Ukrainian Law Firms 2021. A Handbook for Foreign Clients by Olga Usenko

CONTENTS

Editor’s Preface

Ukrainian Legal Market

Practice Areas and Industries Review

Agribusiness

EMI (Electronic Money Institution)

Alternative Dispute Resolution

Energy

Anti-Сorruption

Enforcement of Foreign Proceedings

Antitrust

Environment

Asset Recovery

Financial Services

Banking & Finance

Fintech

Banking Disputes

Franchising

Banking Resolution

Fraud

Bankruptcy

Free Trade Agreements

Business Crime

Gambling

Business Process Solutions

HoReCa

Human Rights

Business Relocation

Cannabis Law

Capital Markets

Commodities Arbitration

Competition Investigations

124

Mergers & Acquisitions

126

Natural Resources

128

Outsourcing

130

Patents

132

Personal Income Tax Compliance

134

Pharmaceuticals

136

Ports & Marine Terminals

138

Private Clients

140

Privatization

142

Procedural Actions

144

Property Rights

146

Public-Private Partnership

Industrial Parks

148

Railways

Infrastructure

150

Real Estate

100

Insolvency Disputes

152

Renewable Energy

102

International Arbitration

154

Retail

104

International Finance

156

Role of Experts in International Arbitration

Construction & Development

106

International Tax

158

State Aid

Corporate

108

Investments

160

Tax

Corporate Governance

110

Islamic Finance

162

Tax Controversy

Corporate Security

112

IT Law

164

Trade Defense Remedies

Counterfeiting and Piracy

114

Labor & Employment

166

Trademarks

Criminal Process

116

Land

168

Transportation

Cross-Border Insolvency

118

Litigation

170

Unfair Competition

Customs Law

120

Maritime & Shipping

172

Virtual Assets

122

Medicine & Healthcare

174

WTO

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CONTENTS 177

Who is Who in Ukrainian Law by Practice Areas/Industries

230

International Arbitration

234

International Trade: Trade Remedies and WTO, Commodities, Commercial Contracts

238

Labor & Employment

242

Litigation

252

Pharmaceuticals & Healthcare

256

Private Clients: Wealth Management, Family Law

260

Real Estate, Construction, Land

Information Technologies, Telecommunications & Media

266

Retail

220

Infrastructure

268

Tax and Transfer Pricing

224

Intellectual Property

276

Transport: Aviation, Maritime & Shipping

178

Agribusiness

182

Antitrust and Competition

186

Banking & Finance, Capital Markets, Fintech

192

Bankruptcy

196

Corporate and M&A

202

Criminal Law/ White-Collar Crime

208

Energy & Natural Resources

214

The project of YURIDICHESKAYA PRACTIKA Publishing

UKRAINIAN LAW FIRMS 2020. A Handbook for Foreign Clients. ISBN 978-966-8042-74-4. Published by Yuridicheskaya Practika Publishing 10, Hoholivska Street, Office 12, Kyiv, 01054, Ukraine • Telephone: +380 44 495-2727 • E-mail: info@pravo.ua EDITOR: Olga Usenko • RESEARCHERS: Olga Usenko, Alena Chernyavskaya, Oleksiy Nasadyuk DESIGNERS: Oleksandr Dmytruk, Serhii Chebyshev • COPY EDITOR: Peter Dutczyn The names of law firms and all lawyers whose nominations were accepted by the editor were listed without charge. It was impossible to buy entry into the Handbook. Contributors and other law firms were invited, but not required, to supply their profiles and “address boxes” which were published upon payment of a fee. The publishers and editors do not accept responsibility for any errors, omissions, mis-statements or mistakes. No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication can be accepted by the editors, authors or publishers. The selection of firms and professionals in the table reflects the research carried out by the editorial staff of Yuridicheskaya Practika Publishing. It is based on a poll with market participants and submissions of the project portfolio provided by law firms. It remains a subjective view and implies no disparagement of any firm/professional not mentioned here but which is, nevertheless, active in this field. The Handbook should not be treated as a substitute for specific legal advice concerning individual situations. The omission of any lawyer or law firm from any section of this Handbook does not indicate that they do not practise in the area or are not well regarded. You should do your own research before engaging lawyers in any field. The views expressed in this publication by any contributor are not necessarily those of the editors or the publishers. The publication uses Ukrainian transliteration of geographical names and indications. All names of individuals are written with mixed transliteration (Ukrainian and Russian) at their personal request. Printed in Ukraine. First published in 2002. Electronic version of this publication is available at www.UkrainianLawFirms.com Українські юридичні фірми. Довідник для іноземних клієнтів (англійською мовою) Видавець: ПрАТ «Юридична практика» Украинские юридические фирмы. Справочник для иностранных клиентов (на английском языке) Издатель: ЧАО «Юридическая практика»

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UKRAINIAN

Added Value Mission The global pandemic became a tipping point for rethinking the whole chain of legal service provision and consumption, thereby transforming companies strategically and operationally. The most meaningful trend for the time being is, in my opinion, strategic client management and investment in client experience. It gives reasons for optimism, as it means that the competition moves from pure pricing to the level of producing premium added value. This is a competitive edge with the long-term prospect of capitalization.

OLGA USENKO | Editor-in-Chief The ever-changing business environment needs a prompt and advanced source of insight. Being published since 2003, this publication grows in synergy with its closeness to Ukrainian legal and business circles. In addition to its clear mission of connecting lawyers and clients, we have also tried to make it an ambassador of the Ukrainian state brand for foreign investors, presenting dedicated promotion videos. Ukrainian Legal Market section paves the outlook on the areas of growth and decline, eye-catching transactions, disruptive trends and events throughout different segments of the marketplace. Practice Areas and Industries Review brings concentrated content of unique insights into the business environment. Our annual analytical research is presented in Who is Who in Ukrainian Law — with the section telling readers at a glance about the performance of legal counsel and the market picture. As always, we have done our best to make it well-structured, suitable, insightful and useful for all stakeholders. Thankfully, we see genuine interest from Ukrainian readership and our audience from abroad. This inspires the team to disseminate the publication for the new markets and accelerate digitalization of its content. The digital version is available on our web-site www.ukrainianlawfirms.com and at ISSUU digital platform. Enjoy reading, Olga Usenko

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LEGAL MARKET

UKRAINIAN

Reasons for Optimism Research 2021 Ukrainian Law Firms. A Handbook for Foreign Clients is initially designed to connect business and lawyers, providing a comprehensive survey of topical issues, and navigating customers across doing business in this unprecedented period. This publication traditionally presents the landscape of the Ukrainian legal market by practice areas and industries — in a way that can be easily navigated by clients. The research is conducted in several steps. First, the team collects the submissions from law firms and systematizes available public sources. Second, we ask market participants for their individual feedbacks for peers’ reviews, hereafter we conduct in-depth personal telephone (Zoom, Skype or Teams) interviews. All interviewees are granted confidentiality at all levels. In-house counsel is another valuable source of our research, and give us a sharper vision, especially on the industry-wise specifics of external outsourcing. Third, the communication and collection of insights is done on a non-stop basis for many years and became an essential part of the further promotion of this publication. As one of the key purposes of the research is to provide the complete market landscape, the firms that do not provide for their submissions but are highly referred during the polls and interviews, are still mentioned in the respective practices. As we don’t have information on their portfolios and available public information is not sufficient to determine their market position properly, we do not rank them. The contents of surveys remained almost identical to the previous edition. The Capital Markets survey became an integral part of the Banking & Finance overview. In addition, we continue our research of the Fintech area and keep an eye on Aviation Finance developments. The market landscape is presented in the form of corporate and individual shortlists. The shortlists are composed of 3, 5 and 10 firms in those practices/industries where it is relevant for the current market situation. In certain narrow areas where the landscape is not sharply seen, we provided our selection in alphabetical order with supportive descriptions of the performance of market players in our editorial texts. This, the nineteenth edition of the Handbook, includes 20 surveys and 32 rankings. Inclusion in ranking tables is based on a reasonable combination of the project portfolio during the research period — 2020, complexity and significance of matters, client profile, practice versatility, the team’s expertise, its capacity and reputation, sustainable development during the research period and beyond it.

The category “Other Established Practices” encompasses firms with sustainable expertise and is proved by the subsequent track record during the research period, and an accomplished team of legal practitioners. The category for personalities — “Authorities” — reflects individual achievements, referred to undisputable market professionals named as people establishing standards, less involved in each project at present, but playing a key role in client relationships, reputation and the market staying power of their firms or practices. In response to market feedback in certain practice areas, in the current publication we introduced the category of “Celebrated Practitioners”, which determines practicing long-timers, and showcasing their many years of experience on the legal market. We further continue to collect and systematize publishable deals (please, see Tables 1-4). The table of transactions in the antitrust area is not published this year due to the non-provision of foreign legal counsel, which is considered to be the most valuable part of this list.

Practice Outlook at a Glance The outbreak of the pandemic in spring 2020 provoked total business ambiguity. Many planned transactions were postponed or even cancelled, while the focus shifted on day-to-day operations until the situation become more or less predictable. The past autumn showed signs of recovery and return of postponed demand. Compared to other sectors, legal services demonstrated resilience despite the new waves of restrictions. Labor and employment assignments expectedly kept law firms busy. This is not only the result of redundancies caused by the lockdown but also mass revelation of shadow employment. After political tensions and persecution in Belarus following the presidential election in August 2020, a huge wave of relocation requests arrived, especially from the IT sector. The standstill in M&A in the second quarter of 2020 changed for the revival in summer and a truly busy end of the year. Interestingly enough, foreign investors are as always much more exposed to risks and behave traditionally more cautiously than locals. The average sum of deals fell, especially for internal Ukrainian transactions. Thus, for the year 2021 and beyond M&A experts predict the main activity will be in the mid-market. Privatization and public-private partnership make up another lucrative area, where law firms are actively promoting their services. Transformations are ongoing in tax practice, provoking vivid changes in its structure. Due to the moratorium on tax inspections the practice of subsequent legal support shrunk, while demand for administrative and court appeals fell. However, auditing and unblocking of

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LEGAL MARKET tax invoices, determination of the category of risky taxpayers, as well as VAT refunds, are sought after. The changes in tax legislation that incorporated new institutions, such as controlled foreign companies (CFC) rules, place of effective management (PoEM), gave impetus for development of tax planning, as businesses were forced to reconsider and simplify their corporate structures. Pharmaceuticals and healthcare obviously became a field of strong concern compared to any other industry. The firms with sector specific experience report on increases in client inquiries in corporate and business law, intellectual property, regulatory issues and dispute resolution. Public-private partnership in healthcare is another prospective area of legal work. Ukrainian IT and R&D were on top in the last few years and continue to secure both confident growth and rapid spread to other businesses and everyday life. For example, the retail industry is moving online, facilitating e-commerce and e-markets; the shipping and delivery service moved to mobile applications, drastically transforming customer experience. TV medicine rebooted itself as one of the most fast-growing areas. Furthermore, cybersecurity and extra data protection appeared to be a pending issue for many industries. After being prohibited for more than a decade, the gambling business in Ukraine was legalized in August 2020. So, gambling is now another rapidly launched practice in a number of law firms, including online casinos. The development of infrastructure in Ukraine is driven by state projects supported by international financial institutions. These are projects of public-private partnerships in railways, highways, aviation and port infrastructure. State enterprises of Ukrainian sea ports are being prepared for privatization. The signing of concession agreements in relation to Kherson and Olvia sea ports in 2020 was a positive sign for investors. Expansion plans and aggressive export strategies of national business are postponed for better times. On the contrary, national manufacturers became keener to protect their local markets by preventing imports from abroad. Matters of export control, trade investigations and imposition of anti-dumping and safeguard duties

facilitated the development of this niche practice over the last few years. Nevertheless, insiders argue that it is more and more difficult to initiate a trade investigation in view of the broader geopolitical perspective, and GR plays an extremely important role in trade matters. In addition, recent trade wars with neighboring countries brought a new nature of work for international trade practitioners. The COVID-19 outbreak disrupted established relationships between business partners and caused failure to execute contracts for reasons beyond the control of the parties, entailing a series of commercial disputes. Market participants confirm that dispute resolution in arbitration will increasingly go online. Lots of oral hearings take place online due to the pandemic. It is also expected that even the resolution of complicated arbitration disputes may completely shift online, alongside the development of appropriate electronic tools. Perhaps this is an inevitable positive development that may speed up the dispute resolution process, making it faster, easier and cheaper. Corporate bankruptcies are an enviable consequence of each economic crisis. The big share of non-performing loans of the banking sector in Ukraine gives rise to a huge number of credit disputes in courts. The lodging of appeals against sanctions imposed by the National State Security and Defense Council is currently considered to be a lucrative area of litigation work for the near future. And, of course, white-collar crime and the criminal law practice continued to boom, as the state fuels criminal defense attorneys with a huge portion of work with declaring its “imprisoning course”.

TOP-10 Market Trends The lessons of uncertainty and turbulence obviously led to hanges in legal business operations, management of fee earners and c support staff, client relationships, and to rethinking marketing and investment strategies. The ULF team has been keeping an eye on market trends for almost 19 years and, by way of tradition, provides for your attention our vision of trends based on visible market changes and exclusive insights.

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UKRAINIAN 1. Splits and team departures The year of 2020 and the first half of 2021 brought a predictable misbalance in the incomes of partners and certain legal practices. Conflict situations are inevitable and result, naturally, in splits and departures. As long as the turbulence within the business environment prevails, the internal storms inside law firms will remain. This is a crash test for partnerships, values, flexibility, and ability to preserve ethics in terms of possible “divorces”. Another trend initiated in 2020 and which is likely to continue in 2021, is lateral hiring of partners and teams to open new practices and re-launch existing ones. Entry requirements are specified by quite significant targets on annually-generated business. This is perhaps the main factor that limits mass transfers.

2. Shrunken budgets and keeping sophisticated work inside legal departments In addition to postponed business expansions and transactions that are on hold, in-house lawyers confirm that high-profile work is being performed more and more by their internal legal departments without the hiring of an external counsel. It’s important to place this trend in a wider context, basically expanding the role of corporate legal departments. Not only were budgets reduced, but control on their use became more precise.

3. Cost-cutting and aggressive cost control measures Despite cost-cutting being an unpopular topic for an honest discussion many firms, nevertheless, took immediate steps to reduce their costs – decreasing their headcounts, working hours, compensations and bonuses, as well as marketing and business development expenditures, office rent, etc. According to insights from the market, as of autumn 2020 many of them had repaid the cut salaries or at least returned them to the previous level. Although, as for the summer of 2021, there is much greater confidence than there was in 2020, though many firms are still rather cautious about additional internal expenses.

Despite a turbulent 2020 and many business activities finding themselves on hold, significant reductions in spending resulted in growth of profits per equity partner (PEP) in Western markets. This is a noteworthy trend and one that was reported by various professional media. As for Ukraine, the high-end market certifies that PEP for 2020 remained more or less at the level of 2019.

4. Contract lawyering The trend outlined by in-house lawyers and rather spread in Western countries, is attracting lawyers on a project-by-project basis. This is a quite flexible solution in having such a roster of legal practitioners — quite efficient in terms of the cost-cutting and rightsizing trends of the disruptive spring of 2020. Law firms benefit in terms of employment expenses, while both sides could achieve the so critical work-life balance. In the US this category is called contract attorneys.

5. Pricing pressure in high-margin practices The competition in the segment of premium and high-margin work is often won by big full-service firms not only because of their reputation and market position, but due to a banally favorable price. Possessing a significant level of financial safety, Big Law can afford temporary price drops and even dumping prices. It might have looked strange 5-10 years ago, but now the strategy of grabbing a big client is aimed at acquiring a project due to pricing advantage and further efficient cross-sale of other services. Some mid-market firms that are competing to provide this elite work for average rates confirm that they are gradually losing tenders to market giants. On the contrary, overrated pricing may play a bad game with firms who attempt cherry picking. This may work for a certain category of clients and services, but could be harmful for other clients in a firm’s portfolio. Law firms seeking to follow a unified rates approach already face internal conflicts between partners and a certain fall in client retention.

MARKET EVENTS Splits, Amalgamations and Expansions In late September 2020 a well-known IP professional Oleksandr Mamunya and a group of lawyers left AEQUO law firm and started IP boutique Mamunya IP.

At the beginning of July Eterna Law announced the joining of the banking and finance team led by partner Nikolas Likhachov (previously the team was part of Spensers). Nataliia Koroviakovska (previously — individual practice) joined the firm as a partner and head of the dispute resolution practice in Ukraine.

In December 2020 Sayenko Kharenko opened its office in Strasbourg to protect the rights of the firm’s clients in the European Court of Human Rights. The office is headed by Oleksandr Ovchynnykov, a French lawyer of Ukrainian origin.

In August 2020 Mykyta Nota re-joined AVELLUM as counsel, focusing on competition and antitrust, arbitration and cross-border litigation. Kostiantyn Likarchuk also re-joined as senior partner and head of the international arbitration practice, effective from 1 January 2021.

In April 2021 Volodymyr Chyzhykov and Mykola Mishyn left KPMG and established A1 Consulting. The new firm specializes in transfer pricing, corporate tax and business assessment.

Tetiana Tyshchenko joined Asters as a partner responsible for leading all aspects of business development across the firm’s international offices, coordinating and enhancing communication with strategic international partners. Prior to joining she was the commercial director at AEQUO.

On 2 June Belarusian law firm REVERA opened an office in Ukraine, which is primarily focused on the IT business. Alexander Shtrykul, leading associate, became its head. On 14 June 2021 Kinstellar announced the acquisition of DLA Piper’s practice in Ukraine. Now consisting of 60 lawyers, including 10 partners, Kinstellar is among the largest law firms in Ukraine. The firm is led by a management committee comprised of Daniel Bilak, senior counsel, and co-managing partners Margarita Karpenko, formerly the managing partner of DLA Piper Ukraine, and Olena Kuchynska, the managing partner of Kinstellar’s pre-merger Kyiv office.

Promotions and Transfers In June 2020 Daniel Bilak, former chief investment adviser to the Prime Minister of Ukraine, joined Kinstellar as a senior counsel. Based in Kyiv, he works closely with Kinstellar’s regional and local management and business development teams regarding strategic and business development initiatives for the firm across the region as a whole.

On 15 September 2020 Maksym Grekov joined Juscutum Law Firm as a business partner. He is an expert in the international structuring of corporate and private assets. In October the real estate and construction practice of Sayenko Kharenko added Svitlana Gurieieva as a partner and Olena Denisova as a senior associate, both from Auchan Retail Ukraine. In October Kinstellar announced the appointment of Olexander Martinenko as a partner and head of the dispute resolution and commercial practices at the Kyiv office. He came from the Kyiv practice of CMS Cameron McKenna Nabarro Olswang, where he was a senior partner. In November Borys Danevych joined CMS Cameron McKenna Nabarro Olswang as a partner and head of life sciences. Danevych. Law, a life sciences Ukrainian boutique law firm was strategically integrated in the Kyiv office following his appointment.

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LEGAL MARKET 6. Temporary alliances for tenders The qualifying requirements for tenders are rising alongside the complexity of projects. Some ambitious mandates require specific expertise which could be absent even in big full-service law firms. Earlier on, this problem was mainly resolved by hunting for subsequent practitioners from the market, but now law firms intend to cooperate as ad hoc alliances on a project-by-project base. It gives us reason for optimism, as it brings value to clients and improves the quality of legal service as such. Even more, this is an important step forward in developing civilized competition.

7. Strategic client management Strategic client management is getting more and more sophisticated, extending to a full circle of legal service delivery and postcommunication, tailored pricing models, cross-sale. The situation has forced law firm leaders to review their relationship with clients and enhance their focus on the client experience. A boosted level of client service and permanent availability of core executives could be the most efficient tool for client retention and ensuring long-term relationships. Interestingly, at one of the recent professional forums in-house counsel confirmed that Ukrainian law firms preserve a much more client-centered approach as compared to firms abroad, where lawyers are less responsive to non-working hours in emergency situations. In general, this is a very meaningful trend that may be a tipping point in boosting the quality of legal advice in a sustainable evolutionary way.

8. Hybrid mode of work After several waves of lockdown, many law firms introduced a ybrid mode of work, whereby employees may stay at home and work h at the office depending on the situation. Since March 2020 perhaps all businesses have expanded the boundaries of what can be done virtually. Among the key lessons learned is experience in arranging working process remotely, building virtual teams, transition to full electronic

In November two more business partners joined Juscutum Law Firm — Vladislav Belotskiy became head of the IP practice, and Taisiya Belotskaya — of the family law practice. DLA Piper announced the appointment of Natalia Kirichenko as head of the intellectual property and technology practice at its Kyiv office. The appointment follows the departure of Natalia Pakhomovska, who led the team and decided to leave the firm. The same month LCF Law Group announced the promotion of Iryna Kobets to counsel and head of litigation. In December VB PARTNERS announced the expansion of its partnership team with the promotion of counsel Denys Shkarovsky to partner. He specializes in criminal proceedings, protection of business, its shareholders and top managers from the pressure of lawenforcement agencies. From 1 January 2021 Maksym Maksymenko was promoted to partner at AVELLUM’s real estate and infrastructure practice. AVER LEX has reinforced its litigation practice. Volodymyr Yenich, who was promoted to partner, is experienced in representing clients in commercial, corporate and administrative disputes. Kateryna Stashkiv was promoted to counsel and defends the interests of public officials in cases involving protection of honor, dignity and business reputation. In March 2021 Mark Segall, a recognized lawyer with over 20 years of experience, joined Dentons as a partner in the banking and finance team in Warsaw. His experience covers a wide range of financial products, including acquisition and leveraged finance, structured commodity finance and project finance. Before that he was a Warsaw-based banking partner of CMS Cameron McKenna Nabarro Olswang.

document management and online data storages, establishment or improvement of cyber security. Apart from the technical side of remote working, there is also the rather sensitive but quite widespread problem of the burnout and emotional state of some employees. Certain firms, especially internationals ones, shared their experience in attracting coaches and psychologists for preserving the mental health of their teams. That said, it is important to preserve the personal touch for strategic relationships. Personal meetings enhanced their value in the long-term perspective. Soft skills in maintaining communication with clients, the art of negotiation and project management became no less important than hard skills. As some firms revealed, it has affected the hiring process.

9. Video communication era Internal and external communications in a video format acquired a new sense. It brought more flexibility and time-savvy options. Despite the pandemic impacting the ability to travel with business and networking purposes in mind, video conferences brought local and foreign clients even closer than before. Law firms explained that rapidly extended communication online enabled the discovery of new queries and prompt reaction, which led to some being rewarded with new work.

10. Digital environment More sophisticated content and ways of delivering it became a true challenge for business development and marketing teams. Online platforms and interactive online reporting with timely notification on rapid legislative responses to pandemic became a rather common effort that ensured interactive feedback to emerging requests. At the same time, with the Internet and social networks oversaturated with webinars and legislative news, legal marketing professionals attempted to find new visual solutions, video content, streaming tools as well as other technological innovations so as to stand out from the crowd. But the good news is definitely that increased investment in technologies is taking place, even in conservative firms.

The same month Redcliffe Partners announced the arrival of new partner Sergiy Ignatovsky, who joined the litigation and restructuring practices. He was previously chief legal officer at Mriya Agro Holding. Furthermore, Yuriy Terentyev, former chairman of the Antimonopoly Committee of Ukraine, joined the firm as a partner. In April 2021 Asters announced that Sergiy Burnus had r ejoined the firm as counsel and the head of its London office. He combines an extensive variety of legal advisory, regulatory policy, and business development projects in the UK and Ukraine in the banking and finance, capital markets, M&A, dispute resolution, immigration and international trade areas. In May 2021 Eterna Law announced Andrii Trostin’s joining as a partner and head of its GR practice (previously — Philip Morris Ukraine). Dr. Tatyana Slipachuk resumed her legal career and returned to Sayenko Kharenko as special advisor. In her new role she focuses on arbitration practice, cross-border disputes and multijurisdictional investigations and proceedings, continuing her activities as an arbitrator and expert. In February the co-head of the judicial practice, Andrii vozdetskyi, was promoted to partner of the ADER HABER law firm. H He specializes in doing business for leading companies and corporations, representing clients in banking disputes, debt restructuring projects, and conducting financial investigations. At the beginning of July 2021, Oleksiy Filatov joined AEQUO as a senior partner and head of the dispute resolution practice group. He focuses on cross-border and local litigation and international arbitration, particularly corporate, commercial and investment disputes. He had previously acted as secretary of the Constitutional Commission and coordinator of the Judicial Reform Council under the President of Ukraine and his deputy chief-of-staff.

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UKRAINIAN

Capital Markets Table 1 Value

Transactions

Legal Support (Ukrainian Law)

Legal Support (Foreign Law)

USD 2 billion

Issuance by Ukraine of its new 7.253% senior notes due 2033

AVELLUM represented the Ministry of Finance of Ukraine; Sayenko Kharenko represented the joint lead managers and joint dealer managers — J.P. Morgan and Goldman Sachs International

White & Case acted as the US and English law counsel to the issuer; Latham & Watkins acted as the US and English law counsel to the joint lead managers and joint dealer managers

EUR 1.25 billion

Second breakthrough issuance of Ukraine’s euro-denominated notes at a record low coupon of 4.375%

AVELLUM advised the Ministry of Finance of Ukraine; Sayenko Kharenko represented the joint lead managers and joint dealer managers — BNP Paribas, J.P. Morgan and Raiffeisen Bank International

White & Case acted as the US and English law counsel to the issuer; Latham & Watkins acted as the US and English law counsel to the joint lead managers

USD 1.09 billion

Consent solicitation by Ukrainian Railways (Ukrzaliznytsia) to amend terms and conditions of its outstanding USD 500 million loan participation notes due 2021 and USD 594 million loan participation notes due 2024

Sayenko Kharenko advised J.P. Morgan and Dragon Capital as solicitation agents; Asters advised Ukrzaliznytsia

Latham & Watkins acted as English law counsel to the solicitation agents; Dechert acted as English law counsel to Ukrzaliznytsia;

USD 600 million

Tap issue of Ukraine’s outstanding USD 2 billion 7.253% notes due 2033. The additional issuance was priced at a 6.20% yield

AVELLUM represented the Ministry of Finance of Ukraine; Sayenko Kharenko represented joint lead managers — BNP Paribas and Goldman Sachs International

White & Case acted as the US and English law counsel to the Ministry of Finance of Ukraine; Latham & Watkins acted as the US and English law counsel to joint lead managers

USD 500 million

Eurobond offering by Vodafone Ukraine which was intended for, among others, the bridge loan prepayment attracted for Bakcell’s (part of NEQSOL Holding) acquisition of Vodafone Ukraine

AVELLUM advised joint lead managers; DLA Piper advised NEQSOL Holding

Linklaters acted as English law counsel to joint lead managers; DLA Piper acted as English law counsel to the issuer

USD 333 million

Issuance by Metinvest B.V. of 7 year 7.65% notes due in 2027; and cash tender offers on its USD 118 million 7.50% senior notes due 2021 and USD 944.5 million 7.75% senior notes due 2023, with a concurrent consent solicitation in respect of 2021 bonds to include the issuer’s call option

AVELLUM advised Metinvest B.V.; Sayenko Kharenko advised joint lead managers — Deutsche Bank, Natixis, IMI Intesa Sanpaolo, and Raiffeisen Bank International

Allen & Overy acted as English and US law counsel to the issuer and guarantors, and Dutch law counsel to the issuer; Linklaters acted as English,US and Dutch law counsel to the joint lead managers and the trustee

USD 328.79 million

Open market repurchase of Ukraine’s outstanding GDP-linked warrants funded through a tap issue of sovereign Eurobonds

AVELLUM advised the Ministry of Finance of Ukraine; Sayenko Kharenko advised the initial purchaser and bookrunner

White & Case acted as English and US legal counsel to the issuer; Latham & Watkins acted as English and US legal counsel to the initial purchaser and bookrunner

USD 316 million

Сash tender offer by The State ExportImport Bank of Ukraine (Ukreximbank) to Goldman Sachs International as dealer manager

AVELLUM advised as transaction counsel for both sides

Clifford Chance acted as English law transaction counsel for both sides

USD 300 million

Offering of 6.75% guaranteed notes due 2027 by Kernel Holding S.A. combined with a tender offer for the notes maturing in January 2022

Sayenko Kharenko advised joint lead managers — Crédit Agricole, J.P. Morgan and Natixis; AVELLUM advised Kernel Holding S.A.

Latham & Watkins acted as international legal counsel to joint lead managers; Arendt & Medernach acted as Luxembourg law counsel to Kernel; Borel & Barbey acted as Swiss legal counsel to Kernel

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LEGAL MARKET Value

Transactions

Banking & Finance Table 2 Legal Support (Ukrainian Law)

Legal Support (Foreign Law)

EUR 1.2 billion

Fifth macro-financial assistance program from the European Union

AVELLUM advised the Ministry of Finance of Ukraine

White & Case acted as international and EU law counsel to the Ministry of Finance of Ukraine

USD 344.4 million

Term loan facility to the State of Ukraine from Deutsche Bank AG for general budgetary purposes to cover short-term liquidity needs of the state budget

AVELLUM advised the Ministry of Finance of Ukraine; Sayenko Kharenko advised Deutsche Bank AG

White & Case acted as English law counsel to the Ministry of Finance of Ukraine; Clifford Chance acted as English law counsel to Deutsche Bank AG

EUR 250 million

Loan to the State of Ukraine from Cargill Financial Services International to finance the state budget of Ukraine

AVELLUM advised the Ministry of Finance of Ukraine

White & Case acted as English law counsel to the Ministry of Finance of Ukraine

USD 150 million

Acquisition by way of funded participation of syndicated debt of the Ukrainian borrower, EcoEnergy, from International banking group

Dentons advised international banking group

USD 100 million

Loan to Novus Group, one of Ukraine’s major food retailers, provided by the EBRD

Sayenko Kharenko advised EBRD

Reed Smith acted as English counsel to EBRD

EUR 64 million

Intergovernmental loan granted by the French government to the Ukrainian government for 30 years with a 10-year grace period and at a rate of 0.08% annual interest

AVELLUM advised the Ministry of Finance of Ukraine

White & Case acted as French law counsel to the Ministry of Finance of Ukraine

EUR 62 million

Loan from Black Sea Trade and Development Bank (BSTDB) to Metinvest group to finance and refinance machinery and equipment purchases by the group’s iron ore producers

USD 70 million

Loans to JSC Concern Galnaftogaz extended by EBRD and IFC

Asters represented EBRD and IFC

Norton Rose Fulbright acted as English law counsel to EBRD and IFC

EUR 52.5 million

Loan to one of the largest shopping malls in Odesa — Riviera Shopping City, extended by the EBRD

AVELLUM advised EBRD

Watson Farley & Williams acted as English legal counsel to EBRD; Harneys Aristodemou, Loizides, Yiolitis acted as special Cypriot counsel to EBRD; LK Shields Solicitors acted as Irish counsel to EBRD

USD 60 million

Loan to Fozzy Group, Ukraine’s major retailer, provided by EBRD

Sayenko Kharenko advised EBRD; LCF Law Group advised Fozzy Group

Bird & Bird acted as English law counsel to EBRD

EUR 50 million

Loan from the European Investment Bank (EIB) to Ukraine’s first vertically-integrated innovation park UNIT.City, a part of the holding company Ufuture, to finance the Ukrainian Innovation Campus Project

CMS Cameron McKenna Nabarro Olswang advised the European Investment Bank; EVERLEGAL represented Ufuture; INTEGRITES advised JSB Ukrgasbank, a financial partner to the EIB

EUR 31 million

Refinancing by the Black Sea Trade and Development Bank (BSTDB) of a secured loan to Mykolaiv Milling Works

CMS Cameron McKenna Nabarro Olswang advised BSTDB

Bae, Kim & Lee acted as Korean legal counsel to BSTDB; Holborn Law (CMS Singapore) acted as Singaporean legal counsel to BSTDB

USD 36 million

Secured financing provided by the Export-Import Bank of Korea (KEXIM) to Grain Terminal Holdings, a Singaporebased joint venture between Posco International, Korea's largest trading company, and the Orexim Group, a leading agri transshipment and export company in Ukraine, that controls a Ukrainian grain terminal based in Mykolaiv

CMS Cameron McKenna Nabarro Olswang advised the Export-Import Bank of Korea; AEQUO advised Posco International; Sayenko Kharenko advised Orexim Group

CMS acted as English and Singaporean law counsel to KEXIM; Harneys Aristodemou, Loizides, Yiolitis acted as special Cypriot counsel to Orexim Group and Posco International; Jipyong acted as Korean counsel to Posco International

EUR 30 million

Loan to a leading Ukrainian bank, Ukrgasbank, provided by BSTDB

AVELLUM advised BSTDB

EUR 25 million

Financing to Yuria-Pharm, Ukraine’s leading manufacturer of intensive care medicines, medical devices and antiseptics, provided by EBRD

Asters represented EBRD

Allen & Overy acted as English law counsel to Metinvest group

Empty table cells in a foreign legal support column mean that the information is either not available, confidential or there was no foreign law counsel. WND — the value of the deal was not disclosed.

