects all segments of the economy. For example, one cannot simply increase the tariff without abusing consumers. On the other hand, in the end somebody will pay the market price for electricity, generation facilities and grid infrastructure. This consequence becomes even more complicated when the climaterelated aspect is on the table. Somebody will pay additionally for the emissions or invest in climate-neutral generation facilities. For example, it is no coincidence that the EU is promoting changes on the electricity market as a ‘fair deal for consumers. That is, as a compromise between the energy industry, households and business consumers. For example, in addition to the mentioned Mediation and Constitutional Court case, we are now dealing with a complex state aid matter. Starting from 2022, Ukraine has a commitment to apply EU regulations prohibiting state aid, namely support for business entities by the state, which affects competition. It also provides for very strict rules

Starting from 2022, Ukraine has a commitment to apply EU regulations prohibiting state aid, namely support for business entities by the state, which affects competition allowing so-called ‘compatible’ state aid programs. In the light of this, the Ministry of Energy, NEURC and AMCU will cooperate to ensure qualification of the ‘feed-in’ tariff or alternative support schemes (such as ‘feedin’ premiums) under state aid regulations. We, in unison with our clients, provide stakeholders with analytics and arguments which could be used to achieve this goal. For example, our team, together with the expert on EU state aid legislation, Dr. Leigh Hancher from the Florence School of Regulation, have prepared the amicus curiae on this matter. Therein we have explained how EU state aid regulations and the applicable case law of European Court of Justice could be applied to the Ukrainian electricity market. Therefore, in addition to excellent knowledge of the client’s business, a suc-

cessful GR team shall demonstrate excellent understanding of the market and how it could be affected by various regulatory decisions. Furthermore, understanding the interests and powers of different market stakeholders and the Regulator is of vital importance.

UJBL In April 2021 the first investment arbitration was initiated by Modus Energy International B.V., and it’s likely that the decision is a highly-anticipated one for its precedent-setting nature. What is your view on this? Would you anticipate new investment claims in the near future? I. B.: We are currently aware of the second claim against Ukraine brought by Belgian wind farm developer SREW N.V. to the International Centre For Settlement of Investment Disputes.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

LCF LAW GROUP

COVER STORY

If the Government is successful in the performance of its commitments and plans, a new cycle of investments coming to the electricity market could begin. My bet is that as early as spring 2022 we will hear announcements about new significant projects and investments We discussed this issue a lot with our arbitration team and international colleagues. First of all, there are no strict case law rules in investment arbitration, and every case shall be assessed individually. Therefore, existing cases will hardly form precedents for ones which could follow them. On the other hand, the outcome of the Modus case and the SREW N.V. case will form the background and framework for assessment of any subsequent FiT-based claims against Ukraine. The quality of the legal position, document production and discovery will form the attitude of arbitrators to a Ukrainian case and could affect subsequent initiatives. Therefore, all inves-

tors and the legal community will keep an eye on it. At the same time, the most important thing is the fact that the existence of both cases demonstrates problems in the implementation of commitments undertaken by the Government before investors in mediation. The vast majority of investors are waiting for the Government to perform its commitments specifically for the sake of debt repayment. Should the Government fail to perform, then more investment arbitration claims could be expected early next year.

UJBL What about regulatory disputes? Are they politically motivated or quite reasonable?

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

I. B.: The first regulatory dispute that comes into my mind is the challenge to the imbalance settlement formula brought by renewable energy producers against the NEURC. According to the law, RES producers shall compensate the SE Guaranteed Buyer for the share of the imbalance settlement costs caused by wrong generating forecasting. The formula for calculation of the compensation for each power producer defined the individual imbalance (deficiencies between generation forecast and actual electricity output). In January 2021, the Regulator introduced the new vision. The basis for compensation was calculated as the overall imbalance settlement cost of the Guaranteed Buyer calculated as the difference between purchases at the FiT and sales on the electricity market. In other words, as a result of the new formula renewable energy producers compensated the Guaranteed Buyer for the imbalance caused by its trading policy in addition to forecasting imbalances. Such an approach obviously contradicts the Law of Ukraine On the Electricity Market and to state guarantees given to renewable energy producers for offtake of all generated electricity at the feed-in tariff. The new formula is currently subject to judicial review. If the court is reluctant to cancel it, then Parliament will be able to restore the interests of investors through relevant legislative amendments.

UJBL What are your expectations for 2022? I. B.: First of all, we believe in the future growth of businesses on the electricity market. Early next year (probably by midspring) businesses will receive the information required to update their plans and prognosis. That is, regarding performance/ misperformance of the Government’s commitments before RES producers, fair price indicatives on the day-ahead market, future rules for renewable energy project development. If the Government is successful in the performance of its commitments and plans, a new cycle of investments coming to the electricity market could begin. My bet is that as early as spring 2022 we will hear announcements about new significant projects and investments. On the other hand, if the Government were to fail, we will watch new arbitrations and regulatory claims. END

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

BIZ LUNCH

Timely Questions Investment arbitration may be seen as an indicator of business climate, investors’ trust in and predictability of state policies, and reputational concerns for states. We have reached out to David Pinsky, a partner in the New York office of Covington & Burling, and asked about the investment arbitration landscape and about his firm’s international arbitration practice. As arbitration counsel in investment arbitration cases involving Ukraine, in particular aimed at recovery of damages from Russia’s seizure of Ukrainian investments in Crimea, Mr. Pinsky explained his commitment to his work from both a professional and a human side. Our editorial team is grateful to him for speaking with us. UJBL How would you describe the cur-

rent global investment arbitration landscape? David Pinsky: It’s a timely question. In October, the International Center for Settlement of Investment Disputes (ICSID) issued its annual report for the 2021 fiscal year. In the past year, ICSID registered 70 new cases, an annual record. And that’s after last year’s record of 57 new cases. Another arbitral institution, the Permanent Court of Arbitration (the PCA), also registered a record number of new investorstate cases in 2020 — a total of 59. The PCA, unlike ICSID, also administers commercial and state-to-state cases. This gives you a sense of the volume of cases that are being brought, meaning that investors are filing more claims against host states when they believe the host state has violated its obligations under international law.

