The Ukrainian Journal of Business Law, #3, 2020 In focus: Intellectual Property by Olga Usenko

EDITOR’S NOTE

Pressing Times

eform of intellectual property rights protection in Ukraine and its enforcement has been fairly sluggish. Western countries, including the US, have been pressing Ukraine for years. The recent report by the European Commission states that despite the major regulatory approximation that Ukraine committed itself to in the Association Agreement, which came into force in 2016, only limited progress has been seen in the last two years. According to research, Ukraine still has a long way to go in fighting the situation with dishonest registration of trademarks, counterfeiting and online piracy. Regulatory data protection and the efficiency of Customs also have to be improved. Recent law-making activities in the IP field provoked hot debate among stakeholders. Our cover story hero Victoria Sopilnyak, a partner of IP agency Doubinsky & Osharova, explained the possible outcomes of legislatively proposed restrictive patentability criteria in Ukraine. It goes without saying that the top issue of the last month is the drastic impact of the coronavirus pandemic. As we adjust to our new realities of staying at home and social distancing, many IP owners try to demonstrate their responsiveness and leadership role in order to get at least reputational benefits in these pressing times. Many museums, galleries, libraries and educational platforms provide free access to their expositions and contents. Some governments have introduced new measures in response to the outbreak, including even permitting patent infringement for COVID-19 treatment. Stay at home and stay healthy!

Happy reading, Olga Usenko

The Ukrainian Journal of Business Law April 2020 Vol. 18 No.4 GENERAL DIRECTOR Rustam Kolesnik EDITORIAL ADVISORY BOARD Oleksiy Didkovskiy (Asters) Sergei Konnov (Konnov & Sozanovsky) Sergii Koziakov (High Qualification Commission of Judges of Ukraine) 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 25А, "L" Dehtyarivska Street, Kiev, 04119, Ukraine Tel.: +380 44 495-2727 Fax: +380 44 495-2777 editor@ujbl.info www.ujbl.info

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April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

THE LEGAL GUIDE FOR FOREIGN BUSINESSMEN IN UKRAINE!

April 2020 Vol.18 No.4

CONTENTS

EXPERT OPINION

Eduard Tregubov

The Protection of Intellectual Property Rights in Ukraine

COVER STORY

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

IN RE

Dmytro Nikulesko

Anton Polikarpov, Anna Kolodenska

Intellectual Property Reform Utility Model and Patent Trolling: Window of Opportunities Seemingly Closed

April briefing

Anton Kapitonenko, Khrystyna Nykerui

“Justice Delayed, is Justice Denied”

ARGUMENT

VICTORIA SOPILNYAK

Lively Discussion

Viktor Dovhan

How should Investment Projects in Infrastructure be Prepared?

4 Deals 6 Cases 8 Draft 10 Law Digest 12 Biznews

CRUX

Legal Digest

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

DEALS APRIL 2020

AVELLUM — legal counsel to BSTDB

AVELLUM acted as the Ukrainian legal counsel to the Black Sea Trade and Development Bank in connection with a long-term secured loan to LLC Butsefal and Prometey Swiss SA totaling up to USD 10 million. Part of the loan proceeds were used to acquire a new silo in Mykolaiv Region, which has total storage capacity of Glib Bondar up to 62 thousand tons and is the first steel silo in the portfolio of Prometey Group. The remaining loan proceeds are intended for the acquisition of another silo and general replenishment of working capital. The AVELLUM team was led by senior partner Glib Bondar with support from counsel Maksym Maksymenko, senior associate Tetiana Mykhailenko, associates Anastasiia Zhebel, Daryna Mykhailenko, Dmytro Radzivon, and Mariana Veremchuk.

Sayenko Kharenko advised EBRD on EUR 15 million financing to OTP Leasing

Sayenko Kharenko has acted as a Ukrainian legal counsel to the European Bank for Reconstruction and Development on providing a four-year loan of up to EUR 15 million (equivalent) to OTP Leasing. The loan will be available for disbursement as a UAH synthetic and/or a EUR denominated facilities. It will enable OTP Leasing to fiIgor Lozenko nance long-term leases to small and medium-size enterprises across Ukraine despite the current market situation caused by the coronavirus pandemic.

The funding will be available under the EU4Business-EBRD Credit Line provided in the context of the Deep and Comprehensive Free Trade Agreement between the EU and Ukraine. Sayenko Kharenko’s team was led by partner Igor Lozenko and included associate Vira Pankiv and junior associate Oleksandra Maksymenko.

Asters advised Regal Petroleum

Asters acted as a legal counsel to Regal Petroleum, a British oil and gas company, on its acquisition of up to USD 8.63 million of Arkona Gas-Energy, a Ukrainian company holding a license to explore, develop and produce hydrocarbons in the Svystunkivsko-Chervonolutske field located in Poltava Region. Asters’ team provided full transactional support on Oleg Boichuk Ukrainian law issues, including preparation of transaction documents (together with English law counsel, HFW), negotiation and signing/closing assistance. Asters’ project team included partner Oleg Boichuk, senior associate Oleksandr Khomenko and associates Bogdana Marchuk and Natalia Kondrashyna.

AVELLUM advised EBRD

AVELLUM acted as the Ukrainian legal counsel to the European Bank for Reconstruction and Development in connection with a long-term on secured loan to Novi Biznes Poglyady in the total amount of up to EUR 52.5 million. NBP is a special project company, which owns and operates Riviera Shopping City, a shopping mall located in Odesa Region. The loan proceeds provided by the EBRD will be used for the expansion of the shopping mall’s lease area, as well as for the financial restructuring of the NBP’s balance sheet. The AVELLUM team was led by senior partner Glib Bondar with support from counsel Maksym Maksymenko, senior associate Tetiana Mykhailenko, associates Oleg Krainskyi, Anastasiia Zhebel, Daryna Mykhailenko, Mariana Veremchuk, Dmytro Radzivon, and Andriy Kornuta.

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

CASES APRIL 2020

Court ordered PrivatBank to pay out USD 200 million

The Pechersky District Court in Kyiv has confirmed the obligation of state-owned PrivatBank to fulfill the terms and conditions of deposit agreements concluded with offshore companies owned by the Surkis brothers without waiting for the essential court decision or the appeal in this case. The issue is more than USD 200 million deposited by a number of offshore companies on the accounts of the Cyprus branch of PrivatBank in 2012-2014, as well as the interest that had accrued by 17 February 2020. At the same time, the court noted that the bank’s lawyers did not provide sufficient evidence that a concurrent trial was taking place in Cyprus.

State Grain Corporation paid USD 4 million to Chinese company following court order

which had been signed with Eximbank of China in 2012. The Chinese party believes that under Annex No. 3, for every ton of grain SFGCU exported not only to China, but also to any other country, the corporation is obliged to pay Chinese CCEC fees in the amount of USD 5. And this is in addition to the payment of interests on loan and fees for its maintenance. The Chinese party believed that the SFGCU did not comply with this provision and turned to GAFTA.

High Court of England confirmed limited nature of payments on PrivatBank Eurobonds

The High Court of England and Wales confirmed the payment mechanism for arbitral decisions adopted by the London Court of International Arbitration. This court decision means that if arbitral decisions come into force, PrivatBank will be obliged to pay only to a limited class of holders of Eurobonds issued in 2010 and 2013. Even if PrivatBank is obliged to make any payments, these will be significantly less than the total sum of claims filed by the trustee in arbitration proceedings. In the event that the defense strategy of PrivatBank on recognition of the bail-in procedure is successful, the bank will not be obliged to make any payments whatsoever. Within the framework of PrivatBank’s nationalization, its obligations to a specially created British company (SPV) — a Eurobonds issuer — were subject to a bail-in procedure and were exchanged for an additional issue of shares in the bank.

The largest state grain trader, the State Food and Grain Corporation, lost a lawsuit to the Chinese company CCEC worth USD 4 million in the international arbitration court under GAFTA (Grain and Feed Trade Association). Acting Chairman of the Board, Simon Chernyavsky, informed that the specified amount had already been paid to the Chinese company. He explained that in 2015, SFGCU and CCEC concluded Annex No. 3 to a credit agreement worth USD 1.5 billion,

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

At stake here are three issues of Eurobonds: one worth USD 175 million at a rate of 10.875% maturing on 28 February 2018,another worth USD 200 million at a rate of 10.25% maturing on 23 January 2018, of which USD 40 million was repaid in August 2016 and one more worth USD 220 million at a rate of 11% (bonds of subordinated debt) maturing in 2021. The issuer of Eurobonds maturing in January and February 2018 was UK SPV Credit Finance plc., a Special Purpose Vehicle registered in the UK. The Eurobonds maturing in 2021 were issued through ICBC Standard Bank Plc. (UK), but during their restructuring this debt was reassigned to UK SPV Credit Finance plc. Following PrivatBank’s nationalization, the securities issuing company remained in the bank’s ownership. In early October 2017, PrivatBank changed the trustee for Eurobonds worth USD 175 million maturing on 28 February 2018 and those worth USD 200 million maturing on 23 January 2018. From 3 October 2017, the new trustee is Madison Pacific Trust Limited instead of Deutsche Trustee Company Limited (UK). In its turn, on 27 October 2017, the National Bank gave approval for a change in the structure of the PrivatBank banking group. SIA PrivatLizings (Latvia), Privatofis LLC (Dnipro), UK SPV Credit Finance PLC and Ukraine Mortgage Loan Finance No.1 PLC (UK) were excluded from the group. On 2 November 2017, Madison Pacific Trust Limited notified the bank of the acceleration of debts on Eurobonds.

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

DRAFT APRIL 2020

Draft of new Labor Code to be finalized to comply with EU legislation

The Verkhovna Rada Committee on European Integration recommended the finalizing of Labor Code Drafts Nos. 2410, 2410-1 and two Draft Laws On Labor Nos. 2708-1, No. 2708-2, so that they fully take into account the provisions of EU legislation. The Committee recognized them as not contradicting the obligations of Ukraine under the Association Agreement signed with the EU and EU legislation. Comments are given to articles on restricting the rights of employees depending on requirements inherent to a particular type of work and related to age, level of education, state of health, gender, and the like.

Draft law on new land lease terms

In particular, it determines new terms, whose introduction is necessary for legislative regulation of effective land relations and support for independent land management by its owners. Moreover, the terms of land lease agreements are set, and lease holders no longer have the ability to manipulate the extension of the land lease for their own benefit, and litigations related to lease terms are virtually eliminated. It includes a proposal to charge rent in non-cash form only. The Draft Law proposes to provide landowners with the right of early termination of land use agreements.

Improvements to some regulatory mechanisms connected to banking activities

On 30 March Draft Law No. 2571-d on improvement of some regulatory mechanisms related to banking activities, submitted by Danylo Getmantsev, head of the Parliament Committee on Finance, Taxation and Customs Policy, has passed its first reading. The adoption of this law is one of the requirements made by the International Monetary Fund for the allocation of funds to the State of Ukraine. At the current stage, this Draft Law is most important for the state-owned bank PrivatBank in terms of the confrontation waged by its former owner, Igor Kolomoisky.

The Draft Law On Progressive Land Relations has been registered with the Ukrainian Parliament. The document proposes to amend the Civil Code of Ukraine, the Land Code of Ukraine, and the Law of Ukraine On Land Lease. According to the explanatory note, the changes will facilitate landowners to maintain their lease relations and provide an opportunity to set rent payment for land use on a competitive basis.

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

The Draft establishes that invalidation of the decision on the bank’s withdraw from the market cannot be the basis for its cancellation. The explanatory note to the Draft states that the document contains three blocks of amendments to be introduced to legislative instruments. 1. Improvement of regulatory mechanisms related to banking activities through the provision of necessary control tools by the National Bank of Ukraine. The document says this “will increase the ability of the regulator to properly respond in cases of violation of law during the process of acquisition or increase in the qualifying holding in a bank” and “will ensure that unscrupulous or financially insolvent persons are not allowed to manage banks”. 2. Determination of the characteristics of court proceedings related to appeals against decisions of the National Bank of Ukraine on classifying a bank as insolvent, on revoking a banking license and liquidating a bank, decisions of the state-run Deposit Guarantee Fund on introducing provisional administration in a bank, on starting a bank liquidation procedure, on approving a scheme of arrangement and more 3. Improvements to the regulation of the bank liquidation procedure, indemnification (recovery of losses) mechanism from bank affiliated parties and other persons that caused losses to a bank and its creditors, expansion and improvement of mechanisms for state participation in a bank’s withdrawal from the market.