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Bird & Bird acted as English law counsel to EBRD

>> Continued on page 14

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Banking & Finance Table 2 Value

Transactions

Legal Support (Ukrainian Law)

Legal Support (Foreign Law)

EUR 25 million

Fixed-term loan provided by EBRD to Ukrainian State Air Traffic Services Enterprise towards working capital needs

Redcliffe Partners advised EBRD

EUR 25 million

Four-year loan to OTP Leasing provided by EBRD to support MSMEs in Ukraine

Sayenko Kharenko advised EBRD

USD 27 million

Short-term secured loan provided by EBRD to Nibulon for financing of seasonal working capital needs of the group’s trading operations

Redcliffe Partners advised EBRD

EUR 20 million

Synthetic UAH financing to ProCredit Bank Ukraine by the European Fund for Southeast Europe to support Ukrainian agricultural sector

Sayenko Kharenko advised European Fund for Southeast Europe

USD 20 million

Loan to Nyva Pereyaslavshchyny, a leading Ukrainian pork producer, provided by the International Finance Corporation

Asters represented IFC

EUR 15 million (Appr. USD 18 million)

Four-year loan to OTP Leasing provided by EBRD to support MSMEs in Ukraine

Sayenko Kharenko advised EBRD

USD 15 million

Trade financing from AlmaStone Services Limited (UK) to Black Sea Commodities Limited (UAE)

ANK Law Office advised Black Sea Commodities Limited

USD 13.9 million

Loan extended by EBRD within the framework of the Ukraine Sustainable Energy Lending Facility program to Irshanska SES LLC to support the construction and operation of the 30 MW solar power plant in Zhytomyr Region

CMS Cameron McKenna Nabarro Olswang advised EBRD

EUR 10.535 million

Financing from the State Savings Bank of Ukraine (Oschadbank) to LLC Terslav, project company of UDP Renewables, for construction and development of a solar power plant in Dnipro Region

EVERLEGAL represented UDP Renewables

EUR 10 million

Financing to Novopecherska School, a leading private education institution in Kyiv, extended by the Black Sea Trade and Development Bank, for the construction of a school in the UNIT.City innovation park

Asters represented BSTDB; EVERLEGAL represented Novopecherska School

EUR 10 million

Project financing to Ukreximbank provided by NEFCO to launch a new facility to finance green projects

Sayenko Kharenko advised NEFCO

EUR 10 million

Financing to Enzym, the leading yeast producer in Ukraine, extended by EBRD

Asters represented EBRD

Watson Farley & Williams acted as English legal counsel to EBRD; Norkus and Partners Cobalt acted as Lithuanian counsel to EBRD

USD 10 million

Loan to Astarta, Ukraine’s leading agribusiness operator, extended by EBRD

AEQUO advised EBRD

White & Case acted as English legal counsel to EBRD

USD 10 million

Financing to Olimpex Coupe International (GNT Group Member) provided by Vostok Bank

ANK Law Office advised Olimpex Coupe International

USD 10 million

Loan to Prometey Group, a Ukrainian storage capacity company, from BSTDB

AVELLUM advised BSTDB

USD 10 million

Pre-export secured facility provided by Innovatus Capital Partners to a group of companies dealing with producing and trading in grains, oilseeds and byproducts of oilseeds and other farming services

Dentons advised Innovatus Capital Partners

EUR 8 million (USD 9.55 million)

Project financing to the Ivano-Frankivsk city council provided by NEFCO and grant funds from Eastern Europe Energy Efficiency and Environment Partnership (E5P)

Sayenko Kharenko advised NEFCO

WWW.UKRAINIANLAWFIRMS.COM

Bryan Cave Leighton Paisner acted as English law counsel to BSTDB; KPK Legal provided legal opinion to BSTDB

LEGAL MARKET Value

Transactions

Banking & Finance Table 2 Legal Support (Ukrainian Law)

Legal Support (Foreign Law)

EUR 7.5 million

Synthetic loan in local currency to Bank Lviv provided by EBRD under the EU4Business — EBRD Credit Line

Sayenko Kharenko advised EBRD

EUR 7 million

Financing to Grain Alliance Group from EBRD

Asters represented EBRD

USD 8 million

Financing from Pivdennyi Bank to Metalsukraine Corp Ltd (GNT Group Member)

ANK Law Office advised Metalsukraine Corp Ltd

USD 7.52 million (EUR 6.3 million, including EUR 5 million loan and EUR 1.3 million grant)

Project financing to the Kyiv municipal enterprise aimed at implementing energy-saving technologies provided by NEFCO and grant funds from Eastern Europe Energy Efficiency and Environment Partnership (E5P)

Sayenko Kharenko advised NEFCO

USD 6 million

Loan to Poltava Rail Road Overhaul Plant extended by Viceroy Trade and Invest Limited

KPD Consulting advised Viceroy Trade and Invest Limited

Appr. USD 6 million (EUR 5 million equivalent in UAH)

Loan to Bank Lviv provided by European Fund for Southeast Europe

Sayenko Kharenko advised European Fund for Southeast Europe

Appr. USD 6 million (EUR 5 million equivalent in UAH)

Loan to Bank Lviv provided by Green for Growth Fund (GGF)

Sayenko Kharenko advised Green for Growth Fund

USD 5.25 million

Project finance to VPG Agro Plus LLC, agriholding carrying out grain trading and owning a land bank in Kyiv and Chernihiv Regions, provided by Financial Company Status Capital Plus

Gramatskiy & Partners advised VPG Agro Plus LLC

USD 5 million

Synthetic loan in local currency to Piraeus Bank Ukraine provided by EBRD to support SMEs

Sayenko Kharenko advised EBRD

USD 5 million

Loan facility to a graintrader MGT Black Sea LLC for working capital financing provided by OTP Bank

Gramatskiy & Partners represented MGT Black Sea LLC

USD 5 million

Debt finance for City Capital Group for the reconstruction of the Voronin Business Center provided by Techhosting LLC

Gramatskiy & Partners represented PJSC Voronin Clothing Factory

USD 4 million

Project finance to Caspiy Group LLC provided by Financial Company Status Capital Plus

Gramatskiy & Partners advised Caspiy Group LLC

EUR 3.3 million

Working capital financing to Kormotech LLC, one of the top three market players on the Ukrainian pet food extended by EBRD

Asters represented EBRD

Watson, Farley & Williams acted as English law counsel to EBRD; Michael Damianos & Co acted as Cypriot counsel to EBRD

EUR 3 million

Financing from EBRD to Lantmannen Axa, a leading producer of breakfast cereals in Ukraine that is owned by Lantmannen, Sweden’s largest agribusiness cooperative

Asters represented EBRD

Bird & Bird acted as English law counsel to EBRD

USD 2.04 million (EUR 1.71 million, including EUR 1.31 million loan and EUR 400,000 grant)

Project financing to Fastiv City Council aimed at reconstructing wastewater treatment plant in the city of Fastiv provided by NEFCO and co-financed by the EU Neighborhood Investment Platform (NIP)

Sayenko Kharenko advised NEFCO

USD 1.17 million (EUR 0.98 million, including EUR 820,000 loan and EUR 160,000 grant)

Project financing to Khmelnytskyi city council aimed at modernisation of water and wastewater facilities provided by NEFCO within the framework of the NIP Ukraine Water Modernisation Program

Sayenko Kharenko advised NEFCO

USD 1.1 million

Loan facility to MGT Black Sea LLC, a grain trader, provided by OTP Bank

Gramatskiy & Partners represented MGT Black Sea LLC

>> Continued on page 16

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UKRAINIAN

Banking & Finance Table 2 Legal Support (Ukrainian Law)

Value

Transactions

USD 0.839 million (including UAH 14.88 million loan and EUR 250 000 grant)

Project financing to Melitopol city council provided by NEFCO under the NorwayUkraine Energy Efficiency Initiative (NUEE)

Sayenko Kharenko advised NEFCO

USD 0.779 million (including UAH 14.88 million loan and EUR 200,000 grant)

Project financing to Kaniv city council aimed at increasing energy efficiency provided by NEFCO under the NorwayUkraine Energy Efficiency Initiative (NUEE)

Sayenko Kharenko advised NEFCO

Appr. USD 0.752 million (including UAH 13.640 million loan and EUR 220 000 grant)

Project financing to Kreminna city council aimed at increasing energy efficiency provided by NEFCO under the NorwayUkraine Energy Efficiency Initiative (NUEE)

Sayenko Kharenko advised NEFCO

USD 0.734 million (including UAH 13.721 million loan and EUR 196,000 grant)

Project financing to Pervomayskyi city council provided by NEFCO under its Energy Savings Credit Facility

Sayenko Kharenko advised NEFCO

USD 0.699 million (including UAH 12.8 million loan and EUR 200 000 grant)

Project financing to Izium city council aimed at increasing energy efficiency provided by NEFCO

Sayenko Kharenko advised NEFCO

USD 0.699 million (including UAH 12.8 million loan and EUR 200,000 grant)

Project financing to Bakhmut city council aimed at increasing energy efficiency provided by NEFCO under its Energy Savings Credit Facility

Sayenko Kharenko advised NEFCO

USD 0.588 million (including UAH 10.7 million loan and EUR 165,625 grant)

Project financing to Myrnohrad city council provided by NEFCO under its Energy Savings Credit Facility

Sayenko Kharenko advised NEFCO

USD 0.55 million (UAH 15.255 million)

Project financing to Slavutych city council aimed at increasing energy efficiency provided by NEFCO under its Energy Savings Credit Facility

Sayenko Kharenko advised NEFCO

USD 0.54 million (UAH 14.88 million)

Project financing to Vinnytsia city council provided by NEFCO under its Energy Savings Credit Facility

Sayenko Kharenko advised NEFCO

USD 0.53 million (UAH 14.71 million)

Project financing to the Sumy city council aimed at increasing energy efficiency provided by NEFCO under its Energy Savings Credit Facility

Sayenko Kharenko advised NEFCO

WND

Financing of Walnut House, a social enterprise that transfers 40% of its income for supporting the social projects of the Walnut House Fund, including the Center of integral care for women in crisis, by Western NIS Enterprise Fund, a regional fund funded by US government via USAID

Marchenko Partners advised Western NIS Enterprise Fund

WND

Financing of the Center for Labor Rehabilitation of Disabled Persons Printing House, a social enterprise in Kramatorsk, Donetsk Region, specializing in the production of various types of printing products and employing disabled persons, by Western NIS Enterprise Fund

Marchenko Partners advised Western NIS Enterprise Fund

WND

Financing of Veterano Pizza, a restaurant chain in Kyiv, which supports veterans of the military conflict in Eastern Ukraine by employing them and remitting 10% of its profit to families of deceased veterans, by Western NIS Enterprise Fund

Marchenko Partners advised Western NIS Enterprise Fund

WWW.UKRAINIANLAWFIRMS.COM

Legal Support (Foreign Law)

LEGAL MARKET Value

Transactions

Debt Restructuring Table 3 Legal Support (Ukrainian Law)

Legal Support (Foreign Law)

UAH 117 billion (appr. USD 4.3 billion)

Restructuring of indebtedness of state-run Deposit Guarantee Fund of Ukraine to the Ministry of Finance of Ukraine under the relevant promissory notes issued by the Fund

AEQUO advised the Deposit Guarantee Fund of Ukraine

Freshfields Bruckhaus Deringer acted as legal advisor on EU law

USD 1.82 billion

Refinancing and restructuring of almost USD 1.5 billion in debt, raising extra USD 320 million in working capital by ED&F Man Treasury Management PLC, one of the oldest UK commodities traders and one of the largest globally

Redcliffe Partners advised ED&F Man Treasury Management plc

Clifford Chance acted as English law counsel to ED&F Man Treasury Management plc; Allen & Overy and Akin Gump Strauss Hauer & Feld acted as English law counsel to scheme creditors and note holders

USD 1 billion

Restructuring of debt owed to a syndicate of international banks (ING Bank N.V., UniCredit Bank AG, VTB Bank (France) SA, Raiffeisen Bank International AG and others) by EnergoGroup, a major international group specializing in mining and metallurgy

Marchenko Partners advised EnergoGroup

USD 300 million

Sale of multibillion pools of NPLs of Ukrainian banks under bank resolutions procedures, which DebtX, a leading international NPL sales platform, organized for the Deposit Guarantee Fund of Ukraine

AEQUO advised DebtX

USD 80 million

Restructuring by PJSC Obolon, one of the largest breweries in Ukraine and Europe, of its debt to international and domestic lenders under bilateral secured loan agreements

Baker McKenzie acted for PJSC Obolon; Sayenko Kharenko advised majority lenders

USD 68 million

Restructuring of PJSC Eurocar and LLC RIC debt owed to Export Guarantee and Insurance Corporation (Czech Republic) and Erste Abwicklungsanstalt (Germany)

GOLAW advised the creditors — EGAP and Erste Abwicklungsanstalt

Appr. USD 25.5 million

Secondary financial restructuring of Herson Greenhouse Facility LLC indebtedness performed in accordance with special legislative act on voluntary restructuring of debt

AEQUO advised JSCB Industrialbank

USD 20 million

Secondary restructuring of indebtedness under a loan granted to Ukrainian borrower Bestment-Service LLC and secured by mortgage of Plazma Shopping and Entertainment Center

AEQUO advised JSCB Industrialbank

USD 20 million

Secondary restructuring of indebtedness under the loan granted to Mercury LLC and secured by mortgage of Hotel Khreschatyk in Kyiv

AEQUO advised JSCB Industrialbank

WND

Financial restructuring of debts owed by Try O LLС, owner of Gulliver shopping and office complex in Kyiv, to Oschadbank and Ukreximbank

EY Ukraine and KPMG Law Ukraine advised the debtor

WND

Financial restructuring of debts owed by Ekobiotek-Ukraina LLC, a major Ukrainian producer of sunflower oil, to Oschadbank

EY Ukraine acted as an independent advisor

Mount Street Portfolio Advisers GmbH represented Erste Abwicklungsanstalt under German law

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UKRAINIAN

Mergers & Acquisitions, Joint Ventures Establishing Table 4 Value

Transactions

Legal Support (Ukrainian Law)

Legal Support (Foreign Law)

USD 450 million*

Acquisition of Spot, a leader in computer management and cost optimization of public clouds, by NetApp, an American hybrid cloud data services and data management company

AEQUO advised NetApp

Gibson, Dunn & Crutcher acted as lead counsel

USD 200 million*

Sale of a portfolio of selected overthe-counter (OTC) and prescription pharmaceutical assets of Takeda Pharmaceutical Company Limited to Acino

Redcliffe Partners advised Takeda Pharmaceutical Company Limited

White & Case acted as English law counsel to Takeda Pharmaceutical Company Limited

USD 126 million

Transferring into concession assets of State Enterprise Stevedoring Company Olvia and assets of State Enterprise Ukrainian Sea Ports Authority (USPA). The public side of the transaction includes the Ministry of Infrastructure of Ukraine (grantor) and USPA (coparty to concession agreement). The concessionaire is LLC QTerminals Olvia, a special purpose vehicle controlled by QTerminals W.L.L., a high-profile port operator from the State of Qatar

EY Ukraine advised IFC, EBRD and the Ministry of Infrastructure of Ukraine; Kinstellar advised QTerminals

GIDE (France) acted as international legal counsel to IFC, EBRD and the Ministry of Infrastructure of Ukraine; Clyde & Co (UK) acted as international legal advisor to QTerminals

EUR 101.8 million**

Acquisition of a controlling stake of 51% in major Ukrainian stevedoring operator TIS Container Terminal by DP World, a Dubai-based provider of worldwide smart end-to-end supply chain logistics

Marchenko Partners advised DP World; CMS Cameron McKenna Nabarro Olswang advised TIS Container Terminal; Jurline advised Fedcominvest Monaco SAM and Alekszej Fedoricsev (together holding 37.5% of shares in TIS-Container Terminal)

Squire Patton Boggs advised DP World on matters of English law; CMS Cameron McKenna Nabarro Olswang advised TIS Container Terminal on matters of English law

EUR 58.5 million**

Acquisition by Novus, a major food retail chain, of Billa Ukraine from REWE Group, a German diversified retail and tourism cooperative group

Dentons advised REWE Group; AEQUO advised Novus

USD 45 million

Acquisition by Embracer Group AB Holding, a Swedish video game holding company, through its wholly-owned subsidiary Saber Interactive of 100% in Kyiv/Malta-based 4A Games Limited, video game developers

Baker McKenzie advised Embracer Group AB Holding; Sytnyk & Partners advised 4A Games

Baker McKenzie acted as global transaction counsel to purchaser

EUR 27 million*

Acquisition of subsidiaries of Gesco AG, Europe’s leading manufacturer of wear parts for agricultural technology, by the Swiss private equity investor Evoco AG

Nobles advised Evoco AG

Noerr acted as a German law counsel to Evoco AG

EUR 17 million

Acquisition of a leading FinTech company, YayPay Inc., by Quadient, a leading manufacturer of mailing equipment and provider of mailing-related services

Redcliffe Partners advised YayPay Inc.; CMS Reich-Rohrwig Hainz advised Quadient

Goodwin Procter acted as a US law counsel to YayPay Inc.; Quarles & Brady acted as a US law counsel to Quadient

USD 14 million

Transferring into concession assets of State Enterprise Kherson Sea Commercial Port and assets of State Enterprise Ukrainian Sea Ports Authority (USPA). The public side of the transaction includes the Ministry of Infrastructure of Ukraine (grantor) and State Enterprise USPA (co-party to concession agreement). The concessionaire is LLC Project Company Risoil-Kherson, a special purpose vehicle controlled by Petro Oil and Chemicals (Georgian Industrial Group) and Risoil S.A. (Switzerland)

EY Ukraine advised IFC, EBRD and the Ministry of Infrastructure of Ukraine; Sayenko Kharenko advised Risoil-Kherson LLC

GIDE (France) was international legal advisor to IFC, EBRD, and the Ministry of Infrastructure of Ukraine

USD 10 million

Acquisition by Bastion Group of PJSC Kyivpasservice, which owns bus stations and railway stations in Kyiv and Kyiv Region, during privatization

Gramatskiy & Partners represented Bastion Group

* Global deal, total value in all jurisdictions. ** Sourse: Emerging Europe M&A Report 2020/21, CMS. Empty table cells in a foreign legal support column mean that the information is either not available, confidential or there was no foreign law counsel. WND — the value of the deal was not disclosed.

WWW.UKRAINIANLAWFIRMS.COM

LEGAL MARKET Value

Transactions

Mergers & Acquisitions, Joint Ventures Establishing Table 4 Legal Support (Ukrainian Law)

USD 10 million

Sale of the Arsenal Plaza Business Center to Tarantino Family group, a chain of restaurants in Ukraine

Gramatskiy & Partners advised Tarantino Family group

UAH 193.8 million (USD 7.2 million)

Acquisition of the property of Imexbank JSCB (the Stadium Chornomorets in Odesa) by Allrise Capital Inc., an American investment company

MORIS GROUP advised the Deposit Guarantee Fund of Ukraine on matters of NPL enforcement procedures; AEQUO advised Allrise Capital Inc.

USD 5 million

Investment by Horizon Capital, TA Ventures, Genesis Investments, iClub and Mission Tech in Liki24, a Ukrainebased e-commerce platform for medicine delivery

EY Ukraine advised Horizon Capital

USD 1.9 million

Acquisition of 100% stake in Selin Trade LLC, which owns land plots in the city of Kyiv, by City Capital Group, involved in development and construction

Gramatskiy & Partners advised City Capital Group

USD 1.7 million

Acquisition of 100% stake in PE Agricom Invest, which owns land plots in Boryspil District, Kyiv Region, by Ditrans LLC, a holder of real estate objects

Gramatskiy & Partners advised Ditrans LLC

USD 1.6 million

Acquisition of 100% stake in PE Stand Plus, which owns a land plot in Boryspil District, Kyiv Region, by Ditrans LLC

Gramatskiy & Partners advised Ditrans LLC

USD 1.45 million

Acquisition by Lagako LLC, a company involved in cultivating and processing flax plant, of the corporate rights of Linen of Desna from Ukren Agri

EUCON Legal Group represented Lagako LLC

USD 1.45 million

Investment to CreatorIQ, an influencer marketing company with R&D in Ukraine, by Kayne Anderson Capital Advisors, a leading alternative investment firm

AEQUO advised group of investors led by Kayne Anderson Capital Advisors

WND

Acquisition of business center located in Kyiv with total area of 4,500 sq.m. by Dragon Capital, which will be transfered to Kyiv School of Economics for long-term use

AEQUO advised Dragon Capital

WND

Investments by UMG Investments, a Ukrainian investment company focused on asset management in the industrial and commodities sectors, in two clay mining companies in Ukraine

AEQUO advised UMG Investments

WND

Acquisition of AXDRAFT, a document automation company, by Onit, a leading provider of Enterprise Legal Management solutions

AEQUO advised Onit; AVELLUM represented major shareholders of AXDRAFT

WND

Acquisition of the Industrial Park Ryasne-2 by Dragon Capital from CTP Invest, one of the biggest developers of industrial parks in Europe

AEQUO advised Dragon Capital; KPMG Law Ukraine adviced CTP Invest

WND

Sale by Treeum group, a leading online financial supermarket in Ukraine, of its controlling stake to Dragon Capital

AEQUO advised Dragon Capital; Sayenko Kharenko advised Treeum group and its shareholders

WND

Purchase by Intersections Inc. d/b/a Aura, a technology company dedicated to simplifying digital security for consumers, of a software business

Asters represented Intersections Inc. d/b/a Aura

WND

Sale by Volterra Energy Group of minority stake to VR Capital in 10 solar power plant projects in Ukraine with total installed capacity of 147 MW

Asters represented Volterra Energy Group; Sayenko Kharenko advised Elementum Energy Limited, a subsidiary of VR Capital

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Legal Support (Foreign Law)

Morris Manning & Martin acted as lead counsel

>> Continued on page 20

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Mergers & Acquisitions, Joint Ventures Establishing Table 4 Value

Transactions

Legal Support (Ukrainian Law)

WND

Acquisition of Agritel International, a subsidiary of Agritel, an expert provider of information, consulting, and forecasting on agricultural and agro-industrial markets, by Argus Media Ltd, a leading global commodity information service provider

AVELLUM advised Argus Media Ltd

WND

Acquisition of Svarog Group, a high-tech agricultural company, by Epicentr

AVELLUM advised Epicentr

WND

Acquisition by UDP, a leading Ukrainian development company, of a 33.35% stake in Ocean Plaza, one of the largest shopping and entertainment centers in Ukraine and Europe

AVELLUM advised UDP

WND

Acquisition of KOSMO, one of the largest cosmetics and house care retail chains in Ukraine, by Prostor, a Ukrainian cosmetics retailer

AVELLUM advised Prostor

WND

Acquisition by Glencore Agriculture Limited, the agricultural commodities giant, of LLC Everi port terminal in the city of Mykolaiv from the Orexim Group

Baker McKenzie advised Glencore Agriculture Limited; Sayenko Kharenko advised Orexim Group

WND

Acquisition by Flügger group A/S of 70% stake in Eskaro Group AB, an international paint group with operations in Ukraine, Russia, Belarus, Estonia, Latvia and Finland

Baker McKenzie advised Flügger group A/S

WND

Acquisition of East West Biopharma, a Ukraine-based human bio-specimen solutions organisation, by Discovery Life Sciences, a US-based biospecimen, genomic sequencing, cell and immunohistochemistry services firm

CMS Cameron McKenna Nabarro Olswang advised Discovery Life Sciences

WND

Investment by Horizon Capital in MAKEUP, a leading European e-commerce player in the beauty segment operating in 14 markets

EY Ukraine advised Horizon Capital

WND

Acquisition by Project Partners LLC of a Ukrainian company holding Business Center Azor in Kyiv from Basenj LLC

EY Ukraine advised Project Partners LLC

WND

Sale by Global Space Management of a controlling stake in Zhitlobudinvest LLC, one of the largest development companies in Kyiv

Gramatskiy & Partners advised Global Space Management

WND

Acquisition by Sibelco, a global material solutions company of Euromineral LLC specializing in extraction of mineral resources in Ukraine

INTEGRITES advised Sibelco

WND

Acquisition of a minority stake in Feednova LLC, a Ukrainian company focusing on the production of feed additives for farm animals and pets, and the subsequent establishment of a joint venture with Effective Investments Group and other stakeholders in Feednova

Kinstellar advised UMG Investment

WND

Acquisition of LeBoutique, one of the leading players in Ukrainian online fashion retail, by Ukrainian business group DCH

KPD Consulting advised DCH

WND

Merger of Radioaktivefilm Ltd (UK), a production service company, and TF7-TV S.L. (Spain), specializing in producing creatively driven content for brands, advertising agencies, studios and production companies worldwide

Legal House Group advised Radioaktivefilm Ltd

* Global deal, total value in all jurisdictions. ** Emerging Europe M&A Report 2020/21, CMS. Empty table cells in a foreign legal support column mean that the information is either not available, confidential or there was no foreign law counsel. WND — the value of the deal was not disclosed.

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Legal Support (Foreign Law) White & Case acted as the global legal counsel to Argus Media Ltd

Norton Rose Fulbright (Moscow office) acted as English law counsel to the seller

Michael Damianos & Co advised Discovery Life Sciences on Cypriot law aspects

LEGAL MARKET Value

Mergers & Acquisitions, Joint Ventures Establishing Table 4 Legal Support (Ukrainian Law)

Transactions

Legal Support (Foreign Law)

WND

Sale by former head of 1+1 Media Oleksandr Tkachenko of 25% stake in Odesa Film Studio to Oleksandr Morozov, a Ukrainian banker

Pavlenko Legal Group represented Odesa Film Studio JSC

WND

Acquisition by the leader of the Ukrainian healthcare industry Dobrobut of medical chain operating three clinics in Kyiv under the brand name Doctor Sam

Sayenko Kharenko advised Dobrobut

WND

Buy-out by Elementum Energy Limited, a subsidiary of VR Capital focused on investments into renewable energy, of the minority stake of its partner Volterra Energy Group in a joint venture company that had successfully developed 10 solar power plant projects in Ukraine with total installed capacity of 147 MW

Sayenko Kharenko advised to Elementum Energy Limited

WND

Sale by Myrwayton Holding Limited of a railway operator to Renaisco B.V., a subsidiary of Glencore Agriculture

Sayenko Kharenko advised Myrwayton Holding Limited

WND

Acquisition by the DCH group of 100% shareholding in JSC Bank Credit Dnipro

Sayenko Kharenko advised Mr. Aleksandr Yaroslavskyi, owner and president of the DCH group

WND

Purchase by Santa Impex Brest, the largest Belarusian food holding and the third largest distributor in the CIS, of a power station in Ukraine

SBH Law Offices advised Santa Impex Brest

WND

Global acquisition by Schneider Electric, a firm specializing in digital transformation of energy management and automation, of ProLeiT, a developer of technological solutions

Sytnyk & Partners representing Schneider Electric

Hengeler Mueller and Schoenherr advised Schneider Electric on Austrian and German law

WND

Acquisition of two Ukrainian subsidiaries of ERBER Group, by Royal DSM, a global science-based company in nutrition, health and sustainable living

Wolf Theiss advised Royal DSM

Wolf Theiss Austria advised Royal DSM on Austrian law matters

WWW.UKRAINIANLAWFIRMS.COM

Agribusiness

Agribusiness: Top Trends and Expectations for 2021 It is widely acknowledged that the agricultural sector has always been a major driving force of the Ukrainian economy. Even though agribusiness now accounts for 10% of the country’s GDP1, various opportunities for growth and development of the sector are still to be put into operation. Recent estimates by the Ukrainian Institute for the Future and Latifundist Media suggest that by 2030 the importance of the agro-industry will continue to increase dramatically2. Ukraine will strongly maintain its position as an international leader in supplying crops and oilseeds and become a ‘world store’ of ecologically clean and fresh produce. The most important current trends and expectations in the Ukrainian agrobusiness sector along this way are the European Green Deal (EGD), agricultural insurance, agrarian bonds, and land reform.

Pro-European Course of Reforming Agricultural Legislation

national agreements within the EGD. It is important to remember that the EGD is a dynamic process, so Ukraine will monitor it constantly and modify its efforts to keep up with EU requirements. Thirdly, local initiatives are very important too. Cities hold a special place in implementing the Green Deal and may enforce smaller local initiatives ahead of the national political and economic process. Ideally, all three directions shall will be pursued by the country simultaneously, supporting and amplifying each other.