Relevant to Ukraine, the largest share of ICSID cases registered in 2021 involves states in Eastern Europe and Central Asia. According to the annual report, 30 percent of ICSID’s new cases in 2021 involved Eastern Europe and Central Asia, which I think is interesting and demonstrates the importance of investor-state arbitration in those regions. From my own experience, investors are becoming increasingly aware of the protections that investment treaties and investorstate arbitration offer them, and are considering how to structure their investments in foreign jurisdictions to increase the likelihood they’ll be able to seek redress against the host state if something goes wrong. That may be one of the reasons why the number of new investor-state cases keeps increasing each year. I think that is probably the headline and why we’ve once again seen a record number of cases in the past year.

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

UJBL I wanted to clear something up

about the cooling-off period within the framework of bilateral investment treaties (BITs). As far as I understand, it’s not a very efficient tool. Is it? D. P.: In theory, cooling-off periods are a good idea, because it can be a significant undertaking for a foreign investor to pursue an investment arbitration against a state. Unfortunately, if an investor pursues an investment arbitration, it may mean the end to the investor’s business in that country. And investors may prefer to try to resolve a dispute amicably, so they can continue to operate in a particular country, especially if the investment over which a dispute arises is but one investment among many in the country. The bottom line is that, in theory, a cooling-off period can be a good idea. In my experience, however, cooling-off periods result in amicable resolutions more often in com-

BIZ LUNCH mercial disputes, where the parties often are thinking about continuing their relationship in some way, as opposed to in investment arbitrations. That said, I think it would be beneficial if both investors and states approached the cooling-off period as an opportunity to reach an amicable resolution. Without talking about specific cases, I think that too often the cooling-off period is not used in this way.

UJBL What are the main areas of focus

of Covington’s international arbitration practice? How is it organized globally and particularly in your jurisdiction? D. P.: Covington as a firm is over 100 years old. The firm’s arbitration practice dates back essentially to the firm’s founding. Unlike some other international firms, Covington’s strategy is not to open offices in dozens of different jurisdictions. Nonetheless, even though our arbitration lawyers are principally based in a handful of jurisdictions — in Washington, New York, London, Dubai, Seoul, and Johannesburg, — we very much have a global practice. We handle cases for Ukrainian clients, for example, even though we don’t have an office in Ukraine, and for clients invested in other states in the region. You’ve also asked about my jurisdiction. I’m one of Covington’s arbitration partners based in New York. But Covington operates on a “one firm model”. In practice, this means that when we’d like to staff a case or are thinking about pitching for a case, we try to identify the lawyers who have the relevant expertise, regardless of where they are located. Another point about our history. The firm started as a Washington, D.C. firm focused primarily on regulatory issues. Our regulatory practices today span virtually any industry you could possibly think of, which leads to a breadth of interesting opportunities for our arbitration lawyers. So, if you look at our arbitration practice, we operate across many different industries. There are, of course, industries in which we tend to handle a greater number of cases because more disputes arise in those industries — for example, in the energy and mining sectors. But, if I think off the top of my head about the industries in which we are currently working, these include energy and natural resources, mining, telecommunications, media, life sciences, food, and many others. One of the reasons for that is the regulatory expertise within the firm that helps disputes lawyers — whether international arbitration practitioners or domestic litigators here in the US or the UK — understand our clients’ businesses and the regulatory issues they face.

Covington today is the largest law firm in Washington, D.C., by number of lawyers. In terms of the size of the arbitration practice alone, we have over 50 lawyers focused on international arbitration across our offices.

UJBL Do you have any specific focus

on commercial cases or investment arbitration? I know that the firm is actively involved in cases in the field of public international law. Do you have this division inside your practice? D. P.: Within our practice itself, we don’t divide ourselves up by specialty. Most of our senior arbitration practitioners, if not all of them, in fact, have diverse practices and are quite versatile lawyers. For example, I focus on complex international disputes, involving both investment arbitration and commercial arbitration, as well as litigation in support of arbitration. Some of our senior lawyers focus on one particular area but most have diverse practices. But, to answer your question, I would divide our practice into four parts. First, is commercial arbitration — we are very much focused on that and in terms of volume, this may be where we have the largest number of cases, across a variety of industries. Second, is investment arbitration — there may be fewer investment arbitration cases than commercial cases, but investment arbitration cases are often very large and they may be as time-consuming as multiple smaller commercial cases. Third, this brings us to the public international law work that you mentioned. Some of my partners, in particular, Marney Cheek, Jonathan Gimblett, David Zionts, and Nikhil Gore, are very active, as you probably know, doing work for the Ministry of Foreign Affairs of Ukraine. And they have done a very nice job of linking the broader arbitration practice with public international law disputes. Finally, the fourth category, which is a subset of commercial arbitration, is insurance coverage arbitration, where our firm has a very strong practice of representing policy holders that have claims against insurance companies to recover the insurance that is due to them under their policies. And a lot of those policies provide for international arbitration as a dispute resolution mechanism. Insurance is a specialized field, so we have some members of our arbitration practice who are also insurance coverage lawyers or litigators and have a specialty in arbitration as well. It’s a very valuable asset to our clients.

UJBL What made you decide to work on Ukrainian investment arbitration cases? While preparing for our interview I read that your parents emigrated from the Soviet Union when you were two years old. D. P.: I think the connection starts with the Yukos arbitration. When I was a young associate at Covington, I had an opportunity to work on an investment arbitration on behalf of minority Yukos shareholders against the Russian Federation. Two of my partners who also do a lot of work in Ukraine — Marney Cheek and Jonathan Gimblett — helped lead this work. When Covington decided to take on that case, the firm in effect made a strategic decision that we were going to handle cases not for the Russian government and state-owned enterprises, but for clients that were adverse to them. Also, not having an office in Russia helped to a degree because of the political aspect of the Yukos cases. In 2014, when Russia invaded and occupied Crimea, my colleagues and I had already worked on cases against Russia and against Russian state interests. For me, because of my background (I was born in Kyiv in 1977 and moved to the United States in 1979), I had a personal interest in what was happening in Ukraine. I remember reading about what was happening in Crimea, and later about what was happening in eastern Ukraine. My colleagues and I then explored opportunities to help Ukrainian investors in Crimea and the Ukrainian government itself. This is how a number of us at Covington began working on cases in Ukraine, and we have found them to be rewarding both professionally and personally given the issues at stake. UJBL Could you please comment on

these cases from the legal perspective? We are waiting for their outcomes and hope they could be precedent setting. D. P.: The general point is that investment arbitrations arising from the invasion and occupation of Crimea reflect the importance of investment arbitration as a form of recourse for investors. I don’t want to comment on the specific legal issues in specific cases because these cases are still ongoing. But I am sure the results of some of these cases will be reported publicly as the cases continue to develop, so stay tuned.