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

LAW DIGEST APRIL 2020

EU simplifies rules for transporting goods between countries

The European Commission has adopted new rules for transporting goods through so-called “green corridors” to avoid queues and delays in deliveries. In particular, it is about reducing the time to cross the border to no more than 15 minutes, opening “green corridors” for vehicles transporting any category of goods. National governments should abolish their existing restrictions related to certain days or hours for transporting goods. Requirements of carrier documentation are also reduced.

Coronavirus counteraction

On March 18 Ukrainian President Volodymyr Zelensky signed the Law On Amending Certain Legislative Acts of Ukraine Aimed at Preventing the Occurrence and Spread of Coronavirus Disease (COVID-19). The Law provides for the following temporary standards with a period of validity of 3 months: — procurement of goods, works and services necessary for the stated purpose without applying the procedures established in the Law On Public Procurement, 100% prepayment for such goods, works and services; — exemption from import duties and VAT for pharmaceutical products, medical devices and medical equipment intended for preventing the outbreak and spread of COVID-19 — control over the prices on pharmaceutical products, medical supplies and socially significant goods conducted by the Cabinet of Ministers. A set of legal standards aimed at protecting the rights of individuals and legal entities during quarantine and restrictive measures related to the spread of COVID-19 provides for the following: — the possibility of working from home for employees, public employees and employees of bodies of local self-government or a paid vacation upon their consent; — granting the right to owners to change the business hours of bodies, institutions, enterprises, establishments, organizations, particularly in the admission and servicing of individuals and legal entities, with mandatory informing of the public about this using websites and other communication tools; — prohibition on cancellation of a certificate of registration of an internally displaced person (for the quarantine period and 30 days after its cancellation); — attributing the legal fact of introduction of a quarantine to force majeure circumstances;

— extension of deadlines for the receipt and provision of administrative and other services; — prohibition on conduct of state supervision (control) through scheduled measures for the implementation of state supervision policy in the area of economic activities. The Law includes an instruction to the government to establish weekly fringe benefits for medical and other employees directly involved in work to eliminate COVID-19 in the amount of up to 200% of wages for the period of carrying out of measures to prevent the occurrence and spread of the disease, until completion of these measures, as well as fringe benefits to certain categories of employees servicing the core areas of life. Moreover, fines and penalties for nonpayment of utility services bills are not charged during the quarantine period; it is prohibited to stop the provision of utility services in the event of non-payment or non-payment in full, forced eviction of citizens for non-payment of utility services is also prohibited. According to the Law, the legal fact of introduction of quarantine is classified as force majeure circumstances. The deadline for filing of electronic declarations by public officials this year is extended till 1 June. President Zelensky signed Law No. 533IX On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Supporting Taxpayers for the Period of Implementation of Measures to Prevent the Occurrence and Spread of Coronavirus Disease (COVID-19). The document establishes the following: — payment of temporary disability benefits to the sum of 50% of the average salary during the implementation of counteractions related to COVID-19 for the period of stay in specialized healthcare institutions and in controlled self-isolation;

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

— exemption from liability under consumer credit agreements from 1 March to 30 April 2020; — during this period, no penalties for violation of tax legislation, failure to pay or late payment of the single social tax (UST), failure to submit (untimely submission) of reports on the payment of UST shall be applied. — moratorium on the holding of tax inspections from 18 March to 31 May 2020; — Exemption from payment of the single social tax for individual entrepreneurs for themselves from 1 March to 30 April (this period is included in the pension insurance record for the payment of pensions, other state assistance, social insurance). The changes will also be introduced to the Criminal Code of Ukraine. It is proposed to introduce civil liability for unauthorized leaving of a place of observation or quarantine by a person who may be infected with coronavirus, as well as to increase criminal liability for violation of sanitary rules and standards on preventing the spread of infectious diseases. Establishment of civil liability for non-disclosure of information on public procurements carried out under this law on public procurement. The following is established for violating the rules and standards established to prevent epidemic and infectious diseases, as well as mass noncontagious diseases: a fine of 1-3 thousand tax-free minimum incomes of citizens (UAH 17-54,000), arrest for a period of 6 months, personal restraint or imprisonment for 3 years, if such actions led or could lead to the spread of COVID -19. If violation of medical observation rules entailed death or other serious consequences for third parties, the offender may be given a prison term of 5-8 years.

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

BIZNEWS APRIL 2020

Oil & Gas Oil prices crash by 30%

On 9 March oil prices fell by more than 31% at the start of trading on Asian markets as OPEC members failed to reach an agreement on cutting output with other oil producers. This is the worst drop in oil prices since 1991, when the Gulf War raged. Following forecasts by Goldman Sachs, the investment bank, oil may continue its fall and reach the level of USD 20-30. It is noted that due to the coronavirus, the world market faced excess supply of oil, but following the collapse of the OPEC deal, oil producers cannot get rid of the excess. Against the backdrop of the drop in oil prices, Asian markets also fell sharply on 9 March: the Nikkei index fell by 5%, the Hang Seng by 3.5%, and the Australian ASX 200 by more than 6%.

Privatization Salt monopolist Artyomsol and State Food and Grain Corporation readied for sale

The Ukrainian government has abolished the monopoly on salt production in Ukraine. SE Artyomsol is set to be privatized. The Cabinet of Ministers will also transfer the enterprise State Food and Grain Corporation of Ukraine for privatization. The government also transferred the Bolshevik Plant (JSC First Kyiv Machine-Building Plant) and the SJSC Bread of Ukraine for privatization.

Coronavirus Travel industry could suffer losses of USD 1 trillion

Due to the coronavirus outbreak, current losses incurred by the global tourism industry amount to USD 600 million, and by the end of 2020 they could grow to USD 1 trillion. This was stated by Bulut Bagci, head of the World Tourism Forum Institute. He stressed that 50 million people around the world employed in the tourism industry could lose their jobs. According to him, global tourism market generates an average of USD 1.7 trillion annually.

EU to allocate EUR 750 billion to overcome adverse effects of pandemic

The European Central Bank will allocate EUR 750 billion to counter the challenges the eurozone faces due to the coronavirus pandemic. The issue here is a new temporary program for public and private sector securities purchase to counter serious risks arising to the transmission mechanism of monetary policy and forecasts for the eurozone due to the pandemic. The total volume of the new Pandemic Emergency Purchase Program will be EUR 750 billion. The purchase will be carried out by the end of 2020 and include all categories of assets listed in the existing purchase program.

JPMorgan expects imminent global recession

The financial agglomerate expects the ongoing pandemic to cause a deep recession in the US and European economies as early as this summer. JPMorgan forecasts made in recent weeks have changed as the outbreak has spread around the world and caused the worst stock market collapse of recent decades. According to JPMorgan forecasts, the US economy may fall by 2% in the first quarter and by 3% in the second, while the eurozone economy may decrease by 1.8% and 3.3% in the same periods. Cancellation of major sport, cultural, and business events will further reduce consumption spending, and the uncertainty related to the virus will hinder a coordinated economic restart. Sharp price fluctuations on the financial markets and falls in asset prices will also contribute to the economic downturn over the next two quarters. The bank’s economists have noted that the key measure to avoiding an even stronger blow to global growth is for the authorities to introduce incentive measures: limiting stress in the financial market and supporting consumer demand through monetary policy.

Capitalization of global technological giants sinks

The capitalization of American company Apple has fallen below USD 1 trillion, which means Microsoft remains the only company with a market value above this amount. Against the backdrop of the spread of the coronavirus and fall in the global smartphone market by 38% in February, Apple shares fell below USD 1 trillion in March for the first time since March 2019. Microsoft shares also fell by 28% in recent weeks, with the company’s capitalization falling to USD 1.04 trillion. The capitalization of Amazon is currently USD 924 billion and that of Alphabet is USD 700 billion.

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

BIZNEWS APRIL 2020

M&A Europe remains a magnet for international dealmakers

Stock Market

The latest edition of the CMS and EMIS Emerging Europe M&A Report reveals: — Deal volumes across emerging Europe fell by 6.5% in 2019. — Foreign investment surged, with crossborder M&A increasing by 14.6% (1,163 deals). — Private equity investments reached a record high with 318 deals, accounting for 16% of all deal-making. — Telecoms & IT outperformed manufacturing as the second largest sector by volume (300 deals in 2019, compared with 279 in 2018) and claimed seven out of the top 20 deals by value. — Real estate and construction remained the most active sector with 378 deals and was also the sector with the highest overall deal value (EUR 16.6 billion). — Ukraine appears to be a country to watch — with transaction volumes increasing by 26% and transaction values increasing by 26.3%, compared with 2018. — The deal count fell in Poland and the Czech Republic, but the overall deal value was up in Poland by 68% There has been a marked increase in cross-border M&A deals, which now account for nearly 60% of all transactions. In-bound investment originating from outside the region witnessed particularly strong growth. The US was the clear leader in international investment in terms of transaction numbers, clocking up 122 deals — a 37% increase on 2018. In-bound investments from UK-based companies also increased (+9%), as did investment from other Western-European countries, including Germany (+17%), France (+19%) and Spain (+133%). Investment from Asia into emerging Europe also surged in 2019, accounting for 15.9% of M&A value. The overall value has more than doubled y-o-y, reaching EUR 11.5 billion in 2019. China’s presence in the region continues to strengthen, and it was the largest investor in emerging Europe by value (EUR 6.4 billion — more than double the value of its investment in 2018). The region also saw a rise in the value of investment from Japan (EUR 2.9 billion, +112%), Singapore (EUR 607 million, +601%) and South Korea (EUR 717 million, +1,093%). Private equity continued to build on its strong roots in 2019 and hit a record high of 318 deals (up from 307). The sector was responsible for 16.2% of all M&A deals (a 3.6% increase compared with 2018), coming to a value of EUR 22.66 billion. Activity in private equity was well-spread across the region, and is credited as one of the key drivers behind the rise in deals across many of the region’s most active sectors, including: telecoms and IT, manufacturing and wholesale and retail. Private equity buyers and sellers were involved in five EUR 1 billion-plus deals across the region in 2019 — the largest being the EUR 1.9 billion purchase of Central European Media Enterprises by PPF Group of the Czech Republic. Ukraine has been identified as one of the countries to watch out for in terms of foreign investment in 2020, as the reforms adopted by new president Volodymyr Zelensky begin to kick in. While the deal flow remained almost flat in larger M&A markets (e.g., Russia and Turkey), in Ukraine transaction activity (+26%) and values (+26.3%) were at their highest levels since 2013.

US stock market experienced biggest crash since 1987

On 12 March the escalation of the coronavirus situation caused the largest crash of indices on the US stock market (Dow Jones, S&P 500) since 1987. Following trading, indices fell into the so-called “bear zone”. That is how a situation when prices fall by more than 20% is called. The S&P 500 Index, which includes the 500 largest companies in the world, fell by 9.5% that day. The US stock market lost 26.7% from the highest point established as late as the previous month. The Dow Jones Industrial Average lost nearly 10% of its value. This is the biggest loss since its fall by 23% on Black Monday in 1987. Thus, the unprecedented growth of indices, which lasted for 11 years, has ended.

Banking & Finance State Affordable Loans program at 5-7-9% begins to operate

State-owned bank PrivatBank began accepting preliminary applications from 2 March for preferential loans under the state Affordable Loans program at 5-7-9%, which is intended for startups. Within the program’s framework, Ukrainian entrepreneurs can receive a loan (or several loans) of up to UAH 1.5 million for the creation and development of a business for a period of up to 5 years. The state compensates the entrepreneur part of the interest on the loan, with rates ranging from 5% to 9% per annum, depending on the number of jobs created, with an option of a quarterly interest rate reduction.