Relaunch of Agricultural Insurance

Anton Sintsov Counsel, Asters

The European Green Deal consists of a number of policy initiatives transforming the EU into the first climate-neutral continent by 2050. The deal is set to implement broad objectives. Its core spheres include biodiversity, sustainable agricultural policy (the From Farm to Fork system), sustainable industry, clean energy, and climate action3. There are ongoing discussions within the Ukrainian business community regarding the EGD as its implementation is likely to create big challenges for Ukrainian and EU businesses and to have a major impact on economic, social and political cooperation between Ukraine and EU. For example, EU policies in the agricultural sphere and the transition towards a sustainable food production system are likely to tighten requirements for agriculture and food produce, which would subsequently result in additional trade barriers and harm Ukrainian exports. This issue highlights the necessity to align the Ukrainian agro-industry with EU requirements and to overhaul the current system in line with eco-friendly food production and expansion of smart farming. It is also important to note the prospective Carbon Border Adjustment Mechanism (CBAM) that should come into effect in 2023. The Ukrainian government has proposed to consider Ukraine alongside the EU in the administration of CBAM due to Ukraine’s undertakings to implement the corresponding laws. Furthermore, Ukraine plans to introduce a respective emission trading scheme. Currently, there are several directions of applying Ukraine’s efforts to join the EGD. Firstly, at the strategic stage, the Green Deal roadmap will be developed for Ukraine. Similar, for example, to the Green Agenda for the Western Balkans, it will contain flagship initiatives, which both Ukraine and the EU are interested in. In practice, this may include cooperation in the hydrogen fuel sphere, single emission trading scheme, development of the cluster of Nature 2000 conservation area, integration of Ukrainian producers in EU supply chains, and inclusion in the EU Renovation Wave Strategy. Secondly, in the harmonization process, Ukraine will fulfill its undertakings under the Ukraine-EU Association Agreement and inter1

https://latifundist.com/blog/read/2498-agrobiznes-v-tsifrah-analiz-i-prognozy

https://latifundist.com/novosti/45587-v-ukraine-prezentovali-strategiyu-razvitiya-agrosektora-do2030-goda

https://ukraine-eu.mfa.gov.ua/en/2633-relations/galuzeve-spivrobitnictvo/klimat-yevropejskazelena-ugoda

On 17 February 2021, the Cabinet of Ministers of Ukraine adopted a draft law setting out a new insurance scheme for agricultural products. This draft of amendments to Law of Ukraine No. 4391-VI On the Specifics of State-Supported Insurance of Agricultural Products repeals the previous agricultural insurance pool scheme, criticized by numerous experts in the field due to the lack of transparency in the selection of insurers. The new draft law establishes clear mechanisms to access government aid and defines market participants, insurance objects, products, risks, claims and contract requirements. It ensures transparency and sets out requirements for eligible insurance companies and their control. These changes are positively welcomed by both agro and insurance market professionals as the previous system proved itself to be unsatisfactory and failed to provide effective risk management mechanisms. Besides, Ukraine has one of the lowest levels of agricultural insurance penetration in the market, partly because the old scheme was costly and had a limited selection of counterparties and a complicated insurance structure. Effective government support of agricultural insurance can become a powerful relief instrument for the Ukrainian agro industry amidst the coronavirus crisis and drought. The market niche for Ukrainian agricultural insurance is nearly vacant and provides significant expansion opportunities. Thus, government support to remove obstacles is essential to boost the economic performance of agrobusiness. This drive is supported by agro entrepreneurs who claim that the inability of the state to cover losses caused by extreme weather conditions has left many agricultural producers alone on the brink of insolvency. This is the major reason why it is so important to reboot agricultural insurance in the immediate future. As of April 2021, the Tax Committee of the Verkhovna Rada approved Law No. 5104, which introduces efficient state support of the agricultural insurance market.

Agrarian Bonds Redesigned Agrarian bonds were introduced in 2012 as an instrument for financing agricultural producers in accordance with Law of Ukraine No. 5479-VI On Agrarian Bonds. However, in practice, such bonds began to properly function only in 2015, following amendments to relevant laws and regulations, which purported to clearly define the status of agrarian bonds. Agrarian bonds have a strong potential to positively influence development of agro production, but only if the respective legal norms are effectively enforced. In particular, it is crucial to clearly define a taxation regime of transactions with these bonds. This will make these instruments more attractive to agro enterprises, banks, non-bank credit institutions, and private investors, including non-residents. On 3 February 2021, the Ministry of Economic Development, Trade and Agriculture of Ukraine announced Draft Law No. 2805-д On Amendments to the Law of Ukraine On Agrarian Bonds and Certain

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Morris, Prada S.p.A., Sanofi, Societe Generale, Syngenta, Visa, Webuild S.p.A, and many others. Asters is an exclusive Ukrainian member of Lex Mundi, World Services Group, Legalink, Biolegis, Life Sciences Practice Group and Energy Law Group. Asters and its partners are consistently placed at the very top of the country’s legal market by the most authoritative international and Ukrainian market reviews. Chambers Europe 2021 recognizes 23 lawyers of Asters — the largest number of renowned practitioners in a single Ukrainian law firm. For the third consecutive year Asters is included in Tier 1 ranking in all 12 practices reviewed by The Legal 500: Europe, Middle East and Africa 2021 Guide. In 2020 Asters was recognized as Ukraine Firm of the Year by Chambers Europe Awards 2020, Who’s Who Legal 2020 and by The Lawyer European Awards 2020.

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Other Legislative Acts of Ukraine Regarding the Functioning and Circulation of Agrarian Bonds, which will redesign the nature of agrarian bonds from document of titles to securities. Other major novelties will include expansion of the range of issuers of agrarian bonds, simplification of the process of issuing, circulation, and termination of agrarian bonds, providing for the issue of longterm bonds, and strengthening guarantees for creditors’ rights in case of their enforcement on the bonds. The Ministry expects the draft to become law in 2021.

Land Reform Unfolds Land reform mainly stipulates the possibility for Ukrainian citizens, legal entities owned by Ukrainian citizens, state, or territorial communities, banks, state, or territorial communities to acq uire arable land into ownership. Liberalization of the land market will take place in several stages.

Vadym Samoilenko

During the first stage, which started on 1 July 2021, only individuals (Ukrainian citizens) are able to freely purchase agricultural land. The maximum amount of land that can be so acquired is 100 hectares per individual. During the second stage, which commences on 1 January 2024, legal entities will be able to purchase arable land. The ownership ceiling is set at 10,000 hectares per legal entity. Land reform is a fundamental process of change in the agricultural sector of Ukraine, which is still far from taking its final legal form. As of April 2021, the status of this massive work is in the table below. As projected, to complete land reform in its main aspects, it is necessary to develop and adopt at least 3 major laws and 39 Decrees of the Cabinet of Ministers of Ukraine in this sphere.

Partner, Asters

As of April 2021, the status of this massive work is as follows: Adopted Laws

Pending Legislation

Laws in Development

No. 552-ІХ On the Conditions of Circulation of Agricultural Lands

No. 2195 On the Sale of Land Plots at Electronic Land Auctions

Regarding the Transformation of the Title of Permanent Land Use

No. 985-ІХ On State Agricultural Registry and Enhancement of State Support

No. 3205-2 On the Fund of Partial Guarantee of Credits in Agriculture

On Land Consolidation

No. 340-ІХ On Counteraction to Raiding

No. 3012-2 On Ensuring the Right of Agricultural Enterprise Employees to a Land Plot

On Pooling of Water Users (for the Development of Water Reclamation Systems)

No. 554-ІХ On the National Infrastructure of Geospatial Data

No. 2194 On Improving the System of Management and Deregulation in the Sphere of Land Relations (Facilitation and Decentralization of Land Procedures)

No. 2498-VIII On Issues of Collective Ownership, Improvement of Land Use No. 711-ІХ On Land Use Planning

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Alternative Dispute Resolution

Allegations of Criminal Activity and International Arbitration Arbitral tribunals in investor-state Ukraine registered the underlying investdisputes frequently deal with allegament, despite certain documentary breachtions of breach of domestic legislation, es, convinced the tribunal that the investfraud and corruption in jurisdictions ment was legal. traditionally known as having weak rule In another case, Saba Fakes v. Turkey,4 of law. Depending on the degree of the the tribunal stated that in the event that an allegation and jurisdiction, admissibility investor breaches a requirement of domesof the claim and even annulment or entic law, a host state can take appropriate acforcement of an arbitral award may be tion against such investor within the frameaffected. work of its domestic legislation. However, In these type of cases the ‘clean unless specifically stated in the investment hands’ doctrine is of utmost importance. treaty under consideration, a host state The doctrine provides that a court will should not be in a position to rely on its donot lend its help if a claimant’s cause of mestic legislation beyond the sphere of inaction derives from an unlawful act. The vestment regime to escape its international arbitral tribunal in Inceysa Vallisoletana, undertakings vis-à-vis investments made in S.L. v. Republic of El Salvador summed its territory. up the doctrine in the following way: An allegation of fraud and/or corrup“No legal system based on rational tion is a serious one. It entails the existence grounds allows the party that commitof a commenced criminal investigation into ted a chain of clearly illegal acts to benethe activities of those involved. Absence of fit from them.” However, considering the any criminal investigation in the host state lack of relevant case law, it is difficult to is a strong argument in favor of the claimdetermine the doctrine’s status, let alone Senior Partner, EQUITY Law Firm ant. the standard to be applied. In African Holding v. Congo, the arbitral The purpose of provisions on the tribunal dismissed allegations of corruption legality of investment is “to prevent the raised by the state finding that such allegaBilateral Investment Treaty from protecting investments that should tion was very grave and requires a high standard of proof, such as not be protected, particularly because they would be illegal”.1 “the evidence required for the investigation or criminal prosecution of The ‘clean hands’ doctrine has found its application in a number corruption in countries where it is considered a criminal offense”. of cases where claims were dismissed for the lack of jurisdiction or In Glencore International A.G. and C.I. Prodeco S.A. v. Colombia5 recognized as inadmissible because they were obtained fraudulently the arbitral tribunal rejected Columbia’s allegations of an investor’s or not in accordance with the law of the host state. corruption partially on the basis that Colombian criminal courts and In a number of cases the arbitral tribunals found that they lack the prosecutors did not initiate an investigation into the alleged corrupt 2 competence to rule on a claim where the claimant has unclean hands. practices. Therefore, the evidence did not meet the necessary standIn Phoenix Action v. Czech Republic the tribunal stated that there is no ard of proof. doubt that the requirement of the conformity with law is important in By contrast, the ICSID tribunal in Metal-Tech v. Uzbekistan found respect of the access to the protection of the investor under the BIT. that it lacked jurisdiction, due to corruption, which tainted the claimHowever, if it is manifest that the investment has been performed in ant’s investment in Uzbekistan. The tribunal found that the claimant violation of the law, it is in line with judicial authority not to assert ju- made payments of around USD 4 million to several individuals close risdiction. to the Uzbek government under the guise of consultancy fees. InterIn other cases, claimants were found to be barred from request- estingly, the tribunal pointed to the fact that “indicators” or “red flags” ing a remedy (inadmissible claim), despite the tribunal’s assertion of of corruption in this case arose from the evidence submitted by Metjurisdiction. Finally, even if the tribunal al-Tech itself. The tribunal took into account has jurisdiction and the claim is found the amounts in question, any appropriate to be admissible, protection may still be qualification for the rendering of such serdenied. For example, in Al Warraq v. Invices, connections between the involved donesia3 the tribunal held that the claimparties as well as documentary or testimoant failed to uphold the host state’s laws, nial evidence in support of the legitimacy of thus his actions fall within the scope of the services — which Metal-Tech was not application of the ‘clean hands’ doctrine able to produce. Given that the host state’s and, therefore, he cannot benefit from actions were also tainted by corruption, the investment protections. arbitral tribunal ordered each party to bear When it comes to ‘clean hands’, its own costs. a great deal also depends on the host When it comes to proving the allegastate’s conduct. In Tokios Tokelés v. tions on the part of each side, there is an Ukraine the tribunal decided that the inevident imbalance between a claimant and vestment was made in accordance with a host state. Written evidence of corrupthe laws and regulations of Ukraine, tion is typically scarce. With regard to oral despite Ukraine’s objections that regisevidence, no party alleged to have given or tered investments were made in breach received bribes is likely to admit to doing of certain laws of Ukraine. The fact that so when questioned as a witness before the arbitral tribunal, because he or she

Viktor Barsuk

https://www.italaw.com/cases/958

https://jusmundi.com/en/document/decision/enphoenix-action-ltd-v-czech-republic-award-wednesday15th-april-2009, para. 102

https://www.italaw.com/sites/default/files/casedocuments/italaw4164.pdf,

Oleg Malinevskiy Partner, EQUITY Law Firm

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https://jusmundi.com/en/document/decision/en-sabafakes-v-republic-of-turkey-award-wednesday-14th-july-2010, para. 119

https://www.italaw.com/sites/default/files/case-documents/ italaw10767_0.pdf (para. 738).

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risks subsequent criminal prosecution. transitioning to the balance of probabilities As to the host state, evidence obtained standard applicable in civil cases. through the police powers of the state In the latest case, Vale S.A. v. BSG Remay breach the principles of good faith sources Limited, the arbitral tribunal statand equality of arms. ed: “it is clear that the applicable standard In Glencore6 the arbitral tribunal should be the “balance of probabilities”, made reference to such general inealbeit that “the fact that fraud is a very quality between claimants, which are serious allegation may be relevant to the normally private companies, and reinherent probabilities of its occurrence, spondent states. The tribunal further [though] it does not affect the standard of explained that if states were allowed proof’.” to use their wide powers to coerce eviFinally, if sufficient evidence in supdence from claimants, it would create a port of corruption allegations is discovered perverse incentive: states would initiate or revealed after the award is issued, such all types of administrative proceedings evidence may serve as a basis for the anagainst potential claimants in order to nulment of such award. improve their litigation positions. For example, in Siemens A.G. v. ArAt the same time, in Awdi v. Rogentine Republic8 the arbitral tribunal ruled 7 mania the tribunal found that the real in favor of the claimant under the Germaissue raised was the weight and probany-Argentina BIT. However, at a later stage tive value to be given to the evidence, evidence of corruption was procured in rather than its admissibility, and that it proceedings in a German court. Siemens would be guided by the rule of presumpwas said to have obtained the underlying tion of innocence when assessing that Counsel, EQUITY Law Firm contract in Argentina through bribery. Arevidence. gentina requested the annulment of the Tribunals have traditionally stated award on the basis of newly-discovered that the allegation of fraud and corrupevidence. In the end, Siemens withdrew tion requires a sufficient degree of confidence and a high threshold the claim, saving Argentina at least USD 208 million.9 of evidence. However, as explained above production of such strong evidence is often impossible. More recent case law shows a trend of

Oksana Varakina

6 7

https://www.italaw.com/cases/7539, para 89 https://www.italaw.com/cases/101

https://www.italaw.com/sites/default/files/case-documents/ita0790.pdf

http://arbitrationblog.kluwerarbitration.com/2020/06/14/how-do-tribunals-in-investmentarbitrations-treat-parallel-domestic-investigations-and-proceedings/

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Anti-Corruption

Fight Against Corruption and Combating Economic Crimes during COVID-19 Pandemic Corruption equals monopoly plus discretion minus accountability — Robert Klitgaard

menting anti-COVID-19 programs. Corrupt regimes use such emergencies to further strengthen their power and expand their spheres of influence.

The pandemic of 2020–2021 resulted in an unprecedented socio-eco3. Emergency Procurement nomic crisis and posed a serious chalIncreasing Corruption Risks, lenge for the entire world economy. It is Lack of Transparency and the first time that the international comControl in the State Budget munity is facing a healthcare challenge affecting every country. The outbreak of Allocation System this disease affects both developed and As a rule, procurement of medicinal developing countries. The measures products and supplies in healthcare systaken by many governments to address tems is one of the areas most vulnerable the global Covid-19 epidemic have been to corruption schemes. According to the characterized by errors and flaws. It is United Nations Office on Drugs and Crime, becoming clear that most countries about 10-25% of all money spent on prowere not prepared for such a pandemic. curement worldwide was lost because of The healthcare sector is suffercorruption before the pandemic. These ing from constant underfunding, which figures do not take into account the admakes it difficult to provide an adequate ditional funds aimed at fighting COVID-19. and sufficient response to the crisis. GovEmergencies and urgent need can be ernments are forced to reallocate state a pretext to simplify the established probudgets to help the healthcare system Managing Partner, Founder, GRACERS curement procedures, deviate from transand to fund social security programs. The parency standards in making decisions on huge amount of allocated resources, the Serhii Lysenko was awarded the prize Advocate of allocation of state budget funds. However, speed and mechanisms of their allocation the Year 2020 in the White-Сollar Crime category and create favorable opportunities for corrup- Advocate of the Year 2021 in the Advocate of the Year it should be noted that it is transparency that is the key to a fair and effective retion, embezzlement, overpricing of medic- in Criminal Cases category according to the Ukrainian sponse to emergencies, since it ensures inal products and medical supplies, ma- Bar Association that resources are provided to the intendnipulation of procurement processes, etc. ed beneficiaries in the right quantity and We should also not forget the hindrances caused by corruption in the fight against the Ebola epidemic quality at a reasonable price. In particular, on the basis of Law of Ukraine On Amending Cerin West Africa in 2014–2015 or the swine flu H1N1 in 2009. Of course, medical aspects are important in developing state tain Legislative Acts of Ukraine to Prevent the Occurrence and Spread strategies. However, as evidenced by past and especially by the cur- of Coronavirus Disease (COVID-19) of 17 March 2020, a number of rent crises, the effectiveness of measures to fight a disease largely amendments were made to Law of Ukraine On Public Procurements. depends on the observance of the law in the country, the government’s Thus, it was established that Law of Ukraine On Public Procurements commitment to the transparency and accountability principles in al- did not apply to cases where the procured items were goods, works or services necessary to implement measures aimed at preventing the locating funds and making of other managerial decisions. Thus, the fight against corruption and other economic crimes occurrence and spread, localization and elimination of outbreaks, epishould be considered a priority issue in any crisis, including in the pandemics and pandemics of the coronavirus disease (COVID-19). The list of such goods, works or services and the procedure demic of SARS-CoV-2 virus and the COVID-19 disease caused by it. It is critical that the existing resources, as well as any additional invest- for procurement thereof was approved by a resolution of the Cabiments to address the effects of epidemics, are used strategically and net of Ministers of Ukraine and included some medicinal products, immunobiological drugs, food products, disinfectants, antiseptics, diseffectively ensuring benefits to those who need them most. According to the 2020 Corruption Perceptions Index, Transpar- infection equipment, medical devices, medical equipment and other ency International identified several key trends of corruption risks and goods. These goods and services can be purchased without a standard tender procedure, public customers are granted the right to conchallenges caused by the outbreak of the disease. clude direct contracts with suppliers. Those changes were made with the aim of helping hospitals 1. Corruption and Underfunding of Major State quickly purchase essential goods to fight the coronavirus. Sectors In practice, the lack of adequate state control in procurement has Systemic chronic corruption diverts funds from key social sec- led to the use of such changes with serious abuses and violations. tors, including healthcare, making countries around the world vulThe conflict between the leadership of the Ministry of Health and nerable and ill-prepared to crises in this area. the specialized Medical Procurement of Ukraine State Enterprise either A recent international study by the Transparency International did not contribute to the efficiency and speed of the processes. Health Initiative obtained evidence of corruption at service points durIn addition, according to the Nashi Hroshi information portal, the ing the pandemic, stressing that it reduced the availability and quality difference in prices between the most expensive and cheapest mediciof health services. nal products reaches 500-700%. For example, prices for medicinal products with meldonium 2. Violation of Human Rights and Democratic Norms as the active substance varied from UAH 92.72 to UAH 737.38 per Countries with high levels of corruption are more likely to vio- package. Similar facts of overpricing (including purchase at a price late human rights and democratic norms in the context of imple- several times higher than the market average price) were identified in

Serhii Lysenko

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procurements of hydrogen peroxide, ethyl alcohol, ascorbic acid, ceftriaxone, paracetamol, azithromycin, methotrexate, metronidazole, analgin, etc. According to the Prosecutor General’s Office, in March 2021 the Zakarpattia Region Prosecutor’s Office filed the charging document against two former officials of the Health Department of the Zakarpattia Region State Administration for neglect of duty, which caused serious consequences (Part 2 of Article 367 of the Criminal Code), and against two heads of companies for embezzlement of property worth UAH 29.6 million by abuse of office committed by a group of persons upon a preliminary collusion (Part 5 of Article 27, Part 5 of Article 191 of the Criminal Code of Ukraine). According to the findings of the investigation, officials of the regional state administration and the heads of a private company signed contracts for procurement of respirators and protective suits for employees of medical institutions engaged in fighting COVID-19. They conducted a tender procedure for procurement from one bidder (i.e. from the already selected private firm) at an overstated price. In addition, the expert examination established that the protective means purchased do not meet quality standards. The amount of damage was almost UAH 30 million. In addition, on 16 February 2021, NABU announced a pre-trial investigation into possible abuses in the procurement of vaccines against COVID-19. The relevant criminal proceeding was initiated at the request of the General Director of Medical Procurement of Ukraine SE. Ihor Umanskyi, former Minister of Finance and ex-advisor to the head of the Office of the President of Ukraine, also criticized the decision of the government to reallocate over UAH 30 billion from the Coronavirus Fund to Ukravtodor for implementation of the “Big Construction” road program.

4. Minor Corruption at the Service Provision Level Unofficial payments, illegal prescriptions, favoritism and nepotism on the part of health care professionals thrive during pandemic outbreaks. Such corruption cases can be caused by low salaries, bad working conditions, and contribute to a negative perception of public services by patients, which affects their further behavior when applying for medical care to a medical institution. Thus, in April this year, the Prosecutor General’s Office of Ukraine announced the detention of the head of the pathology department and a doctor in one of Kyiv’s hospitals when obtaining illegal benefits. Employees of the hospital regularly demanded money from relatives of patients who died from COVID-19 for speeding up the autopsy, storage in refrigerators, washing, dressing and preparation for burial. At the same time, according to regulations of the Ministry of Health of Ukraine, those services were to be provided free of charge. In particular, in April 2020, law-enforcement officers discovered and stopped illegal disposal of hazardous medical waste from hospitals in Kyiv. A pre-trial investigation was launched into violations of sanitary rules and regulations on the prevention of infectious diseases and mass poisoning, as well as misappropriation, embezzlement or seizure of property through abuse of office (Article 325 and

Serhii Lysenko, Managing Partner and Founder of GRACERS, was awarded the prize “Advocate of the Year 2020” in the White-Collar Crime category and “Advocate of the Year 2021” in the “Advocate of the Year in Criminal Cases” according to the Ukrainian Bar Association. We became Winners of “Legal Awards 2021” legal prize, in the category “Law Firm — Breakthrough of the Year”.

Tel.: +380 44 361 0037 E-mail: info@gracers.com Web-site: www.gracers.com

Article 191 of the Criminal Code of Ukraine). The investigation established that a company specializing in the disposal of hazardous waste, including medical and biological waste, instead of disposing of medical waste in specially designated areas, brought it to illegal and regular landfills for solid waste in Kyiv Region. That medical waste contained syringes, medical masks, gowns and other waste from medical institutions in Kyiv, including hospitals treating patients with COVID-19. In September 2020, the Kharkiv Region Prosecutor’s Office provided procedural guidance in respect of three men who set up illegal production kits for collection of biological materials, transportation, and PCR testing for COVID-19 and other viral infections. Counterfeit goods manufactured without the necessary permits were then sold to public healthcare institutions and pharmacy chains through controlled individual entrepreneurs. About 850,000 sets for the total amount of almost UAH 24 million were sold in 2020 through such individual entrepreneurs on the prozorro.gov.ua website. In May, under the procedural guidance of the Kyiv Podilskyi District Prosecutor’s Office, an international criminal group was found out. They organized a fraudulent scheme on the Internet to misappropriate foreign citizens’ money under the guise of supplying the Pfizer vaccine against COVID-19 to other countries. U4 Anti-Corruption Resource Center, another well-known anticorruption organization, proposes the following measures to minimize corruption during the pandemic, based on the results of its research: • inclusion of representatives of anti-corruption and anti-fraud services (agencies, organizations) in the national committee or working group for planning measures aimed at fighting the pandemic; • identification and assessment of corruption risks in the framework of situational analysis; • provision of public control and awareness, as well as transparency of decisions in planning and implementing crisis response measures, including using online platforms (such as the Ukrainian service for monitoring public procurement for budget funds allocated to fight Covid-19 https://covid.dozorro.org); • analysis and assessment of the results of measures taken to further adjust government programs aimed at combating corruption. In the condition of depletion of resources, the need for preventing corruption in the public and private sectors is becoming increasingly important. Inefficient management of public finance and poor control over its use are not new problems for Ukrainian society. But the pandemic makes these risks particularly relevant. Thus, the misuse of funds aimed at fighting COVID-19 can bring to nought all government efforts to fight COVID. Procurement of goods, works or services at prices that are absurdly several times higher than market prices, as well as misuse of allocated funds undermines public trust in the leadership of the state. In turn, such distrust increases the likelihood of mass refusal of vaccination, which will jeopardize its effectiveness as a whole. At the same time, increasing the transparency of public spending, strengthening the institutions of oversight of procurement procedures can pave the way for a fairer, more inclusive society and prepare our country for global crises to come.

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Antitrust

Proactive Competition Regulation in Digital Markets – is There a Case for Ukraine? Digital markets have become an such as increased merger control threshindispensable part of our lives. Consumolds and data access claims for private ers enjoy simplicity, speed, the choice of enforcement, the Act introduces the conproducts and services online platforms cept of “undertakings with paramount sigoffer, while business users value access nificance for competition across markets”. to end customers irrespective of their The Act does not provide quantitative critelocation. Online platforms, in turn, benria to define such undertakings but refers efit from tracking and profiling customto qualitative case-by-case assessment of ers and the resulting network effects, factors such as access to data and vertical which enable platforms to leverage their integration. The list of prohibitions includes advantages from one area of activity to the prohibition to self-favor, to make the innew ones, building conglomerate ecoteroperability of products or services or the systems around their core services. portability of data more difficult, to hinder However, while there is a fair share competitors in a market on which the comof merit in the success of online platpany in question can quickly expand its forms, an excessive combination of position and others. Notably, just nine days users’ data, network and lock-in effects, after the Act came into force, Bundeskarservice conglomeration make large ontellamt extended the scope of its ongoing line platforms ‘gatekeepers’ between proceedings against Facebook to examine business and end users, which may sigwhether the company is subject to the new nificantly restrain emerging competition rules that apply to undertakings with paraand can substantially harm the rights of mount significance for competition across both business and end customers. markets. In the digital platform economy, le- Managing Partner, CLACIS In order to harmonise EU efforts gal disruption is not an accident since aimed at fairness and the contestability of it develops much faster than applicable EU digital markets, the European Commislegislation. While traditional compesion presented its regulation proposals last tition law provisions on abuse of dominance and anticompetitive year, namely the Digital Services and Digital Markets Acts and the New concerted actions remain applicable to core platforms, their scope Competition Tool. The Digital Services Act aims to complement the is limited, enforcement remains ex-post and requires an extensive in- existing E-Commerce Directive and Platform-to-Business Regulation vestigation of complex issues on a case-by-case basis. At the same and establish new clear rules for handling illegal or potentially harmful time, these rules do not tackle problems inherent in concentrated content online, liability for Third Party Content, and the protection of digital markets efficiently: the risk of anti-competitive monopolization users’ fundamental rights online by online platforms and other providof adjacent markets, demand-side market failures (due to consumer ers of intermediary services. inertia), unequal distribution of data access, to name just a few. Until In its turn, the draft Digital Market Act (DMA) provides for explicit recently, these issues were not addressed, since none of them are competition rules to be followed by large platforms. This draft regutraditional theories of harm in competition law. lation defines “gatekeepers” and establishes detailed regulations to But to ensure the contestability of digital markets, the UK, EU prevent distortion of competition in digital markets. The Draft DMA and Germany have initiated significant steps to complement tradi- covers core online platforms, including online intermediation services tional antitrust laws with proactive competition regulation in digital (e.g. marketplaces), search engines, social networks, video-sharing markets. In 2021 we can expect the introduction of new enforcement platforms, operating systems, cloud systems, messengers and adverbodies and regimes for online markets. Solutions proposed by the tising systems. The Draft DMA designates a core platform as a gatethree competition agencies address the same policy issues: the need keeper if such a platform meets the three cumulative criteria: “(i) has for obligations and prohibitions for platforms with significant market a significant impact on the internal market, (ii) operates a system that power, defining criteria for substantial market power in digital mar- is a key gateway for business users to end customers it enjoys an kets and ensuring efficient ex-ante enforcement powers to a respec- entrenched and durable position in its operations, or it is foreseeable tive regulator. that it will enjoy such position in the near future and meet financial However, each of the three approaches possesses a different ac- thresholds”. Each qualitative criterion is combined with respective ficent. In the UK, the core emphasis is made on the establishment of a nancial thresholds — an approach that differs from the one taken in dedicated enforcement body. In November 2020 the UK government Germany. But at the same time, based on market investigations, the announced the establishment of the Digital Markets Unit in April 2021, European Commission can also designate platforms as gatekeepers, which will produce and enforce a new code of conduct for ad-funded even if the criteria mentioned above are not met. platforms that have strategic market status (SMS). The new body’s The rules for gatekeepers include, among others: (i) an obligation scope of powers and details of the new regime is yet to be confirmed to refrain from combining personal data sourced from core platform by the UK government. However, it is expected that the SMS regime services to any other services offered by the gatekeeper or with perwill provide enforceable ‘do’s and don’ts’ for SMS players, proactive sonal data from third party services; (ii) prohibition of self-favoring; intervention powers and updated merger rules for SMS companies (iii) prohibition to prevent users from uninstalling any pre-installed combined with a coherent regulatory landscape for all digital services. software or app if they wish so; (iv) obligation to allow businesses to Notably, Australia and Japan took similar approaches by designating promote their offers and conclude contracts with customers outside dedicated units to monitor and enforce competition in digital markets the platform. The DMA will give new extensive powers to the Eurowith subsequent initiatives for ex-ante code of conducts for digital pean Commission to monitor markets and identify new practices that markets players. are unfair or limit the competitiveness of online markets. The ComWhile the new regime is yet to be introduced in the UK, the ACR mission will have powers to enforce non-compliance by imposing Digitalization Act amending the German Act against Restraints of Com- fines of up to 10% of the company’s worldwide annual turnover, peripetition came into effect in January 2021. Among numerous novelties odic penalty payments and additional tailored remedies.

Antonina Yaholnyk

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CLACIS CLACIS is a leading competition law advisory, which focuses on matters regarding competition law in Ukraine and the region. The services it provides include all aspects of competition law such as investigations, audits, infringement cases, leniency, merger control approvals, competition law, legal due diligence, antitrust litigation, distribution and contract related antitrust issues, public procurement, as well as compliance issues. The firm’s team of professionals of recognized competence makes CLACIS, in unison with regional coverage, a unique law firm. Well-known as a “one-stop-shop”, CLACIS offers its clients high-quality advice on competition law matters in a number of jurisdictions with international capacity through relationships with independent law firms. It regularly advises international companies at regional level on competition law issues arising in the region. Such multijurisdictional expertise in antitrust matters within this region is unique on the market. Both founding partner Antonina Yaholnyk and CLACIS have been highly recognized by such international and local legal directories as Chambers Europe, Best Lawyers and the ULF Handbook.

Address: Leonardo Business Center, 17/52 Khmelnitskogo Street, 2 Floor, Kyiv, 01030, Ukraine

As one of the leading individuals in the field of antitrust & competition, Antonina Yaholnyk has over 20 years of legal practice, including over 15 years of experience handling antitrust and compliance matters. She also headed Baker McKenzie’s Competition & Compliance Law Practice Groups. Antonina Yaholnyk has an LL.M. degree from the University of Cambridge (UK) and a Master’s Degree in International Law and Economics from the World Trade Institute (Switzerland). Mrs. Yaholnyk chaired the European Business Association’s Competition Committee in 2011-2012 and was elected a Member of the Council of Competition Law Committee at the Ukrainian Bar Association in 2016. Our lawyers are a team of dedicated professionals in antitrust and antitrust litigation, having graduated from leading local and foreign universities with professional experience in international and regional law firms in Ukraine and the region.