UJBL You have already explained that

you are well-positioned to handle cases against Russia and Russian state-owned enterprises. But there is one question that I

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BIZ LUNCH and many other people would like to ask. Is it possible to enforce the award of international arbitration tribunals against Russia? D. P.: I think the best reference point may be to take a look at what the majority shareholders in the Yukos arbitration have been doing. Enforcement may be a time-intensive process. For example, if a host state loses at the jurisdictional and merits stage, the host state may have the ability to apply to set aside that award in the domestic courts of the state in which arbitration is seated, which can delay the enforcement phase. Investors in Russia likely want confidence that Russia will abide by its international obligations and, if an award is issued against it, that Russia will voluntarily pay the award like many host states do — and that there won’t be a long delay between an award and payment of compensation to the investor. That said, ultimately, there is an avenue for enforcement because most countries, including Russia, operate internationally and have assets in various jurisdictions. An investor ideally does not want to search all over the world for the host state’s assets. But, as you can see in the Yukos ar-

bitrations, that is something that investors sometimes have to do.

UJBL Covington has a deep commitment

to pro bono work, including on matters related to states of the former Soviet Union. What kind of projects do you perform pro bono? How does this policy affect the development of the firm in the broader sense? D. P.: Covington has long had a very strong commitment to pro bono work. Most recently, in each of the last three years, Covington has been ranked first in the United States by The American Lawyer magazine measured by the average hours each lawyer spends on pro bono work. Pro bono efforts are very much integrated into the culture of our firm because we think it’s the right thing to do. I also think that the firm’s commitment to pro bono work attracts lawyers to the firm who are interested in not only doing well but also in doing good, in addition to their paid client work. Certainly, this was one of the reasons why I was attracted to the firm when I was in law school (I have been with Covington for my entire career, beginning as a summer associate). ADVERTISEMENT

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

In my own pro bono practice, I have been focused on media freedom issues. In the year between law school and joining Covington, I lived in Russia, studying media freedom issues on a fellowship from the State Department. When I came to Covington, I very much wanted to pursue that interest. As an associate, I handled a number of asylum cases for journalists from the former Soviet Union, for example, from Uzbekistan. As a partner, I’ve been working on similar cases, supervising associates who have similar interests. My colleagues and I also recently have been able to marry interests in press freedom in Russia with investment arbitration. Specifically, investment arbitration may be relevant to media outlets if an international media outlet manages its business in Russia from a foreign jurisdiction that has a bilateral investment treaty with Russia. If Russia takes measures that harms that business, or investment, the media outlet may bring an investment arbitration claim under the treaty. This type of work can be extraordinarily rewarding and important. END

CRUX

Legal Digest For the past few months, we have carefully monitored the most important novelties and initiatives in Ukrainian legislature. The highlights of the period are definitely the newly-adopted Law On Meditation and the recently signed EU-Ukraine Open Skies agreement, both of which were long-awaited in the legal sphere and beyond. Another significant initiative is the presidential draft On Ratification of the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. For your attention there is also Law No. 3959-1, which finalizes the launching of the Bureau of Economic Security and important laws in the agriculture and infrastructure fields.

On 5 November Draft Law No. 0132 On Ratification of the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters was registered in Parliament. What does this ratification envisage, and why is it important for Ukraine?

VALERIA LADA, Associate, LCF LAW GROUP The Convention aims to provide a single global framework for the free circulation of judgments in civil and commercial matters among the Convention’s contracting states. To that end, the central obligation imposed on states is the mutual recognition and enforcement

of foreign judgments. The following provisions of the Convention are worth noting. Firstly, the Convention lists those matters that are excluded from its scope, in particular insolvency, defamation, carriage of goods, intellectual property matters. In addition, the Convention does not apply to interim relief. Furthermore, a judgment is eligible for recognition and enforcement under the Convention, if it complies with the so-called jurisdictional requirements stipulated by this treaty. For instance, if the person against whom enforcement is sought was habitually resident

in the state where the judgment was given. Finally, if a judgment is enforceable under the Convention, it shall be recognized and enforced without any review on its merits. There are only limited grounds on which a court can refuse to recognize and enforce it, including public policy, fraud, improper notice. In conclusion, the Convention appears to be a great step forward in the area of recognition and enforcement of foreign judgments. The treaty provides an essential toolkit to overcome the lack of uniformity in national laws and practices around the globe, ensuring a

sufficient degree of predictability. Though the ratification of the Convention by Ukraine is a significant development, it will not become an immediate game-changer for Ukrainian parties. The Convention has not yet entered into force, and, currently, there are only five signatories, including Ukraine. Thus, the real impact of this treaty would be felt in the longterm, as more and more states join the Convention. In this regard, it is noteworthy that the European Union and the United Kingdom are likely to accede to the Convention in the foreseeable future.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

CRUX LEGAL DIGEST On 16 November the Ukrainian Parliament adopted the Law On Mediation (draft law No. 3504) in its second reading. What amendments were brought in comparison to its first reading?