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

EXPERT OPINION

The Protection of Intellectual Property Rights in Ukraine

At present, there are several draft laws under consideration at the Ukrainian Parliament that are aimed at improving the situation with protection of intellectual property rights

Instead, reform in this area and putting things right in connection with the illegal use of intellectual property poses a threat that consumers will be forced to pay for things they used to get either for free or buy much cheaper. Surely this situation impedes the development of honest law-abiding business,

S. Riabokon

kraine has been going through major reforms recently covering various branches of law, ranging from the administration of justice and its system of law-enforcement authorities to tax legislation and customs regulations. The protection of intellectual property rights stands out vividly against this background, but rather than providing an example of successful reforms, it remains one of those areas that undeservedly receive little attention from legislators. Intellectual property matters have traditionally been treated by state authorities as a narrow issue that affects only a minor part of business while the presence of large volumes of counterfeit or grey products on the local market is seen almost as a benefit for consumers who get access to cheaper goods. Intellectual property is perceived as something that ultimately does not constitute property. Downloading audio and video content, using pirated software is accepted as the norm in Ukraine. What is more, the absolute majority of computers used by state authorities and bodies of local self-government, including the very authorities whose task is to counteract the infringement of intellectual property rights, operate counterfeit software.

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

Eduard TREGUBOV is a managing partner at Salkom

hampers investment in Ukraine and annually brings Ukraine to the top in the global rankings of pirate states. For instance, the situation on the brand licensing market is dire. It is common practice for developed markets to purchase licences to specific brands (names of athletes, celebrities, film and animation characters, works of

EXPERT OPINION INTELLECTUAL PROPERTY art, etc.) in order to manufacture branded products. In Ukraine, this market is still in an embryonic state. Would it be economically feasible to purchase an expensive licence to some or other brand from a licensor when identical goods made by unknown manufacturers in the absence of any official permits can be bought much cheaper at every corner, in any store or supermarket? It follows that both Ukrainian law and the national law-enforcement system fail completely when it comes to countering counterfeit and pirated products. On the other hand, the Ukrainian legal system does not provide right holders with efficient instruments that would allow them to protect their own intellectual property rights. It is a common situation when the identity of

an offender cannot be established, a trial can last unreasonably long, and the levels of fines that can be imposed at the demand of the right holder are extremely low and not commensurate with the market value of a brand or a licence. The other pressing issue exists in the area of copyright and underlies the formation of a fair and transparent administration framework for collective management organisations that would ensure the transparent collection and distribution of royalties and payments to authors and other right owners. The Law of Ukraine On Efficient Management of Property Rights of Right Holders in the Area of Copyrights and/ or Related Rights was adopted as far back as 2018. However, no negotiations have been conducted to determine final tariffs that would ensure a balance between the interests of right holders and users based on the criteria of reasonableness and objectivity. At present, there are several draft laws under consideration at the Ukrainian Parliament that are aimed at improving the situation with protection of intellectual property rights. On 20 December 2019, Draft Law No. 2659 On Amendments to Some Laws and Regulations of Ukraine Regarding the Acquisition, Exercise, and Protection of Intellectual Property Rights was registered by Parliament. The objectives of this draft are as follows: to ensure consistency of Ukrainian statutory provisions governing intellectual property; to harmonise Ukrainian intellectual property law with the laws of the European Union; and to facilitate the comprehensive modernisation of Ukrainian intellectual property law and ensure

It is safe to say that recently some headway has been made towards upgrading the legal framework for the protection of intellectual property rights in Ukraine

its compliance with the needs of modern society. Moreover, on 4 February 2020 the Verkhovna Rada of Ukraine adopted in the first reading two draft laws that introduce reform of the system of legal protection of intellectual property: 1) Draft Law No. 2255 On Amendments in Some Laws and Regulations of Ukraine Regarding the Formation of a National Intellectual Property Agency that establishes a legal framework for the operation of the National Intellectual Property Agency (NIPA) that will be established within the structure of the Ministry for Development of Economy, Trade and Agriculture; and 2) Draft Law No. 2258 On Amendments in Some Laws and Regulations of Ukraine Regarding the Strengthening of Security and Protection of Rights to Trademarks and Industrial Designs and Counteracting Patent Trolling, the objective of which is ensure that Ukraine meets its commitments regarding harmonisation of Ukrainian laws governing the protection of rights to trademarks and industrial designs with the legislation of the European Union. On 5 February 2020, Parliament adopted in the first reading Draft Law No. 2259 On Amendments to Some Laws and Regulations of Ukraine (regarding reform of patent law). This draft is aimed at ensuring that Ukraine fulfils its commitments regarding the harmonisation of Ukrainian laws governing the protection of rights to inventions and utility models with the laws of the European Union. In particular, the draft law provides for: an increased list of technologies that are not granted legal protection; filing applications in an electronic form; the right of any person to file their justified objections in connection with an application within six months following the date when a patent application is published; a detailed procedure for granting extended protection to the rights to inventions; an increased list of rights and obligations of holders of rights to inventions (utility models), etc. Taking these legislative initiatives into consideration, it is safe to say that recently some headway has been made towards upgrading the legal framework for the protection of intellectual property rights in Ukraine. At the same time, thorough changes in the efficiency of the work of courts, law-enforcement and customs authorities are also required to really change the situation. END

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

IN RE Intellectual Property Reform

kraine keeps on fulfilling its commitments to carry out intellectual property reform in accordance with the Association Agreement between Ukraine on the one part, and the European Union, the European Atomic Energy Community and their member states on the other part (hereinafter — the Association Agreement). To this end, three extremely important Draft Laws were adopted in the first reading by the Verkhovna Rada of Ukraine on 5 February 2020, including changes which are part of the reform in the field of intellectual property, which has already been going for more than five years, in particular: — No. 2255 On Amendments to Certain Legislative Acts of Ukraine Regarding the Establishment of the National Intellectual Property Authority; — No. 2258 On Amendments to Certain Legislative Acts of Ukraine Regarding Strengthening the Protection and Defense of Rights to Trademarks/Industrial Designs and Fighting Patent Trolling; — No. 2259 On Amendments to Certain Legislative Acts of Ukraine (Regarding Reform of Patent Legislation). According to the authors, Draft Law No. 2255 is aimed at creating an optimal, high-quality and effective state system of legal protection of intellectual property capable of developing and implementing a transparent public model to overcome existing challenges and risks, suggesting effective tools for the intellectual property field as incentives for development of related economic and social factors. There is no doubt that Ukraine has long been expected to create an effective state system of legal protection of intellectual property, and this Draft Law meets key standards. For instance, there is finally a proposal to establish a two-tier structure for the state system of intellectual property protection in Ukraine, with all main functions belonging to the Ministry of Economic Development and the National Intellectual Property Authority (hereinafter — the NIPA). The Ministry of Economic Development will ensure both state policy formation and implementation in the intellectual property field, and the

There is no doubt that Ukraine has long been expected to create an effective state system of legal protection of intellectual property, and Draft Law No. 2255 meets key standards NIPA will perform separate public functions (authorities) to implement state policy (issuing protection documents (patents, certificates) for intellectual property). Such a state system model of intellectual property protection stands a good chance of becoming effective, which is corroborated, inter alia, by international practice. A system of this kind has long been in use by most world-leading economies, particularly by Germany, Japan, Singapore, South Korea, France and others. However, many IP experts claim that the aforementioned Draft Law needs to be supplemented with rules minimizing further stagnation in formation of an effective system. Thus, it is indicated in the explanatory report to the Draft Law that the NIPA’s functions will be performed by a state organization established on the basis of the State Enterprise Ukrainian Institute of Intellectual Property (expert institute), and will be assigned to the Ministry of Economic Development Administration. Yet, the Draft Law does not clarifiy this information, which can lead to a “fight” between existing enterprises which are part of the Ministry of Economic Development in the intellectual property field for NIPA’s status. It would be appropriate to amend the Draft Law prior to the second reading so that both final and transitional provisions are supplemented with a provision obliging the Cabinet of Ministers of Ukraine to promptly determine the organization performing NIPA’s functions, a state organization formed by reorganizing the State Enterprise Ukrainian Institute of Intellectual Property

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

Dmytro NIKULESKO is an attorney at law at Ilyashev & Partners

(Ukrpatent), as advised by the central executive authority, ensuring both formation and implementation of policy on state intellectual property. Such a position is quite reasonable and tenable since it is Ukrpatent that has held both International Searching Authority and the International Preliminary Examining Authority statuses for many years. Depriving Ukrpatent of this status and transferring it to another entity, established in any way other than by its reorganization, may lead to reform delay sine die. Moreover, NIPA’s legal status requires more precision in accordance with Draft Law No. 2255, provided that all the powers inherent in state bodies are granted to it, particularly the power to issue protection documents. It is more expedient to define the NIPA’s legal status as the central executive authority carrying out state policy in the intellectual property field. According to the authors, Draft Law No. 2258 will ensure the achievement of a European level of protection of intellectual property rights for both trademarks and industrial designs, ensuring transparency in the procedures for the acquisition and disposal of intellectual property rights, improving the quality of protection of documents, ensuring an effective implementation mechanism for protecting intellectual property rights, including the fight against “patent trolls”. The most important changes introduced by the Draft Law are as follows: — the procedure is established for filing registration applications for marks for goods/ services and industrial designs in electronic form; — a single term for trademarks is granted, since the “sign for goods and services” concept is replaced by “trademark”, which is provided in the Civil Code of Ukraine; — a one-time penalty is envisaged for unfair trademark use, the amount of which is determined by a court in the sum of 10 to 50,000 minimum wages; — the grounds for registration refusal and invalidation of trademarks are expanded; — extra eligibility criterion — an individual character is granted to industrial designs;

IN RE — the maximum term of property rights of up to 25 years is established for industrial designs; — a certificate will be issued instead of a patent to certify title to an industrial design; — the possibility to recognize an industrial design certificate out of court by filing an appropriate application with the Appeals Chamber is envisaged; — compensation for losses or a one-time monetary penalty is provided, the amount of which is determined by a court in the amount from 10 to 50,000 minimum wages for dishonest registration of an industrial design. The aforementioned innovations suggested by Draft Law No. 2258 are able to provide telling rejoinders in the fight against socalled “patent trolling”. Thus, the possibility of recognizing industrial design certificates in an administrative post-grant opposition by contacting the Appeals Chamber can significantly shorten the procedure for invalidating these objects. It is also important that the decisions of the Appeals Chamber come into force from the date of their approval by the order of the Institution being subjected to full disclosure on the Institution’s official website, based on the consideration results of such an application, according to the proposed draft rules. Thus, even when appealing against such a decision to a court, an unscrupulous owner will no longer have rights to the corresponding object, which greatly improves the chances of minimizing unscrupulous registrations. It should be pointed out that the application of monetary penalties by the court with respect to such infringers significantly reduces the economic effect compared to what they are receiving now, except for the simplified procedure for recognizing unfairly registered patents and certificates. At the same time, according to the explanatory report to the Draft Law, its purpose is to implement Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to bring the laws of Member States relating to trademarks and the Council Regulation (EC) No. 207/2009 of 26 February 2009 on the Community trade mark into national law. However, as fairly noted by the Main Scientific and Expert Directorate, the proposed law’s provisions do not take into account the provisions of the new EU Directive No. 2015/2436 and Regulation (EU) 2015/2424, on amendments to the Council Regulation (EC) No. 207/2009 on: 1) signs of which a trademark may consist and in what form it may be represented

S. Riabokon

IP REFORM

Draft Law No. 2258 is in general terms forward-looking, despite the aforementioned shortcomings, and meets all the commitments assumed by Ukraine under the Association Agreement (Article 3 of Directive No. 2015/2436 and Article 4 of Regulation (EU) 2015/2424); 2) some grounds for refusing to register a trademark, such as the impossibility of registering trademarks pursuant to Union legislation or international agreements to which the Union is party, providing for protection of traditional specialties guaranteed (Article 4(1)(k) of Directive No. 2015/2436 and of Article 7(1)(l) of Regulation (EU) 2015/2424); 3) trademarks which consist of, or reproduce in their essential elements, an earlier plant variety denomination registered in accordance with Union legislation or the national law, providing protection for plant variety rights, and which are in respect of plant varieties of the same or closely related species (Article 4(1)(l) of Directive No. 2015/2436 and Article 7(1)(m) of Regulation (EU) 2015/2424); 4) some grounds for refusal to register a trademark, such as the presence of a previous trademark which has a reputation in a Mem-

ber State in respect of which the registration is applied for or in which the trademark is registered, and if the usage of a later trademark without good excuse may receive an unfair advantage, or damage the distinctive character/reputation of the previous trademark (Article 4(3) of Directive No. 2015/2436 and Article 8(5) of Regulation (EU) 2015/2424), etc. Given the above, Draft Law No. 2258 is in general terms forward-looking, despite the aforementioned shortcomings, and meets all the commitments assumed by Ukraine under the Association Agreement. Draft Law No. 2259 will ensure the achievement of a European level of intellectual property rights protection for both inventions and utility models, fulfillment of commitments undertaken by Ukraine under the Association Agreement, implementation of the provisions of the EU acquis in the field of intellectual property into national legislation, ensuring transparency in the acquisition and disposal of intellectual property rights, improving the quality of protection documents, providing the introduction of an effective mechanism for protection of intellectual property rights. Its authors claim it will also create the prerequisites for enhancing inventive activity, leading to an improvement in the investment climate in Ukraine. The most important changes introduced by the Draft Law are as follows: — the list of technology objects not covered by legal protection for inventions and/or utility models is expanded; — a procedure for filing registration applications for inventions and utility models in electronic form is established;