Tel.: +380 44 391 2021 E-mail: yaholnyk@clacis.com Web-site: www.clacis.com

Another pro-active instrument proposed by the European Commission is the so-called “new competition tool” (the NCT), through which it is planned to cover not only digital markets. The NCT is designed to enable the Commission to initiate market investigations independent of any infringement of competition rules and impose behavioural and structural remedies unilaterally to address any structural competition problems that are uncovered, irrespective of finding any potential competition law infringement. Such instrument is not unheard of in other jurisdictions such as the UK, where the CMA can engage in such proceedings. This is, however, a new tool for the Commission, which currently can conduct sector inquiries to detect possible infringements of Articles 101 or 102 Treaty on the Functioning of the EU but cannot apply any remedies. Basically this instrument has been designed to react quickly to potential or actual competition Associate, CLACIS law problems in the market (among others connected with digital services). A similar market investigation tool is also available in Ukraine. There are still substantial differences between the proposed NCT and market investigations conducted by the Antimonopoly Committee of Ukraine. While the AMCU can issue recommendations to business entities or state bodies to take measures to prevent/terminate activities that can adversely impact competition, such recommendations do not entail any direct sanctions for entities. The only legal consequence of not complying is the potential opening of case proceedings on an alleged infringement of competition law which may or may not result in sanctions for violating competition law that is already in force. Also, the AMCU’s recommendations usually deal with traditional theories of harm, such as abuse of dominance and anti-competitive concerted actions, while

the NCT is designed to apply in situations where theories of harm under traditional enforcement tools are difficult to articulate or prove. Under the EU-Ukraine Association Agreement signed in 2014, the parties recognised the importance of free and undistorted competition. The Association Agreement provides a list of legal acts to which Ukraine shall approximate its competition laws and enforcement practices. This, however, does not mean that newlyintroduced competition law instruments shall not be covered. The provisions of the Association Agreement have a dynamic effect. Taking into consideration the constantly developing regulation in the EU, Ukraine might implement similar measures led by a general obligation to maintain efficient competition laws, as it decided, for example, in the case of GDPR. Moreover, the Association Agreement is subject to comprehensive revision, which is already on its way. And considering the cross-border nature of digital markets, the EU might include the DMA, DSA and NCT provisions when adopted in the harmonisation schedule. Ukraine is part of the global digital market and already has some influential local players. Thus, a specific competition law regulation as well as practice in the area is imminent. This means that, sooner or later, Ukraine may implement ex-ante competition rules specific to digital markets. Considering the speed of development of digital markets and the scale of harm that can be caused by distorted competition on such markets, it is essential that laws and practice change in a proactive manner to prevent adverse effects of dominance in digital markets, which would enable the saving of significant resources spent on investigations and attempts to redress harm ex-post.

Anastasiia Zeleniuk

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Asset Recovery

Recovery of Debtor’s Assets Located in Ukraine and Overseas are no documents confirming ownership of such property. Such a situation is typical for enterprises that have been established for a long time and which have not been properly documented. The procedure on liquidation of a We are convinced that in this case the debtor’s property is the most radical in liquidator must include all the property on bankruptcy proceedings. The key figure the balance sheet of the bankrupt in the liqat this stage of the bankruptcy proceeduidation estate, and if certain individuals beings is the liquidator, who organizes the lieve that the property does not belong to the entire liquidation procedure and, in fact, bankrupt, they are entitled to challenge the replaces the bankruptcy authorities. liquidator’s actions in court. The main purpose of the arbitration It is also important to assess the proptrustee during the liquidation procedure erty of the bankrupt, which aims to deteris not just the sale of all the debtor’s propmine the initial value of the property of the erty. Both in the reorganization procedure bankrupt for subsequent sale. Both the and in the liquidation procedure the arbibankrupt and creditors are interested in detration manager is entrusted not only termining the highest possible price of the with the powers of the authorized person bankrupt’s property. of the bankrupt, but also with special In order to identify the property of the powers aimed at forming the liquidation bankrupt, the liquidator sends inquiries to estate of the bankrupt, measures aimed the authorities that carry out registration of at finding, identifying and returning the property. The Code does not contain a list of property of the bankrupt, which is bethese bodies, in connection with which the ing held by third parties, the sale of the Senior Partner, L.I.Group, participants of the process are assisted by bankrupt’s property and settlements with court practice. Until recently, it was considcreditors as prescribed by the Bankruptcy Arbitration Manager, Attorney ered sufficient for the purpose of approval Proceedings Code. Artur Megeria graduated from NTUU Igor Sikorsky of the liquidation balance to send inquiries The powers of the liquidator under Kyiv Polytechnic Institute, major in Law, 2008. Clito the registrar of property rights to movable Article 61 of the Bankruptcy Proceedings ents accompanied by Artur Megeria: OTP Bank JSC, and immovable property, the State AutomoCode of Ukraine are aimed at preserving UkrSibbank JSC (BNP Paribas), Bank Credit Dnipro bile Inspectorate, the State Inspectorate for the property of the bankrupt and at re- PJSC, as well as TAS Group, Svarog West Group Agriculture, credit institutions and bodies plenishing the liquidation estate in order Corporation, DCH, ALFA SMART AGRO LLC, Vitagro that keep records of land rights and more. to maximize satisfaction of creditors’ Group, Investohills Vesta LLC, Helios Financial ComIn the liquidation procedure, the liquidaclaims. pany LLC and many others. tor’s task is not a simple statement of the In the liquidation procedure, the key fact of absence of property, but an effective actions are aimed at forming the liquidation estate and disposing of the bankrupt’s property in order to convert and proper search for the bankrupt’s property, so the liquidator must the bankrupt’s property into funds, as well as the proportional and eq- prove in the report that his actions were aimed at finding and identifying uitable distribution of funds received from the sale of this property to the bankrupt’s property. In addition, the liquidator must perform reasonable and logical actions, as well as make inquiries to the relevant authorcreditors. The composition of the liquidation estate and, accordingly, the sat- ities, taking into account the past activities of the bankrupt. In this case, isfaction of the creditors’ claims depend on the actions of the liquidator the number of requests is not a criterion for the quality of the liquidator, in identifying the assets of the bankrupt. The Bankruptcy Proceedings as this criterion is the actual filing of the liquidation estate. Code of Ukraine defines the actions of the arbitration manager as folCollection of Financial Information lows: • conducting an inventory reconciliation and valuation of the bankIt’s important to identify and recover any lost financial and primary rupt’s property; accounting records so as to identify assets and confirm their withdrawal. • filing claims against third parties for the return of amounts of receivIn the absence of documents on the financial and economic acables to the bankrupt; tivities of the bankrupt enterprise, as well as in the event of it being im• submission of applications to the court on recognition of transac- possible to obtain these documents, the liquidator of the bankrupt is tions (agreements) of the debtor as invalid; obliged, in order to fulfill the obligation under Article 61 of the Code on • application of measures aimed at finding, identifying and returning the analysis of the financial situation of the bankrupt, to take all meathe property of the bankrupt, which is in the possession of third sures aimed at identifying the assets of the debtor, to investigate the parties. movement of funds in the bankrupt’s accounts for the period before the The Bankruptcy Proceedings Code of Ukraine foresees three opening of bankruptcy proceedings and after the decision in the form of grounds for including the bankrupt’s property in the liquidation estate: recognition of the debtor as bankrupt. property belonging under the right of ownership, property belonging unTherefore, measures on obtaining from the former management der the right of economic management and detection of property during and recovering lost documentation on bankruptcy (primary, accounting, the liquidation procedure. financial documentation, agreements and contracts) are mandatory, If everything is clear with the first two grounds, then the third as is an analysis of the financial condition of the bankrupt with written (detection during the liquidation procedure) is a broad concept, and it evidence of this analysis. It is the debtor’s primary documentation that includes conducting reconciliation of inventory. The Code provides for should contain information about property assets, including receivables, cases not only when the bankrupt has documents for individually identi- alienated property, securities, cash, and so on. fied property, but also when the bankrupt has property in the form of The liquidator must analyze any contracts and other transacstock, accounted for a long time on a company balance sheet, but there tions of the bankrupt, indicating a list of them in order to determine

The Role of the Liquidator in the Formation of the Liquidation Estate

Artur Megeria

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L. I. GROUP L.I.GROUP law firm is a recognized market leader in the field of bankruptcy and restructuring, litigation. The company has been providing comprehensive qualified legal services in the jurisdiction of Ukrainian and international law since 2008. The company successfully provides legal support to largescale financial and industrial groups in Ukraine. During this period, we have attracted the following largest international banks of Ukraine as our loyal customers: JSC OTP Bank, JSC UkrSibbank (BNP Paribas), PJSC Ukrsotsbank, PJSC Piraeus Bank MKB, PJSC Universal Bank, JSC Alfa-Bank, JSC Bank Credit Dnipro. Other customers were TAS Group, Svarog West Group Corporation, DCH Group, ALFA SMART AGRO LLC, Vitagro Group, LADA International Corporation, Investohills Vesta Financial Company LLC, Helios Financial Company LLC, FC Horizont LLC and many others. Mykola Kovalchuk, attorney and arbitration manager, Doctor of Philosophy in Law (PhD) and Artur Megeria, attorney and arbitration manager are senior partners of L.I.GROUP.

Law Practices Bankruptcy, debt restructuring, litigation, corporate disputes, protection of honor, dignity and business reputation, antitrust law, criminal law, business protection, sports law.

Address: 36-D Yevhen Konovalets Street, Office 4-G, Kyiv, 01133, Ukraine

their legality (especially for movable and immovable property). In addition, the liquidator identifies and applies for invalidation of bankruptcy agreements on property under Article 42 of the Code and on other grounds provided by civil legislation of Ukraine. It is worth noting a separate set of actions to identify receivables and recover them, as it is also an asset that can cover the costs of liquidation proceedings. After the liquidator of the bankrupt has identified all the assets, conducted reconciliation of inventory, analyzed financial and primary accounting documents, he must conclude whether the bankrupt’s property is owned by third parties and whether the bankrupt’s property was illegally expropriated before the opening of bankruptcy proceedings or during it. If the bankruptcy of the property of third parties or illegal alienation of such property were identified, the liquidator must take measures to return property by sending appropriate appeals to persons who have such property or address a court with a lawsuit, which is a more effective mechanism.

Key Facts We are ranked among the TOP-20 law firms of Ukraine, TOP-5 in terms of financial efficiency, business protection, number of lawyers (according to the version of Yuridicheskaya Practika TOP-50 Leading Law Firms of Ukraine 2020). L.I.Group was distinguished in the field of its bankruptcy practice. The company is the winner of the Legal Awards 2021 in two nominations — Best Law Firm of the Year in Sports Law and Best Law Firm of the Year in Dealing with Problem Debt. Ukrainian Law Firms. A Handbook for Foreign Clients 2020 noted the company in the TOP-5 in bankruptcy, and also named us among the top companies in the practice of litigation. In the TOP-25 of the best companies according to the results of the professional research of Yurydychna Gazeta — Market Leaders of 2020. In the same study, the company was ranked the best in the field of bankruptcy, debt restructuring, business protection, as well as in the TOP-12 in terms of financial efficiency. Liga Zakon Awards 2020 recognized it the best law firm in civil disputes and litigation. The best law firm in the field of bankruptcy, according to the results of Legal Awards 2021. The company is also in the Golden League for marketing communications (PLS TOP Teams 2020).

Tel.: +380 44 227 0514 E-mail: lawyer@ligroup.com.ua Web-site: www.ligroup.com.ua

• obstruction of individual creditors or the creditors’ committee in the process of returning assets; • lengthy litigation with regard to the issue of return of assets of the bankrupt (entails depreciation and even reduction of assets). A clear example of the return of assets in a bankruptcy case is the case of the state-owned shipping company Black Sea Shipping Company. There were a huge number of real estate objects in Odesa belonging to the Black Sea Shipping Company. The arbitration manager managed to return part of the debtor’s assets and draw up title deeds for property to the total estimated value of UAH 130 million. These included: car depots, radio broadcasting centers, real estate in the city, a yacht club, restaurant building, two office buildings in the city center. But the big surprise awaited the arbitration manager when he was searching for the company’s assets abroad. The docuSenior Partner, L.I.Group, ments for an asset owned by the Black Sea Arbitration Manager, Attorney, Shipping Company in Vietnam were found in the shipping company’s archives. These Doctor of Philosophy in Law were brief snippets. In Ukraine, the arbitraMykola Kovalchuk graduated from the National Aviation manager learned the Black Sea Shiption University, major in Law, Aviation and Electronic ping Company owns corporate rights in the Devices, Finance, 2006. Law practices: bankruptcy, amount of a 33.7% stake in a joint venture debt restructuring, litigation, corporate disputes, Key Difficulties in Recovering called Lotus. protection of honor, dignity and business reputaAssets of Bankrupt The joint venture owns a small port in tion, business protection, sports law. Provides legal Vietnam, the history of which dates back to The following are among the prob- support to world-class athletes. Mykola is currently Soviet times. “In Soviet times, Vietnam allolem issues in returning assets of a bank- the personal lawyer to professional boxers: Oleksandr cated 80 m of berth wall to create a port. rupt to the liquidation estate: Hvozdyk, Serhiy Derevyanchenko, Denys Berynchyk, The Black Sea Shipping Company had in• imposing such a duty on the arbitra- Vladyslav Sirenko, Oleh Malinovskiy and many others. vested USD 3.3 million in this joint venture.” tion manager alone (the liquidator Twice awarded by the international rating agency As a result of the return of ownership may lack the physical and material The Best Lawyers in the category Judicial Practice, in of corporate rights in Lotus, the Black Sea resources to carry out the set of mea- 2021 and 2022. Shipping Company receives dividends, sures); which are assets from which to pay off • repeated alienation of property in debts owed to creditors. favor of third parties (systematic In each individual bankruptcy case, the change of owners in order to complicate the return process in arbitration manager chooses the means and methods for filing the liqthe future); uidation estate. However, the arbitration manager should not forget that • lack of title and other supporting documents for the property; his/her actions are monitored by a court, the creditors’ committee, the • expiry of the statute of limitations; • lack of funds to pay the court fee for filing relevant applications to state bankruptcy authority and other participants in the bankruptcy proceedings, as well as by law-enforcement agencies. a court;

Mykola Kovalchuk

WWW.UKRAINIANLAWFIRMS.COM

Banking & Finance

Source of Wealth Compliance Report — a New “Must Have” in the Banking and Finance World • conducting transactions without economic justification or with dubious ecoFor at least the last two decades, nomic justification, violation of transfer the world community has been actively pricing or intragroup financing requirefighting the problem of money launderments; ing. On 19 June 2018, the EU adopted • conducting frequent identical transacthe 5th anti-money laundering Directive tions, cash or deferred payment transac(Directive 2018/843), which introduced tions; many changes, particularly regarding • use of electronic funds; transparency, openness, evaluation cri• inability to track the movement of capital teria and financial transactions protecdue to defective reporting and unreasontion as well as significantly affected the able secrecy of materials, such as the activities of banks, especially in the field formation of capital through cash loans of compliance procedures. Therefore, with the inability to confirm the lender’s new customers face increased banking source of funds; control regarding the confirmation of • inability to confirm the fulfilment of tax source of capital, activities and transacobligations and the absence of tax debt; tions legality. • conducting business activities with the Although compliance requireuse of fiduciary (trust) relations or unments are becoming more and more reasonable delegation; stringent, the risk-based approach • negative media information or its abremains the main method used for sence and others. acceptability analysis. It follows that For instance, where the funds come banks will continue developing their from a third party, the risk is large enough Partner, Head of Corporate & M&A, compliance policies for proper cusand leads to further enquiries about the retomer due diligence, based on regula- ETERNA Law lationship between the customer and the ultory requirements of national legislation timate underlying principal of the funds (i.e. and recommendations of specialized the actual provider of the funds) as well as bodies, such as the Recommendations of the International Financial assessment whether the purpose of the transaction is in line with the Action Task Force (FATF). documented economic profile of the customer. Consequently, a potential customer will be assigned to a certain Besides, provision of source of wealth confirmation documents risk group based on the adopted internal requirements and the direct should be made considering the distinctions between laws of different compliance assessment will be carried out under specific procedures states, business customs, mentality and other relevant factors as perof the assigned group. Thus, the lower the risk of a potential custom- fectly legal and habitual operations in the territory of one state may be er, the fewer documents and information will be requested, and the questioned following the national law of the bank’s jurisdiction. Thereless time needed to open a bank account. Without doubt, the source fore, additional unwanted issues may arise and need to be clarified. of wealth compliance report is one of the most efficient instruments, For example, foreign banks may question the veracity, validity which can reduce the level of risk, simplify the opening procedures as and acceptability of private law agreements, which are not prohibited well speed up the opening process. and are common practice in CIS countries, such as a loan agreement concluded between individuals. The regulation of this issue in Spain Source of Wealth Risk Assessment as High Risk either is indicative because, according to Articles 1218, 1227 of the Spanish Civil Code and Judgment No. 10.163 of the Supreme Court, private law at Customer or Matter Level As already mentioned, risk criteria are set internally by each bank contracts are not recognized as evidence of a fact in themselves, and separately, but we can identify the following generally accepted risk only facts stated in public documents should be taken into account. Therefore, in the process of finding and choosing a bank, as well criteria: as in the initial communication, it is necessary to take into account • Politically Exposed Person (PEP) status; • conducting business in countries with high levels of corruption, or- the national characteristics of the state of incorporation of the bank, to correlate differences in the national legal systems of different jurisganized crime, drug production or terrorism; • conducting business in countries with limited AML policies or those dictions and the potential perception of a fact by compliance officers.

Why it is Important and Useful

Oleh Malskyy

that have not implemented the provisions of EU directives and FATF recommendations into national legislation; • conducting vulnerable activities, such as cryptocurrency, gambling, military, armaments and others; • receiving income from companies without an economic presence, despite the lack of specific requirements for the creation of an economic presence in the jurisdiction of the company’s incorporation; • income from intricate corporate structures, which also include companies from offshore jurisdictions or companies that use bearer shares or other similar instruments;

Main Features of Source of Wealth Compliance Report The Source of Wealth Compliance Report can be defined as a document that first of all explains the origin of the customers’ funds and answers potential questions from the bank regarding customer and matter issues. Generally, the Source of Wealth Compliance Report includes, but is not limited to, customer identification, his/her history of formation, information regarding a customer’s activities, an overview of his/her

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ETERNA LAW ETERNA Law is a full-cycle European law firm possessing strong expertise in Ukraine and the CIS region. Founded in 2002 in the Ukrainian capital, the firm has grown rapidly. We are continually named among market leaders for quality, responsiveness and reliability of service as well as for the depth of our expertise. We are a dynamic, client-oriented and solution-focused firm whose team of energetic, foreign-educated young professionals provides concise and practical legal advice in a cost-effective manner, while not compromising on quality. ETERNA Law has an extensive history and experience within Ukraine and the CIS region. We understand these diverse markets, which demand international experience from a law firm in unison

Address: Gulliver Business Center, 1-A Sportivna Square, 32 Floor, Kyiv, 01001, Ukraine

with knowledge of local business realities and the legal environment. It’s for this reason that we consistently act in some of the most highprofile matters in Ukraine and the CIS for a broad range of clients, such as international financial institutions and corporations across various industry sectors, government bodies, non-governmental organizations, etc. We are an exclusive member of four lawyers association — First Law International, PLG International Lawyers, Libralex, AIEL which gives us the possibility to cover more than 80 jurisdictions for the needs of our clients.

Tel.: +380 44 490 7001 E-mail: office.kyiv@eterna.law Web-site: www.eterna.law

reputation, transaction details, extracts Last but not least, successful idenfrom registries, indicators of well-being, tification of the sources of a customer’s a detailed list of related persons as well wealth is of great use for gambling inas the customer’s compliance assessdustry participants. It enables gaming opment. erators to mitigate risks related to money Such reports involve OSINT (Open laundering and financial crime. Although Source Intelligence) investigation techuncovering the exact source of wealth is niques and are based on accurate and not always straightforward, it is already a reliable sources of information, docuregulatory requirement in many jurisdicments provided by the customer, infortions. Apart from reputational damage, the mation received from the authorities, penalties for non-compliance may include: publicly available information, external large fines and legal prosecution, increased Internet resources, the press and its scrutiny and monitoring by the regulator, sources. Whenever possible, all facts suspension of operating licenses or even are documented and such pieces of being shut down completely. proof are attached to the report. The exact scope of the report depends on the To Sum Up customer and his/her activities. If the Taking into account that tightened bank has additional questions during the requirements of banks regarding proving check, the report can be supplemented. the Source of Wealth Compliance Report It should be noted that all the inforof potential customers, which are likely to mation presented in the report is objecsee an even bigger crackdown in the near tive, but is aimed primarily at meeting the future, provide for a number of challenges interests of the customer. Therefore, one Partner, Head of Banking & Finance and obstacles during the opening process, of the important points is description of Source of Wealth Compliance reports are the risks associated with the customer. Practice, ETERNA Law an instrument for proper assessment of Based on our experience, compilation customers and risk reduction. of a list of risks that the bank is most Furthermore, the broadest majority of banks positively perceive likely to indicate during the check is very useful. These risks are ususuch reports, since they contain a consistent detailed history of the ally described in order to reduce their impact on the final decision. For formation of the customer’s capital, its evaluation, the customer’s example, the conduct of customer activities in vulnerable territories personal history with supporting documents in an easy-to-process can be considered as such that it is associated with terrorism. In this format, which contributes to a greater level of trust between the cusregard, extra early provision of objection or explanation to such potentomer and bank, speeds up the verification process and significantly tial conclusion is of high importance as it can soften the possibility of increases the customer’s chances for a positive decision. In addition, a negative answer. submission of statements on the source of a customer’s capital, preNegative data concealment is a blunder especially if negative inpared and certified by a reputable law firm, is the so-called “gold standformation is publicly available. In this case, the best way is to include ard” for foreign banks. this information into the report and refute it with appropriate arguTherefore, a Source of Wealth Compliance Report is a new “must mentation, supporting documents and legal opinions. Moreover, this have” for private and corporate clients to tackle challenges in the bankapproach can increase the credibility of both the customer and the ing and finance world. entire report.

Nickolas Likhachov

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Banking Disputes

Insolvent Bank Stakeholders and Directors are to Be Overtaken for the benefit of stakeholders (which cannot be considered as a bank due to the absence of a license from the National Bank of Ukraine). However, the bank liquidation procedure, as initiated by the DGF, is not completed and will continue. Moreover, before Law No 590-IX came The so-called “bankfall” that took into legal force there were cases in court place in previous years has triggered proceedings under the statements of claim new genres in banking disputes. The of insolvent banks, which were recovered Deposit Guarantee Fund (DGF) is makfor stakeholders, against the DGF and the ing attempts at recovering damages National Bank of Ukraine regarding recovcaused to banks and their creditors ery of damages. from bank directors and stakeholders. However, the transitional provisions of On the other hand, bank stakeholders Law No 590-IX obliged former stakeholders have sued the DGF and National Bank of to give back documents, seals and other Ukraine with demands regarding invalivaluable assets of the bank to the DGF. dation and cancelation of revocation of Thanks to that, the DGF, getting back cona bank license decision, as a result, with trol of a bank, conducted actions aimed at demands to recover assets in kind, speclosing court procedures initiated on behalf cifically to recover the bank as it is which of a bank by former stakeholders demandobtains a bank license. ing recovery of damages. In the same way, And while numerous cases regarda bank which was recovered for the bening recovery of damages from bank diefit of stakeholders, saw the issue of legal Partner, Attorney, ADER HABER rectors are in court proceedings for now, capacity resolved because control of the the issue of recovering bank assets to Key specialization: banking, corporate and commerbank was returned to the DGF and the latter return them to former owners was cial disputes, cross-border litigation, energy litigation dealt with lawsuits filed against it by former resolved by the legislator. And that is and regulatory stakeholders on behalf of the legal entity, something new. The DGF and National which was a bank prior to its liquidation. Bank of Ukraine discovered that if it is According to the provisions of Law No complicated to succeed in a court case against former stakeholders 590-IX, former stakeholders of the insolvent bank, the decision on liqand bank directors it is not fatal. There is always the path of legislative uidation of which was declared to be illegal, can only protect its rights amendments. Taking into account the fact that finding funds for the by filing a damage recovery lawsuit in monetary form. In this event, the State Budget of Ukraine is essential and a high-priority issue, legisla- sum of damages caused should be defined as the value of that partors are always glad to endorse an initiative of this kind. ticular bank’s shares on the day on which the decision to liquidate the The Law of Ukraine On Introducing Amendments to Certain Leg- bank was adopted. It is interesting, that the provisions of Law No 590islative Acts Regarding Improvement of Regulation of Banking Activity IX set out demands regarding establishment of the said value. The law Mechanisms No 590-IX came into legal force on 23 May, 2020 (Law provides that it is obliged to take into account the fact that this refers No 590-IX), which acted as a key event for the numerous disputes be- to a bank’s shares “without outlook”. And this is not all — a conclutween former bank stakeholders on one side, and the DGF and the sion on the value of a bank’s shares should be stipulated in an audit National Bank of Ukraine on the opposite side. We will not go into detail report on a bank’s financial activity, which should be issued by auditors as to provisions of the named law, but we’ll just mention that according who meet the criteria of the National Bank of Ukraine. Technically, the to the provisions of Law No 590-IX, the procedure for a bank’s liqui- claimant is obliged only to pay the court fee and to deposit expenses dation cannot be canceled or put on hold in the event of cancelation on gathering certain stipulated evidence and its evaluation. by a court of decisions adopted by the National Bank of Ukraine on revocation of a bank license. In such a case former stakeholders can only count on recovery of damages caused by illegal decisions and/or Everyone Will Be Responsible The DGF, on the basis of Article 52 of the Law of Ukraine On the actions of the DGF or the National Bank of Ukraine, but not to get back Deposit Guarantee System for Individuals sues an insolvent bank’s asthe legal entity which has a bank license. The first result of the adoption of Law No 590-IX, namely dismiss- sociated persons with demands to recover damages caused to the al of cases as per demands made by stakeholders in a former bank, bank. There are currently 64 similarly filed statements of claim for a concerned putting on hold or closing the bank liquidation procedure total amount of more than UAH 97.2 billion. For now, proceedings within most of the cases relating to recovand recovering control of the insolvent bank to the former beneficiary. It should also be mentioned that at the time of adoption of Law ery of damages caused from former stakeholders are on hold till comNo 590-IX there had already been several cases when stakeholders in mercial case No. 910/11027/18 is considered. This means that coman insolvent bank recovered control of it. In this event the participants mercial case No. 910/11027/18 can be a leading case for deciding on of the case faced the legal capacity issue of a legal entity, which was damages (payable) to a bank and its creditors. Within the said case the recovered by the stakeholders. That is so because due to the cancel- Grand Chamber of the Supreme Court is considering the cassation of ation of the decision regarding revocation of the bank license and the the DGF against the decision of the court of first instance and appeal decision on bank liquidation the legal entity does not automatically re- courts in a case on recovering damages caused from persons associcover the bank license of the National Bank of Ukraine for conducting ated with the UKOOPSPILKA bank. Within the confines of the case the DGF insisted that directors banking operations. Due to the provisions of Law No 590-IX the liquidation procedure cannot be put on hold or wound up, there is a kind of (members of the board, supervisory council) have caused damages uncertain legal capacity of the legal entity as the entity was recovered to UKOOPSPILKA and its creditors by concluding a bond sale and

Deposit Guarantee Fund Has Gained an Advantage in Disputes against Insolvent Bank Former Stakeholders and Directors

Andrii Hvozdetskyi

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ADER HABER ADER HABER Dispute Resolution Practice is renowned in Ukraine, has been successful in achieving results in a wide range of controversial cases — trial and appeal, international and domestic, and through arbitration and other forms of alternative dispute resolution. Our clients know that we are fearless advocates who achieve winning outcomes by anticipating what’s next. They seek our help when working under the burden and urgency of possible litigation, and entrust us with their reputation and bottom line. ADER HABER specialist team regularly handles complex commercial litigation, class actions, international litigation, securities litigation, bankruptcy and creditors’ rights matters, product liability, white-collar and enforcement defense cases, and labor and employment matters. We apply our deep experience to deal with the matters in certain key industries, including government contracts, construction, Address: Business Center Carnegie Center, 14th Floor, 7 Klovsky Uzviz, Kyiv, 01021, Ukraine

agriculture, energy and natural resources, healthcare, banks and financial institutions, services, trade. Our litigation team is led by Yuriy Petrenko and Andrii Hvozdetskyi, who is recognized by The Legal 500, as “pragmatic” and “robust”. Clients will be reassured to know that the firm as a whole receives recognition and is ranked by The Legal 500 and recommended for its expertise in Chambers. The Legal 500 says it is about us: “They always make you feel like you’re their most important client.” In 2020, the litigation team significantly strengthened its portfolio of projects. The clients of ADER HABER are companies from the USA, China, Switzerland.

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No. 4546 (Draft No. 4546). It contains provipurchase agreement. The defendants, sions that widen the scope of persons who in their turn, insist that there is no set of can be sued by the DGF to recover damagelements of a civil offense. es caused to a bank being liquidated. Draft After reviewing the case for more No. 4546 proposes to entitle the DGF to sue than a year and a half the Grand Chamany other persons who are parties: ber of the Supreme Court granted the • of deals, which have been invalidated by DGF’s statement of claim and ordered the DGF; recovery by management of the UKOOP• of deals that contain terms not complySPILKA bank of approximately UAH 75 ing with prevailing market conditions; million in inflicted damages as per the • of loan agreements, loan debtor under decision of 25 May, 2021. The Grand which doesn’t spend the money in acChamber of the Supreme Court has not cordance with the lending purposes; yet drafted and published the full text of • who has gained postponement of paythe decision, but several arguments of ment, reduction or exemption from inthe Supreme Court are already known. terest or penalty payments; The Grand Chamber of the Su• of deals, regarding which the guaranpreme Court has come to the conclutee was halted or changed (mortgage, sion of directors’ and stakeholders’ joint pledge); responsibility for damage recovery re• who received assets of the bank as a gardless of whether or not such persons guarantee (pledge, mortgage, guarantake direct part in the making of any detee, trust); cisions on bank deals and assets. The • who has received loans in contravenGrand Chamber of the Supreme Court tion of the National Bank of Ukraine’s points to the obligation of bank direc- Senior Associate, Attorney, ADER HABER requirements; tors and stakeholders to act in the best • of deals concerning the purchase by the possible way for the benefit of the bank, Key specialization: banking disputes, commercial litigation, disputes against state authorities bank of non-state bonds, and the issuits creditors and clients. Such a concluers of the bonds. sion creates a threat of responsibility for In addition, Draft No. 4546 stipulates those directors who did not vote in favor of certain deals and for subsequent directors who, in the opinion of the that the basis for compensation of damages caused to the bank’s Grand Chamber did not take actions to evade insolvency of the bank creditors by the bank’s directors and stakeholders will be the decisions or actions, inactivity of such persons or in connection with imafter the deal (in question) is made. Moreover, the Grand Chamber has not linked the fact of infliction proper and dishonest performance of their duties, or without taking of damages to a bank’s creditors with invalidation of challenged deals, into account the interests of the bank and / or its creditors, or without which could be indicative of its non-conformity with law, but the Grand complying with the limits of usual business risk, or with obvious negChamber has connected the named with the shortage of insolvent ligence or waste. Obviously, such normative consolidation actually bank assets to satisfy all the demands of creditors. Actually, this refers means the principle of responsibility of the directors and stakeholders to introducing the principle under which a bank’s associated parties of the bank by default, which allows the courts to satisfy the claims are, by default, responsible. This is a dangerous precedent for the di- of the DGF. The biggest threat of Draft No. 4546 is already familiar from Law rectors and stakeholders of every bank being liquidated, because it is known that disposal of assets usually proceeds after several opening No. 590-IX. That is negligence of the principle of inadmissibility of the price reduction stages and differs not only from the book value of such retroactive effect of the law. It is assumed that all the procedures will be applicable for creditors’ claims satisfaction of those banks whose assets but also from the real amount of claim owned by the bank. liquidation was initiated before the law came into legal force. Coming Threats No doubts, there is a whole era of mass recover from the direcOn 19 May, 2021 the Verkhovna Rada of Ukraine adopted at tors and stakeholders of liquidating banks, and under such circumthe first reading stage the Draft Law On Introducing Amendments to stances there are almost no opportunities for procedural maneuver Certain Legislative Acts of Ukraine Regarding Banks Liquidation and and rights protection. In fact, the amount at stake is equivalent to 10% Improvement of Mechanisms for Satisfaction of Creditors Demands, of all revenues of the State Budget of Ukraine.