YEVHEN FILONENKO, Counsel, EQUITY The Verkhovna Rada of Ukraine has adopted the Law On Mediation and submitted it to the President of Ukraine for signing. The given law spells out the legal grounds and order under which mediation as a non-judicial procedure to settle a conflict (dispute) is conducted. Generally, the legislative procedure in connection with this Law has been under way for 18 months. In fact, this is the period of time between the first

and second readings. Taking the afore-mentioned into account, the content of the draft law in the first reading and content of the adopted Law has certain differences. Thus, the following are significant amendments to the content of the draft law: — expanded purpose of mediation which specifies two goals or, to be more specific, during the procedure the parties are trying to prevent a conflict (dispute) or settle it. In other words, mediation has started to perform a preventive function rather than only a regulative one; — specified list of stages at which mediation may be conducted by adding a stage of pre-trial investigation to reconcile the victim and the suspect; — provided that mediation does not influence the period of limitation;

— simplified requirements to persons who can become mediators (a degree from a higher educational institution is not required); — application of the Law to persons who had been equipped with the basic skills of a meditator before the Law came into effect, with respective certificates confirming this fact. Generally, the mediator may not issue an award on merits of a conflict (dispute) between parties to mediation. That said, the parties may go beyond the subject of the conflict (dispute) in their agreement following mediation. Information about mediators will be entered into open registers on the Internet. The Law has also introduced changes to a number of procedure codes in terms of possible application of me-

diation during the trial. Thus, the parties to a case may file a motion with a court regarding non-judicial settlement of a dispute via mediation. In such a case the court may suspend proceedings for the period of mediation but not for more than 30 days after the day on which a respective order is made. At the same time, mediation can also be conducted during the pre-trial investigation, though the Law does not introduce any changes to provisions of the Criminal Code of Ukraine, which may result in certain collisions in practice. Thus, mediation must, in its essence, become an alternative to public courts. However, taking into consideration the imperfect nature of provisions of the Law, its implementation may fail to achieve the objectives pursued by mediation.

The Draft Law On Critical Infrastructure (No. 5219) was adopted on 16 November in its first and final readings. How do you assess the adopted draft?

MARINA SHARAPA, Partner, AGRECA Law Firm The critical infrastructure protection system is an integral part of the national security of common law and civil law countries. Amidst global escalation in political and military context that has recently diffused, North America and Europe are

extremely concerned about this issue. Ukraine, in turn, is only now laying one of the key elements in national security groundwork. The Draft Law On Critical Infrastructure No. 5219 was adopted on 16 November in its second reading. The Law has been sent to the President of Ukraine for signing. However, no public consensus was reached on this issue. The business community is uncompromising: the law needs revision. The American Chamber of Commerce, the European Business Association, the Internet Association of Ukraine and others have repeatedly said this.

Moreover, after the Law was adopted, the European Business Association asked the President of Ukraine not to sign it. Business sees substantial risks in the practical application of the current version. Business believes that the Law contains overly broad definitions and criteria for classifying objects as critical infrastructure and that they will confer unlimited powers on certain authorities when classifying a critical infrastructure object. Please note that according to the adopted Law, as a result of classification of an object as being critical infrastructure, a number of managerial and

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

financial obligations are imposed on the owner of such object. For non-compliance with such obligations the Law imposes special administrative and economic sanctions. It is expected that the President will hardly respect the position of the business community due to the extreme importance of this Law. The time for discussions is over before it has even begun. This example of lawmaking once again shows that Ukraine lacks precedents of successful communication between the public and private sectors, which ensures consensus and common interest on all issues, even national security.

CRUX LEGAL DIGEST Ukraine and the EU signed the Agreement on a Joint Aviation Area. How will it influence the state of aviation in Ukraine, local airlines, passengers, and how do you evaluate the Agreement?

OLEKSANDR KAMSHA, Attorney at Law, Insolvency Receiver, Ilyashev & Partners The Agreement on a Joint Aviation Area, or Open Skies agreement, was signed between the EU and Ukraine at the 23rd Ukraine-EU Summit, which took place on 12 October 2021 in Kyiv. The main goal of the agreement is to deepen the integration of Ukraine into the European airspace ensuring high standards of flight safe-

ty, environmental protection, and aviation security, air traffic control, as well as benefits for participants in the aviation market (including passengers). It is assumed that following the signing of the agreement the air transportation market will become more open and competitive. At the same time, signing the agreement is only the first step. Now is not the right time to discuss any short-term benefits for the aviation market. The process of implementing the deal is quite continuous. After all, the agreement provides for the introduction into Ukrainian legislation of a number of EU regulations and directives, which should be dealt with by the central authorities of Ukraine. The agreement provides for the liberalization of flights

between the EU countries and Ukraine, which will be implemented in two stages. The first is the removal of restrictions for Ukrainian and EU carriers on flights between any cities or countries. The second stage is that EU air carriers will be able to operate domestic flights in Ukraine. Also, at this stage, Ukrainian carriers will be able to make unlimited flights between any EU airports, as long as the starting or ending point of the route is in Ukraine. The agreement provides for the introduction of equal rights for Ukrainian and European airlines, the lifting of monopolies on certain routes and restrictions on flights between the airports of Ukraine and the EU countries. In other words, it is planned to create prerequisites for opening new routes

and conditions for better competition in the aviation market. The greatest advantage for passengers lies in the mandatory implementation by Ukraine of EU directive No. 261/2004 on the protection of passengers’ rights during delays and cancellations of flights, which regulates compensation issues. In the event of a long delay of the flight, the airline must provide passengers with food and accommodation. Also, passengers can count on compensation if the delay was due to the fault of the airline. It is important that these requirements will also apply to low-cost airlines. Hence, it is hoped that national air carriers can become more responsible. However, we will see the impact of the agreement on the Ukrainian aviation market only in a few years.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

CRUX LEGAL DIGEST The Verkhovna Rada of Ukraine adopted Law No. 3205-2 On the Fund for Partial Credit Guarantee in Agriculture. What does it provide, and how will it influence the agriculture business sector?