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

IN RE IP REFORM — any person is granted a right to submit a grounded objection to an invention’s registration within six months after the information about the relevant application was published; — the procedure for providing extra protection to inventions is being determined; — the possibility of recognizing patents for utility models and inventions out of court, by filing an appropriate application with the Appeals Chamber, is established; — the concept of a declarative patent is completely removed; — the requirement is envisaged of granting permission before the product intended to protect health and plants is released onto the market; — an additional period for the protection of medicinal products, plant protection products and medicinal products that underwent pediatric studies was established. Taking into account all the forwardlooking provisions, unfortunately, Draft Law No. 2259 does not contain any provision envisaging a one-time penalty for dishonest registration of a utility model, as provided for

By turning draft laws Nos. 2258, 2259 and 2255 into adopted laws, Ukraine is approaching completion of reforms in terms of the goals defined in Article 157(b) of the Association Agreement industrial designs. The presence of such a provision in the Draft Law is required to combat patent trolls as this type of dishonest registration is widely popular not only in relation to industrial designs but utility models as well. Moreover, regretfully, none of the draft laws mentioned above, although aimed at intellectual property development in Ukraine and are part of reform, contains any provisions to actually stimulate innovation in Ukraine, while Article 157 of the Association ADVERTISEMENT

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

Agreement, opening the Intellectual Property Chapter, notes that the objectives of this chapter are to: a) facilitate the production and commercialization of innovative and creative products in the Parties; and b) attain an adequate and effective level of protection and enforcement of intellectual property rights. By turning draft laws Nos. 2258, 2259 and 2255 into adopted laws, Ukraine is approaching completion of reforms in terms of the goals defined in Article 157(b) of the Association Agreement, on an appropriate and effective level of protection and enforcement of intellectual property rights. However, this is only half the reform in the field of intellectual property. We expect that these draft laws will be presented as soon as possible, via which Ukraine will begin to implement Article 157(a) of the Association Agreement to facilitate both the creation and commercial use of innovative and creative products. END

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

IN RE Utility Model and Patent Trolling: Window of Opportunities Seemingly Closed

ithin the last year, Ukraine has taken a lot of measures to limit the possibility of abuse of law. Starting with changes to procedural codes and ending with legislation on intellectual property. As lawyers of big Ukrainian and international companies, we believe that such improvements benefit the conducting of fair business, which has a legal position and hopes to restore infringed rights as soon as possible. Why do we generally talk about the abuse of law when recalling the utility model as an IP object? Under Ukrainian law, a utility model, as well as an invention, is the result of human intellectual activity in any field of technology. The object of a utility model may be a product, a process, and a new application of a product or process. In Ukraine the difference between an invention and a utility model is that (1) a utility model must meet two criteria for patentability: novelty and industrial applicability (thus, an inventive step is not required) and (2) substantive examination is not carried out in the process of registering a utility model. This enables the applicant to receive a title of protection (a patent) at his/her own risk and without verification by the Ukrainian Institute of Intellectual Property (Ukrpatent) within 8-10 months from the date of filing of the application. The utility model patent provides its owner with the same rights as the owner of a patent for an invention. Moreover, in order to invalidate a patent for a utility model, a person must go to the court following the same procedure and prepare the same evidence as in the case of a patent for an invention. As a result of such preferential registration of a utility model and the absence of sub-

Under Ukrainian law, an utility model, as well as an invention, is the result of human intellectual activity in any field of technology

stantive examination, Ukrpatent has granted many patents for utility models which are unlikely to be new technical solutions. Thus, a box for transporting fruit, a cork for corking bottles, a container for transporting goods, a power cable, a ladder, a promotional medium, and many other patents that do not meet such a patentability criterion as novelty were registered as utility models and, consequently, were invalidated by a court. Two categories of people have benefited from this situation for many years: (1) obvious patent trolls which have no own production and product as it is, (2) companies with their own production, but which understand that the technical solution may not be registered as an invention, but as they needed a title they obtained utility model patents. How did these two categories of people proceed to use their exclusive proprietary rights? The first ones, patent trolls, trying to ban the use of a patented object by means of blackmail, agreed with an alleged “infringer”, but in fact a fair business owner, about obtaining a license for their “solution” and a regular or one-time payment. The second lot, noticing a competitor on the market who conducted a patent search when entering

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

Anton POLIKARPOV is a counsel, head of the IP practice at AVELLUM

Anna KOLODENSKA is an associate at AVELLUM

their product on the market, found analogues and considered their product as not requiring a patent due to the lack of novelty in the solution, went to a court so as to prohibit sales of such a product by a competitor. Thus, as we see, the presence of such an IP object as a utility model leads to the fact that patent holders intentionally exercise their monopoly rights and receive unlawful benefits in bad faith. What has been done at the legislative and enforcement level to solve the problem? First. State fees were increased for actions related to protecting the rights to utility models. The state fees for filing an application for an invention and utility model had remained the same till July 2019. However, the state fee for filing an application for a utility model is now 50% higher than the state fee for filing an application for an invention. The same applies to other fees. Thus, the state is building a financial barrier so that an inventor weighs ups the pros and cons when choosing an object to be protected. If he/she chooses a utility model, its protection will be more expensive in terms of state fees. Second. In October 2019, the Verkhovna Rada of Ukraine adopted a draft law which, among other thing, excluded the utility model from the register of IP objects which are protected by the customs authorities when moving goods through the customs border of Ukraine. As soon as the law came into force, the customs authorities updated the respective register of IP objects. Now, the register does not contain any utility model. This step enabled importers who were previously banned from importing goods containing a technical solution protected by a utility model patent to import their products into Ukraine. Furthermore, if the patent holder claims against the owner of such a product,

IN RE UTILITY MODEL he/she may file a lawsuit on the prohibition of the use of his/her patent through a court not during the customs clearance, but after the goods went into commercial circulation. However, this does not prevent honest importers from importing goods into Ukraine, which is a huge plus when deciding on sales. It is likely that a patent troll will not turn to a court to prohibit sales in Ukraine, taking into account known difficulties in obtaining interim measures to prohibit sales during the consideration of a dispute by a court. Third. In February 2020, the Verkhovna Rada of Ukraine adopted the Draft Law On the Patent Law Reform (No. 2259) in the first reading. Among other changes, members of parliament also specified precisely what can be the object of a utility model. As we mentioned above, as of today, such objects can be products (devices, substances), processes and new applications of products or processes. In accordance with the draft law, only a device can be an object of a utility model. Basically, this makes it impossible to register, for example, the active substances of pharmaceutical and agrochemical preparations, the methods of their manufacture. Such objects should be registered as inventions. However, the transitional provisions of this draft indicate that all patents granted

Ukraine is not only aware of the problem of abuse of IP rights, but is also taking active measures to solve the problem

on applications before the draft lawâ&#x20AC;&#x2122;s entry into force are valid. Thus, in our opinion, the owners of patents for utility models will find themselves in different conditions before the adoption of the law and after its adoption. It would be more correct to extend the effect of the law to previously granted patents or to enable interested parties to invalidate patents whose objects are not devices. Patent trolling using a utility model will most likely be virtually impossible after the adoption and coming into force of the law. Fourth. At the end of 2018, the Antimonopoly Committee of Ukraine adopted a decision on Article 15 of the Law of Ukraine On Protection Against Unfair Competition,

according to which, achieving unfair competitive preferences is obtaining such preferences in relation to another business entity by violating current legislation, which is confirmed by the decision of the state authority. The matter was as follows. In 2005 a company registered a utility model, which was then included in the customs register of IP objects. On the basis of this, the State Customs Service did not allow a competitor of this company to import its goods into the territory of Ukraine. This competitor filed a lawsuit to invalidate this utility model patent due to its non-compliance with such patentability criterion as â&#x20AC;&#x153;noveltyâ&#x20AC;?. The court, in its turn, sustained the claim. When considering this case, the AntiMonopoly Committee of Ukraine established that the holder of a utility model patent violated current legislation and received unfair competitive preferences. Thus, the AMCU imposed a fine on the transgressor of more than USD 40,000. The AMCU decision was supported by the courts. All of the above shows that Ukraine is not only aware of the problem of abuse of IP rights, but is also taking active measures to solve the problem. END

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

IN RE “Justice Delayed, is Justice Denied”

Anton KAPITONENKO is an associate at Baker McKenzie

William E. Gladstone Khrystyna NYKERUI is an associate at Baker McKenzie

he establishment of a specialised High Intellectual Property Court of Ukraine has often been viewed as an effective way of improving the IP enforcement system. It was received positively by Ukrainian legal professionals and by the academic community and is expected to become an effective and valuable tool for IP rights holders. It is believed that the creation of a specialised IP court will counter the innovation crisis in Ukraine and improve the IP enforcement system by cutting the duration of court proceedings and simultaneously increasing the quality of decisions in IP cases. It is expected that this will be accomplished through, inter alia, selection and training of skilled judges within specific areas of IP specialisation, as well as by developing uniform and consistent judicial practice. There are several interrelated factors analysis whereof may help to understand whether the creation of the IP Court can be a success in Ukraine. This article will cover one of the factors, namely the complexity of subject matter, and, in particular, those major benefits ascribed to IP specialization which should be produced by transferring complex cases to the IP Court.

Improved decision-making

The IP Court’s sustained involvement with a field may facilitate superior decisionmaking and enable it to keep abreast of developments in its specific area of law and draft better opinions, especially taking into account the fact that IP cases are now distributed rather thinly among general courts and non-specialist judges are infrequently confronted with specialty subject matter. In addition, the increase in the level of judicial expertise may result in less reliance on tech-

Reduction in the size of the docket

The establishment of a specialised High Intellectual Property Court of Ukraine has often been viewed as an effective way of improving the IP enforcement system

nical experts in decision-making, which in turn improves the quality and impartiality of such decisions. Herewith, the initial level of judicial expertise may not be satisfactory due to existing selection requirements. The absence of technically qualified judges in the IP Court may lead to, inter alia, low quality of decisions and long duration of proceedings and may, consequently, undermine the very reason for the establishment of the IP Court. A possible solution (which, however, may not be sufficient) may be either to provide for the position of technically qualified assistants within the structure of the IP Court, which, in its turn, may lead to fruitful cooperation between legally and technically-qualified experts and a balanced approach in settling disputes, or to require the judges to keep educating themselves in respective specialist areas. The effect of the latter is questionable as judges cannot objectively possess specialised skills in all the technical fields dealing with IP.