Dmitrii Shahirmanov

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Banking Resolution

Alternative Dispute Resolution The issue of challenging decisions courts in their case considerations. Thus, of the National Bank of Ukraine and the said ruling of the Grand Chamber of the the state-run Deposit Guarantee Fund Supreme Court has changed rules of the of Ukraine has been acute since 2014, game in disputes with the state regulator when banks were massively recognized and the Fund completely and for everyone. insolvent due to social and political developments of that time. That process, Regarding the Private Law which became known as the fall of Nature of a Given Dispute banks, marked the withdrawing of alAs noted above, factual ground for the most 100 financial institutions from the bail-in was referring the claimants to the market. list of related persons upon the decision Of special significance in this of the NBU. In other words, the subject of story are judicial proceedings related the given dispute was directly connected to the withdrawing from the market of with the decision of the authority — the NaPrivatbank, which is the biggest bank of tional Bank of Ukraine. It is for the purpose Ukraine (hereinafter — the Bank). It must of challenging the actions and decisions of be noted that the Bank was not actually the authorities, and compensation of damwithdrawn from the market as 100% of age sustained in the result of such actions its shares were nationalized after it was and decisions that administrative justice recognized insolvent. exists in the Ukrainian judicial system. In December 2016, having changed Contrary to this, the Grand Chamber of its owner, the Bank continued operating the Supreme Court reached the conclusion in the market. Along with this, a bail-in that the given dispute had merely a private procedure of converting deposits into Partner, EQUITY Law Firm law nature and was related to the claimants’ the shares of the Bank and their further property right to the Bank deposit, rejecting sale for free to the state was used in respect of a certain category of the clients that the NBU had found to all the arguments that it was the decision of the authority that was at the be Bank-related persons. According to the NBU and the Bank’s new core of the dispute. Under such circumstances, the Grand Chamber of management, this procedure made it possible for the state to “save” the Supreme Court reached the conclusion that such disputes are to be resolved in courts of civil and commercial jurisdiction. funds on nationalization of the biggest financial institution. It is worth noting that until now the absolutely opposite legal Taking into account the unfairness and illegality of such measures, a group of claimants whose money was converted into the capi- position of the Cassation Administrative Court in rulings of 20 May tal of the Bank filed a claim to have the said measure canceled and 2018, in case No. 826/20288/16 and 4 September 2018, in case to have their money returned in the administrative court proceeding. No. 826/20239/16 had existed. Having such totally opposite approaches to the jurisdiction of the Following two positive court decisions, the case was sent to the Grand given disputes gives rise to legal uncertainty which, by its nature, is a Chamber of the Supreme Court in cassation. Thus, on 15 June 2020, the Grand Chamber of the Supreme Court restriction of a person’s right to judicial protection. This has been numade a landmark ruling in case No. 826/20221/16, which changed merously stated by the European Court of Human Rights, particularly legislation approaches to contesting decisions of the NBU and Deposit in its decisions regarding Ukraine. In particular, by its decision of 17 January 2013, in the case Guarantee Fund. As we have already mentioned, the factual ground for resorting to Mosendz v. Ukraine (application No. 52013/08) the European Court the bail-in was the fact that the clients had been referred to as Bank-reof Human Rights stated that the applicant was deprived of effective lated persons, which was made not by the Bank itself but by the NBU. national legal remedy guaranteed by Article 13 of the Convention due Therefore, the subject of the dispute in case No. 826/20221/16 was to jurisdictional conflicts between civil and administrative courts (para the illegality of the NBU decision on Bank-related persons and, con- 116, 119, 122, 125). Apart from this, by its decision of 21 December 2017 in the case sequently, insufficiency of all the following procedures regarding the conversion of money. As the nationalization of the Bank and the bail-in Shestopalova v. Ukraine (application No. 55339/07), the European were made by the public bodies of Ukraine, the proceeding was initi- Court of Human Rights concluded that the applicant was deprived of ated in administrative courts resolving disputes with public authorities. the right to access the court in contravention of Article 1 of the ConThe court of first instance and appellate court granted the claims: the vention, since national courts had provided her with controversial interdecision to find the claimants related persons and, consequently, the pretations as to the jurisdiction (para 13, 18, 24). Moreover, the Grand Chamber of the Supreme Court itself reached bail-in procedure made in their respect, were reversed. Meanwhile, the given was being heard by the court of cassation, similar conclusions in its rulings in case No. 752/10984/14-ц of 16 Ocbut was sent to the Grand Chamber of the Supreme Court which, in its tober 2019, and in case No. 243/5078/17 of 21 November 2018. ruling of 15 June 2020, set a number of fundamental positions: • the dispute over challenging the acts of the above-mentioned pub- Regarding the Impossibility to Challenge the Decision lic bodies is of a private law nature, for this reason it is to be heard on Related Persons made by the NBU and the by a civil or commercial court Decisions of the Deposit Guarantee Fund • the decision on finding persons related may not be heard by a court Thus, the Grand Chamber of the Supreme Court points out that in any jurisdiction since it has exhausted its validity. It can be explained by the fact that as of the moment when the case was being when the court made the decision in the case, the disputed decision heard and court decisions were being made in connection with the on related persons had already exhausted its validity, since the register nationalization of the Bank, the list of its shareholders had already of the bank shareholders had been changed by the time the case was been changed and the claimants were no longer considered related considered and the court decisions on the nationalizations of the Bank were delivered. It was for these reasons that the claimants were no persons • Decisions and orders of the Deposit Guarantee Fund made during longer considered to be related persons. What is surprising is that only 8 days passed between the date the bail-in procedure may not be challenged in court since these are internal documents of the Bank and are mandatory only for the when the claimants were recognized related persons and the date Bank’s employees without creating any legal effects for the claim- when the shareholders of the Bank were changed (nationalization). During those 8 days, the temporary administration of the Bank conants. It is worth noting that this legal position relates not only to the giv- verted the claimants’ deposits into the shares of the Bank, whereby it en dispute. Under Ukrainian legislation, conclusions regarding applica- actually interfered with the claimants’ rights. However, the position of bility of legislative acts expressed in rulings of the Supreme Court are the Grand Chamber of the Supreme Court implies that the decision on ersons could have been canceled by a court only within those mandatory for all authorities and must be taken into account by other related p

Vyacheslav Krahlevych

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Address: 4 Rylskyi Lane, Kyiv, 01001, Ukraine,

Tel.: +380 44 277 2222 E-mail: info@equity.law Web-site: www.equity.law

which was formally made in 9 days after 8 days (before making changes to the the drafting and announcing of the introregister of shareholders), when it had not ductory and operative part of the Grand yet “exhausted” its validity. There is no Chamber ruling in case No. 826/20221/16, point explaining here that it is absolutely but almost three months before its full text unrealistic not only for Ukrainian but also was announced. for European courts to make a decision In the given decision the Constituon the merits of the case to cancel the tional Court of Ukraine pointed out that “... NBU decision within 8 days of making legislative regulation should avoid prohibithis decision. tions and restrictions with regard to exerApart from this, in its ruling the cising by a person of the right to challenge Grand Chamber of the Supreme Court decisions, acts or omissions of authoristated that both decisions and orders ties, particularly in the way of determining of the Deposit Guarantee Fund made at the legislative level an exhaustive list during the bail-in procedure may not be of persons who have the right to such a challenged in court either since these are challenge in court, since non-inclusion of internal documents of the Bank and are a person into this list makes it impossible mandatory only for the Bank’s employfor him to prove in court his assurance in ees, and do not create any legal effects the need to protect his rights, freedoms for the claimants. violated by these decisions, acts or omisIt is worth noting that such consions. It is having this assurance that is an clusions of the Supreme Court collide essential attribute of the person’s right to with both the Constitution of Ukraine, address the court with the view to chalparticularly in light of its interpretation lenging decisions, acts or omissions of by the Constitutional Court of Ukraine, Counsel, EQUITY Law Firm authorities, and, therefore, an essential and international standards in terms of prerequisite of exercising such a right”. effective remedy and restoration of violated rights. It is known that general provisions on the right to judicial protec- Conclusion tion are guaranteed by the Constitution of Ukraine (part 1-2, article 55 That is, notwithstanding the fact that the NBU decisions in reof the Constitution of Ukraine and the Convention on Human Rights gard to bank-related persons were the grounds for writing off the and Fundamental Freedoms (the Convention) — Article 6. deposits of the persons listed therein and their conversion into the This implies that any person whose rights and freedoms have bank shares through the so-called bail-in procedure, which was been violated by the actions and decisions of the NBU has the right to documented by the above-mentioned documents of the Deposit challenge such actions and decisions in court. Guarantee Fund, the Grand Chamber of the Supreme Court is of However, the stance of Supreme Court, as set out in ruling the opinion that: No. 826/20221/16, means that the notion of dispute not subject to (1) such relations are of a private law nature administrative legal proceeding must be interpreted in a broad sense, (2) having exhausted its validity after the change of the shareholders, that is as the notion relating to disputes not subject to administrative the NBU decision may not be challenged legal proceeding and relating to those which are not subject to legal (3) decisions of the Fund may not be challenged in court either since proceeding at all. they are internal documents of the bank which exhaust their vaIt is worth noting that this was the first time that the Supreme lidity after their implementation. Court expressed its position regarding the category of disputes that Thus, the Supreme Court’s legal position is a law application precare not subject to legal proceeding at all. Undoubtedly, it is a precedent edent that creates some collisions with provisions of the Constitution which will lead to respective consequences later on. Particularly, in of Ukraine and the Convention in the part of standards with regard to view of the broadness of such position and the fact that it was stated effective remedy and restoration of violated rights. Notably, there is a by the Grand Chamber of the Supreme Court, there are preconditions risk of such an approach going beyond this kind of dispute and posing for such an approach to gain popularity and to be used not only to chala threat of restriction of the right of people to effective judicial remedy lenge decisions of the NBU and the Deposit Guarantee Fund, but to go and restoration of violated rights. far beyond such a category of disputes. Under such circumstances, the current situation is to be resolved by submitting another similar case to the Grand Chamber of the SuRegarding the Position of the Constitutional Court preme Court to solve the issue of derogation from the conclusion of the In its turn, the Constitutional Court of Ukraine expressed its fun- Grand Chamber of the Supreme Court regarding applicability of the rule damental position in its decision No. 6р(ІІ)/2020 of 24 June 2020, of law set out in the ruling of 15 June 2020 in case No. 826/20221/16.

Bohdan Slobodian

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Bankruptcy

Multidirectional 2020 The year 2020 could boldly be called the year of “new bankruptcy” in Ukraine, but the general “epidemiological” trends have imposed their adjustments. Additionally, the internal factors in the insolvency sphere, ones like legislative initiatives, political populism of some parliamentarians and the instability of judicial practice also played a huge role.

Legislative Spam

The bill which cancels the above-mentioned moratorium is currently registered at the Verkhovna Rada of Ukraine. Of eloquence is the very fact that the President of Ukraine has adopted and signed a law which has not been fully thought out and the fact of almost simultaneous introduction by the President of the law in draft form which repeals the law signed before. And this, by the way, is the second facСOVID-19 vs. tor that influenced the bankruptcy field last Bankruptcy in Ukraine year. We are talking about legislative spam. Thus, 5 laws on amendments to the I have good news and bad news. Bankruptcy Proceedings Code of Ukraine Let me start with the bad news. came into force in 2020. In addition, 8 more The impact of quarantine measures draft bills have been registered and are behas led to significant delays in banking considered by the Verkhovna Rada, ruptcy proceedings. which have already introduced or extended Consideration of such cases was 4 moratoriums on the opening of bankruptdelayed both for objective reasons and cy proceedings. Two more moratoriums due to the abuse of rights by certain are under consideration by Parliament. This participants of cases. While in the first will certainly have a negative impact on the few months of quarantine, against the Senior Partner, Ario Law Firm bankruptcy field and the country’s economy. background of general panic, the postThe law on the moratorium on foreign ponement of cases still seemed justi- Co-developer of Bankruptcy Proceedings Code of currency mortgages foreclosure is a case fied, after the state “adapted” Ukraine Ukraine, Member of Board of UBA that depicts the effects of such spam. The to the epidemic, such postponements authors of this draft, trying to please foreign were already unequivocal in nature. For example, the consideration of elementary petitions in individual currency borrowers, voted for a populist law in such a way that could cases took more than 6-7 months, while this should not exceed 2-3 actually lead to a complete cessation of penalties on bank loans for all categories of borrowers. This was prevented only by the implication weeks. For example, in one of our cases, where we represent the credi- of the President’s veto on the adopted law. This case clearly demontor, in February 2020, an application was filed to open bankruptcy strates the low quality of the processing of problem issues and the proceedings. It is quite natural that the preparatory hearing in a case systematic neglect by the Verkhovna Rada of the procedures for conwas postponed during strict quarantine restrictions, when the trans- sidering draft bills. A positive exception to the above list is draft bill No. 4409, which port system was halted. However, the adjournment of court hearings at the request of the debtor, which were filed after the expiry of such was developed by a working group consisting of numerous organirestrictions, was nothing more than an abuse of rights by the debtor. zations, government officials, and so on. These include, in particular, Only after we proved this fact to the court with the provision of evi- Ukrainian MPs, representatives of the Ministry of Justice, the State dence of the debtor’s movement through the territory of Ukraine and Property Fund of Ukraine, Oboronprom, judges of courts of all titles, as his participation in other court cases did we finally manage to open well as the professional community: lawyers, insolvency practitioners, bankers and others. proceedings in September 2020. First, this draft bill addresses the shortcomings of the Bankruptcy The good news is that quarantine measures have not become a kind of “engine” for mass bankruptcies. Despite the absence of Proceedings Code of Ukraine and clarifies certain provisions in connecofficial statistics, we have not experienced any boom. In our opin- tion with initial monitoring of application of the Code. In particular, the procedure for consideration of claim proceedion, there are several reasons for this. The main one is that entire industries are in a difficult position and large-scale bankruptcies ings, the status of the insolvency practitioner, disciplinary procedures would not meet, first, the interests of creditors and the interests of are detailed, and the provisions for consideration of creditors’ claims the Ukrainian economy as a whole. All this is due to the fact that an are specified. Given the development of the electronic auction system, effective solvency recovery procedure requires funds, investors or the bill also clarifies and facilitates the procedure for their conduct. The draft also simplifies access for individuals to the insolvency proasset buyers. Under conditions of general uncertainty and economic crisis, ceedings of individuals, etc. It is expected that this bill will be considnone of these three components existed. Thus, the business sector ered by Parliament in its first reading. chose a strategy for out-of-court settlement of problems. At the same time, I cannot fail to mention the unfortunate fact Judicial Practice: Territory of Uncertainty that Ukrainian business was forced, among other things, to rely Given the change in philosophy in bankruptcy proceedings due to solely on its own resources, due to the lack of effective assistance the Code coming into force, the introduction of certain amendments to from the state. The only thing the state has managed to do in the the Code and the resolution of certain issues in the procedures was, as field of bankruptcy was to introduce a moratorium on the opening of in previous periods, expected to rely on the formation of a single case new cases at the request of creditors, which have arisen since the law. First, the Supreme Court. However, the Code and the Cassation introduction of quarantine. However, this measure was taken with a Filters of the Commercial Procedure Code significantly restrict access significant delay — in the second half of the year, when the relevance to the Supreme Court. Consequently, the formation of relevant case of such a moratorium disappeared as such. As a result, we received law is quite time-consuming. an additional “temporary” moratorium on the opening of cases. In accordance with the provisions of Article 9 of the Bankruptcy In the current reality this moratorium does not comply with the Proceedings Code of Ukraine, only decisions on opening bankruptcy interests of either debtors or creditors, as it is tied to a quarantine proceedings, decisions on the results of consideration of monetary period which cannot be completed. In addition, such an event does claims of creditors, decisions on closing bankruptcy proceedings, as not take into account the nuance that the world has learned to live, well as decisions on recognition of the debtor may be appealed in a coexist and develop in the face of anti-epidemiological measures. court of cassation, as well as bankruptcy and the opening of liquidaOn the other hand, the absence of a moratorium in the most tion proceedings. In addition, with the cassation filters, decisions by critical period of last year confirmed the conclusion that bankruptcy the courts of claim may be appealed against at the Supreme Court is not the optimal solution to the problems of creditors. of Ukraine.

Julian Khorunzhyi

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ARIO LAW FIRM One of the most accurate features of Ario Law Firm is deep expertise and excellent practical knowledge on how to maximize earnings and minimize losses. Some participants of the Ukrainian law market say Ario’s team of zLAWYERS. zLAWYERS are about healthy “athletic” anger, which helps to achieve goals and gain great victories. At the same time, it’s about very aggressive protection of our clients, which leaves no chance to their opponents. zLAWYERS are about zero tolerance for fraudsters and unscrupulous opponents. zLAWYERS are about honesty. zLAWYERS are about changes that we simply do not accept, but that we implement ourselves. This is a young, smart, professional, experienced, extremely creative, dynamic, effective team for solving problems of any complexity in restructuring and bankruptcy, dispute resolution, corporate and M&A, business protection and business structuring, white-collar crime, litigation. Ario Law Firm has conducted some of the biggest and the most famous bankruptcy cases, like the case of PJSC Mykolayiv Shipyard Ocean, Proletariy Lysychansk Glass Factory PJSC, and others. Senior partner Julian Khorunzhyi is co-developer of the Bankruptcy Proceedings Code of Ukraine. Ario Law Firm protects in criminal proceedings Lviv Mayor Andriy Sadovy, State Enterprise

Address: 7 Panasa Myrnoho Street, Kyiv, 01011, Ukraine

Pishchanskiy Quarry, Mr. Maksim Mykytas, former president of a large construction company, and victims of the B2B Jewelry financial pyramid scheme. Our lawyers successfully defend the interests of the Samopomich political party, PJSC Hotel Complex Lybid, IT Company Finik.Pro, Maksim Nefiodov, former head of the Customs Service of Ukraine, Olena Kostenko, ex-head of the State Architectural and Construction Inspection of Ukraine. The firm works closely with highly-qualified arbitration managers, private enforcers, factoring companies, the electronic marketplaces of commodities, loans, and arrested assets as well as the assets of bankrupt banks and companies. Ario Law Firm and its partners Julian Khorunzhyi, Iryna Serbin, Yevhen Hrushovets have received recognition from many Ukrainian and International law ratings, like Сhambers Europe, ULF, The Legal 500, IFLR1000, Legal Awards, Market Leaders, etc.

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A striking example of such a restriction is the practice of application by the court of Article 28 of the Bankruptcy Proceedings Code of Ukraine regarding the termination of the powers of the insolvency practitioner at the request of the creditors’ committee without the need for the insolvency practitioner to establish signs of violations. The respective petitions are satisfied by separate commercial courts of appeal in the order determined by the Code. Other courts form the opposite practice regarding the impossibility of terminating the powers of the insolvency practitioner without the court establishing objective grounds for his removal. Thus, the lack of legal positions of the Supreme Court leads to legal uncertainty regarding the actions of participants in proceedings. In addition, aspects that will require additional resolution and time include issues related to the transition of legal regulation from the Law of Ukraine On Restoration of Debtor’s Solvency or Recognition of Debtor’s Bankruptcy to the Bankruptcy Proceedings Code of Ukraine. At the same time, I cannot fail to note the serious work that has already been carried out by the Supreme Court on the formation of legal positions on the application of the Code, especially in the part of decisions in cases adopted by the entire Chamber of Bankruptcy Cases. Recent legal positions of importance include: • the position on the subsidiary liability of owners of bankrupt enterprises in the event of detection of a debtor being brought to bankruptcy; • introduction of the principle of verification by the court of the completeness of the actions of the insolvency practitioner and the principle of procedural economy; • determining the amount of claims of the mortgagee to the property guarantor, etc. It is also impossible not to note the positive impact of the introduction of electronic auctions for the sale of bankrupt property via the ProZorro.Sales system. Thus, in 2020, almost 2,600 auctions were held and property worth UAH 1.47 billion was sold. This led to a significant reduction in the number of litigations following auctions, which has had a positive impact on both the repayment of creditors’ claims and the timing of bankruptcy proceedings.

Bankruptcy of Individuals: Not Everything at Once It was only recently that individuals in Ukraine received the opportunity to declare themselves “bankrupt” — with the coming into force of the Bankruptcy Proceedings Code, namely in October 2019. Given that the institution of restoring the solvency of individualsdebtors appeared in our country for the first time, the project “Financial Sector Transformation” was implemented at the initiative of the Ukrainian Bar Association and with the support of the USAID last year. It was a large-scale social project which provides free advice to individuals who are debtors. I was invited to lead the project “Providing advice on restoring the solvency of individuals” as one of the developers of the Bankruptcy Proceedings Code.

The aim of this initiative was to finally close the “gestalt” of the past financial crises, which the country’s banking system and thousands of foreign currency mortgage borrowers still cannot deal with. Thus, individuals who had debts on foreign currency loans received from banks before June 7, 2014, could seek free legal advice from leading experts and effectively and “painlessly” restructure their debts. As part of the project, we selected consultants in several regions of Ukraine, developed convenient mechanisms for calculating debt restructuring, and conducted a large-scale communication campaign to involve Ukrainians in solving long-standing problems with creditor banks. We wanted to show to all the participants of the process that transparent and clear rules for all parties have now appeared in Ukraine and that these rules are in no way aimed at depriving citizens of their only mortgaged housing. In addition, we aimed to analyze the practical aspects of the Bankruptcy Proceedings Code in terms of insolvency of individuals to further address the shortcomings and improve these processes. With the last task, I think we coped “perfectly”. Thanks to this project we really identified a number of problems in the legislative sphere, which we will correct. In addition, on the basis of experience already gained, we have prepared guidelines for individuals, covering all the actions that need to be taken in order to settle their debt to creditor banks. For example, how to behave in negotiations with banks, how to prepare for litigation if a financial institution refuses to seek compromises with the debtor, what to look out for, how to properly prepare documents, how long it will take, how much it will cost to resolve the issue in court, etc. The positive results of the project include the fact that dozens of Ukrainian families were able to receive qualified assistance and the opportunity to solve long-standing problems with banks without the risk of losing their only home. Among the negative conclusions we recorded, on the basis of the results of the project, are the low interest in negotiations with creditors on the part of individuals. Last but not least, this is facilitated by the moratorium on foreclosure. Neither did we see any special desire on the part of the banks to enter the situation and make concessions to the borrower. But I believe that later, when the process of restoring the solvency of individuals acquires a more mass nature and, therefore, gets to be understood by all participants, and the moratorium is finally terminated, the situation will gradually level off and both sides will be more active in seeking compromises. After all, this falls within the scope of interests of the financial market as a whole, and directly troubled borrowers.

Summing up In general, according to the results of 2020, it is too early to say that we now have completely transparent and civilized bankruptcy proceedings, though the trends are seen as quite positive. Thus, to be continued...

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Business Crime

Business Crime in Ukraine Business is a risky activity by definition. However, once a company starts to bring in steady returns and the owner thinks that the main risks are now a thing of the past, they are faced with entirely different kinds of threats. As a company grows, its management is faced with both internal threats coming from its associates and business partners, and external ones — from competitors, ill-wishers and public authorities.

Protection Against Illegal Takeovers

A corporate conflict escalating into a hostile takeover is the most dangerous internal risk. As Ukraine does not have a stock market and corresponding financial instruments, such takeovers often border on corporate raiding or illegal takeover, which should be reviewed separately. The key stage of an illegal takeover is performance of illegal registration actions, which subsequently lead to gaining control over the assets. In recent years, the Protection Against Illegal government has announced its intention to Actions by Employees actively combat this illegal scheme. In parFinancial fraud committed by ticular, the government strengthened concompany associates is the most widetrol over maintenance of state registers and spread internal risk and quite dangerintroduced a number of safeguards against ous. The textbook example of this kind registration actions unsanctioned by the of fraud is an accountant writing off owner, which improved the situation to an monetary funds from the company’s extent though, unfortunately, the burden accounts under a simulated contract of protecting their assets still lies on the in favor of a related party. Often, these owners. Thanks to the opening of access Managing Partner, kinds of transactions are performed for to state registers, businesses now have an amounts that are small in terms of the AVER LEX Attorneys at law opportunity to learn about hostile actions in company’s overall turnover. However, advance and block them. over a long period of time the losses An appropriate ownership structure will run into hundreds of thousands of dollars. and regular independent legal audit largely reduce the risk of illegal Despite the widespread nature of the specified threat, it is takeover of assets. In addition, it is advisable to limit access to the rather easy to uncover and eliminate it. A rational set-up of access means of company management, including technical ones. rights to accounting software, impossibility to perform payments It is worth noting that criminal proceedings may be launched from third party computers (including home ones), and also a reg- against a business owner and individuals associated with him/her ular independent audit reduces the risk of this type of fraud to a with regard to white-collar or corporate crimes. In this case, a number minimum. of criminal and legal risks emerge not only for such individuals, but Disclosure of commercial secrets is just as dangerous for a also for their entire assets. business, as it could lead to far greater consequences than comFor example, after an individual has been notified of suspicion, mon fraud. It is noteworthy that this kind of data ‘leakage’ often the court may impose an arrest on all private accounts and assets happens not out of malicious intent: by a former associate during in Ukraine, including the accounts and corporate rights of controlled a job interview with a competitor or current associates while mak- companies. As for the suspect, if he is abroad, he can be placed on ing posts (including on professional social media). In this case, it an international wanted list with subsequent prosecution in absentia. is quite easy to minimize this risk by accurately specifying for all Therefore, the arrest of accounts, seizure of assets and corporate associates, whose information is deemed a commercial secret and rights can also be used within criminal proceedings as an element of the negative consequences that its disclosure will entail. In Ukrai- settlement of a corporate conflict or hostile takeover when the invesnian practice, companies often limit themselves to signing an NDA tor’s opponent is the initiator and the injured party. in Western-like style, which does not contain the necessary, pursuFurthermore, the law of Ukraine envisages transfer of assets ant to national law, information and cannot protect the interests of seized in the criminal proceedings into management of a special a business. public authority called the Asset Recovery and Management Agency. An accurate structure of the access system to the company’s ARMA must ensure preservation of the economic value of such asinternal information in a manner that the source of leakage can be sets. For this purpose, ARMA has the right to transfer into managepromptly identified, or, better yet, prevented, also largely reduces the ment the seized assets to third parties. risk of information leakage. In particular, restriction of access for asThe measures listed above can be used not only as a part of the sociates to sensitive information from third party devices is a must illegal takeover of a company, but also as an element of pressure on for ensuring sufficient control. the business by law-enforcement agencies. However, Ukraine has a Meanwhile, intentional disclosure of information borders on cor- successful legal practice of protection of the investor and his/her asporate espionage and requires a prompt reaction for the protection sets against all mentioned criminal and legal risks. Usually, these kinds of company interests in the area of criminal law. of criminal cases do not contain a critical mass of fundamental proof If the aforementioned safeguards failed and the company suf- of guilt, as the pre-trial investigation authority does not have the goal fered from fraud or information leakage, businesses are often not of bringing the case to a guilty verdict in court. Therefore, requesting willing to get involved in litigations and criminal cases, preferring professional legal assistance, particularly at the early stages of investo settle the conflict out of court, without prosecuting the offender, tigation, will largely reduce the number of risks with the subsequent which, allegedly, saves money and reduces reputation risks. This prospect of such a criminal case being closed. practice leads to repetition of offenses and carries a threat of substantial losses, both financial and reputational in the long run. Sanctions Marathon Therefore, after an associate commits an offense, the compaLately, Ukraine has begun to apply sanctions against foreign nany, with the aforementioned system of safeguards in place, will have a certain body of evidence (system log files, IP addresses, video re- tionals as well as Ukrainian citizens and legal entities. These sanctions cordings, including of the computer’s home screen) for instigating envisage full seizure of assets on the territory of Ukraine for a term of criminal proceedings under the corresponding article of the Criminal three years. Today, sanctions have been introduced against individuals, who, in the opinion of the National Security and Defense Council Code. The prompt legal assistance of an attorney will help to properly (NSDC) and the President, are working with the aggressor state — Rusrecord the discovered offense, which will subsequently make proof sia, and are financing terrorist organizations LPR and DPR. Of note is the fact that imposition of sanctions does not envisage mandatory of guilt in court easier.

Olga Prosyanyuk

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AVER LEX AVER LEX is the leading WCC boutique law firm in Ukraine, focused on high-profile economic crimes and politically-motivated prosecutions, cases regarding defence of corporate executives in criminal proceedings and corporate security matters. The firm stands out for its mature, highly specialized team, and commands unrivalled capacities for being the preferred criminal defense counsel in particular compound and complex WCC litigations in Ukraine. The majority of cases are unique and first hearing cases that set precedents for the criminal judiciary system in Ukraine and established practice for future hearings. These cases are highly public; require massive, regular and open communication with the entire spectrum of media outlets in Ukraine. The client portfolio includes state officials and high net worth individuals looking for protection from politically-motivated prosecutions, consulting and law firms, big corporate clients from a range of economic sectors.

Complex legal decisions The firm advises on all aspects of criminal law, providing both the traditional services of legal prosecution and defense, and the new requirements of preventive criminal law and corporate compliance. Its expertise encompasses: • White-Collar Crime; • Business Crime, Fraud; • Corruption and Bribery; • International Criminal Law; • Protection of personal and business data; • Sanctions; • Risk Assessment; • Criminal Due Diligence, etc.

Address: 2 Khrestovyi Alley, 5th Floor, Kyiv, 01010, Ukraine

investigation or litigation, which is why there is a risk of increasing the grounds for imposition of sanctions. The practice of Government Relations, which is often mixed with lobbying or even corruption, is an effective measure of minimization of these types of risks. In particular, if it is necessary to inform government authorities about existing problems or situations that need to be settled, the companies build a system of communication with the authorities at all levels, with the help of GR specialists, which is then used for building the company’s positive image, among other things. In case the ‘GR safeguard’ does not work and sanctions are imposed on a company, specialists both in criminal and other areas of the law need to be involved for counteraction and the protec-

AVER LEX provides for complex legal decisions in corporate security aimed at identifying and minimizing criminal risks in business; defense of legal rights of detained and convicted persons during provisional arrest; measures to release from custody; comprehensive legal defence during operational search activities and pre-trial investigations by law-enforcement bodies; successful advocating in court hearings within a criminal proceeding; legal aid to complainants; recovery of damages judgments.

International level AVER LEX was recognized as Chambers Europe (the sole leader, Band 1), Legal 500 EMAE, Best Lawyers, Who is Who Legal, Legal Awards, etc. in White-Collar Crime and Criminal Defense. To ensure the rights of our clients and to prevent them being violated, the firm has developed a strong best friends’ network of firms throughout the world (USA, UK, Switzerland, Austria, Netherlands, Portugal, Belarus, Russia, etc.), and is well equipped to handle cases with cross-jurisdictional elements. It also cooperates with a number of leading worldwide and local human right organizations within the framework of ongoing matters. These include Amnesty International in Ukraine, Transparency International Ukraine, Ukrainian Helsinki Human Rights Union, Ukrainian Human Rights Union, Amnesty International European Institutions Office, etc.