ANTON SINTSOV, Counsel, Asters On 4 November 2021 the Ukrainian Parliament adopted the Law of Ukraine On the Fund for Partial Credit Guarantee in Agriculture. Under the Law, the Fund will be a non-banking financial institution with special status, providing credit support and

guaranteeing the repayment of loans to small and mediumsized agricultural enterprises by partially guaranteeing the fulfilment of obligations. The Law defines key issues of the Fund’s activity, namely, the procedure for forming authorized capital, conditions for the increase and decrease thereof; procedure for convening, competence and decisionmaking of the Fund; determining the criteria for business entities subject to a partial credit guarantee. Most importantly, it sets out eligibility criteria for the Fund’s support, i.e. agricultural enterprises cultivating up to 500

hectares of land, which meet the requirements for micro-, small— and medium-sized enterprises. The Law also ensures transparency and increases the Fund’s efficiency by providing guarantees amounting to 50% of the principal loan for the term of the loan agreement but no longer than 10 years. The agricultural industry has predominantly supported the law. Agrarians have listed it among key bills for the effective operation of the agricultural sector since it would be challenging for farmers to compete with other market participants without a financial instrument

like a partial credit guarantee. It is expected that the Fund’s activity will reduce the risks for the banks while farmers will have access to financial resources for agricultural work. This will enable farmers not only to avoid minimizing the costs of agricultural production but to continue commercial activity. Such developments will lead to an increased investment flow as well as higher quality and competitiveness of agricultural products. In overall terms, Law No. 3502-5 is widely endorsed and anticipated to bring promising changes to the Ukrainian agribusiness.

The Law of Ukraine On Making Amendments to the Article 11 of the Law of Ukraine On Currency and Currency Operations On Banks Performance of Functions of the Agents of Currency Supervision No. 1774-IX came into force on 10 November 2021. What caused the provision of additional credentials to the banks and, in your view, how efficient is it?

BOGDAN DYAKOVYCH, Associate, Baker McKenzie — Kyiv The afore-mentioned law has been adopted to support the discharge by Ukrainian banks of their supervisory duties over certain transactions in Ukrainian hryvnia. Currently, as part of their duties under existing foreign

exchange regulations, Ukrainian banks are obliged to provide the National Bank of Ukraine with information on currency transactions carried out by residents and non-residents through such banks and to restrict the making of any currency transactions that violate such regulations. Existing legislation views the transfer of UAH between a resident and a non-resident as a currency transaction (as opposed to UAH transfers between residents). At the same time, when making a UAH transfer at its client’s request to a beneficiary’s account opened with another bank, the Ukrai-

nian bank cannot identify the residency of the beneficiary and whether such transaction is a currency transaction. As a result, the bank may not be in a position to restrict the making of a UAH currency transaction where such restriction is required by the applicable regulations. With the adoption of the above-mentioned law, the situation should change as Ukrainian banks will now be obliged to exchange information regarding the affiliation of their clients’ bank accounts with bank accounts opened for nonresidents. With such new regulations in place, any account

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

opened by a non-resident client with a Ukrainian bank will likely have to be reported by such bank to a centralized register of the NBU, to which all Ukrainian banks will have access. This, in turn, should allow banks to identify the non-resident status of the beneficiary of the transferred UAH funds and ensure that the relevant currency transaction does not violate the applicable restrictions. At the moment, it remains to be seen how such a register will function and whether the NBU will introduce any additional limitations for UAH transfers between residents and non-residents.

CRUX LEGAL DIGEST The Law of Ukraine On Introduction of Changes to the Administrative and Criminal Law in Regards to the Establishment of the Bureau of Economic Security of Ukraine No. 3959-1, which increases the liability for tax crimes, was adopted on 17 November. What does this law provide for, what is the premise for it and is increasing the liability for tax crimes reasonable?

OLEH SHKODIN, Criminal Lawyer, AVER LEX Attorneys at Law The main purpose of Law No. 3959-1 was to introduce changes to the law to ensure proper functioning and exercise of the powers in regards to the pre-trial investigation of criminal offenses by the detectives of the Bureau of Economic Security of Ukraine. Among other

changes, the content of Article 185-13 of the On Administrative Offenses Code of Ukraine has been broadened, setting responsibility for the failure to provide information or providing incomplete information at the request of the BES detectives in the manner prescribed by Article 93 of the CPC of Ukraine. However, in addition to harmonization of legislation, lawmakers also made a decision to substantially increase liability for tax evasion, whereas no substantiation of the necessity of such decision had been given in the supporting documents to the Law.

In particular, the Law doubles the penalties under Article 212 of the Criminal Code of Ukraine: Under Par. 1 (tax evasion in gross amounts), the maximum penalty was increased from UAH 85,000 to UAH 170,000; Under Par. 2 (tax evasion in gross amounts or upon prior conspiracy), the maximum penalty was increased from UAH 119,000 to UAH 255,000. Notably, the sanction under Par. 1 of Art. 212 of the CC of Ukraine has also been changed from an alternative “a penalty… or revocation of the right to hold certain posts…” to

“a penalty… with revocation of the right to hold certain posts… or without it”. Taking into consideration the fact that Law No. 3959-1 assigns the investigation of a criminal offence under the afore-mentioned article to the BES, this is a clear attempt by lawmakers to increase the influence and authority of the Bureau of Economic Security with hopes for effective operation of the newly-created authority, which is expected to lead to an increase in proceeds to the state budget and speed up legalization of the economy.

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

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Повний спектр юридичних послуг, пов'язаних із вирішенням спорів: корпоративні спори, банківські спори, господарські спори, податкові спори, митні спори, спори про захист ділової репутації, спори, пов'язані з інтелектуальною власністю, трудові спори. Стягнення проблемної заборгованості. Виконавче провадження. Банкротство та фінансова реструктуризація. Податки. Нерухомість та будівництво. Аграрне та земельне право. Антимонопольне право. Взаємодія з державними органами (GR). Послуги для власників бізнесу та приватних клієнтів. Юридичний аудит. А також кримінальне законодавство та захист бізнесу

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EBRD, Kernel, Ministry of Finance of Ukraine, ICU, Ukreximbank, Metinvest B.V., JP Morgan Securities Plc, Raiffeisen Bank International, Dragon Capital, Nordic Environment Finance Corporation, Epicentr, DTEK, Nemiroff, British American Tobacco, Argus Media Ltd, AXDRAFT, Caterpillar Inc., Swedfund International AB, UBER, UDP

ІНР Англійська, Українська, Російська

вул. Володимирська, 38, 4 поверх, Київ, 01030, Україна Тел./Факс: +380 44 591 3355 E-mail: info@avellum.com www.avellum.com

Antitrust & Competition, Banking & Finance, Corporate, including M&A and Securities, Compliance, Dispute Resolution, Employment Law, Insurance, Intellectual Property, International & Commercial, IT and Communications, International Trade, Major Projects and Project Finance, Real Estate and Construction, Tax and Customs