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

Transferring complex cases to the IP Court may also reduce the size of the docket due to, at least in theory, more effective and timely manner of performing the functions by the specialised court. There are doubts as to whether the number of IP judges (seven panels of three IP judges in the first instance and three panels of three IP judges in the Appellate Chamber), will be enough to ensure an effective and speedy judicial process as the average number of IP cases in Ukraine considered by commercial, civil, and administrative courts is approximately 1,200 cases a year. Therefore, efficient adjudication of this number of cases by the current number of panels appears to be difficult to accomplish in a timely manner and it may be advisable to consider the most efficient ways of using the IP Court’s resources, as well as implementing alternative dispute resolution mechanisms that would ensure effective adjudication of IP disputes by the IP Court as is envisaged by, for instance, the Agreement on a Unified Patent Court. Having a number of important advantages over litigation, ADR mechanisms have become increasingly sought after in IP disputes. Thus, it is highly advisable to provide either for a mediation program within the IP Court or for a separate ADR centre (which can be administered by the IP Court) to offer to the parties an alternative and, in certain circumstances, highly-effective dispute resolution method. Encouraging judges to guide the parties to mediate or refer to arbitration may help resolve many IP disputes and improve the general resolution environment in the subject area. At the same time, the demand of adjudication varies over time. In the event that the

IN RE IP COURT IP Court is successful in articulating the law, its business will decline because of greater stability and predictability of the law, with less room for disputes and more incentives for settlements. Thus, the relationship between specialisation and complexity is complicated as, for instance, stabilising the legal environment by the IP Court may encourage more of the activity that the court regulates, which inflates the base that produces lawsuits.

Diminution in the number of judge-hours required to As a specialised judiciary should handle IP cases more efficiently, the number of judge-hours required to decide any given number of cases would be reduced. Each case could also be decided more quickly, which is a major advantage in an area where timeliness is crucial. Herewith, notwithstanding that each IP case should be decided more efficiently in terms of judge-hours, it is not necessarily true that specialisation will lead to a decrease in demand for judicial resources. Thus, although more stable court practice offers greater guidance, the IP Courtâ&#x20AC;&#x2122;s success could also attract new business, which might decide to litigate cases that would otherwise have been resolved by extra-judicial means.

Consistency and uniformity

Taking into account that the consumers of IP law base their decisions to invest in innovation upon their expectations of achieving IP protection, the uniformity, predictability, and coherence that are believed to be achieved by the IP Court may improve the IP enforcement system in Ukraine and are especially prized. Increased consistency may make the Ukrainian IP enforcement system more attractive to all consumers, particularly to investors, who will be more confident in doing business in Ukraine. Here, the combination of envisaged specialisation at the first instance and appeal level as well as exclusive jurisdiction of the IP Court seems to be beneficial to the whole system as the IP Court will be able to make needed doctrinal innovations and yet attain uniformity and stability of the law. Moreover, specialisation at the level of the first instance will allow the specialised judge to have the necessary proficiency to evaluate the evidence and expertise to make the best use of procedural provisions.

S. Riabokon

clear docket

The potential imbalance among the parties may also be, at least theoretically, compensated by the lawyers practicing in court

The lack of unified and consistent court practice is identified in the Strategy of Justice Sector Reform 2015-2020 as one of the main reasons for the inability of the national judicial system to perform its duties. Due to the exclusive jurisdiction of the IP Court, and as IP disputes would be adjudicated by fewer judges, each possessing a greater level of experience in such disputes, such uniformity and predictability in the field of intellectual property issues may be achieved. This, in turn, may improve business confidence and reduce the caseload of the IP Court and the duration of proceedings for litigants. With respect to consistency, concentrating cases into the IP Court should generate

a bench small enough to keep the collegiality necessary to speak with a single voice, which is very important in the Ukrainian context, where the cases are spread among different courts and, consequently, a large number of conflicting court decisions exist. The resulting greater consistency in court opinions may offer greater guidance to consumers of the law, enabling parties to settle their disputes and reduce their need for judicial intervention. On the other hand, one needs to keep in mind that concentration of IP cases may make the IP Court more vulnerable to politicization as it will solely bear responsibility for deciding issues regarding the interest group. Even if the appointment process remained untainted, capture may occur after the IP Court begins to function through continuous contact with legal practitioners, as repeat players usually have an advantage over one-time litigants and would be more likely to know the judges, know how the IP Court operates, be acquainted with the eccentricities of IP law, and be positioned to find suitable vehicles for arguing the changes in the law that they desire. Moreover, repeaters will have also some strategic advantages, as they will be able to coordinate their policy arguments and wait for a specific case to push the position they favour. Thus, there is a significant risk that the side that is better equipped or is more powerful could capture the IP Court, as there will be a certain advantage to litigants with

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

IN RE IP COURT more resources. This risk can be exacerbated even more as the IP Courtâ&#x20AC;&#x2122;s jurisdiction is established on the basis of subject matter. Such risk is, to a great extent, mitigated at the stage of appointment of judges due to the procedure of appointment, though it still remains high after the IP Court begins to function. In addition, these potential imbalances may be avoided, at least in cases where the litigants are vertically-integrated companies that both manufacture and conduct research and development. Such companies would, therefore, appear on either side of infringement actions and would lack the motivation to sway the IP Court in any particular direction. The potential imbalance among the parties may also be, at least theoretically, compensated by the lawyers practicing in court. However, for achieving such an effect, the Bar must be well organised and sophisticated, which is not the case in Ukraine so far due to, inter alia, ongoing reform in the field. Moreover, litigants must have access to such legal services, which, again, may be a problem, as an adequate level of legal services in

Overspecialization of the Bar and losing touch with developments in other fields may lead to a more isolated IP Court and, thus, increase the risks associated with specialization

cases dealing with intellectual property is not affordable to the majority of potential litigants. On the other hand, overspecialisation of the Bar and losing touch with developments in other fields may lead to a more isolated ADVERTISEMENT

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IP Court and, thus, increase the risks associated with specialisation. Summarizing all the above, it is hoped that transferring complex cases to the IP Court, staffed by experts and having broad exclusive jurisdiction, will provide such potential benefits as, inter alia, improved decision making, reduction in the size of the docket, and diminution in the number of judge-hours, as well as uniformity, consistency and elimination of forum shopping. However, contextual analysis leads to the conclusion that there are many concerns, such as the level of judicial and/or technical expertise of IP judges, (ii) envisaged number of judges, (iii) structure of the IP Court, and (iv) risks of the IP Court being captured by interest groups, which need to be timely and duly addressed in order, inter alia, not to undermine the very general public perception of how the IP Court, the importance of establishment whereof was emphasized numerous times by high officials within 2014-2019, performs. END

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

VICTORIA SOPILNYAK

COVER STORY

Lively Discussion The protection of intellectual property rights has always been one of the pillars of credible and reliable jurisdiction. The ongoing reform of subsequent institutions in Ukraine and delays in establishing a special IP court are accompanied by the so-called “turbo regime” in selective lawmaking. Victoria Sopilnyak, partner of Doubinsky & Osharova, explains why recent initiatives provoked such a lively discussion among stakeholders, and what the threats to proper patent protection in Ukraine are.

UJBL What are the main changes to be

introduced to the state system of legal protection of intellectual property? What are they based upon, and how would you assess them? Victoria Sopilnyak: You see, if we talk about the intellectual property (IP) field in general, it can be said that one reform there merely leads to another. And it somehow happened that everything is not just being reformed but is being reformed all at once. We currently face institutional reform, judicial reform and, on top of that, legislative reform. All reform processes are quite slow, and there are both objective and subjective reasons for that. In terms of the state system of legal protection of intellectual property, we have already seen a lot, including an authority with special status, and a unit within the structure of some ministry/ agency, changes in subordination and more. I have always asked myself: why can’t we have a properly functioning Ukrainian patent office created under the best practices present in developed countries? Aren’t we such a rich country that we can afford to liquidate, re-purpose, resubordinate, or establish an intellectual property authority anew once every few years?

My position is that institutional reform must be finally completed. It just so happens that we constantly discuss and talk about it, but the relevant authority has never been established. Finally, the National Intellectual Property Agency should be established as the only professional body that will cover all the state’s functions in the IP field. The said authority should be provided with powers and competence that will ensure the most effective process of IP rights acquisition for the applicant, starting with the application submission, its examination in relation to a certain item, registration processes and followed by keeping in force and terminating intellectual property rights. We should also keep in mind the need for a strong and professional Appeals Chamber that will acquire new functions and powers under amended legislation or new legislation on specific intellectual property items.

UJBL What are the main areas of concern in IP legislation? To what extent should the regulations governing the IP field be changed? V. S.: A common problem for all aspects of intellectual property rights protection is the inconsistency of legislative instruments regulating legal relations regarding the items

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

of intellectual property rights with the standards of the Association Agreement signed with the EU, the “desuetude” of certain provisions of these instruments. The lengthy implementation process of European approaches in this field, which has not yet been completed, hinders the establishment of an effective mechanism for protecting intellectual property rights in Ukraine.

UJBL Given Ukraine’s European integra-

tion course, how is the harmonization of IP legislation being implemented? V. S.: The harmonization of IP legislation is extremely slow. The Association Agreement came into force on 1 September 2017, almost three years ago. With only a few exceptions, its provisions cannot be seen as directly applicable ones, and even if it were so, there are no relevant implementation mechanisms. In recent years, we have been constantly discussing certain legislative initiatives, participating in working groups, organizing professional discussions, but the dun is in the mire. How often have we been told about post-grant opposition as a counteraction to patent trolling? How long have we been “improving” the movement of products with IP items across the customs border of Ukraine? It is said that recent changes have slightly improved the

VICTORIA SOPILNYAK

DOUBINSKY & OSHAROVA Year of establishment: 2000 Location: Kyiv, Ukraine Number of partners/ IP specialists & lawyers: 6/20 CORE PRACTICE AREAS Trademarks Patents and Utility Models Designs Copyright Domain Names

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VICTORIA SOPILNYAK

COVER STORY

cines is intended to increase the amount of affordable “quality” and “cheap” (do such things exist?) medicines for Ukrainian citizens. What do legislators propose in the pursuit of quality and cheap medicine? It is simple – to replace the most effective original medicines, which are properly registered in Ukraine, containing items of intellectual property rights with their cheap analogues, whose quality and effectiveness is declared by the supplier. The consequences are not difficult to predict: the originator companies are unlikely to register their original medicines in Ukraine, where patent rights are neglected, to put it mildly, followed by a high risk that the number of unauthorized copies of the original medicinal products manufacture will rise; sharp increase in the volumes of counterfeit medicines; this will open up vast opportunities for the activities of “grey” distributors, not to mention strike a blow to the investment attractiveness of Ukraine and its business climate in general.

I totally oppose the parallel import of medicines (Draft Law No.2089) and do not like the manipulative message that parallel import is intended to increase the amount of affordable “quality” and “cheap” medicines for Ukrainians Customs Code of Ukraine, though I have reasonable doubts. Time will tell. In any case, there is no point in being content with the “legislative provision” of IP rights, but to adopt at least those draft laws that are not the reason for tough professional discussions and not divide those involved in the IP field into opposing teams.

UJBL How would you assess the legisla-

tive initiatives in the IP field presented in the last few months? In particular, Draft Law No. 1230 (the so-called Law on “parallel import”)? V. S.: As in all other fields, legislative changes in the IP field are adopted in turbo regime. More initiatives and steps for adoption thereof have been introduced in the last six months than in 2017, the year when the implementation of the Association Agreement standards into Ukrainian national legislation was to begin. I would not claim that the legislative initiatives we are proposed are always high quality ones.

Moreover, most of them provoke lively discussions between stakeholders. And Draft Law No. 1230, which you mentioned, is no exception. Are parallel imports good or bad? And to be precise, what exhaustion principle should be applied in Ukraine? Everyone has different interests. We constantly argue, debate, but there is no consolidated position, and we cannot agree. This leads to a situation when to set a clear definition of the exhaustion principle to apply in Ukraine (and, therefore, whether we allow parallel imports of original goods) at legislative level seems to be problematic, despite all attempts to “push” any principle into legislation where it doesn’t fit in, to put it mildly. The question has already become a rhetorical one. There is no clearcut answer. I would like to expressly indicate that I totally oppose the parallel import of medicines (Draft Law No. 2089). Moreover, I do not like the manipulative message put into our minds that parallel import of medi-

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

UJBL The provisions of Draft Law No. 2259 on the pharmaceutical industry are quite controversial as of today. What are they exactly? What could be consequences for the pharmaceutical market? V. S.: Currently, the toughest discussions revolve around Article 6 of this draft law, which establishes significant restrictions on items that may be subject to patent protection. There are proposals to exclude from patent protection, in particular, new forms (including salts, esters, ethers, compositions, combinations and other derivatives, polymorphs, metabolites, isomers) of a known medicine, new dosage or new use of a known medicine, irrespective of their compliance with patentability standards. Yet again, the motivation behind this legislative initiative is the everlasting accusation that large pharma companies abuse patent protection, that their patents are “ever green” and that they are trying to cash in on the backs of poor Ukrainian citizens. As if by narrowing the patent protection of medicines we will get cheap medical products. This idea is being deliberately “pushed” today and, unfortunately, the relevant legislative initiative has every chance of being adopted by the Ukrainian Parliament. In my opinion, the adoption of Draft Law No. 2259 with Article 6 will at least lead to a breach of Ukraine’s international patent protection obligations. And the real consequences of such “lawmaking” are even sad to think about. I hope that through “good intentions” to make medicines more affordable, we will not de-

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stroy proper patent protection in Ukraine and will not make the Ukrainian market unattractive to innovative pharma, thereby making it impossible for Ukrainian patients to get treatment using the latest original innovative medicines.