Tel.: +380 44 300 1151 E-mail: info@averlex.com Web-site: www.averlex.com

Artem Drozdov

tion of business interests, now in the legal field. At the moment, taking into account the relative novelty of this risk factor, the practice of protection against sanctions is being built in Ukraine, including by our lawyers, who protect client interests in these situations. Therefore, on the issue of countering business risks, companies in Ukraine need to be educated and prepared to react promptly to threats. Fortunately, there are many protection instruments available now: from open registers and specialized software for monitoring the changes in the company structure to GR specialists, providing all round services on business protection. However, there are still a lot of gaps in legal fields and in the work of courts and law-enforcement agencies that require regulation and revision, which is the origin of the majority of threats for anyone operating a business in Ukraine.

Partner, AVER LEX Attorneys at law

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Business Process Solutions

How to Protect Business in 2021 Business security now has much broader meaning than just legal support. Modern threats and risks are increasing every day, and the main task is to be able to manage them effectively. According to a report from the World Economic Forum, cyberattacks, as well as fraud and data theft, will be one of the main risks of the future. One of the main products, at the present moment, is the audit of existing business processes for criminal and legal risks. Timely adjustment of processes enables avoidance of seizure of accounts, summoning for interrogation and subsequent criminal prosecution. We highlight five main areas of security that can raise the level of protection of your business.

HR Security

An HR specialist is not only a human resources office at the company. Unfortunately, a formal approach to HR exists in most companies. A HR specialist is definitely undervalued, but it is also worth noting that many of them do not possess the relevant expertise. To enable a HR specialist to work at full capacity, it is required that his/her work be organized correctly at the beginning and determine what functions he/she will have and whom he/she will report to. Let’s talk about his/her functions. The recruitment of employees is one of the main ones. In Europe, many companies use interactive tests for stress tolerance, the risk of theft and the tendency of a future employee to lie. If the company has a security service, Data Security a HR specialist should definitely work toAs a first step we suggest the congether with them. It is sometimes worth usducting of an internal security audit and ing a polygraph test during the application answers to the following questions: Counsel, Attorney, ADER HABER stage for a job, though everything depends (1) who has access to data? (2) who Key specialization: white-collar crime, criminal law, on what information and responsibility you and how does he/she work with data? business defense plan to delegate to a new employee. (3) where is the most important/conTeam control is also an important fidential data requiring a special apfunction of a HR specialist. If the company proach stored and how can the neceshas both managers and junior employees, a sary minimum necessary to it (e.g. where is the server, in whose name HR specialist should arrange regular meetings or tests to identify the is it registered) be provided? (4) Who should have access to data? mental condition of an employee. This is because many employees (5) What are the risks associated with redundant access? can become toxic and not only destroy a company from the inside, but It is natural for employees to leave important documents in also harm customers on the external market and pass commercial front of everybody, on desktops, in a printer, etc. In order to discipline information to competitors. employees that this is unacceptable, we recommend the holding of A HR specialist should help with financial investigations in the surprise inspections of workplaces every third month, collection of all company that require cooperation with the security service, have experdocuments that are visible and then work on mistakes with explana- tise in psychology and know as much as possible about all employees. tions of what negative consequences this could cause. Now let’s move on to the second important component, whom a A company’s information is often its main asset and many com- HR specialist should report to. The HR specialist should report directly panies find it difficult to bring an employee to accountability who sells to the business owner, as he should have authority, independence, databases or shares commercial information with competitors. respect and quite wide-ranging powers. Also, one should not forget If you know that employees are abusing their position and pass- that directors are usually hired employees. It is always important to ing on information valuable to the company, we recommend you con- set clear objectives to HR, to define their functions, and the best way sider the following options: (1) a polygraph test (2) a fine (3) a repri- to find them is to look among psychologists. mand or dismissal (4) criminal prosecution. Methods of HR’s effective work: (1) training workshops for emIf the first three options are covered by an in-house lawyer, who ployees (2) regular meetings with employees, preparation of mental should make sure that all these provisions are specified in the relevant condition assessment within the team (3) polygraph tests (if necemployment contract, and the company’s security service, the last op- essary) (4) system of mutual coordination with the security service tion in respect of criminal liability is a bit broader and more compli- (5) development of recruitment policy. cated. There is responsibility for disclosure of commercial and banking Physical Security secrets in Ukraine. And, one would think, if there is a regulation, then Why does a company need physical security? In Ukraine, one in there is an opportunity to bring a culprit to liability, but it seems everyevery three companies is involved in criminal proceedings. This means thing is not that simple. that your business could potentially be faced with searches and unexTo make it possible to bring an employee to criminal liability, it is pected visits from law-enforcement agencies or unauthorized attacks required that you: (1) establish what is to be marked as commercial inby third parties. formation (2) specify in official instructions that the employee has acFirst of all, you have to determine what type of property you have cess to it due to his/her official duties and that disclosure, the passing and what should be noted. of such information in any form, is prohibited without the owner’s consent. And in the process of providing proof, showing damage caused to the company and the fact of sale or transfer of such information is Rented Office important. You should pay attention to who signs the documents with the Information protection methods: (1) cloud storage, (2) secure Inter- owner of the building and where these documents are stored. In the net and network connections, (3) data encryption, (4) restrictions of entry event of an illegal takeover, due to the lack of control over these matpoints for IP addresses, (5) separation in storing corporate and personal ters, documents may be re-signed by the dishonest “new owners” and information on the mobile devices of employees, (6) implementation of your access may be restricted. Therefore, we recommend you to be software solutions ensuring information security like “DLP”, use of facili- always in touch with the building’s owner and to have additional methties ensuring information integrity (7) staff inspections. ods of identification and protection.

Eleonora Salova

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ADER HABER White-Collar Crime practice has taken the place of the irreplaceable and most demanded in the portfolio of services provided by ADER HABER. This is due to the fact that ADER HABER protects business structures and private clients both in case of accidental involvement in the investigation and threats of criminal prosecution, as well as in cases where the client is directly accused of committing a crime. Our core expertise covers the investigation of fraud, money laundering, misappropriation and theft of assets, tax evasion and fictitious bankruptcy, abuse/excess of authority, negligence and illegal enrichment, as well as protection from political persecution of public figures. We assist our clients within the scope of corporate defense, protect their rights as injured parties and advance their interests in an efficient and professional manner. To identify weaknesses and flaws in corporate structures or existing compliance systems, we offer screenings and audits that enable clients to optimize the assessment and minimization of risks. Internal investigations are often a useful instrument when it comes to uncovering serious infringements within a company and preparing for possible litigations. We also provide workshops to train employees on how to act in the event of searches and how to avoid corruption risks. Address: Business Center Carnegie Center, 14th Floor, 7 Klovsky Uzviz, Kyiv, 01021, Ukraine

The documents should be stored in a place that is known to a few people, it is also important to appoint a dedicated person in the lease agreement who will be authorized to sign any documents in respect of the lease agreement or have the power to terminate the agreement. Security control. You need to establish a communication and control system in respect of security operation. As to control over video recordings, we recommend that you agree initially with the owners that you have the right to access the recordings of surveillance cameras situated on your floor.

Your Own Office You need to have the both originals and copies of title documents. Install video surveillance around the office’s perimeter, including the street. Install durable doors with multiple levels of protection. It is also important to install outdoor lighting that will help you to react to possible threats as quickly as possible.

Choosing an Access Control System You can use one of three types of access: passwords, smart cards, fingerprints, retina scanning, hand geometry, signature, etc. Ways of ensuring the company’s physical protection: (1) surveillance cameras. It is very important that such cameras are difficult to access for turning off and that there is a backup server for storing video content (2) pass entry system (PIN-code system), if your office is located in a business center we recommend that you not give out guest passes but that you pick up a guest yourself and accompany him/her to the office (3) double or triple exterior doors (if construction permits this) (4) security service availability (5) lightning.

Legal Security What does legal security consist of? When should we involve an external counsel, and when will an in-house be enough? The majority of issues should be addressed by an in-house counsel. It is cheaper, easier to manage and more sufficient. However, in our opinion, you should always have external counsels on the safe side and sign contracts with them. An in-house counsel should have expertise in (1) contract work (2) dispute resolution (3) development and implementation of human resources documents (4) experience of negotiating. However, every company has a moment when it faces some secondary issues. For example, commencement of criminal proceedings, summons for interrogations, seizures of documents, etc. Methods of legal protection: (1) due diligence at least once a year (2) audit of business processes for criminal and legal risks (3) setting up a budget needed for legal fees (4) selection of an external counsel on narrow-profile issues, signing of an agreement with them (5) a verification system for contractors.

We represent our clients in dealings with investigative authorities, cooperating where appropriate but also contesting allegations if necessary. This includes defense in possible investigative and administrative offense proceedings as well as in court. We also take care of the efficient crisis management that is often required in these proceedings. Attorneys of ADER HABER have gained significant experience in matters with Interpol. We are well-versed in conducting cross-border internal investigations, bringing in partner law firms in other countries and beyond for advice on local legislation where needed. Our multidisciplinary full-service approach ensures that we are able to provide all the advice you need. Our efficient teams are made up of experts with a high degree of specialization and a breadth of practical experience in their field. We never lose sight of our client's business needs and potential risks to their reputation. The company's expertise in the field of White-Collar Crime is recognized as one of the leading in the Ukrainian legal market according to the Legal 500 and the annual research 50 Leading Law Firms of Ukraine published by Yuridicheskaya Practika Publising.

Tel.: +380 44 280 8887 E-mail: office@aderhaber.com Web-site: www.aderhaber.com

Economic Security It is impossible to cover everything about economic security in this article. However, I would like to focus your attention on a few issues. A good accountant. This is probably the second most important person in the company following the director, and maybe even higher. You need to trust, but verify him/her, conduct an internal audit every six months or once a year. This will discipline the accountant and give you the true picture. If you announce these rules as common corporate rules, he/she will consider them as a working rule, but not as a lack of confidence in their person. Proper communication with banks. Good communication with bank managers will enable you to solve problems that arise in the course of work much more promptly and to prevent the loss of money in the event of pressure from regulatory and law-enforcement agencies. Do not neglect their birthdays and other holidays, when you can reintroduce yourself and please an employee responsible for the financial health of the company, and there will be a pleasant bonus if the company’s owner visits the bank’s management with his or her personal congratulations. Management of accounts payable; you should have a system in place for monitoring existing debts and a responsible person who will provide a statement of affairs, preferably once a month.

The Conducting of Two Types of Audit is Recommended (1) Financial crime due diligence is carrying out a preliminary check of all contractors. Your impeccable business may, via a chain of financial and economic activities, face problems of a criminal nature. They can take the form of seizure of funds, or the summoning of your employees for questioning. Conducting “Financial crime due diligence” will help you to understand whether or not it is worth working with new contractors, even if this contractor has been recommended to you, and whether the risks stated by law-enforcement agencies are real. (2) Audit of business processes for criminal and legal risks. Many business processes can include hidden risks that can cause further criminal prosecution or attachment over a company’s accounts or property. Therefore, we recommend that you adjust your processes in a timely manner and minimize the risks borne for your company. To sum up, please note that only the complex nature of the protection tools mentioned above will guarantee peace of mind for a business owner. One should remember that there are some more important components. In addition, since the majority of them are expensive, their implementation should also be financially grounded, because each business risk also has its own price.

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Business Relocation

Business Relocation Process Business growth is one of the key arts, on special terms. Besides, Ukraine goals for a manager. Creating a costhas recently provided special quotas for efficient structure and stable business highly-qualified IT specialists, and they environment is essential. Opening new can get permanent residence permits in branches and departments is a chalUkraine. lenge for any business. However, moving Furthermore, it is easy enough for a the working structure from one country foreign citizen to become an individual ento another involves much more difficult trepreneur in Ukraine, which in some cases issues. helps to save original contracts with for2020 reshaped and greatly affected eign specialists, with only minor changes the way in which business structures in details. and operations are organized. Due to the Each point makes Ukraine attractive political situation in the Republic of Beas a new base for a business, particularly larus, local companies decided not only in IT. to protect the assets of companies and It is worth noting that a local accouninvestors but staff as well. Therefore, we tant has to be involved at the first stage as faced a complex request, namely busiwell — there are distinctive local features in ness relocation. bookkeeping and tax reporting. The business relocation process is Changes in the payment schedule unique as there is basically no time for (tax reporting and taxpaying terms) may consideration — it is already operating, affect the initial business plan. This should, there are employees, income, and costs therefore, be agreed upon before approvthat need to be placed into a different ing the final roadmap for relocation. jurisdiction. And we need to take cog- PhD, Counsel, EXPATPRO Law Firm The second stage is to prepare the nizance of the fact that the business is grounds for staff relocation. This involves already in operation, and any delays can Tetiana Yashchenko specializes in corporate law and deep knowledge of the Labor Code of business administration. cause damages and losses. Ukraine, the Law of Ukraine On EmployEXPATRPO law firm is experienced Head of Corporate BA, Accountancy. Tetiana deals ment of the Population, On the Legal Status in relocating foreign specialists to with most issues related to employment, work perof Foreigners and Stateless Persons, and Ukraine for local IT, energy companies, mits for foreigners in Ukraine. She specializes in legal a number of resolutions of the Cabinet of consulting on mergers and acquisitions, business regetc. Our team of specialists in labor and Ministers of Ukraine. migration law assisted in the process istration, reorganization and structuring (both internal Obtaining all the documents for so that highly-qualified specialists had and international) as well as providing legal support employees requires strict adherence to no worries about the process and could for the current business activity of clients in Ukraine a schedule and control of deadlines for (specifically for the Digital and IT sphere). concentrate on their work. preparing and filing the notifications to However, business relocation is a Tetiana Yashchenko graduated from Taras Shevchenstate authorities, payments of state fees, challenge for managers, lawyers, ac- ko National University of Kyiv; Law department; a timely application for visas, and legal pacountants, who need to organize and Master of Law, Ph.D. in Law. perwork. complete the change in legal structure, Due to the peculiarities of this stage operational routine in a way that will have we advise splitting it into 2 parts: a minimal impact on the work of employees, as one of the essential A) obtaining work permits and employment (which is fully performed features of this form of moving the business is the goal of retaining by employers and their authorized representatives); the foreign specialist team and arrange their transfer to a new country. B) obtaining documents on the legal status of employees (the imObtaining work permits, bank account opening, temporary resimigration stage). dence permits for employees and their families — that is the part of Part A requires actions from the employer’s side: all the applicathe business relocation process that had to be transformed from an tions, notifications, and state fees are completed by the legal entity. individual service into a huge project, where each case is unique. Here it is extremely important to be attentive to the deadlines for It is obvious, that most business relocation requests were origi- each action — application, reply (in case the State Employment Cennated from the Republic of Belarus and there are many still in progress. ter discovers a mistake or missing document), paying the state fee, We divided the full relocation process into three stages: signing the employment contract, and providing a copy of the signed 1) establishing the legal grounds for relocation; contract to the relevant Employment Center. Each action and deadline 2) supporting staff relocation; is specified in the Law of Ukraine On the Employment of the Population. 3) relocating assets. And failure to comply with the law leads to the work permit’s cancellaThe first stage requires that the team gets grounded research in tion (irrespective of the stage at which the breach of the law occurred). corporate, tax, and civil legislation. Basically, lawyers thoroughly check This is extremely important, as the work permit is the ground for whether the registered business can be easily transferred to Ukraine. the D-type visa (if applicable) and a temporary residence permit for the There is no unified legal act on companies in Ukraine, therefore a num- employee. The termination of the work permit leads to automatic revober of legal acts will be checked: Laws of Ukraine On Joint Stock Com- cation of all the subsequent documents received on its basis. panies, On Companies with Limited and Additional Liability, On Business Part B requires the personal presence of the applicants — foreign Associations, Civil Code of Ukraine, Commercial Code of Ukraine, dou- employees. Thorough knowledge of the details of each foreign emble taxation avoidance treaties. ployee regarding their family status can save time in the future: some It is also necessary to know whether there are any specific regula- papers (i.e., birth, marriage certificates) will be requested in the middle tions in Ukraine regarding the types of activities that the foreign busiof the process (usually, family members of the employee apply for the ness entity plans to perform (such as the special requirement made residence papers by virtue of the family’s reunification). of construction documents (On Collective Investment Institutions), to Hence, here it is necessary to plan and support each application managers; regulation regarding requirements for obtaining special individually. licenses or permits (On Financial Services and Financial Services MarThe third stage covers changes in financing, modifications in kets, Tax Code of Ukraine). contracts, and, if applicable/required, contracts for work performed or Full business relocation is easier for those structures which, in services rendered. fact, provide services at a distance (designers, engineers), whose main With IT companies, it is crucial to comply with data protection, asset is IP and the team. Moreover, Ukraine creates good terms for non-compete policies, IP rights transfer. highly-qualified specialists: employers can obtain work permits (as The scope of work at this stage depends on the type of business well as residence permit) for IT specialists, for professionals in the the relocating company is expected to run in Ukraine, whether it will be

Tetiana Yashchenko

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EXPATPRO EXPATPRO is a leading boutique law firm in Kyiv that focuses on immigration to Ukraine and offers personalized, top quality legal services for expats. Our clients are foreign individuals, businesses and investors pursuing business, employment or personal opportunities in Ukraine. Through comprehensive knowledge of legal, political and business areas, our migration experts will walk you through the jungle of Ukrainian law. Our team provides professional legal solutions on how to relocate, and reside, and how to start your own business in Ukraine in the readiest way, the applicable Ukrainian legislation. We strive for close communication and cooperation with our clients and continue to support them in their daily business activities and if their needs in Ukraine evolve. Whether you are considering relocating to Ukraine, starting a business there, or simply seeking advice on a work permit, visa, and residency issues, or have other expat-related legal needs, you can count on EXPATPRO.

Address: 48 Vozdvyzhenska Street, Office 7, Kyiv, 04071, Ukraine,

In addition to immigration and corporate law, EXPATPRO’s practice areas include Ukrainian employment law, legal support for business, real estate due diligence and transactions, dispute resolution and litigation. So, whether you are an employer or employee who needs legal support in Ukraine, a real estate investor who is looking into options in Kyiv, or you have a private or business matter and need court advocacy in Ukraine, EXPATPRO looks forward to assisting you.

Tel.: +380 44 339 9881 E-mail: welcome@expatpro.co Web-site: www.expatpro.co

a holding or operating company, what costs this company will have, what funding is required and its amount, what legal ties this local company will have with the previous company. Most certainly thorough work at the first stage enables speedy completion of changes here. Recent requests for business relocation are mostly from the Republic of Belarus, and this has really influenced the process: we have pretty similar legal systems, many of the rules are quite similar and business models can be implemented in Ukraine with a few changes and losses. All this made the process of business relocation as easy as possible.

To sum up, the business relocation process is a complex legal service aimed at full changing the firm’s business jurisdiction, combined with resettlement of the team. This involves the work of lawyers with different specializations: corporate, tax, employment, migration, specialists in tax and financial planning, accountants. Extreme scrutiny of the existing business model and the possibility of integration into the Ukrainian legal system, timing, and personal care of each team member to be relocated are the key instruments to complete the task EXPATPRO law firm faces and handles successfully.

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Cannabis Law

Evolution and Perspectives of Cannabis Regulation in Ukraine The global cannabis market is Step Forward? estimated to be valued at USD 20.5 bilIn April 2021, the Government changed lion in 2020 and is projected to reach regulations for cannabis as follows: USD 90.4 billion by 2026, recording an • the Ukrainian market is now potentially annual growth rate of 28%, in terms of open for a limited scope of cannabivalue1. This makes the cannabis indusnoid-based pharmaceuticals and active try one of the fastest growing in the pharmaceutical ingredients for their world. production. In particular, nabilone and But there also are actual human nabiximols (in addition to dronabinol lives behind these figures. Medical sigthat already had similar status) were nificance of cannabis is no longer in declassified as controlled substances bate. It is only the scope of it that is still that may be used in medical practice being researched. Studies have shown on prescription basis. They will however that cannabinoids can help patients be subject to control measures, similar with nausea and vomiting in cancer and to the ones currently applicable to morAIDS, facilitate treatment of asthma phine, that are complex and burdenand glaucoma and be used as an antisome in Ukraine; depressant, appetite stimulant, anticon• it was clarified that CBD isolate is exvulsant and anti-spasmodic. empted from drug control. This should In December 2020 the United Naclear the way for pharmaceuticals and tion’s drug policy-making body removed other products based on CBD isolate. cannabis from Schedule IV of the 1961 Other than that, the regulation of canSingle Convention on Narcotic Drugs. nabis remains unchanged. Cannabis had been on that list for While this liberalization is a first move 59 years alongside most dangerous forward, it alone will not be sufficient to do opioids (including heroin), which gener- Counsel, Head of Pharmaceuticals the job. The Ukrainian patient community ally discouraged its use for medical puris raising concerns that the effect of new poses. This decision officially opened & Healthcare, Asters regulation will be limited (if any), as it only the door to recognizing the medicinal covers a narrow scope of high-cost pharand therapeutic potential of the drug, maceuticals and does not adequately address the need for affordable though many countries had already done so long before that. Let’s have a look at where Ukraine stands in terms of cannabis cannabinoid-based treatments. Local cultivation of medical cannabis remains unavailable. regulation, as compared to global trends. Moreover, drug control exemption for CBD isolate only is highly conservative and not in line with current international practice. In many Background EU jurisdictions, not only CBD isolate, but also other cannabis products For many years Ukrainian regulation of cannabis has been ex- with minimum THC content (up to 1%, depending on the country) are tremely restrictive: exempt from the majority of drug control measures. • Cannabis (including its resin, extracts and tinctures): classified as It remains to be seen whether the new regulation will be able to schedule I substance is banned in Ukraine; make at least some cannabinoid-based medicines actually available in • Tetrahydrocannabinol (THC), main psychoactive component of Ukraine. To reach Ukrainian patients pharmaceuticals will need to go cannabis: classified as schedule I substance banned in Ukraine; through a lengthy process. This would only be possible if their manu• Cannabidiol (CBD), another cannabinoid with no psychoactive ef- facturers and distributors see the potential of the local market and fect and huge potential for health and food industries: not sepa- would be prepared to go through local bureaucratic hurdles surroundrately classified as a controlled substance. However, due to a mix of ing the circulation of controlled substances. restrictions and lack of clarity in regulations, CBD products may not At this stage Ukraine is still far from becoming a player in the be produced domestically and are in the grey legal zone in terms growing global cannabis industry and granting sufficient access to of import. cannabinoid-based treatments for patients who need them. Changing Permitted local operations only include license-based cultivation that would require a significantly more comprehensive regulatory shift of industrial hemp for fiber and seeds, subject to a very low THC limit on the legislative level. of 0.08%. Even this narrow segment of the hemp cultivation business is excessively controlled by the Government. Close, but No Cigar Until recently, medical use of cannabis was fully prohibited. PaIn late 2020 — early 2021, members of parliament introduced tients had no legal access to cannabinoid-based treatments available abroad and had to come up with ways to go around the system several proposals for legislation on cannabis. Further in June, those were consolidated in a single bill put before the Ukrainian Parliato get them. Against this background, Ukrainian patient organizations have ment. The bill was supported by a large group of representatives been advocating for access to medical use of cannabis, hitting against from different political parties, as well as the Ministry of Health of the wall of rejection from the State. In 2021 it appeared that the wall Ukraine. The bill provided, among other things, for the following: was finally starting to crack. But is it really? • the regulatory treatment of cannabis would depend on its THC content. In particular, it was proposed to introduce 2 major categories falling under limited legalization: (a) medical cannabis with THC content starting from 0.2%, and (ii) industrial hemp with THC con1 https://www.globenewswire.com/news-release/2021/02/18/2177949/0/en/The-Worldwidetent of up to 0.2%; Cannabis-Industry-is-Projected-to-Reach-90-4-Billion-by-2026.html

Viktoriya Podvorchanska

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Address: Leonardo Business Center, 19-21 Bohdana Khmelnytskoho Street, Kyiv, 01054, Ukraine

• products derived from medical cannabis would be permitted for medical use in Ukraine based on e-prescriptions, but only to the extent they qualify as pharmaceuticals authorized by the Ministry of Health; • controlled local cultivation of medical cannabis would be allowed both for the internal market and export. This had the potential to increase the affordability of cannabinoid treatments for Ukrainian patients and create business opportunities for Ukraine; • various types of safeguards were suggested to prevent the risk of illicit distribution (including licensing, laboratory testing, labelling and traceability system, physical security requirements, prescription only access for patients etc.); • in line with existing international practice, it was proposed to establish a relaxed regulatory regime for the cultivation of industrial hemp and operations with low-THC products (subject to the THC limit of 0.2%); • CBD would be clearly exempted from drug controls in Ukraine; • it would finally create a legal basis for research and development in the cannabis field that has been blocked for many years due to gaps in legislation.

Morris, Prada S.p.A., Sanofi, Societe Generale, Syngenta, Visa, Webuild S.p.A, and many others. Asters is an exclusive Ukrainian member of Lex Mundi, World Services Group, Legalink, Biolegis, Life Sciences Practice Group and Energy Law Group. Asters and its partners are consistently placed at the very top of the country’s legal market by the most authoritative international and Ukrainian market reviews. Chambers Europe 2021 recognizes 23 lawyers of Asters — the largest number of the renowned practitioners in a single Ukrainian law firm. For the third consecutive year Asters is included in Tier 1 ranking in all 12 practices reviewed by The Legal 500: Europe, Middle East and Africa 2021 Guide. In 2020 Asters was recognized as Ukraine Firm of the Year by Chambers Europe Awards 2020, Who’s Who Legal 2020 and by The Lawyer European Awards 2020.

Tel.: +380 44 230 6000, Fax: +380 44 230 6001 E-mail: info@asterslaw.com Web-site: www.asterslaw.com

The bill was quite conservative in its regulatory approach, but the first attempt to pass it through the Parliament still failed. In July 2021, it was put to the floor of the Parliament for the first reading but did not get enough votes from MPs. Nevertheless, given that the bill has strong advocates among different political forces and its public support is growing, we believe there is a fair chance of it being resubmitted to, and eventually pushed through, Parliament, though perhaps in a modified form.

If we Wait until Everything is Ready, we will Never Begin Liberalization of Ukrainian regulations on cannabis is long overdue. Ukrainian patients are striving for it. Medical cannabis, industrial hemp and CBD wellness industries are quickly developing globally in a completely legitimate way. The tide for cannabis is changing. It is now for our policymakers to decide if we will surf the wave.

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Capital Markets

Derivatives, Reforms and Reopening of Derivatives Market in Ukraine A properly functioning derivatives market is a sign of a developed, mature and modern financial system. Although experts often describe derivatives as a “weapon of mass destruction” derivatives are, nevertheless, a very useful instrument to allocate, transfer and hedge financial risks. Risk transferors are usually lots of different entities from all sectors of the economy, while risk transferees are the considerably lower number of hedge providers, such as banks, hedge funds and other financial institutions. Numerically, derivatives do not create more risks than the market has but concentration of respective risks may have disastrous consequences in the event of default of the hedge provider, affecting many of its clients and many entities beyond. Creating a proper derivatives market will, therefore, require not only setting up a proper legal framework but also risk management requirements for hedge providers. Partner, EVERLEGAL Countries from all around the world had been attempting to create a proper framework for derivatives since the 1990s. Ukraine is no exception. The first derivatives regulations were adopted by the Cabinet of Ministers of Ukraine in 1999. Those regulations were applicable to both organized and over-the-counter markets but derivatives were perceived more as a special type of securities rather than private contracts concluded on the basis of standardforms. This perception was reinforced by currency control treatment of derivatives under Ukrainian currency control regulations which accorded them the status of “investment” and required an individual investment license from the National Bank of Ukraine whenever derivatives were entered into on a cross-border basis. Adoption of derivatives regulations in 1999 did not lead to a derivatives boom in Ukraine. Between 1999 and 2008 there were only about 80 registrations of standardized contracts for trading at different exchanges, but even those standardized contracts were not actively traded. There were, however, Ukrainian banks that successfully offered their derivatives products over the counter based on an ISDA Master Agreement. Even such domestic over-the-counter contracts were not voluminous. At the cross-border level, hedging was achieved via synthetic structures, like back-to-back loans and others. This is partly explained by what was happening on the Ukrainian lending and foreign exchange markets. At the time, the National Bank of Ukraine implemented the policy of a fixed exchange rate for the Ukrainian hryvna, and there was no reason to hedge Ukrainian hryvna/foreign currency exposure. Ukrainian banks were also lending predominantly at fixed interest rates, removing the risks of interest rates fluctuations for borrowers, the floating Kibor rate existed from 2000 but it was scarcely used in bank lending practices. Since the credit crunch of 2008 even the limited over-the-counter derivatives market has almost ceased to exist in Ukraine, with the National bank of Ukraine prohibiting derivative dealings with foreign currencies and interest rates, both onshore and on a cross-border basis. This led Ukrainian corporates interested heading their financial risks to move their derivatives transactions to the level of foreign corporates structures of their groups. Primary public complaints about the lack of a proper derivatives market in Ukraine before 2008 were targeting the poor derivatives legislation. In response to such complaints, the draft bill of Ukraine On Derivatives was submitted to the Ukrainian Parliament in 2007. That

draft was prepared under the umbrella of the Ukrainian securities commission and, for this reason, focused mostly on creating an improved legal framework for organized trading of derivatives on stock exchanges. The draft bill was heavily criticized by advocates of the over-the-counter derivatives market, including International Swaps and Derivatives Association, and it did not even get to the first reading in the Ukrainian Parliament. Further drafts of the Law of Ukraine On Derivatives were submitted to the Ukrainian Parliament in 2008, 2010 and 2011 but without any success. The main concerns with the said draft bills were their silence regarding principal risk mitigating mechanisms for derivatives-related trade, such as simple agreement concepts, early termination and its protection from cherrypicking and claw-back remedies at insolvency, liquidation set-off and netting. The latter aspect became even more crucial after the Supreme Court stopped to support the validity and effect of the insolvency set-off. Since 2008 Ukraine has undertaken to launch the derivatives market in Ukraine, and this obligation was further strengthened by the 2014 Association Agreement signed between Ukraine and the EU. The Ukrainian market has been waiting for the changes to come. Given unsuccessful prior attempts to develop derivatives regulations, the EBRD has allocated a grant to develop respective Ukrainian legislation and the National Bank of Ukraine has started its own procedures relating to liberalization of Ukrainian exchange controls and liquidity, accounting and other regulations for transactions with derivatives. Since 2017 the National Bank of Ukraine has been promulgating respective regulations within its sphere of responsibility. In early 2018 the National Bank of Ukraine announced upcoming exchange control liberalization, which eventually came into effect on 7 February 2019. The replacement the individual currency license system with the e-limits system and direct permission to transact forwards, futures and swaps in relation to foreign currencies with a view to hedge exposures under obligations in foreign currency produced an effect almost immediately. On 28 March 2019 the Kernel Group and ING Bank Ukraine reported that they were the first to enter into hryvna/US dollar swaps. More transactions were reported after that and Ukrainian banks are currently actively releasing data regarding volumes of their derivatives offerings. This demonstrates that at least domestically, commercial entities and banks were less concerned regarding existence of proper legislative framework for derivatives and were more looking at lifting currency control restrictions. The process of developing derivatives legislation was running in parallel with preparations for currency control reform. With the support from the EBRD and other donors, the working group has developed the draft law of Ukraine On Capital Markets. Among other things the aim of that draft law was implementing and harmonizing Ukrainian legislation with respective regulations of the European Union, including MiFID II, MIFIR, EMIR. After a series of interactions and improvements it was finally approved by the Ukrainian Parliament on 19 June 2020 and came into effect as of 1 July 2021. Under the Capital Markets Law, derivative financial instruments are clearly split into derivative securities and derivative contracts. Derivative securities are defined as securities which evidence the right of its owner to claim from its issuer, in cases provided for

Vsevolod Volkov

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EVERLEGAL EVERLEGAL is an independent law firm with expertise in various sectors and focus on projects related to sustainability. Our mission is to be a legal business partner for our clients and to get your jobs done. The EVERLEGAL team is a synergetic combination of professionals from international law firms and local legal experts. We advise our clients on (i) transactional matters with focus on corporate finance, (ii) dispute resolution (courts and ADR) and (iii) regulatory matters in various sectors. We feel equally comfortable advising on complex cross-border deals, or defending your interests in domestic courts or representing you in foreign arbitral or judicial fora. Our offering covers Corporate and M&A, Dispute Resolution (courts and ADR), Antitrust/Competition, Banking & Finance, Sustainability, International Arbitration, Employment, Commercial Matters and Criminal Defence. We are also experienced in Legislative Drafting and Advocacy.