International corporations and leading Ukrainian companies and financial institutions, including ArcelorMittal, EastOne Group, Horizon Capital, ING Bank Ukraine, MasterCard, Metinvest BV, Poverkhnost Media Group, Raiffeisen Bank, Societe des Centres Commerciaux, UkrSibbank, BNP Paribas Group

WND English Ukrainian Russian

Renaissance Business Center 24 Bulvarno-Kudriavska Street, Kiev, 01054, Ukraine Tel: +380 44 590 0101 Fax: +380 44 590 0110 E-mail: Kyiv@bakermckenzie.com www.bakermckenzie.com/ ukraine

Антимонопольне та конкуренційне право; Банківське та фінансове право; Корпоративне право, в тому числі Злиття та Поглинання, Цінні папери; Комплаєнс; Судове право; Трудове право; Страхування; Інтелектуальна власність; Міжнародне та комерційне право; Інформаційні технології та телекомунікації; Великі проекти і проектне фінансування; Нерухомість, земельні відносини та будівництво; Податкове та митне законодавство

Міжнародні корпорації та провідні українські компанії і фінансові установи, в тому числі ArcelorMittal, EastOne Group, Horizon Capital, ING Bank Ukraine, MasterCard, Metinvest BV, Поверхность Медиа Групп, Raiffeisen Bank, Societe des Centres Commerciaux, УкрСиббанк, BNP Paribas Group

ІНР Англійська Українська Російська

Бізнес-центр «Ренесанс» вул. Бульварно-Кудрявська, 24 Київ ,01054, Україна Тел.: +380 44 590 0101 Факс: +380 44 590 0110 E-mail: Kyiv@bakermckenzie.com www.bakermckenzie.com/ ukraine

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

ADDRESS

PROMART

LAW DIRECTORY FIRM

EQUITY

EUCON Legal Group

EUCON Юридична Група

GOLAW

PRACTICE AREAS

MAJOR CLIENTS

HOURLY RATES LANGUAGES

ADDRESS

Litigation; Banking and Finance; Restructuring and Bankruptcy; Corporate and M&A; Tax Disputes; Real Estate; Labor; Intellectual Property; Criminal Law; Enforcement Proceedings; Alternative Dispite Resolution, International Аrbitration

Leading foreign and local companies and high-net-worth individuals

WND English; Russian; Ukrainian

4 Rylskyi Lane, Kyiv, 01001, Ukraine Tel./Fax: +38 044 277 22 22 E-mail: info@equity.law www.equity.law

Судова практика; банківське та фінансове право; реструктуризація та банкрутство; корпоративне право та M&A; податкові спори; нерухомість та будівництво; трудове право; інтелектуальна власність; кримінальне право; виконавче провадження; альтернативне вирішення спорів; міжнароднийарбітраж.

Провідні іноземні та національні компанії, а також представництво приватних осіб

ІНР Англійська; Російська; Українська

пров. Рильський, 4, м. Київ, 01001, Україна Тел./Факс: +38 044 277 22 22 E-mail: info@equity.law www.equity.law

Corporate law, Tax law, Transfer Pricing, Financial Instruments and Project Funding, Criminal law/ Economic Crime, Agrarian Law & Land, Combating financial fraud and corruption, forensic investigations, Accounting and Tax Accounting, Labor law, Investments and Business Structuring, Dispute Resolution, Compliance, Electronic and Mobile Commerce, Antimonopoly / Competition Law, Intellectual Property, Property&Business Appraisal

Louis Dreyfus Commodities Ukraine; Savik Shuster Studio; Plastics-Ukraine, LLC; Kyivstar, JSC; LINYK, PJSC; Pruszynski Ukraine, LLC; Teliani Trading, LLC; Ukrrichflot PJSC; Zepter International Ukraine; Heraeus Electro-Nite, LLC; Huawei Tech. Investment Co., LTD; Farmak JSC; Fozzy Group; Braz Trade Sp. z o.o.

English, Polish, Ukrainian, Russian

18/24 Dmytrivska street, Kyiv, 01054, Ukraine Tel.: +380 44 238 09 44 Tel.: +380 44 238 04 13 E-mail: info@euconlaw.com www.euconlaw.com

Корпоративне право, Податкове право, Трансфертне ціноутворення, Фінансові інструменти та проектне фінансування, Кримінальне право/ економічні злочини, Аграрне та земельне право, Протидія фінансовому шахрайству і корупції, форензік розслідування, Бухгалтерський та податковий облік, Трудове праве і міграційне право, Інвестиції та бізнес-структурування, Вирішення спорів, Compliance, Електронна та мобільна комерція, Антимонопольне/конкурентне право, Інтелектуальна власність, Оцінка майна, майнових прав та бізнесу

Англійська, Польська, Українська, Російська

вул. Дмитрівська, 18/24, Київ, 01054, Україна Teл.: +380 44 238 09 44 Teл.: +380 44 238 04 13 E-mail: info@euconlaw.com www.euconlaw.com

Antitrust and competition; Banking and finance; Government relation (GR); Litigation and dispute resolution; Business security; Environment protection; Intellectual property; Compliance, Corporate governance and risk management; Corporate and M&A; Criminal Law and White Collar; International Trade; Maritime Law; Real Estate; Taxation; Private clients; Anti-Corruption and Anti-Bribery; Insolvency and Restructuring; Employment

Azelis; Amic; Česká exportní banka; EGAP; Enkom; Expobank; BNP Paribas; Marks&Spencer; GAP; Red Bull; Inditex Group; Syngenta; Reckitt Benckiser; Omya; Printec; Mercator Medical; Oriflame; Ubisoft; ProCredit Bank; Evyap Trading; Lacoste; Good Look; Red Head Family Corporation

WND Ukrainian Russian English German

19B Instytutska Street, Suite 29, Kyiv, 01021, Ukraine Tel: +380 44 581 1220 E-mail: info@golaw.ua www.golaw.ua