UJBL What inquiries do you receive at present from your clients in the pharmaceutical industry? V. S.: I must stress at once that the vast majority of our pharmaceutical clients are representatives of so-called original pharmacy. And what is the basis of the originator’s IP portfolio? That’s right – patents for active substances of medicinal products, combinations of substances, methods for their preparation and more. Therefore, any inquiries from such clients are focused on ensuring that their patent rights are respected to the fullest extent. We deal with a significant share of preliminary claim settlement activities trying to prevent illegal medicine registrations and to prevent medicines that infringe patent rights from entering the market. Besides, we are known as one of the most effective patent litigation teams in Ukraine. It should be noted that in the current circumstances, when humanity is facing the respiratory syndrome caused by the SARS-CoV-2 virus, a large number of inquiries are related to licensing, patent waivers, granting various permits, charitable aspects and more, as it is already known that in some countries certain original medicines have been recognized as being effective in the fight against COVID-19 and are included in the relevant local treatment protocols. UJBL What are the main pros and cons in relation to the creation of a specialized IP court? Where do you stand? What results do you expect? V. S.: I have always said, and still insist, that I am an adept, if you like, of the idea of creating a specialized IP court. I believe that specialization is the key to improving the effectiveness of judicial protection of intellectual property rights. What is the current situation? The low efficiency of right holders protection actually leads to the “counterfeit nature” of the Ukrainian market, its pirated content, which ultimately has a negative impact on Ukraine’s economy, undermines the country’s image on the international arena, causes a reduction in foreign investment, and actually nullifies the plans our state has for European integration.

Focusing all IP disputes in a single court on a substantive basis will allow for a much higher efficiency rate of judicial protection of IP rights than the existing one Nowadays, Ukraine is listed in the Special 301 Report compiled by the International Intellectual Property Alliance as a country that cannot ensure proper protection of intellectual property rights. And what does the right holder expect? Firstly, that in the event of violation of rights, he/she will have the opportunity to appeal to a court for protection, and, secondly, he/she expects the predictability of a potential court decision given the relevant case law and the stability of the judicial system. But what do we actually see today? IP cases are scattered between all jurisdictions, there is lack of enforcement uniformity and also we see unrealistic terms for the hearing of a case, which does not contribute at all to that efficiency of judicial protection everyone is talking about. The said entails the arguments in favor of an IP court: the need to deepen the specialization of courts and judges, to ensure case-law unity and the predictabil-

ity of decisions adopted by courts. Obviously, focusing all IP disputes in a single court on a substantive basis will allow for a much higher efficiency rate of judicial protection of IP rights than the existing one. We will have judges dealing exclusively with the specified category of cases (currently the possibility of an “additional load” for the IP court with competition litigation matters is being discussed, but no agreement has been reached yet), so we can speak boldly about improving the quality of court decisions. The very specialization of judges and, to put it bluntly, their awareness of the “subject matter”, will certainly lead to a reduction in the time spent on hearing cases, as it seems to me that unnecessary procedural actions such as unreasonable commissioning of expert evidence, the obligation to provide the results of opinion polls and more, which is the case today, will be excluded.

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

VICTORIA SOPILNYAK

COVER STORY

Digitization followed digitalization and caused the rather fast transfer of information, goods, services. Today, everything is possible on the Internet. Moreover, everything is constantly changing and developing quite rapidly. The things that were seen as ‘new’ and ‘wow’ yesterday are already outdated today. It is clear that the law cannot catch such rapid development of the results of digital transformation. Existing IP right tools do not always enable to deal in an effective and timely manner with new types of IP infringements that are emerging. Not to mention the relevant litigation practice. We are currently faced with the “digital product” category – an e-format product that can be transferred/alienated. For example, via email or downloaded via a link. How should we resolve a dispute if, for example, the product is downloaded in one country for 3D printing purposes but is actually printed in Ukraine? The USA and Europe have already developed some law-enforcement guidelines for protecting digital goods. Ukraine has not done this yet. However, in the face of globalization, endless cyberspace capabilities, incredible digital transactions, as well as the “crossborder nature” of our clients, we must be ready for new challenges.

UJBL What is the current situation on

Existing IP right tools do not always enable to deal in an effective and timely manner with new types of IP infringements that are emerging As for the arguments against, the following is usually mentioned: (1) a small number of IP disputes that do not require a separate court – I would like to oppose this at once: there are enough disputes, they are quite complex and given the number of judges expected to be involved in IP court activities following the competition, the workload will be quite large, to put it mildly; (2) limiting access to justice, since there will be only one court in Kyiv and the opportunity for non-resident parties to participate in the proceedings will be limited and will require additional costs – I believe this is a rather artificial disadvantage, as a specialized IP court cannot and should not be established in every settlement. And the opportunity to take part in proceedings

without arriving directly in court has long been provided by the applicable procedural codes. I have in mind hearings held in video conference mode. I have to point out that specialized IP courts are quite successful in the UK, France, Germany, Spain, Portugal, the United States of America, China and other countries. I do hope that all the competition procedures related to such a court in Ukraine will finally be completed, and we will have our own IP court. At least I really wish to “be heard” there.

UJBL How does digitalization affect in-

tellectual property practices? V. S.: I will be right to claim that digitalization is affecting everything right now.

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

the IP protection services market? How serious is the competition and what industries experience it most? V. S.: Competition in the IP services market is quite tough. As before, we have a number of boutique law firms that in the main provide services exclusively in the IP field, as well as “biglaws” with IP practices. International professional directories and ratings also divide us into leagues: gold, silver and the like. We can talk about specific specialization within IP firms or IP practices: some deal only with trademarks/designs, some never visit courts, some focus on patents and pharma, some pursue counterfeiting, and some deal with IT law. Ukrainian top five IP firms “deal with” everything. Therefore, they compete in almost every industry. Everyone needs clients today and each of us is trying to create/invent that particular product to ensure a competitive advantage. The positions of clients when choosing IP counsels are completely different and all have the right to exist. As a matter of fact, someone buys chocolate in a supermarket. But someone is looking for his/her own chocolatier in a small chocolate maker. I personally love boutiques. END

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

ARGUMENT How should Investment Projects in Infrastructure be Prepared?

he Action Plan for implementing the Strategy of Infrastructure Project Lifecycle Management Reform in Ukraine for 2020-2024 envisages changes to the preparation of investment projects. At present there is no uniform approach at state level to prepare investment projects implemented out of various sources of financing, such as: own funds of enterprises, loans from international financial institutions and other loan resources, funds from the State Budget, state aid as well as private investors. Currently, according to Ukrainian legislation and possible sources of financing, the requirements for preparing investment projects are different and they generally do not take into account a sector’s specific nature. Therefore, these requirements need to be adjusted and updated in accordance with best European practices. In addition, there is no centralized approach at sectoral level to prepare and appraise transport investment projects, prioritize them according to clear selection criteria, and to coordinate and properly support their implementation in accordance with sector strategic goals, as well as to monitor them subsequently. As a consequence, the preparation of transport investment projects is, in most cases, not done in line with European practices, but carried out haphazardly without proper justification of the investment need and feasibility, assessment of socioeconomic and financial impact for both the transport sector and the whole country. Therefore, the implementation of transport investment projects out of IFI funds, whose lending sums accounts for the largest share of the possible amounts of attracting external financial resources (more than 90%), is not achieved in full. Transport investment projects were almost not financed at all from State Budget funds, with the exception of road development projects.

Currently the requirements for preparing investment projects are different and they generally do not take into account a sector’s specific nature

Preparation of investment projects

With regard to investment projects to be financed out of State Budget funds or with state aid, the Ministry of Economy has approved requirements to project development and the Guidelines for its preparation: 1) For public investment projects1, to be implemented with public capital investments, the following documents shall be produced: — a Concept Note informing of the project’s purpose, key findings of its performance pre-assessment to take a decision on the feasibility of its implementation: — Investment Project consisting of these sections: Public Investment Project Executive Summary, Feasibility Study, Implementation Program, Financing Plan, and Project Achievement Status. 2) In order for investment projects to be implemented with state aid2, the following documents shall be produced: According to Resolution of Cabinet of Ministers of Ukraine No. 571 of 22 July 2015 “Certain issues of public investment management”, and Order of Ministry of Economy No. 1865 of 22 December 2017 “Guidelines on preparing and assessing the public investment project” 1

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

Viktor DOVHAN is an advisor to the Minister of Infrastructure of Ukraine

— Forms of project (investment) proposal the investment project to be supported with state aid will be developed on, to study a feasibility of the project’s subsequent development; — Forms of investment project to be supported with state aid. As to projects that may be implemented from IFI funds, no approved form or clear guidelines on preparing project proposals are currently available. The Ministry of Finance has currently developed a draft Procedure for examining project proposals for the initiation of investment projects of economic and social development in Ukraine, supported by international financial institutions, including a project proposal form. However, the document is currently under public consultations as a regulatory act.

Calculation of

performance indicators

Requirements for calculating performance indicators need to be adjusted in accordance with European practice and the specific nature of implementing transport investment projects. Namely, a mandatory socio-economic analysis, with achieving of its positive results, as well as mandatory financial analysis. With regard to investment projects that need IFI3 funding, the performance assessment should be carried out only for those projects to be implemented as finanAccording to Cabinet of Ministers of Ukraine Resolution No. 835 of 13 November 2013 “On approving the Procedure for selecting investment projects to be supported with State Aid”, Order of Ministry of Economy No. 724 of 19 June 2012, Order of Ministry of Economy No. 1279 of 13 November 2012 “On approving the Guidelines on developing an investment projects” 3 According to Ministry of Finance order No. 616 of 14 July 2016 “On approving the Procedure for assessing the financial status of a potential beneficiary of an investment project to be implemented as financially sustainable as well as for defining a security type to serve and repay a loan out of international financial institutions funds to be served out of beneficiary’s funds” 2

ARGUMENT INVESTMENT PROJECTS cially sustainable ones, without taking into account the socio-economic effect. Introducing a unified form of investment project and developing the Guidelines to prepare them, given the peculiarities of their implementation and the best European practices, are proposed.

Prioritization of

investment projects

In order for investment projects to be implemented using public capital investAccording to section 18 of the Procedure for selecting public investments projects approved by CMU resolution No. 571 of 22 July 2015 “Certain Issues of Public Investment Management” 5 No. 1785 of 25 October 2016 “On approving the Procedure for monitoring the status of developing (implementing) public investment projects” 6 No. 70 of 27 January 2016 “On Procedure for Preparing, Implementing, Monitoring and Completing Implementation of Projects of Social and Economic Development of Ukraine Supported by International Financial Institutions” 7 No. 81 of 9 February 2011 “On approving the Procedure for Providing the Information on Achieving A Contract Made on PPP basis by a Private Partner to a Public Partner” 4

The order of the Ministry of Economy, has approved the monitoring for public investment projects, to be implemented out of IFIs funds

ments4, the Ministry should submit a list of public investment projects, prioritized in terms of their development (implementation), to the Ministry of Economy.

Introduction of a uniform approach to assessing and prioritizing transport investment projects, irrespective of funding sources, to study further attracting the proper funds as established by the laws, and implementing properly the projects, is suggested.