EVERLEGAL’s clients are industry leaders with global brands, mid-size and growing businesses as well as innovative start-ups. Our lawyers have experience and expertise in a range of sectors such as Energy & Natural Resources (with special focus on RES), Transport & Infrastructure, Real Estate, Agriculture, Innovations and Technology, Healthcare, Financial Institutions and FMCG. We support sustainable development, including green energy, environmental initiatives, healthy lifestyle, and pride ourselves on being “bike friendly”. EVERLEGAL’s motto is “Ever More Success”. We measure this success by how successful our clients are in achieving their business goals!

Address: 4 Rylskyi Lane, Sofyiska Square, 6th Floor, Kyiv, 01001, Ukraine UNIT. CITY, 3 Dorohozhytska Street, B10, 5th Floor, Kyiv, 04112, Ukraine

in the prospectus, to purchase or sell the base assets and/or to fulfil the rights related to the base assets, as those are provided for in the prospectus, and/or to make a payment(s) depending on the index of a base asset. A derivative contract is defined as an agreement the terms of which set the obligation(s) of either or both parties to such agreement in relation to the base assets and/or terms of which are set depending on the index of the base asset, and which also may provide for the making of payments. An important addition for the functioning of the derivative contracts is the provision that such contracts may be entered into on the basis of a master agreement and specifications. It was via such a provision that legislators implicitly incorporated into Ukrainian legislation the “single agreement” concept so that all individual transactions entered into based on a master agreement may be viewed all together constituting one single agreement. The fundamental terms of the master agreement are to be approved by the Securities Commission and, for transactions to which banks are the parties, upon reconciliation with the National Bank of Ukraine. One important factor which must be considered when entering into derivative contracts are that the law requires all transactions with financial instruments to be entered into with participation or intermediacy of an investment company. With respect to derivatives contracts, the only exceptions that would apply are when the bank is entering into an over-the-counter derivative contract with its client, entering into an over-the-counter derivative contract via qualified investors, execution of over-the-counter commodity related derivatives and in cases when a derivative contract is executed outside of Ukraine.

Tel.: +380 44 337 0016 E-mail: info@everlegal.ua Web-site: www.everlegal.ua

Incorporation of the netting concept into Ukrainian legislation is probably the biggest achievement of derivatives reform in Ukraine. Netting is defined as full or partial termination of obligations under derivative contracts, contract for party substitution, dealings relating to financial instruments, currency values or under commodity operations, and which is performed by means of set-off of mutual homogeneous claims and/or by novation of original obligations with a new obligation between the same parties and/or by termination of obligation by other means, which are provided for in the clearing rules. For the netting to be enforceable, the possibility of netting must be set either in the master agreement or in the text of the derivative contract. Netting will not be available if the parties did not provide for such possibility in their contract. The netting provisions in the Law of Ukraine On Capital Markets reinforce the validity of early termination so that all obligations may be circled under the netting arrangement irrespectively of their original maturity. In the netting arrangement the parties shall also agree on which party is responsible for the netting calculations and how the value of respective obligations shall be calculated in a homogeneous way. That is, so that the value of all obligations can be expressed in a single currency. Netting under derivative contracts in the event of insolvency is governed by the laws of Ukraine regulating insolvency in general and the insolvency of banks. In those cases, the netting shall be available as of the date of initiation of the respective insolvency proceedings and the parties do not have to wait for the formal declaration of insolvency. Neither the Law On Capital Markets nor insolvency legislation set any substantive requirement for netting conditions, and it appears that the parties are free to agree on such mechanics and they will be enforced under Ukrainian law.

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Commodities Arbitration

Parties’ Consent as an Essential Element of Arbitration Agreements The year 2020 was quite challenging for the Ukrainian soft commodities market due to various factors, primarily the drought which significantly affected crop production in Ukraine. The imposition of COVID-19 restrictions by the Ukrainian government also had a negative impact on the market. In these circumstances, many contracts on the sale of Ukrainian commodities were under threat of supply failure. It is commonly acknowledged that a considerable part of Ukrainian soft commodities deals is based on standard forms of contracts developed by GAFTA (Grain and Feed Trade Association) and FOSFA (Federation of Oils, Seeds and Fats Associations Ltd). All of these forms contain an arbitration clause under which all disputes under the contracts are to be resolved in accordance with the rules of the corresponding organization. Another feature of standard contracts is that they are Partner, ARBITRADE governed by English law. By concluding a contract based on a standard form, the parties expect that their dispute, if any, will be resolved by the relevant arbitral institution in a competent and effective manner. However, sometimes they fail to duly agree to refer their differences to arbitration. In this regard, due to the lack of substantial jurisdiction, parties lose an opportunity to submit their claims to an arbitral tribunal under GAFTA or FOSFA arbitration rules, but have to apply to a state court instead, which may be more costly and time-consuming. The recent case law of English courts shows that the conclusion of arbitration agreements and, consequently, its binding effect is an issue of sometimes nonunified approaches. One of the last judgments relating to this matter in Black Sea Commodities Ltd v Lemarc Agromond Pte Ltd [2021] EWHC 287 gave rise to active discussion among lawyers and professional commodity traders.

parties agree otherwise than in writing by reference to terms in writing. Second, an agreement is evidenced in writing if an agreement made otherwise than in writing is recorded by one of the parties, or by a third party, with the authority of the parties to the agreement. The section further specifies that references to anything being written or in writing include its being recorded by any means. Finally, it is established that an exchange of written submissions in arbitral or legal proceedings in which the existence of an agreement otherwise than in writing is alleged by one party against another party and not denied by the other party in its response constitutes as between those parties an agreement in writing to the effect alleged. The outlined approach to an arbitration agreement is in line with Article II of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. The latter provides that each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration. When concluding an arbitration agreement, the doctrine of separability of arbitration agreement should also be taken into account. As set out in section 7 of the Arbitration Act 1996, unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement (whether or not in writing) shall not be regarded as invalid, non-existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purpose be treated as a distinct agreement. Relying on the provisions of the Arbitration Act 1996, English courts support the pro-arbitration approach and tend to interpret arbitration clauses in broad terms. As may be seen from the provisions given above, parties may agree to arbitrate by any of the determined ways. However, to record a reference to arbitration does not necessarily mean concluding an arbitration agreement.

Ivan Vashchynets

General Provisions on Arbitration Agreements in English Law General issues of arbitration agreements in English law are regulated by the Arbitration Act 1996, based mainly on the UNCITRAL Model Law on International Commercial Arbitration. Its section 6 defines an arbitration agreement as an agreement to submit to arbitration present or future disputes (whether contractual or not). The reference in an agreement to a written form of arbitration clause or to a document containing an arbitration clause constitutes an arbitration agreement if the reference is such as to make that clause part of the agreement. Section 5 of the Arbitration Act 1996 establishes that the arbitration agreement must be in writing in order to be effective. However, the term “written agreement” is broadly construed. The section provides that there is an agreement in writing in the following cases: • if the agreement is made in writing (whether or not it is signed by the parties), • if the agreement is made by exchange of communications in writing, or • if the agreement is evidenced in writing. In addition, section 5 sets out two cases where an agreement made otherwise than in writing equates with a written one. First, where

Consent as a Fundamental Concept in Arbitration According to the classical definition, arbitration is a consensual dispute resolution mechanism. As Lord Hoffman said in Premium Nafta Products Ltd (20th Defendant) & Ors v Fili Shipping Company Ltd & Ors [2007] UKHL 40 at [5], “[a]rbitration is consensual. It depends upon the intention of the parties as expressed in their agreement”. That is why particular importance is attached to the consent of parties while concluding an arbitration agreement. Hence, to conclude an arbitration agreement, the parties must express their consent to it. They can do this in different ways: it can be expressed by promise, conduct, or performance. In any case, as Professor Gary Born noted, the parties must sufficiently manifest their consent to the separable arbitration agreement, regardless of their consent to the underlying contract. In practice, however, parties usually focus on the terms they consider essential for their contracts, such as description, quantity, and

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ARBITRADE ATTORNEYS-AT-LAW ARBITRADE is a boutique law firm specializing in international trade, international arbitration, litigation and complex negotiations/restructuring. The leading positions of the firm are confirmed by professional awards and the achievements of its team, as well as national and international legal rankings, including the Legal 500 (Tier 1 in Dispute Resolution, 2013-2021), Best Lawyers, and others. ARBITRADE has extensive experience of domestic litigation, which covers Ukrainian courts of all levels and specialization. The firm often acts in cases with an international element, representing both Ukrainian and foreign parties. In international arbitration, the company successfully represents clients in various cases under a number of arbitration rules of various arbitral institutions, including ICSID, LCIA, ICC, SCC, VIAC, the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry

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(ICAC at the UCCI), etc. These are proceedings of diverse nature, including international commercial arbitration cases, investment treaty cases, commodities arbitration and others. ARBITRADE’s lawyers also frequently appear as arbitrators in complex international disputes. They also act as experts on issues of Ukrainian law in international investment arbitration and before foreign courts. ARBITRADE also possesses unique experience in arbitration proceedings under GAFTA and FOSFA arbitration rules.

Tel.: +38 044 585 0947; Fax: +38 044 585 0948 E-mail: info@arbitrade.ua Web-site: www.arbitrade.ua

price of goods, and pay less attention to other terms. It is even more so in commodity trading, where a contract can be concluded by the exchange of emails. Neglecting an arbitration clause may lead to losing parties’ opportunity to refer their dispute to arbitration, as was in the case described below.

Consensus to Arbitrate Must Be Clearly Expressed In Black Sea Commodities Ltd v Lemarc Agromond Pte Ltd, a dispute arose as to whether there was a binding arbitration agreement in place between the parties. The negotiations between them were conducted by exchange of emails containing draft conditions through a broker during the period 9 to 14 March 2018. In a series of communications between them, which was called the “pick and mix” approach, the parties agreed on certain terms (quantity, price, delivery period, etc.). By 14 March, the NOR spread was only one issue to which the defendant had not agreed. Interestingly enough, the parties did not dispute the arbitration clause; however, it appeared later, after 9 March. In any case, a formal contract had never been executed and signed by the parties. According to the claimant’s submission, there was neither a binding contract of sale nor an arbitration agreement. He further claimed that if, contrary to his contention, there was a binding contract of sale, it did not contain a GAFTA or any arbitration clause, and that although, in the draft conditions which the claimant’s agent sent to the defendant, a GAFTA arbitration clause was included, those draft conditions were never agreed, and there was no consensus ad idem when the negotiations broke down. The defendant’s primary case is that there has been a binding agreement, varied/supplemented by agreement as to a GAFTA arbitration clause by virtue of the subsequent exchanges between the parties. He made it clear that his case was not about whether an arbitration clause had initially been agreed, but that subsequently, in the exchange of draft conditions, whereas there was a dispute about other terms, there was no dispute as to the GAFTA clause. So that the arbitration agreement became binding, either by virtue of a variation of the contract or as an independent agreement. The defendant relied on the definition of separability of an arbitration agreement in Section 7 of the Arbitration Act 1996 and the obiter dicta of Lord Hoffmann in Fiona Trust v Privalov [2007] Bus LR 1719 at [10], whereby he referred, in the context of construction of contract, to the fact that “businessman frequently do want the question of whether their contract was valid, or came into existence, or has become ineffective, submitted to arbitration and that the law should not place conceptual obstacles in their way”. So here, the Court should not place conceptual obstacles arising out of a strict interpretation of offer and acceptance in the way, when, as he submits, the parties intended to be bound by the GAFTA arbitration clause.

Having held in favor of the claimant, the High Court stated that even if there had initially been a binding agreement in place between the parties on 9 March, the GAFTA arbitration clause was not one of the terms set out, and it was not agreed then or by virtue, or in the course, of the ensuing abortive exchange of draft conditions, whether by “pick and mix” or progressive supplementation or silent agreement by conduct. In response to the defendant’s reference to the separability of an arbitration clause under section 7 of the Arbitration Act 1996, the High Court noted that to take the benefit of this the defendant must show that the arbitration agreement was the subject of consensus even if the underlying agreement was not, or he must show that it was incorporated into the underlying agreement by a variation. He must establish, therefore, that the clause was agreed by virtue of its being included in the draft conditions and not rejected by the parties when other conditions were rejected. It is also of interest that the High Court found insufficiently certain a term that there would be “provision for GAFTA arbitration”. In this regard, the Court indicated that the arbitration clause in the draft conditions was not as per GAFTA 49. Finally, the High Court stated that particularly in the absence of prior dealing, an arbitration agreement cannot be implied without any reference “in an agreement to a written form of arbitration clause or to a document containing an arbitration clause” as required by section 6(2) of the Arbitration Act 1996.

Departure from the Pro-Arbitration Approach The decision in Black Sea Commodities Ltd v Lemarc Agromond Pte Ltd may be viewed as a certain departure from the pro-arbitration approach adopted by English courts. According to the latter, arbitration agreements are to be given effect wherever possible. It should be noted that the Arbitration Tribunal appointed under the GAFTA Rules determined that it had jurisdiction over the dispute. In the present case, it was concluded that there was no arbitration agreement due to the lack of consensus among the parties on this matter. The court was not convinced by the defendant’s argument that the claimant did not expressly object to the arbitration clause. It appears that the court’s conclusions must be taken into consideration by professional traders and other commodity market participants. In practice, the parties to an arbitration agreement are advised to ensure they have reached a clear consensus to refer their disputes to arbitration. During the contracting process, references to the GAFTA or FOSFA standard forms of contracts, while included in the underlying agreement, need to be specific in order to avoid any uncertainties.

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Competition Investigations

Competition Investigations in Ukraine Over the past few years, the Antimonopoly Committee of Ukraine (AMCU) has investigated a number of cases related to alleged abuse of monopoly (dominant) position. For example, in 2019 the AMCU terminated 268 violations related to abuse of monopoly (dominant) position with the overall total of fines imposed for this type of violation coming to UAH 404 million. One of the biggest fines, UAH 107 million, was imposed on OSTCHEM Group. In the Ostchem case the authority not only imposed heavy financial sanctions but also decided to divest the respondent’s business. The AMCU applied structural remedies for the second time in its practice and the decision is still being challenged in courts. Irrespective of judicial review of this particular case, it may serve as a signal that the AMCU is ready to apply structural remedies too. In 2020 the overall amount of fines imposed by the AMCU for abuse Partner, AEQUO of monopoly (dominant) position constituted UAH 712.6 mln. For example, DTEK Group with a fine of around UAH 275 mln and Zeonbud with a fine of UAH 25.7 million. Below we’d like to provide a short overview on the concept of dominance and possible forms of its abuse.

To summarize, a “large” market share does not necessarily mean that a company occupies a monopoly (dominant) position. As evidenced by court practice, the authority shall analyze both structural and behavioral factors to claim alleged monopoly (dominant) position. Please note that having a monopoly (dominant) position is absolutely legitimate, while abuse of a monopoly (dominant) position is prohibited and entails responsibility in accordance with legislation. Concept of Abuse of Monopoly (dominant) Position The Law of Ukraine On Protection of Economic Competition provides a statutory definition of abuse of monopoly (dominant) position (Part 1 Article 13) and non-exhaustive list of abusive practices (Part 2 Article 13). The AMCU may hold a dominant company liable for abuse of its dominance under Part 1 and/or Part 2 of Article 13 of the mentioned law. Although a position exists that a dominant company’s conduct under Part 2 of Article 13 is abusive per se and does not require assessment of anti-competitive effect, we consider that such suggestion is rather contentious and not in line with recent EU case law. In general, abusive practices may be categorized as follows: • Exclusionary conduct which excludes competitors and other players from the market or restricts their access to the market. For example, refusal to supply, exclusive dealing, etc. • Exploitative conduct which is harmful to consumers. For example, setting prices or other trading conditions that would be impossible in the event of existence of substantial competition (unfair commercial terms). • Discriminatory conduct. For example, applying dissimilar prices or other conditions to equivalent agreements without objective reasons. In this article we will briefly outline EU case law and AMCU practice regarding excessive prices and discriminatory conduct.

Mariya Nizhnik

General Criteria for Defining Monopoly (dominant) Position in Ukraine To start with, the burden of proof is on the AMCU to establish both monopoly (dominant) position and its abuse by a company. To claim alleged monopoly (dominant) position in a market, the market itself must be defined in the first place. This relates to definition of both product and the geographical boundaries of the market. A precise definition of the market is the cornerstone for further comprehensive and accurate assessment of the alleged monopoly (dominant) position of companies by the authority. The AMCU possesses exclusive powers to define product markets, while the companies concerned are welcome to submit their explanations/objections on this matter. In practice, companies often invoke an “incorrect” market definition as one of the grounds to invalidate the AMCU’s decisions in courts. Once the market is defined, the authority may proceed with an assessment on whether or not the company is dominant. A company has a monopoly (dominant) position on a relevant product market if its market share exceeds 35% provided that such company is not exposed to substantial competition. Thus, market share is one of the factors, but not the only one, to be reviewed by the authority to claim alleged monopoly (dominant) position. The AMCU has to analyze whether the company in question is exposed to substantial competition. For these purposes the AMCU should scrutinize the market structure and competitive environment with a special focus on such factors as: the list of competitors and their market shares; development of market shares over time; barriers to enter the relevant market; existence of countervailing buying power on the market; legal regulation that may govern a dominant’s company behavior in specific markets; ability of alleged monopoly (dominant) company to dictate commercial terms to its customers, etc. Although the applicable regulations do not clearly prescribe that the AMCU should take into account countervailing buying power on the market, we strongly believe that assessment of dominance should include countervailing buying power on the market. Furthermore, such an approach is in line with the relevant practice of the European Commission.

Discriminatory Conduct To qualify the actions of a dominant company as abuse of dominance by applying dissimilar prices or other commercial conditions to equivalent agreements without objective reasons, the AMCU shall prove that agreements are indeed equivalent and there are no objective reasons for alleged discrimination. In practice, the assessment of the equivalence of two agreements is a rather complicated and ambiguous issue. To claim equivalence of agreements the AMCU should analyze all applicable factors and not limit its review only to some of them. For example, even if two companies buy the same volume of goods they still may be non-equivalent from the perspective of competition law. There may be additional factors justifying the lack of equivalency (different sales channels, different payment terms etc.). In addition, a dominant company may argue that alleged discrimination is objectively justified. In addition, EU case law tends to apply an effects-based approach to cases involving price discrimination. For example, the Court of Justice in the MEO case ruled that a dominant’s company discriminative behavior may be qualified as abusive only if it tends to distort competition. The mere presence of an immediate disadvantage affecting customers who were charged more, compared with the tariffs applied to their competitors for an equivalent service, does not mean that competition is distorted or capable of being distorted. For these purposes it is necessary to examine all relevant circumstances, in

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articular, customers’ negotiating power p and duration and the amount of the tariffs charged. The Court also clarified that where the effect of a tariff differentiation on the costs borne by the customer or on the customer’s profitability is not significant, it may be, in some circumstances, deduced that tariff differentiation is not capable of having any effect on the customer’s competitive position.

Excessive Prices

sented value to the customers. Hence, the Commission did not find that the prices charged were unfair in themselves. In Ukraine there is no valid methodology to determine whether the price charged by a dominant company is excessive. Presumably, evolving case law would shed light on this issue in Ukraine. One of the recent landmark cases, where the AMCU charged DTEK Group for abuse of dominance by fixing excessive price for electricity in peak hours may, in this respect, be of interest. Notably, that the AMCU accused DTEK of charging excessive prices in the market where the sectorspecific regulator established price caps. Furthermore, from the publicly available version of the decision, the AMCU did not apply the two-step test to excessive prices that is used in the EU. No evidence of price that would exist on the competitive market is produced by the AMCU (to compare with allegedly excessive prices of respondent). The said decision is likely to be challenged in a court, which may answer open questions related to excessive prices in Ukraine.

The cases related to excessive prices are much more complicated than it might appear. There are a lot of problems to be solved by competition authorities investigating such types of abuse. It is argued that competition authorities should control prices in a limited number of cases. Such control might be required when: (i) there are high barriers of entry to the market and (ii) there is no sectorspecific regulator. If the barriers to enter the market are low, high prices will en- Senior Associate, AEQUO courage new players to enter the market or existing competitors to expand output and, consequently, prices would reach a “competitive level” without the need to intervene. Furthermore, dominant firms might be reasonably willing to cover their expenses and to have an incentive for further in- Conclusions vestments. Finally, it is, indeed, complicated to determine that a parOne should note that a “significant” market share is not equal to ticular price is excessive. To do so, a competition authority must have dominance (monopoly), while dominance (monopoly) does not entail a benchmark of “fair” price. any responsibility itself. Dominant (monopoly) companies are not Given the above, the European Commission seems to be re- prevented from conducting their business activity. Still, abuse is outluctant to intervene solely on the basis of prices charged, although lawed and, therefore, dominant companies should pay special focus a number of investigations have been completed to date. In recent on their conduct in the market. cases the European Commission applied the two-step test laid down Investigations on abuse are complicated proceedings that require earlier in United Brands to establish the abuse of dominance. Follow- in-depth analysis of the market, and parties are welcome to provide the ing EU case law, a cost/price analysis is not itself sufficient to estab- authority with proper evidence (market research, expert opinions etc.) lish that prices are excessive. The regulator is also expected to exam- to ensure comprehensive review of a case. Proactive participation in ine whether the price is unfair in relation to the economic value of the proceedings may facilitate the AMCU to issue a grounded and objecproduct (unfair in itself, or when compared to competing products). tive decision. For example, in Scandlines Sverige AB v. Port of Helsingborg the ComThe AMCU has shown itself to be improving its approaches on a mission stated that there was insufficient evidence to conclude that permanent basis and seems to follow best European practice. Although the port charges would have “no reasonable relation to the economic there are some gaps, evolving practice is likely to bring more clarity to value” taking into account the port’s unique location, which repre- controversial issues on abuse of dominant (monopoly) position.

Yevgen Blok

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Construction & Development

Special Aspects of Legal Regulation over Renewal of Land Lease Agreements Land lease is one of the most common forms of land use in Ukraine and around the globe. The social significance of land lease defines certain special aspects of its legal regulation. In addition to the common industry codes — Civil Code and Land Code — the specialised Law of Ukraine On Land Lease, enacted in 1998, regulates land lease and indicates the legislature’s deep understanding of its significance. The legal principles of land leases are uniform regardless of the form of ownership (private, public or communal). The normative regulation of lease contractual relations is based on the freedom-of-contract doctrine. The Law has been amended almost annually. The amendments eliminate shortcomings and equivocations in certain provisions that became obvious in their application. They also adjust new aspects of leased land relations, such as the adoption of the Laws of Ukraine Partner, JN Legal On Amendments to Certain Legislative Acts of Ukraine on Combating Raids of 5 December 2019, and On State Support of Investment Projects with Significant Investments in Ukraine, of 17 December 2020. These two laws from 2019 and 2020 introduced significant changes to the provisions of the Law related to the renewal of lease agreements and a land tenant exercising his pre-emptive right to enter into a lease agreement for a new term. In general terms, the renewal of a land lease agreement was introduced to establish a legal mechanism that protects the interests of a bona fide land tenant, as a more vulnerable party, in the event where a landlord unreasonably evades extending the lease term. Most lease agreements were concluded for a short time which, as a rule, did not ensure the land tenant achieved his purpose of lease (i.e., return on investment and profit). However, disputes over the renewal of land lease agreements have been among the most common categories of land disputes in Ukraine due to the peculiarity of regulatory settlement of this issue. Article 33 of the Law regulated the renewal of land lease agreements until 16 July 2020. Its norms were somewhat specific compared with the general principles of civil and economic legislation on such issues. The specificity involved both the definition of the special procedure to extend land lease agreements and the wording of the provisions in Article 33 of the Law, written in an ambiguous way that allowed for interpretation and application. Consequently, renewal of a land lease agreement did not always ensure the proper safeguard for land tenants and landlords. There was no clear and transparent mechanism for extending the legal relations in leases, thus enabling unfair practices by both parties. Therefore, the amendments to the procedure for renewing land lease agreements, effected on 16 July 2020, aimed to ensure effective safeguards at the legislative level, which would prevent such situations Comparing “previous practice” and “current practice” will help to illustrate these changes. Current legislation stipulates that the new rules for renewing lease agreements apply only to agreements concluded or amended after 16 July 2020. Land lease agreements concluded prior to that date shall be renewed on terms specified therein and in accordance with the rules in force at the time of conclusion.

Article 33 of the Law, as worded until 16 July 2020, provided for two cases in the renewal of land lease agreements. • First case: The renewal of the lease agreement, as stipulated in parts 1–5 of Article 33, so the land tenant can exercise its pre-emptive right to conclude the lease agreement for a new term. Such renewal should be possible only after the term for which such agreement was concluded expired. After expiry of this period, the land tenant, who duly performed his/her obligations under the terms of the agreement, could exercise his pre-emptive right to enter into a land lease agreement for a new term on conditions agreed by the parties. Thus, Article 33 provides for the conclusion of a new agreement rather than the renewal of the previous one. • Second case: The so-called “automatic” renewal of the agreement, as stipulated in part 6 of Article 33, means that provided that the land tenant continues using the land and the landlord has no objection within one month after expiry of the lease agreement, the agreement may be extended for the same period and on the conditions stipulated in the land lease agreement. Thus, this statutory concept provides different grounds for proceeding with lease legal relations and specific means for their implementation. Until recently, the judiciary applied the above provisions of Article 33 of the Law ambiguously, sometimes using diametrically opposing legal approaches in cases. For instance, in cases regarding part 6 of Article 33, the Civil Court of Cassation and Economic Court of Cassation at the Supreme Court supported different positions on the need of the land tenant to notify the landlord of his/her intent to exercise his pre-emptive right to renew the agreement prior to its expiry. Consequently, there have been different outcomes in similar circumstances in civil and economic cases. The Grand Chamber of the Supreme Court resolved this issue conclusively in its decision dated 22 September 2020 in case No 313/350/16-ts. There, the court stated that the legislature, when using the concept of “renewal of the land lease agreement”, actually identified both grounds defined in Article 33 of the Law on renewal of the lease term. Therefore, regardless of the grounds for such renewal, the land tenant shall notify the landlord of his/her intent to exercise his pre-emptive right. This decision by the Grand Chamber is of great practical importance because it ensures the courts will uniformly apply the provisions of Article 33 of the Law as worded before 16 July 2020. Thus, all land lease agreements concluded before 16 July 2020 will be subject to renewal. However, the amendments introduced in the Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine on Counteracting Raiding, effective 16 July 2020, significantly changed the procedure for land lease agreement renewals concluded or extended after the specified period and the statutory concept of legal provisions. In particular, the amendments distinguished between concluding a new lease agreement for a land tenant to exercise his/her pre-emptive right and ‘automatic’ renewal of the lease agreement, the procedure of which is significantly simplified.

Sergiy Dakhnovskiy

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At the same time, the text of Article 33 of the Law excludes the provision on agreement automatic renewal (part 6 in the former wording). The Law is supplemented by Article 32-2, according to which the land lease agreement shall be renewed in a manner stipulated under the new Article 126-1 of the Land Code of Ukraine. The developments are as follows: • In the event of extending private land lease agreements concluded before 16 July 2020, as well as a lease agreement for public or communal land with real estate located thereon, these agreements shall specify provisions for renewing the agreement and the land tenant’s pre-emptive right to conclude a land lease agreement for a new term as defined by current legislation. • The algorithm for exercising the pre-emptive right to enter into an agreement for a new term stipulates that the land tenant shall provide the landlord, prior to the end of the agreement and within a period established in it, but not later than one month before its expiry, with a corresponding Notification Letter (along with a draft agreement). The landlord will consider the same within a month, agree with the tenant (if necessary) the essential contractual terms, and in the absence of any objection, sign a new lease agreement. In this case, in the event of a failure to reach an agreement on lease payment and other essential contractual terms, as well as in the event of changes to the boundaries or intended use of the land plot, the land tenant’s pre-emptive right to enter into a land lease will be terminated. At the same time, the refusal to sign or delay in signing a new land lease agreement may be appealed in court. • Lease agreements for privately-owned land, concluded on or after 16 July 2020, will be automatically renewed for the same period and under the same conditions only if this agreement contains a provision on automatic renewal. No other additional actions (i.e., entering into supplementary agreements, notices or responses thereto) are required. In the absence of a statement by either party to remove information from the State Register of Proprietary Rights to Immovable Property on the renewal of the agreement, the agreement will be extended automatically upon the tacit consent of the parties. In this case, following the relevant end date of the agreement, the state registration of proprietary right to lease shall be extended for the same period. • Lease agreements for public and communal land plots concluded on or after 16 July 2020 will be automatically renewed only if there is real estate located thereon, owned by the user or acquirer of title to use the land plot. That is, the renewal of an agreement for land lease, where the land tenant does not own real estate located on such land, requires a decision issued by the relevant executive authority or local government disposing of the land within the powers defined under Article 122 of the Land Code of Ukraine. Such agreements will be free of a provision on an agreement’s renewal.

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• The party to the land lease agreement wishing to exercise the right of refusal to renew the agreement shall submit to the State Register of Proprietary Rights to Immovable Property, no later than one month prior to the end date, an application to remove the information on renewal from this register. While these developments have positive and practical significance, there are possible issues in their implementation, especially regarding safeguarding land tenants and their protection. For example, where the purpose of leasing a public or communal land plot free of real estate owned by the land tenant is land development, then it will be impossible to provide for a renewal provision, as the law explicitly prohibits it. The question is whether the parties will reach a consensus in this case if the construction is not completed within the specified term of the lease. The provisions of Article 126-1 of the Land Code of Ukraine do not provide for any safeguard that would prevent the landlord from exercising, immediately after the signing of the lease agreement, his/her right to refuse renewal by applying to the State Register of Proprietary Rights to Immovable Property to remove information about renewal of the agreement. The matter is ambiguous as to any obligation to define in the land lease agreement the provisions on the pre-emptive right of the land tenant to conclude a new agreement. Article 33 of the Law does not stipulate such a direct obligation (unlike the definition in relation to the condition of the lease agreement’s renewal in Article 126-1 of the Land Code of Ukraine). At the same time, submission by the land tenant of a Notification Letter of Intent to exercise his/her pre-emptive right is “linked” directly to the period of notice specified in the agreement. There is no doubt that sooner or later these issues will be resolved and regulated in legal terms because land legislation continues to develop dynamically under land market reform. The Law of Ukraine On State Support of Investment Projects with Significant Investments, of 17 December 2020, has already supplemented Article 33 of the Law with new provisions defining an additional mechanism for protection against unfair landlords of tenants who are investors with significant investments and parties to special investment agreements signed in accordance with this law. In particular, in the event that the landlord fails to notify such a tenant, no later than 30 days before the end date of an agreement, in a corresponding Notification Letter on non-renewal, and provided that the tenant intends to continue using the land after expiry of the agreement, such agreement shall be considered renewed for the same period on the conditions specified in it, except for the amount of the lease payment. To sum up, despite significant positive legislative developments in regulating the renewal of land lease agreements, issues regarding their implementation will continue to receive meticulous attention from both lawyers in the field and case law.