Антимонопольне та конкурентне право; Банківське та фінансове право; Взаємодія з державними органами (GR); Вирішення судових спорів; Захист бізнесу; Захист навколишнього середовища; Інтелектуальна власність; Комплаєнс, корпоративне управління та управління ризиками; Корпоративне право та M&A; Кримінальне право та посадові злочини; Міжнародна торгівля; Морське право; Нерухомість; Податкове право; Послуги для власників бізнесу та приватних клієнтів; Протидія корупції; Реструктуризація та банкрутство; Трудове право

ІНР Українська Російська Англійська Німецька

вул. Інститутська 19-Б, офіс 29, Київ, 01021, Україна Тел.: +380 44 581 1220 E-mail: info@golaw.ua www.golaw.ua

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

PROMART

LAW DIRECTORY FIRM

EVERLEGAL

Konnov & Sozanovsky

Коннов і Созановський

MAJOR CLIENTS

Antitrust & Competition, Banking & Finance, Corporate and M&A, Dispute Resolution, International Arbitration & Cross-Border Disputes, Criminal Defence, Commercial, Employment, Real Estate, Energy and Natural Resources, Innovations & Technology

Leading foreign and Ukrainian companies, including: National Bank of Ukraine, OTP Bank, Alfa-Bank, Ukrsotsbank, UkrSibbank, JSC FUIB, Concorde Capital, Louis Dreyfus Company Ukraine, Agromino Agroholding, Resilient a.s., HarvEast, Kivshovata Agro, UDP Renewables, Main Group Ukraine, UNIT.City, Onur Air (Turkish Airlines), First Ukrainian expert center, Go To-U, Thirdwave Ukraine, Blackbull Trading, 8allocate, Apsim Technologies, Rainbow, Adidas Ukraine, Farmak, Regus and others.

WND / Ukrainian, English, German, Polish, Russian

4 Rylskyi Lane, Sofiyska Square, Kyiv, 01001, Ukraine Tel: +380 44 3370016 E-mail: hello@everlegal.ua www.everlegal.ua

Антимонопольне право та конкуренція, банківське та фінансове право, корпоративне право та злиття та поглинання, вирішення спорів, міжнародний арбітраж та транскордонні спори, кримінальний захист, комерційні питання, трудове право, нерухомість, аграрне право, енергетика та природні ресурси, інновації та технології

Провідні іноземні та українські компанії, в тому числі: Національний банк України, АТ «ОТП Банк», АТ «Альфа-Банк», АТ «Укрсоцбанк», АТ «УкрСиббанк», АТ «ПУМБ», Concorde Capital, Louis Dreyfus Company Ukraine, Agromino, Resilient a.s., HarvEast, Kivshovata Agro, UDP Renewables, Main Group Ukraine, UNIT.City, Onur Air (турецькі авіалінії), ПУЕЦ, Go To-U, Thirdwave Ukraine, Blackbull Trading, 8allocate, Apsim Technologies, Rainbow, Adidas Україна, Фармак, Regus та ін.

ІНР / Українська, Англійська, Німецька, Польська, Російська

Провулок Рильський, 4 Софійська площа, Київ, 01001, Україна Тел.: +380 44 337 0016 E-mail: hello@everlegal.ua www.everlegal.ua

Intellectual property; Copyright and media law; Renewable energy and green tariff; IT; Commercial law and Contracts; Corporate and M&A; Investments; Labour law; Dispute resolution; Tax, including international tax structuring; Land, construction and real estate; Litigation

Multinational corporations and Ukrainian companies

WND Ukrainian, Russian, English

23 Shota Rustaveli Street, Suite 3, Kyiv, 01033 Tel.: +380 44 490 5400 Fax: +380 44 490 5490 e-mail: info@konnov.com www.konnov.com

Інтелектуальна власність; Авторське та медіа право; Альтернативна енергетика та зелений тариф; IT; Комерційне право; Корпоративне право та M&A; Інвестиції; Трудове право; Судові спори; Податки, включаючи міжнародне податкове структурування; Земля, будівництво та нерухомість; Судовий процес

Транснаціональні корпорації та українські компанії

ІНР Українська, Російська, Англійська

вул. Шота Руставелі, 23, оф.3, Київ, 01033 Тел.: +380 44 490 5400 Факс: +380 44 490 5490 e-mail: info@konnov.com www.konnov.com

Litigation, Banking & Finance, Bankruptcy & Restructuring, Competition & Antitrust, Corporate and M&A, Energy & Natural Resources, Intellectual Property, International Arbitration, Tax, WhiteCollar Crime

Альфа-Банк, Промінвестбанк, Перший Український Міжнародний Банк (ПУМБ), ФК «Контрактовий дім» (EasyPay), OTP Банк, Universal Bank, VR Global Partners, МРІЯ Агрохолдинг, Bunge Ukraine, Spike Trade, ЮРіЯ-Фарм, Fozzy Group, Кондитерська група «АВК», TNT Express Worldwide, Альянс Україна, Ostchem Holding Limited, SCATEC Solar, Кондитерська корпорація «Рошен», Миколаївський суднобудівний завод «Океан», Alros Holding Limited, Finance Real, Граве Україна, UDP Renewables, Українська асоціація відновлюваної енергетики (УАВЕ), Klosterfrau, Unicorns.

WND / Ukrainain Russian English

47 Volodymyrska Street, Office 3, Kyiv, 01001, Ukraine Tel./Fax: +380 44 455 8887 info@lcf.ua www.lcf.ua

Судова практика, антимонопольне та конкуренційне право, банківське та фінансове право, банкрутство та реструктуризація, енергетика та природні ресурси, інтелектуальна власність, корпоративне право та M&A, міжнародний арбітраж, податкове право, кримінальне право

Alfa-Bank, Prominvestbank, First Ukrainian International Bank (FUIB), FC Kontraktovyi Dim (EasyPay), OTP Bank, Universal Bank, VR Global Partners, MRIYA Agro Holding, Bunge Ukraine, Spike Trade, YURiA-Pharm, Fozzy Group, AVK Confectionery Company, TNT Express Worldwide, Allianz Ukraine, Ostchem Holding Limited, SCATEC Solar, Roshen Confectionery Corporation, Mykolaiv Shipyard Ocean, Alros Holding Limited, Finance Real, Grawe Ukraine, UDP Renewables, Ukrainian Association of Renewable Energy (UARE), Klosterfrau, Unicorns.