Monitoring of investment projects

The order of the Ministry of Economy5, has approved the monitoring for public investment projects, to be implemented out of IFIs funds. See sections 41-46 of the Project Monitoring Section in accordance with the resolution of the Cabinet of Ministers of Ukraine6; the PPP projects should be monitored according to the CMU resolution7. A unified approach to monitoring all projects that have been selected, assessed and prioritized by the Ministry regardless of their funding sources, is proposed. END

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

CRUX

Legal Digest Over recent weeks the UJBL team has monitored the most important legislative initiatives, from the considerable recently adopted in the first reading Draft Law On Financial Leasing to the widely discussed and necessary Law On Support of Taxpayers for the Period of Measures to Prevent the Occurrence and Spread of the Coronavirus Disease (COVID-19). Other important initiatives include several drafts in the public procurement field, drafts that may finally regulate lobbying in Ukraine. We’ve invited legal experts to share their viewpoints in commentaries below.

On 4 February the Verkhovna Rada of Ukraine adopted Draft Law No. 1111 in its first reading. What exactly does this draft include, and what results should we anticipate?

BOHDAN DMUKHOVSKYY, Counsel, Aequo

ANNA POTAPOVA, Associate, Aequo

Draft Law No. 1111 On Financial Leasing brings general legal and organizational principles of financial leasing in Ukraine into line with EU and international legal standards. It replaces outdated controversial regulations that are currently in effect in Ukraine and establishes a uniform approach to regulating financial leasing, its individual forms and types. This draft is aimed at creating a proper competitive environment on the financial services markets and enhancing its credibility, ensuring favorable conditions for the development of leasing services in Ukraine. It introduces several important innovations that are worth mentioning: — mandatory and clear requirements to the terms of a leasing agreement and parties thereof, which enable the avoidance of unnecessary lawsuits and legal expenses;

— extending the types of property which may be leased out, to include integral property complexes, which creates alternative financing opportunities for the development of infrastructure projects; — establishes clear requirements and essential conditions of subleasing agreements, among others, includes joint and several liability of the lessee and sub-lessee to the lessor. Such innovations contribute to more effective and frequent use by a business of such a legal instrument; introduces a clear ban on the inclusion of an object of financial leasing in the composition of the liquidation mass in the event of liquidation of the lessee. This improvement is aimed at protecting the rights of a lessor and thus encourages financial service providers to increase financing through leasing agreements; a new

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

mechanism for the transfer of ownership to the leased property that provides for the possibility to determine conditions and procedure for the acquisition of ownership to the leased property in a lease agreement (or in a separate agreement). The current Law On Financial Leasing is outdated and needs a comprehensive overhaul, as it has not been amended for the last 15 years. The main advantage of this draft stems from the identity of its developers, which are participants of the leasing market united in the Association Ukrainian Union of Lessors. Therefore, this draft provides practical solutions to the problems encountered by financial services providers in their day-to-day activities. It was designed with a professional understanding of leasing instruments and is aimed at expanding the tool of financial leasing as an alternative mechanism for long-term financing.

CRUX LEGAL DIGEST At the beginning of 2020, Parliament registered Draft Law No.2831 On the List of Objects of State Ownership that Cannot be Privatized as the main draft, and Draft Laws Nos. 2831-1 and 2831-2 as versions. What is provided by these documents?

NATALIYA TYSCHENKO, Senior Associate, Baker McKenzie — Kyiv On 2 October 2019 Parliament adopted Law No. 145-IX On Considering as Expired the Law of Ukraine on the List of Objects of State-Owned Property that are not Subject to Privatization, which took effect on 20 October 2019, thereby supporting the large-scale privatization campaign initiated by the Cabinet of Minis-

ters and State Property Fund of Ukraine. After the abolition of this law, the matter is regulated by the Law of Ukraine On the Privatization of State and Municipal Property, which provides for general regulation of the matter providing for categories of state enterprises that cannot be privatized (e.g., subsoil, roads, military equipment manufacturers, state healthcare facilities, facilities of state education institutions, etc.). Therefore, to clearly regulate the matter, the Cabinet of Ministers of Ukraine prepared Draft Law No. 2831, which provides a list of stateowned property that cannot be privatized, including: — 9 joint-stock companies in which the share capital of

state-owned corporate rights is 50% + 1 share; — 101 joint-stock companies in which the share capital of state-owned corporate rights is 100%, state unitary enterprises and state enterprises; — 109 cultural and sports facilities. Under Draft Law No. 2831, the number of state property objects that cannot be privatized was significantly decreased in comparison with the list envisaged by the abolished law. After the appointment of the new prime minister of Ukraine, Draft Law No. 2831 was withdrawn. An alternative Draft law, No. 2831-1, was initiated by a group of Members of Parliament and contains the same three lists

of state property items which cannot be privatized. However, it also provides for the specific regulation of the privatization of JSC Ukrainian Railways in view of the intended restructuring of the Ukrainian rail transport system. With regard to Draft Law No. 2831-2, this was also initiated by Members of Parliament and provides for renewing the effect of the abolished law as the Members of Parliament in question believe that it is better to manage state-owned property effectively than to sell it. We believe it is important for Ukraine to have a list of state property that cannot be privatized, the adoption of which will provide greater clarity to investors regarding the privatization program.

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

CRUX LEGAL DIGEST On 19 February Draft Law No. 3087 On the Bureau of Economic Security was registered. What are its main provisions?

YULIAN DURDA, Junior Associate, EQUITY The European integration path that Ukraine has embarked on presupposes establishing and ensuring the operation of institutions that would guarantee supremacy of law, respect for rights and interests of individuals and legal entities and their effective protection. Thus, on 10 October 2019, the Verkhovna Rada of Ukraine approved the program of the Cabinet of Ministers of Ukraine. One of the paragraphs in this program specifies the formation of an agency that would investigate crimes in the field of public finances. Besides, the approved Law of Ukraine On the 2020 State Budget of Ukraine envisages

UAH 1.288 billion worth of expenditure on forming a body that would carry out investigations in the field of public finances. Since the time the aforementioned program was approved, several draft laws providing for formation of a body that would investigate crimes in the sphere of public finances, including Draft No. 1208-2 On the Bureau of Financial Investigations of 18 September 2019, have been registered with the Verkhovna Rada of Ukraine. However, the document in question was rejected by Parliament. On 19 February 2020 Draft Law No. 3087 On the Bureau of Economic Security, drawn up on the basis of the aforementioned Draft No 1208-2, accounting for comments made by the main legal department of the Verkhovna Rada, was registered with the Verkhovna Rada. According to its explanatory note, the Draft is aimed at differentiating the service and law-enforcement functions of the State Tax Service, liquidating the tax police, downsizing

the structure and personnel numbers of the bodies combating crimes in the sphere of finance, discovering overlapping functions and the actual formation of the Bureau of Economic Security. The main objectives of the BES include preventing, detecting, stopping, investigating and solving criminal offences referred to its jurisdiction by legislation. The activities of BES are to be directed and coordinated by the Cabinet of Ministers of Ukraine through the Minister of Finance of Ukraine, though the latter does not have significant influence over the BES. In accordance with the proposed changes to the Criminal Procedure Code of Ukraine, 29 articles of the Criminal Code of Ukraine outline the jurisdiction of detectives of the BES, with 20 of them describing the direct functions of the agency in connection with economic crimes. In this way an attempt was made to protect businesses from control over the economy by other security, defense and law-enforcement agencies.

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

The Draft specifies that the maximum number of personnel must not exceed 3,000 officers, with officers who handled economic crimes while working for other law-enforcement bodies or prosecution bodies from 2010 to 2015 being banned from working for the BES. The Draft sets out the procedure for competitive selection of the BES director and deputy directors, involving donors who have provided international technical assistance to Ukraine with a view to preventing and combating corruption and economic crimes in the last two years. In general terms, the proposed formulae to establish a new central body of executive power specializing in investigation of crimes in the area of public finances will positively influence the existing business environment in the country, enhance the effectiveness of investigation of crimes in the economy and finance, reduce corruption risks in the system of law-enforcement bodies. At the same time, Draft Law No. 3087 needs further reworking.

CRUX LEGAL DIGEST A number of draft laws on lobbying regulations (Nos. 3059, 3059-1, 3059-2, 3059-3) have been registered in Parliament. How would you evaluate them, and which of the mentioned do you regard to be the most suitable?

MARTA BARANDIY, Head of Asters office in Brussels, Ph.D., LL.M. Eur. Although Ukrainian society is highly politicized, citizens do not feel responsible for the state’s policies, since they do not directly participate in their creation. Lobbying could be a good tool for such participation. Lawmakers seem to understand this. As of today, four drafts have been submitted to the Verkhovna Rada of Ukraine, all of which attempt to regulate the lobbying process. All of these drafts have common features, namely the establishing of a lobbying register, requirements to disclose the nature of

contracts between a lobbyist and his client, penalties and criminal liability for the violation of lobbying standards. However, there are some major differences. For example, Draft Laws Nos. 3059-1 and 3059-2 contain rules on “self-organisation of lobbyists”. According to Draft No. 3059-1, lobbyists automatically become members of a nonprofit professional organization and they are required to pay membership fees. Draft No. 3059-3 provides for a distinction between lobbying and advocacy, although in practice advocacy is lobbying of a humanitarian nature. At the same time, advocacy and legal advocacy are put together and forbids lawyers from being lobbyists. This provision completely ignores the EU’s experience, where law firms have the greatest lobbying potential. Drafts Nos. 3059-1 and 3059-2 prohibit foreigners from lobbying in Ukraine.

All these drafts, except for Draft No. 3059, impose restrictions on lobbying the interests of the state that has been recognized by Ukraine as an aggressor. A common feature of all the documents, with the exception of Draft Law No. 3059, is the format of lobbying relationships: it restricts the range of individuals who can influence law-making to intermediaries for whom lobbying is their exclusive entrepreneurial activity or a professional activity. However, NGOs or associations cannot participate in lobbying without intermediaries. Although the explanatory notes to the drafts, which usually explain the intentions of their initiators, recognize this need. Thus, the explanatory note to Draft Law No. 3059-2 states that “small non-government organizations that do not have significant resources and other opportunities to influence the

government, join the process of government decision-making and public policy-making.” In fact, Draft No. 3059-2 implies that only those who have “resources” can influence state policies. The intention of the initiators of Draft Law No. 3059-3 is to “legalize existing lobbying”, which may seem correct given the need to eliminate the corruption component from the lawmaking process. However, in a vacuum situation it is crucial not to “legalize” existing, chaotic historically-established links between lawmakers and “lobbyists”, but to focus on creating new actors in this field and establishing the same rules for all of society. In general, all draft laws submitted to the Ukrainian Parliament attempt to regulate lobbying relations in terms of control over lobbyists, and none is able to meet society’s demand for participation in policy-making.

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

CRUX LEGAL DIGEST Draft Law No. 3132 offers an overview of the mechanics of the AMCU as a body of appeal in the public procurement sphere. What mechanics are suggested instead, and what is your opinion on such an initiative?

OLEKSANDR FEFELOV, Partner, Ilyashev & Partners We would like to begin our commentary by reminding readers of what Ukraine undertook in the sphere of public procurement under the Association Agreement with the EU. Specifically, Ukraine was obliged to ensure progressive approximation of public procurement legislation in Ukraine with EU public procurement acquis, accompanied with institutional reform and the creation of an efficient public procurement system based on the principles governing public procurement in the EU. Within the framework of institutional

reform, Ukraine undertook to designate an impartial and independent body tasked with the review of decisions taken by contracting authorities or entities during the awarding of contracts. As stipulated by the Law On Public Procurement, the AMCU was designated as the appeal authority which has to ensure impartial and coherent policy in the area of contesting procurement procedures. The Law also provides procedures for the functioning of the Permanent Administrative Board for Handling Compliance against Violations of Public Procurement Legislation within the AMCU. As you well know, the Board currently consists of three state commissioners of the AMCU, whose work is getting harder and harder with every passing year. For instance, in 2019 11,147 claims were submitted to the Board for consideration, demonstrat-

ing a 43% rise on 2018. This absolutely enormous number of claims forced the Board to hear the claims from morning to night, frequently even at 23:59, in order to comply with the procedural deadlines provided by the Law. The Board quite often hears 50 or more claims per day. Apart from the fact that three commissioners are unable to carry out their “duty” in the Board to fulfil their direct functions as members of the Committee, such an abnormal overload may raise concerns of the parties to the proceedings on the correctness and legal perfection of its decisions. In fact, the appeal system in the field of public procurement provided by the current Law cannot be considered effective and responsive to business needs, its functioning definitely requires enhancements. In such circumstances, proposed amendments would obviously be helpful.

The main idea of the proposed amendments is to establish a new body within the AMCU called the Commission on Reviewing the Claims on Breach of Legislation in Sphere of Public Procurement and to transfer to it the functions currently carried out by the Board. It is proposed that the Commission would include at least three authorized officers (not state commissioners of the AMCU). If seven persons were to be appointed authorized persons this could enable consideration of claims by two “commissions” at the same time, which would ensure an appropriate workload on those officers. Hopefully, the proposed institutional reform inside the appeal system will ensure its stabilization and facilitate effective protection of the rights and interests of participants of public procurements.

On 5 March Draft Law No. 3176 was registered in Parliament. What does this draft propose, and is it topical for these times?

ALEXANDER TRETIAKOV, Senior Associate, Antika Law Firm

The Draft Law On Making Changes to the Law of Ukraine On Public Procurement Regarding the Procurement of Natural Gas that was registered in Verhovna Rada on March 2020 should resolve a substantial issue in regulations created once the energy exchange market begins its work. Currently, the natural gas which is purchased by stateowned enterprises should be purchased through the

procurement procedure on ProZorro. This also includes the situation when the gas is purchased for the technological purposes by the operators of the gas transport system. At the same time, the Code of Gas Transport System adopted in 2015 allowed the purchase of gas through exchanges — which was not in line with the provisions of the Law of Ukraine On Public Procurement.

April 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

The Draft should resolve this situation and allow the operator to easily purchase gas on the exchange markets without a lengthy and complex procurement procedure. At the same time, we do not expect the changes to have an impact on the gas market in general as the draft is aimed at a particular piece of regulation which affected the work of the gas transport system’s operators.

CRUX LEGAL DIGEST How would you evaluate Draft Law No. 3220 (Law No. 533-IX), adopted by Parliament and directed at setting temporary tax rules for the period of measures to prevent the occurrence and spread of COVID-19?

LILIIA TARAN, Senior Consultant, KPMG in Ukraine On 18 March 2020 Law No. 533-IX (Draft Law No.3220) On Amendments to the Tax Code of Ukraine and other Laws of Ukraine on Support of Taxpayers for the Period of Measures to Prevent the Occurrence and Spread of the Coronavirus Disease (COVID-19) came into force. This Law is aimed at supporting businesses during the quarantine period and introducing certain tax exemptions. However, the taxation and tax administration system continue to operate, so each amendment should be carefully analyzed.

One of the most supportive actions introduced by the Law is postponing tax audits. Namely, the Law introduced a moratorium on documental and actual tax inspections for the period from 18 March to 31 May 2020 except for audits on VAT refunds (Art. 78.1.8 of the Tax Code of Ukraine ) and a moratorium on audits regarding the unified social tax for the period from 18 March to 18 May 2020. Taxpayers should take into account that the period of limitation (prescribed by Art. 102 of the TCU) is suspended for the same period. According to the updated schedule of tax audits published by the tax authorities on 24 March the number of scheduled audits for 2020 is not reduced, which may mean an increase of pressure on the tax authorities. In addition, the tax authorities may conduct desk audits and send requests to taxpayers during this period. The Law does not establish

special exemption on providing information to a request made by the tax authorities, which may cause violation of the TCU requirements on providing information because of constrained delay. The land tax and real estate tax are not charged for March and April 2020. The current edition of the Law does not determine any limitation on this exemption for entities which did not suspend their business activity. To realize the right to this exemption taxpayers should submit an adjusting tax return for 2020 before the deadline of the relevant tax payments. Cancellation of UST charges was introduced for individual entrepreneurs only, for March and April 2020, so legal entities are obliged to pay the UST under the general rules. In addition, special medical goods for anti-Covid-19 measures determined by the Cabinet of Ministers are temporarily exempted from import VAT and customs duties.

Taxpayers are temporarily exempted from penalties and late payment interest for violation of tax legislation for the period from March to May 2020 as well as for late submission of UST reports, late payment of the UST or underpayment of the UST for the period from March to April. However, tax penalties are still in force for violations of accrual, declaration and payment of VAT, excise tax, rent, regulations on ethanol and fuel. The tax authorities have issued clarifications that penalties for late registration of VAT invoices are temporarily cancelled, just like other penalties, but the right to VAT credit exists only on the basis of a registered VAT invoice. The Law really has provided some simplifications for entities. However, certain under-law regulations should be amended to ensure that the simplifications provided operate in reality.

www.ujbl.info | The Ukrainian Journal of Business Law | April 2020

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January — February 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

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AGCO, Boehringer Ingelheim GmbH, Česká exportní banka, a. s., Coast2Coast, Deere & Company, Deutsche Beteiligungs AG, Ferrexpo plc, ILTA Commodities S.A., ING Bank N.V., Kernel Holding S.A., MHP S.A., Uber, UniCredit Leasing S.p.A., група Караван, ЄБРР, ПАО «Центрэнерго», Міністерство фінансів України, місто Київ, ПАТ «Комерційний Банк «Центр»

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

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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

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Провідні іноземні та українські компанії: Ferrexpo AG, Concorde Capital, Азовмаш, Корпорація НЕСТ, ACME Color, Helen Marlen Group, «КРИСТАЛБАНК», NorYards AS, Корпорація «Артеріум», АвтоКрАЗ, СК «Омега», SOTA Cinema Group та інші

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www.ujbl.info | The Ukrainian Journal of Business Law | January — February 2020

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ІНР Українська Російська Англійська Німецька

вул. Інститутська 19-Б, офіс 29, Київ, 01021, Україна Тел.: +380 44 581 1220 Факс: +380 44 581 1222 E-mail: info@golaw.ua www.golaw.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

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

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

Corporate law, Tax law, Transfer Pricing, Labor law, Criminal law/ Economic Crime, Mergers and Acquisitions, Competition law, Intellectual Property, Due Diligence, Administrative law, Land law

ДИЧЕСКАЯ ГРУППА

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Корпоративне право, Податкове право, Трансфертне ціноутворення, Трудове право, Кримінальне право/ економічні злочини, Злиття та поглинання, Антимонопольне /конкурентне право, Інтелектуальна власність, Юридичний аудит, Адміністративне право, Земельне право

January — February 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

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VR Global Partners, Alfa-Bank, Prominvestbank, FUIB, AVK Confectionery Company, Bunge Ukraine, FOZZY GROUP, TNT Express Worldwide, MRIYA Agro Holding, Spike Trade, Humana People to People, Deposit Guarantee Fund, Ministry of Justice of Ukraine, FC Vesta, FC Kontraktovyi Dim (EasyPay), OTP Bank, Universal Bank, Allianz Ukraine, Yuria-Pharm, Avtosojuz, IMMER Ukrplastic

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

Cудова практика, банківське і фінансове право, банкрутство, міжнародний арбітраж, корпоративне право, податкове право, захист бізнесу, інтелектуальна власність

VR Global Partners, Альфа-Банк, Промінвестбанк, ПУМБ, Кондитерська група «АВК», Bunge Ukraine, FOZZY GROUP, TNT Express Worldwide, МРІЯ Агрохолдинг, Spike Trade, Humana People to People, ФГВФО, Mіністерство юстиції України, ФК «Веста», ФК «Контрактивий дім» (EasyPay), OTP Bank, Universal Bank, Альянс Україна, Юрія-Фарм, Автосоюз, IMMER Ukrplastic

ІНР Англійська, Німецька, Французька, Українська, Російська

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

Antitrust and Competition, Financial Services, Commercial Contracts, FCPA/UK Bribery Act and Anticorruption, Corporate, International Dispute Resolution, International Trade and Export Controls, Intellectual Property and Technology, Labor and Employment Law, Litigation, Mergers and Acquisitions, Private Equity and Venture Capital, Real Estate, Tax Strategy and Benefits

Accenture, Carlsberg Ukraine, ContourGlobal, Furshet, Group DF, Lufthansa Ukraine, Vodafone Ukraine, Orithil, Ukrainian Construction Company, UniCredit Bank, United Capital Partners, Velti, Winner Imports Ukraine, Boeing

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12 Khreschatyk Street, Kiev, 01001, Ukraine Tel.: +380 44 591 3100, Fax: +380 44 591 3115 salkom@salkom.kiev.ua www.salkom.ua

Банківське та фінансове право, вирішення міжнародних спорів, дотримання антикорупційних норм (FCPA/ UK Bribery Act), злиття і поглинання, інтелектуальна власність, конкурентне право, контрактне право, корпоративне право, міжнародна торгівля та експортний контроль, нерухомість, податки, приватний і венчурний капітал, представництво в судах, трудове право

Accenture, Карлсберг Україна, Контур Глобал, Фуршет, Group DF, Люфтганза Україна, Vodafone Україна, Orithil, Українська будівельна компанія, УніКредіт Банк, United Capital Partners, Велті, Віннер Імпортс Україна, Boeing

ІНР Українська Російська Англійська Німецька

вул. Хрещатик, 12 Київ, 01001, Україна Тел.: +380 44 591 3100, Факс: +380 44 591 3115 www.salkom.ua

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 Str., 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

LCF LAW GROUP

Salkom in association with Squire Patton Boggs

«Салком» в асоціації з Сквайр Паттон Боггс

Sergeyevs’ Law Office

Юридичне бюро Сергєєвих

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PRACTICE AREAS

ADDRESS

www.ujbl.info | The Ukrainian Journal of Business Law | January — February 2020

PROMART

INFORMATION FOR WRITERS

Writing for the UJBL Guidelines for Authors

Index to Advertisers in UJBL As a service to our readers and advertisers, we are

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

may be submitted on disc (as MS Word files) or by e-mail to editor@ujbl.info.

listing the advertisers and their page numbers.

• Author’s Personal Info

American Chamber

Please include phone and fax numbers, e-mail, and a brief biographical note with the author’s professional status. We also need the author’s photo for the publication. • Style The Article should be of interest to experts in the field but also easily understood by non-specialists. Please explain references and terms that may not be easily recognized. The Article should highlight recent developments which should be mentioned in the lead. All articles must be written in the third person. Avoid “you,” “I,” “our,” and the imperative tense. The editors will write the headlines and any subheads that may appear. Your suggestions are helpful but not binding.

Amber Law Company

33 11

Asters

outside back cover

AVELLUM

Doubinsky & Osharova

Ilyashev & Partnes

inside front cover

INTA

Jurist

Legal Awards 2020

MORIS

Salkom

inside back cover

Task Force

• Editing 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.

The Ukrainian Journal of Business Law 25А "L" Dehtyarivska Street, Kiev, 04119, Ukraine Telephone: +38 (0)44 495-2727, Telefax: +38 (0)44 495-2727 E-mail: editor@ujbl.info

Ukrainian Arbitration Forum

Ukrainian Law Firms 2020

The Ukrainian Journal of Business Law Ukrainian Attorney

VI Ukrainian Antitrust Forum

VIII International Judicial Forum Yuridicheskaya Practika online

Yuridicheskaya Practika Subscription

▶2020 EDITORIAL CALENDAR

To submit your Article or advertise in the Ukrainian Journal of Business Law, please contact Olga Usenko, Editor, at +380 (0)44 495-2727 or e-mail quiries to editor@ujbl.info Issue

Theme (In Focus)

Article Submission Deadline

Ad Space Closing Date

January — February

Banking & Finance

closed

March

International Crime

closed

April

Intellectual Property

closed

May — June

M&A

closed

27 April

July — August

IT and Telecommunications

3 June

26 June

September

Real Estate and Land

3 August

27 August

October

Investment Regulation

3 September

25 September

November

English Law

2 October

26 October

December

Asset Recovery

3 November

27 November

Back Issues & Subscriptions 44

Back issues and subscriptions may be obtained from Yuridicheskaya Practika Publishing, 25А, "L" Dehtyarivska Street, Kiev, 04119, Ukraine; phone: (044) 495-2727; fax: (044) 495-2777; e-mail: subscribe@ujbl.info. Subscriptions are also available at any Ukrainian Post Office (subscription codes — 08087) and through private subscription agencies in Kiev and other major cities.

January — February 2020 | The Ukrainian Journal of Business Law | www.ujbl.info

The Ukrainian Investment Roadshow

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