ІHР/ Українська Російська Англійська

вул. Володимирська, 47, офіс 3, Київ, 01001, Україна Тел./Факс:+380 44 455 8887 info@lcf.ua www.lcf.ua

LCF LAW GROUP

Юридична група LCF

HOURLY RATES LANGUAGES

PRACTICE AREAS

November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

ADDRESS

PROMART

LAW DIRECTORY FIRM

Mamunya IP

PRACTICE AREAS

SERGEYEVS' LAW OFFICE

ЮРИДИЧНЕ БЮРО СЕРГЄЄВИХ

HOURLY RATES LANGUAGES

ADDRESS

Full scope of services in Intellectual Property: Foreign and Ukrainian large companies, patent, trademark, industrial design, geographical including international corporations, tech start-ups. indications, plant varieties prosecution and enforcement, including litigation; copyright advice and enforcement, unfair competition, anti-counterfeiting, IP assignments and licensing, IP due diligence.

WND Ukrainian English Russian

Stand Business Center, 14 Vasylkivska St., Kyiv 03040 Ukraine Tel.: +380 44 495 4500 E-mail: office@mamunya-ip. com mamunya-ip.com

Повний спектр послуг у галузі інтелектуальної власності: реєстрація та захист прав на винаходи, торговельні марки, промислові зразки, географічні зазначення, сорти рослин, у т.ч. судовий захист; консультування та захист авторських прав, захист від недобросовісної конкуренції, боротьба з контрафактом, передача прав та ліцензії, аудит прав інтелектуальної власності.

Великі іноземні та українські компанії, включаючи міжнародні корпорації, стартапи у технічних галузях.

ІНР Українська Англійська Російська

Бізнес-центр «Стенд» вул. Васильківська, 14, Київ, 03040, Україна Тел.: +380 44 495 4500 E-mail: office@mamunya-ip. com mamunya-ip.com

Corporate Law, Tax Law, Dispute Resolution and Conflict Management, Investment Support, Labor Law, Customs Law, Migration Law, Intellectual Property, Antitrust Law and Procurement

Leaders in IT/TMT, HoReCa, trade and pharma: GigaGroup, GigaCloud, Synchron, Trustee Wallet, Ipharm.Help, Myronivsky Hliboproduct (MHP), Gastrofamily (Family of Restaurants of Dmytro Borysov), Chornomorka, Yudgin Burger, Mirta Ukraine, Medical Data Management, Ukrainian Innovations

WND Ukrainian English Russian

37V Vasylkivska Street, Kyiv, 03022, Ukraine Tel.: +380 93 317 10 20 E-mail: mk@mklegalservice.com www.mklegalservice.com

Корпоративне право, податкове право, вирішення спорів та управління конфліктами, супровід інвестицій, трудове право, митне право, міграційне право, інтелектуальна власність, антимонопольне право та тендери

Лідери в галузі IT/TMT, HoReCa, торгівлі, фармацевтики: GigaGroup, GigaCloud, Synchron, Trustee Wallet, Ipharm.Help, Миронівський хлібопродукт (МХП), Gastrofamily (Сім'я ресторанів Дмитра Борисова), Чорноморка, Юджин Бургер, Мірта Україна, Medical Data Management, Українські Інновації

ІНР Українська Англійська Російська

вул. Васильківська, буд. 37В, Київ, 03022, Україна тел.: +380 93 317 10 20 E-mail: mk@mklegalservice.com www.mklegalservice.com

Maritime Law, Litigation, Corporate Law, Labor Law, Tax Law, International Arbitration, Mediation, Due Diligence, Private Clients, Business Security

SC V.Ships (Ukraine), SC CMA Ships Ukraine, ABC Maritime LLC, Wilhelmsen Marine Personnel (Ukraine) Ltd, BSM Crew Service Centre Ukraine, Solstad Offshore Crewing Services Ukraine Ltd, SC Danaos Ukraine, V.Ships Offshore Ukraine, M Shipping LLC

WND Ukrainian English Russian

11/6 Armiiska Street, Office 2A, Odesa, 65058, Ukraine Tel.: +380 48 737 8228; +380 50 199 8228 Fax: +380 48 737 8228 E-mail: office@srgv.com

Морське право, судова практика, корпоративне право, трудове право, податкове право, міжнародний арбітраж, медіація, юридичний аудит, приватні клієнти, захист бізнесу

ІНР Українська Англійська Російська

Вул. Армійська, 11/6, офіс 2а, Одеса, 65058, Україна Тел.: +380 48 737 8228; +380 50 199 8228 Факс: +380 48 737 8228 E-mail: office@srgv.com

MK Legal Service

MAJOR CLIENTS

www.ujbl.info | The Ukrainian Journal of Business Law | November — December 2021

PROMART

INFORMATION FOR WRITERS

Writing for the UJBL Guidelines for Authors Thank you for your interest in submitting an Article to the Ukrainian Journal of Business Law. We welcome articles which illuminate business problems or issues currently confronted by the government, private enterprises, law firms, etc, by setting them within general legal or business context. Remember that you are writing a newspaper piece to which we have certain stylistic requirements. All articles are submitted on speculation; we do not guarantee publication. Articles must be original. When submitting an article, please also mind the following: • Language All articles are published in English. • Deadlines Deadlines are strict. Our schedules and production requirements may change; therefore, we reserve the right to publish any Article in a different issue than the one for which it was submitted. • Length Unless otherwise indicated by the editor, the articles must be maximum 13 000 characters with spaces. • Form of Submission Please provide two typed or word processed doublespaced manuscripts with wide margins. Manuscripts

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The editors will consult the author about substantive changes to the copy. We reserve the right to copy-edit according to the UJBL style without notice to the author. Before publication, the editors may send edited material for the authors final proof. Authors receive two complementary issues. Additional copies may be ordered at the cost of reproduction.

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10 January

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17 February

25 February

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14 June

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12 August

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Labor and Employment (to be confirmed)

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November — December 2021 | The Ukrainian Journal of Business Law | www.ujbl.info

The Ukrainian Journal of Business Law, #11-12, 2021 In focus: Energy

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