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Corporate

At the Dawn of Change: Corporate Legislation Reform in Ukraine A multi-vector update of Ukrainian in an only collegial executive body, namely legislation, business liberalization and the board of directors. When it comes to the stimulation of investment activity is process of realization of powers, it should currently taking place. Corporate legisbe outlined that functions related to the lation is no exception. For that reason, management of current activities of the improving the level of efficiency of corjoint stock company are performed by exporate governance, implementation of ecutive directors. Non-executive directors anti-raiding measures and establishing perform risk management and control over effective safeguards for protection of the activities of executive directors and the property owners and other mechanisms company as a whole. for this sphere of legal regulation has When it comes to the two-tier manbecome a legal reality. At the same time, agement structure, it should be noted that the growing interest of foreign businessit consists of the general meeting, the sumen and investors in Ukraine can be expervisory board and the executive body plained taking into account the positive (that can be collegial or individual). The dynamics of legislative reforms highly mentioned above management structure appreciated by strategic partners and stands for a clear division of functions international organizations. for direct management of the current (opIt is worth stressing that signifierational) activities of the company and for cant attention in the Association Agreecontrol over the activity of the executive ment between Ukraine and the European body and other managers. The first one is Union of 27 June 2014 is paid to various provided by the executive body, while the aspects related to company law and control powers are vested in the supervisocorporate governance. Taking into ac- President, Gramatskiy & Partners ry board. The supervisory board consists of count the importance of effective legal members of the supervisory board, some Attorneys at Law rules and practices in the areas of law of whom are independent members (indementioned above for creating a fullypendent directors). functioning market economy and for The management structure of a joint fostering trade, the first-range priorities for the Ukrainian government stock company is determined by the articles of association of the joint include protection of shareholders, creditors and other stakeholders stock company. Naturally, the issue of management structure deteraccording to EU rules in this area, introduction of relevant international mination belongs to the exclusive competence of the general meeting. standards in the field of accounting and auditing and further develop- Analysis of Draft Law No. 2493 gives grounds to sum up that a joint ment of corporate governance policy in line with international stan- stock company with a two-tier management structure is entitled to dards. decide on transition to a one-tier management structure. At the same In order to attain the goals defined in the Association Agreement time, a joint stock company which was established with a one-tier between Ukraine and the European Union and recognizing their signifi- management structure has the right to decide on the transition to a cance for the business community, the Verkhovna Rada of Ukraine two-tier management structure. It is crucial to underline that a one-tier supported Draft Law No. 2493 On Joint Stock Companies in the first management structure may not be introduced in joint stock compareading (hereinafter — Draft Law No. 2493). nies which are enterprises of public interest. Despite the fact that Draft Law No. 2493 has not yet been adoptThe proposed innovation will provide joint stock companies with ed by the Verkhovna Rada of Ukraine (thus, it isn’t in force), there are a the legal opportunity to choose a management structure that will be lot of positive aspects referring to corporate governance and protec- more cost-effective and convenient for a joint stock company. Moretion of shareholders, which should be analyzed in detail. over, it is proposed to exclude the legal norms referring to the creation and operation of an audit commission (auditor).

Ernest Gramatskiy

Changes in Corporate Governance System

The Law of Ukraine On Joint Stock Companies (hereinafter — Law No. 514-VI) enshrines a two-tier corporate governance system in joint stock companies. In general, that means there are two separate bodies that operate independently. The executive body of the joint stock company manages the current activities of the company. At the same time, the supervisory board is entitled to protect the rights of the company’s shareholders and, within the competence defined, control and regulate the activities of the executive body. One of the most eye-catching innovations of Draft Law No. 2493 refers to establishing a possibility for a joint stock company to choose the two-tier or one-tier management structure. The one-tier management structure in joint stock companies includes the general meeting and the board of directors. The board of directors consists of executive members (executive directors) and non-executive members (nonexecutive directors). At the same time, non-executive directors may be independent members of the board of directors (independent directors) or persons affiliated with the company. Consequently, a onetier management structure provides for a combination of functions of control and management over the activities of the joint stock company

Online General Meetings The worldwide COVID-19 epidemic has created a widespread threat not only to the life and health of people, but also to corporate governance in joint stock companies in Ukraine. Unfortunately, there has never been any legal regulation related to procedure of online (remote/electronic) general meetings in joint stock companies according to Law No 514-VI. However, on 16 April 2020 the National Securities and Stock Market Commission adopted Resolution No. 196 On Approval of the Interim Arrangements for Convening and Remote Holding of the General Meeting of Shareholders and the General Meeting of Participants of the Corporate Investment fund (hereinafter — Resolution No. 196). Resolution No. 196 established a detailed procedure for remote holding of the general meeting, including the possibility of entering into an agreement with the National Depository of Ukraine on the provision of remote general meeting services, which regulates relations on the procedure and conditions for providing related services. According to Resolution No. 196 it was stated that agreement with the National Depository of Ukraine on the provision of services for

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remote holding of the general meeting may be entered into by the supervisory board of the joint stock company or by the executive body (in the event that according to the articles of association the supervisory board is not supposed to be formed). Despite there being a lot of inaccuracies in Resolution No. 196, its role in progressive changes referring to remote holding of the general meeting of shareholders is difficult to overestimate. At the same time, Draft Law No. 2493 contains legal rules which enshrine that the general meeting in joint stock companies may be held as a face-to-face meeting or as an electronic meeting. An electronic general meeting in joint stock companies and all the issues related are proposed to be held via an electronic system — software and hardware complex created by the National Depository of Ukraine and authorized by the National Securities and Stock Market Commission. The electronic system for a general meeting should meet specific requirements to provide identification and registration of shareholders (or their representatives) for participation in the general meeting. It is planned that the owners of securities will get the opportunity to obtain documents and other information which can be used and reviewed by shareholders during preparations for the general meeting, to vote, to participate in discussions on the agenda, to summarize the results of voting on the agenda of the general meeting via the above-mentioned electronic system. When it comes to identification of shareholders (their representatives) to participate in the general meeting of the joint stock company, it is carried out with the help of a qualified electronic digital signature or other means of electronic identification in accordance with Law of Ukraine No. 2155-VIII On Electronic Trust Services which meet the requirements set by the National Securities and Stock Market Commission. It is worth noting that there are proposals to place the electronic form for the general meeting in the legislation of limited liability companies.

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Accounting of Shares Mechanism One of the most promising innovations in Draft Law No. 2493 refers to introduction of a mechanism for the accounting of shares in limited liability and additional liability companies via the accounting system of the National Depository of Ukraine. According to current corporate legislation the accounting of shares in limited liability and additional liability companies is carried out exclusively in the form of a record in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Associations. However, the list of entities entitled to make changes to the Register mentioned above is still large, which may prompt raiding risks. Having decided to transfer the accounting of shares to the National Depository of Ukraine, all the information about a company’s participants is excluded from the Register in order to prevent raiding. Thus, the disclosure of information about the company’s participants will be carried out only by the National Depository of Ukraine in the way prescribed by the National Securities and Stock Market Commission.

Personal View It is worth noting that current reform of corporate legislation is one of the most promising of recent years. To our mind, it is difficult to overestimate certain significant steps such as the opportunity to choose management structure and online general meetings in joint stock companies, accounting of the shares mechanism in limited liability and additional liability companies. All the changes are likely to be sufficient for improving the level of corporate governance efficiency and anti-raiding measures.

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Corporate Governance

On the Establishment of Supervisory Boards in Ukrainian LLCs and Their Benefits Although it has technically been possible to form a supervisory board in Ukrainian LLCs for a while, the ability to run it effectively did not arrive until June 2018, when the Law of Ukraine On Limited and Additional Liability Companies came into force, dedicating an entire separate provision to the issue. Since then, many Ukrainian companies have established such boards to make business management more effective, and many others are seriously considering it. In this article, we’ll look at the circumstances under which a Ukrainian company should create a supervisory board, go over this body’s functions and powers and to also clarify who can be its members and on what terms.

What a Supervisory Board is A supervisory board is a corporate governance body which reports to the general meeting of shareholders and supervises the activities of the CEO.

Tetyana Gavrysh Managing Partner, ILF

When it is Time to Form a Supervisory Board There are a few situations that have already become classic examples, due to how common they are, of supervisory boards becoming an effective governing body in a company. The Ukrainian offices of foreign companies were the first to establish supervisory boards after the adoption of the aforementioned law. Many foreign businesses are divided into clusters, which may encompass several countries. Employees of each country’s office are not necessarily, or not exclusively, subordinate to the CEO of that office, but may also report to an appropriate supervisor in the cluster. Thus, one of our clients, international tech company CMO Ukraine, reports to the company’s Israeli office, which coordinates all of the company’s marketing departments in the EMEA region, rather than to the CEO of the Ukraine office. Such a structure used to have no legal basis and hinged on the trust between stakeholders for each other and for corporate rules. Now, however, the actual state of affairs can finally be given a legal form, which will certainly make managing these companies easier, more effective and less stifled by red tape. Another classic example comes into play when the founders step away from day-to-day management. This could happen when a business is transferred to heirs, or when the founders decide to take on some other project. In this case, by switching from an executive body to the supervisory board, they can retain the ability to influence policy and development without having to be constantly involved in day-today operations. The following are not so common scenarios that have served as a prerequisite for the establishment of supervisory boards in recent years. Thus, the supervisory board is a useful tool for involving investors (after attracting investment) in the company’s affairs. In recent years, all kinds of instruments have been gaining popularity in

Ukraine for attracting investment at the early stages of a project, such as SAFE or convertible loans. Yet, the main way to attract large sums still involves an investor’s entry into the company’s authorized capital. As members of the supervisory board, investors can watch over their money and monitor the company’s activities without interfering with routine management, benefiting day-to-day operations by bringing in consultants and experts that are necessary for the project at hand. This scenario is particularly widespread among Ukrainian IT companies. There have also been more and more cases when an outsourcing company’s pet project grows into a separate entity with its own employees and executives. A supervisory board could help the parent company support and assist a fledgling company like that. Hence the next reason for creating boards. A notion has been gaining traction lately that the purpose of a supervisory board is not so much in supervising the company’s managers but in serving as a way to support them and help them achieve growth. Such supervisory boards consist of experts that help out with strategic tasks, also mentoring managers and helping with their development. The functions of such boards include evaluating and training managers, ensuring a succession of authority, selecting candidates for executive positions from among the employees, providing advice in crisis situations, etc. The final reason is the desire to consolidate management. Businesses often operate as groups of several Ukrainian LLCs and companies incorporated in other countries, to optimize tax or administrative aspects based on the needs of the business and its customers. Local companies are run by local managers, but the owners of the group, if they are actively involved in operations, seek to maintain control over management while avoiding control over current business transactions, which may conflict with compliance requirements in certain states. In a situation like this, having a supervisory board can help to ensure a single vector for all companies in the group. It should be noted that these scenarios are quite arbitrary and that, in most cases, the creation of a supervisory board involves multiple prerequisites and advantages, some of them too specific for this general overview.

How a Supervisory Board is Established The decision to form a supervisory board is made by the general meeting of shareholders. Its status and functions are prescribed in the company’s charter and can be elaborated on in dedicated regulations. By mentioning only key, strategic functions in the charter, the company avoids the need to rewrite it every time the board’s functions or model of operation change, which is important given the expectation that a supervisory board is supposed to be as flexible a body of corporate governance as possible. The body’s name might suggest that it must be collegial, but that is not necessarily the case. The supervisory board of LLCs can have

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ILF LAW FIRM ILF (Inyurpolis Law Firm) is an independent Ukrainian law firm whose core focus is on litigation and business support (business setup, transactional support, regular advisory support). The firm has been operating on the market for 27 years through its two offices located in two major cities, namely Kyiv and Kharkiv. Among ILF’s strong points is the ability to follow up on court decisions and attain tangible results. This is due to years of experience dealing with debt recovery for banks and insurance companies (USD 500 million recovered in 2007-2017) as well as deposit recovery from liquidated banks on behalf of companies and individuals. We carry out business support through our commercial, corporate, M&A, tax and other teams, which follow an industry-minded approach. The team’s diverse expertise ranges from business structuring and high-profile contracts to corporate acquisitions and asset deals. We’re known for our successful business structuring record in the IT sector, support of sophisticated technology contracts, and public-private partnership work in the field of healthcare and pharmacy. We help our foreign clients to get a clear understanding of the Ukrainian business environment, based on our knowledge and experience in medicine and pharmacy, agribusiness and alternative energy, IT, banking and finance. Our regular clients include Avon Products, Volvo Ukraine, BASF Ukraine, Malteurop Group, Ecostar/ DISH, SPS Commerce, EGGER, American Jewish Joint Distribution Committee and Amcor Tobacco Packaging. Our industry-oriented approach enables us to discover legal solutions for business as well as manage projects dealing with in-

Address: 22 Shovkovychna Street, Kyiv, 01024, Ukraine

stitutional changes. In 2016-2017 ILF lawyers, working together with an expert team from the Ukrainian Ministry of Health and supported by the World Bank and UNICEF, designed legislation on primary healthcare reform. The ILF team includes 45+ highly-qualified lawyers, attorneys, tax, investment and business consultants.

Reputation For the last years ILF has been in the TOP-20 law firms in the national rating 50 Leading Law Firms of Ukraine compiled by Yuridicheskaya Practika Weekly. The Ukrainian Law Firms. A Handbook for Foreign Clients named ILF one of the leaders of the Ukrainian legal market and places the firm’s partners among key experts in respective fields of expertise: litigation, medicine and pharmacy, IT and labor law.

Areas of practice: Public-private partnerships and privatization, corporate law and M&A, land and real estate, labor and employment, debt recovery.

Tel.: +38 050 339 2307 E-mail: office@ilf-ua.com Web-site: www.ilf-ua.com

any number of members, starting with a single person. One-person boards are often created in companies with two owners, with one of them nominating the CEO and the other - the member of the supervisory board.

CEO loses the trust of shareholders or the ability to act, the board can step in and assume his/her functions.

Who Can be a Member

There are several ways to form a supervisory board: Functions and Powers of • It can consist entirely of company ema Supervisory Board ployees. If your company has a sufficient number of qualified staff, and if By law, the supervisory board conyou approve of their performance and trols and regulates the activities of a are confident in their abilities, they can company’s executive body. However, in be your supervisory board. The main practice, the board also determines the advantage of this solution is having main guidelines of the company, evalumembers that are familiar with the ates and approves the goals and key company’s inner workings. performance indicators, also evaluating • The board can also consist of indepenand adopting the strategy and business dent members brought in from outside. plans for the company’s main activities. In this case, the board will be focused In addition to standard powers, on the company’s overall activities, from such as hiring and firing CEOs, paying a high level of abstraction, rather than bonuses, preparing general meetings, on the minute details of its activities. approving contracts, arranging audits • It’s also possible to combine outside ex(selecting auditors and signing conperts and company employees, making tracts with them), the board’s functions Partner, Innovation Officer, ILF use of the benefits offered by both of encompass: these categories. A mixed board will un• Ensuring compliance of the CEO’s dederstand the company’s inner processcisions with the interests of the owners. It’s also possible to deteres and will also be able to see them with mine what kinds of transactions the CEO can go through only with fresh eyes. On the other hand, it could the board’s blessing. spark conflicts within the board due to • Monitoring implementation of the adopted strategy. The CEO, being the division between “our own” and “outimmersed in day-to-day affairs, can sometimes forget the overall siders”. strategy, and the board’s task is to bring the big picture back into The board can include various experts as well as CEOs, presifocus. • Protection against the impact of corporate disputes. Conflicts bedents or owners of other companies that you consider to be role modtween partners can interfere with general meetings of sharehold- els. You can also bring in marketers, lawyers, auditors - all those whose ers. The supervisory board can handle things in the meantime, as expertise can help evaluate the CEO’s actions and seek out effective solutions. it has the authority to make decisions and oversee management. A civil or employment contract can be concluded with members • Ensuring succession of executive bodies. When a key executive quits, it could damage the business, in terms of funds, structure of the supervisory board; they can work with or without remuneration. To sum up, a supervisory board is an instrument which a busior morale. To prevent this from happening, the supervisory board ness can use to address a multitude of tactical and strategic tasks, nominates reserve candidates for these positions. • Protection against external threats. Since the board monitors the and this instrument is becoming increasingly popular in Ukraine, evolvCEO’s decisions, this mitigates the risk of corporate raiding. If the ing with each passing day.

Arsen Buchkovskii

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Corporate Security

Business Security: Non-Conventional Remedies Ukraine is a promising place for doing business. The government declares a strong commitment to protecting investments. Nevertheless, business security and a fair attitude of the authorities remain the key concerns of investors entering Ukraine. In practice the issue is twofold: lawabiding businesses often face excessive pressure due to abuse of the criminal justice means by local law-enforcement bodies. Conversely, business often does not find adequate protection from the state when it becomes a victim of unlawful actions. Very limited statutory rights provided to such companies by law makes the situation worse. The means of pressure vary: groundless institution of criminal proceedings, searches, seizures, excessive investigations or even explicit threats. Summarized in countless reports and articles, the above problem was so tangible that it even triggered the adoption Partner, Asters of “Dawn Raids Stop” laws. Nevertheless, the traditional remedies against pressure on business lack efficiency, as most of them suggest complaining to the very same authority responsible for pressure. The same goes for habitual remedies against ineffective investigations suggesting that the authority or official handling the investigation should be approached. The above resulted in high demand for non-conventional remedies to protect businesses. The several institutions described below might be of assistance for such purposes.

Sergiy Grebenyuk

The Business Ombudsman Council The Business Ombudsman Council is an independent institution established in 2015 and founded by the EU and several countries (the US, the UK, France, Germany, etc.). The Council has already proven its effectiveness in countering malpractice against businesses of all sizes and origins. This may include groundless prosecution; application of disproportionate coercive measures such as searches, seizures, questioning; different procedural breaches; the failure by authorities to comply with a court decision; repeated attempts by the authorities to attach the property after the courts refused to do so; groundless attempts to prevent imported goods from entering Ukraine or export from the country, etc. As each case is unique, it is an in-house or outside counsel`s task to correctly identify violations and draft a well-reasoned complaint meeting the admissibility criteria. For instance, before lodging a complaint the company should exhaust at least one level of administrative appeal (if applicable). Also, just like other ombudsman formations, the Council cannot consider cases that have been subject to any court or arbitral proceedings. The temporal limit of the Council’s supervision is one year from the moment that the alleged violation occurred. By 2021 the Council rejected almost half of the complaints against law-enforcement bodies due to the failure to comply with admissibility criteria. Thus, due attention to the formal requirements should be paid to obtain the Council’s attention. Furthermore, a key to reach an effective and timely result is to proactively communicate with the Council. A failure to comply with the Council’s request for additional documents or clarifications may result in the dismissal of the complaint. The declared term of consideration of a case by the Council is around 3 months. According to our observations, the result is usually

reached even faster, though some complicated cases may require more time and effort. When it comes to the imminent risk of irreparable damages to business, the Council may react there and then. In this type of case, it is the counsel’s task to correctly identify the necessity of such an urgent reaction. For instance, in one of our cases, we identified to the Council that the police’s decision to initiate freezing of the company’s bank accounts on questionable grounds would immediately cause the business to rupture and the inability to pay wages to hundreds of employees. This complaint got a prompt reaction from the Council and the issue was resolved. The Council regularly meets with the relevant authorities to convey its standpoint and recommendations regarding complaints received. The Council may also send written recommendations to the senior management of the authorities at issue.

The Department of Criminal Law Policy and Investments Protection at the Prosecutor-General’s Office One of the big steps for business protection was the establishment in 2020 of the Department of Criminal Law Policy and Investments Protection within the Prosecutor-General`s Office. Its task is to counter illegal interference with business activity. The Department provides a forum for dialogue between highprofile prosecutors and businesses on issues of concern related to the criminal justice system. Furthermore, upon a company complaint, the Department has a wide range of powers to address the matter. For instance, it may commence monitoring of respective criminal proceedings to determine whether the actions of investigative authorities were lawful. The Department may also study case files, instruct prosecutors and investigators, overturn their decisions, etc. In one of our cases, the Department even took the case under its procedural supervision, having appointed its prosecutor in charge of the group of prosecutors in the case. As a result, the Department acknowledged that the allegations against the company were ill-founded and the criminal proceedings were closed due to the absence of corpus delicti. The Department may, at its discretion, decide on the exact measures to be taken within the case, though it may also adhere to the company’s request. There are no particular admissibility criteria for complaints to be filed. As a matter of practice, the procedural irregularities and other violations depicting pressure on a business must be identified to succeed. The Department`s response is prompt — it usually considers complaints within a couple of weeks. The result can be noticed even earlier — in one of our cases, business malpractice on the part of the tax police ceased to exist on the next day the complaint was filed with the Department. Thus, in some cases, the mere fact that the business is ready to fight for justice and the Department’s attention to the case may be sufficient to stop the unlawful actions of law-enforcement bodies.

Business Associations International and local business associations take advocacy measures to protect their members against unlawful pressure by lawenforcement. The most prominent ones are the American Chamber of Commerce, European Business Association, Union of Ukrainian Entrepreneurs, etc.

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Address: Leonardo Business Center, 19-21 Bohdana Khmelnytskoho Street, Kyiv, 01054, Ukraine

Membership in such associations offers a presumption of trustworthiness, as companies are subject to scrutiny prior to their admission. The associations are thus perceived by the authorities as a voice of honest business that should be heard. Such associations have become a platform for dialogue between the management of key law-enforcement and businesses. As an example, the American Chamber of Commerce has signed memoranda with the Prosecutor-General`s Office, the National Police and other authorities. To protect the legitimate interests of its members, the ACC holds regular meetings with the management of the said authorities and may bring up specific cases for discussion. Additionally, the ACC may directly address local-level authorities with the issues of its members’ concern. The ACC may step in for its member company if there is a prima facie case of bad faith actions on the part of the authorities. Where applicable, a wisely developed business protection strategy should include all possible remedies. For instance, we recently brought the case of our client to the attention of the ACC, the Department, the Council and the embassy. It concerned a multi-million fraud with the client’s assets. Such strategy resulted in a transfer of the criminal proceedings to the highest possible investigative authority and acceleration of the investigation.

Other Instruments Embassies A foreign investor may also seek support from the embassy of its country. The embassy may step in to protect the interests of the company in one way or another in line with diplomatic protocol. When an embassy brings a case to the attention of local authorities, the issue usually becomes a matter of high priority for the officers involved, as Ukraine’s reputation in the international arena is at stake.

UkraineInvest/the Commission on Business Protection Issues and Investments Climate Improvement UkraineInvest is the Ukrainian government’s investment promotion office, which was created in 2016 to attract foreign direct in-

Morris, Prada S.p.A., Sanofi, Societe Generale, Syngenta, Visa, Webuild S.p.A, and many others. Asters is an exclusive Ukrainian member of Lex Mundi, World Services Group, Legalink, Biolegis, Life Sciences Practice Group and Energy Law Group. Asters and its partners are consistently placed at the very top of the country’s legal market by the most authoritative international and Ukrainian market reviews. Chambers Europe 2021 recognizes 23 lawyers of Asters — the largest number of the renowned practitioners in a single Ukrainian law firm. For the third consecutive year Asters is included in Tier 1 ranking in all 12 practices reviewed by The Legal 500: Europe, Middle East and Africa 2021 Guide. In 2020 Asters was recognized as Ukraine Firm of the Year by Chambers Europe Awards 2020, Who’s Who Legal 2020 and by The Lawyer European Awards 2020.

Tel.: +380 44 230 6000, Fax: +380 44 230 6001 E-mail: info@asterslaw.com Web-site: www.asterslaw.com

vestment and assist existing investors to expand their businesses in Ukraine. Being part of the government, this institution communicates directly with high-profile officials. UkraineInvest collaborates with the Commission on Business Protection Issues and Investments Climate Improvement created by the Cabinet of Ministers with powers to consider complaints by business and raise its concerns before key lawenforcement bodies. This may help to highlight the issue of an unfair attitude and address it.

The European Court of Human Rights Proceedings at the European Court of Human Rights are quite lengthy, but addressing this Court might be beneficial in various ways. As a matter of practice, the mere fact that the case is accepted by the ECHR (which dismisses more than 90% of incoming applications) disciplines the authorities, as it shows that the company is determined to seek justice using even international arbitration mechanisms. In general, the ECHR accepts cases after all domestic remedies are exhausted. Consequently, companies must go through all levels of domestic courts before reaching the ECHR. Nevertheless, in certain cases, there are no effective remedies, which open the possibility to file an application before the ECHR immediately. It is thus for the counsel to properly identify the issue and apply to the ECHR in a timely manner, bearing in mind that the temporal limit of the Court’s supervision is six months after the violation occurred. The time limits are expected to be reduced to four months from August 2021.

In a Nutshell The attitude of Ukrainian authorities towards business still needs to be improved. In our experience, any business operating in Ukraine may eventually encounter all the imperfections of the criminal justice system. This is where non-conventional methods of business protection may be helpful. The task of a counsel is to identify the best possible remedies in a given case and to use them wisely.

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Counterfeiting and Piracy

Analysis of Situation with Customs Protection of IP Rights at Customs Border and Recommendations on its Improvement Ukraine has finalized adaptation of its national legislation to the EU standards and practices and the transformation of its legislation in the sphere of assisting in protection of intellectual property rights (IPR) at the customs border. The amendments provided the legal framework for such a system of IPR protection at customs, which: • first, does not interfere with the legal trade in original goods, but on the contrary facilitates the movement of such goods; • secondly, strengthens the efforts to combat against the movement across the customs border of goods involving IPR violations, in particular, counterfeit and pirated goods. At the present stage, the transition of the customs offices of the State Customs Service of Ukraine to new principles of work should be guaranteed, which will ensure the effective application by all Ukrainian customs offices of the mechanism to promote IPR protection at the border and establish control over this process.

cessing of the Customs Register data by the State Customs Service. As regards the cooperation between the customs offices and right holders upon identification of the goods involving the features of IPR infringement, such cooperation is currently maintained in the format of the combination of paper/electronic data exchange, which is ineffective and does not provide a full picture of all data exchange operations between the customs offices and right holders in cases of suspensions. Immediacy of such exchange affects the duration of customs procedures and, as a consequence, the right holders’ expenses.

Suspensions Statistics

During 2020 the total number of suspensions of customs clearance carried out by the Customs Service of Ukraine was 1907, out of which 87 suspensions concluded with destruction of counterfeit goods, in Partner, Pakharenko and Partners IP and 1 case the labelling of counterfeit goods Law Firm, Attorney-at-Law, Ukrainian was changed, in 42 cases the protocols on violation of customs rules were drawn up, Patent Attorney, Director of the Ukraine 30 of which were based on Article 476 of Alliance Against Counterfeiting and Piracy the Customs Code of Ukraine. Therefore, in terms of preventing the counterfeits from Complex IT System Ensuring entering the territory of Ukraine, only 7% of Implementation of the Border suspensions appear to be effective. Measures The leading position in the effectiveness of the applied measures According to the order of the Ministry of Finance of 9 June 2020 belongs to the Odesa Customs of the State Customs Service, which No. 282 new complex IT system Customs Register of Objects of Intel- is a unique customs office that carries out customs control of goods lectual Property Rights, the associated software and information ser- moving by road, sea, river, air and rail. To be specific, the efficiency vice for owners of intellectual property rights (rights holders) and au- index of Odesa Customs was almost 80% with an average of 7%; 92% tomated risk analysis system for IPRs were expected to be launched (80 cases) of all cases of destruction of counterfeit products were carried out under the customs control of Odesa customs officers; 87% (26 by 1 July 2020. For the time being, no official information is available on the sta- cases) of all administrative cases under Article 476 of the CCU were tus of development of these services and on the expected time of their initiated by Odesa Customs. In the first two months of 2021 the customs offices carried out launch. On the website of the State Customs Service, in the “Personal 49 suspensions of customs clearance of goods suspected of infringeCabinet”, there is only a complex IT system Customs Register of Ob- ment of IP rights, out of which only 2 cases concluded with destruction jects of Intellectual Property Rights operating in an old and new for- of counterfeits, thus the effectiveness of measures has decreased and mat, and an interface for entering applications in electronic form by is only 4%. Given that automatized profiles for analysis and management of right holders in the Customs Register of IP rights (https://cabinet.cusrisks associated with IPR infringements did not work since April 2020, toms.gov.ua/ipr/reg/overview) has also appeared there. Unfortunately, for the time being, the complex IT system Cus- as shown by the practice, all goods infringing IP rights were identified toms Register of Objects of Intellectual Property Rights has lost its as result of inspections initiated to combat other types of violations of integrity in terms of formation and use of the data. Retrieval and use customs legislation. Although the effectiveness of border measures has increased of the data of customs register by right holders, importers/exporters and other concerned parties is not an easy and transparent process compared to previous years, 2020 and early 2021 are characterized by lower activity in applying border measures aimed at assisting in today. Furthermore, there is a lack of up-to-date information for the the protection of IP rights at customs and a large number of ineffecbroader public that could facilitate the process of obtaining and pro- tive suspensions of customs clearance of goods suspected of IPR

Alexander Pakharenko

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PAKHARENKO & PARTNERS IP and Law Firm Pakharenko & Partners was established in 1994 and has offices in Kyiv and London. As a firm providing full IP service coverage, we are keen on developing successful protection and enforcement strategies for our clients, covering the development of an IP portfolio, acquisition of IPRs, commercialization of IPRs, enforcement and management of IPRs including patents (inventions and utility models), designs, trademarks and geographical indications, domain names, copyright and related rights, plant breeders' rights at both national and international level. The firm provides assistance to national and foreign clients in securing and enforcing their intellectual property rights in Ukraine and CIS countries. The company’s lawyers have been involved in anti-counterfeiting and anti-piracy activities since the implementation of the relevant provisions on IPR enforcement in Ukrainian legislation. Our staff also has expertise in pharmaceutical law, competition law, media law, corporate and commercial law, commercial litigation. We are able to service our clients' needs around the globe through our established network of associates. The special relationships developed by our company with many attorney firms in key foreign markets provide ongoing, substantial benefits to our internationally-focused clients.

Address: 72 Velyka Vasylkivska Street, Olympiysky Business Center, Kyiv, 03150, Ukraine Tel.: +380 44 593 9693 v iolations. The dynamics, unfortunately, are disappointing since the number and effectiveness of measures continues to decline.

Reasons for Decrease in the Number of Effective Cases of Suspension of Customs Clearance Suspension cases are considered to be effective if they resulted in the destruction of counterfeit goods or their relabeling, drawing up protocols on administrative offenses under Articles 476 or 473 of the Customs Code of Ukraine. According to the results of a study of the state of border measures aimed to protect intellectual property rights at Ukrainian Customs, conducted in April this year by the Ukraine Alliance Against Counterfeiting and Piracy with participation of right holders whose IP objects were entered in the Customs Register and their representatives, the situation with border measures can result from THE LACK OF: — political will of the country’s leadership to stop the infringements of intellectual property rights; — proper monitoring by the leadership of the Ministry of Finance of Ukraine and State Customs Service; — motivation and appropriate level of guidance from the central office of the State Customs Service in implementation into practice of legislative changes; — motivation of the employees of structural subdivisions of the customs authority which was made responsible for organization of application of measures aimed at customs protection of IP rights; — systemic approach of the Customs Offices to measures to assist in the protection of IP rights, considering the fact that most identifications of goods infringing IP rights were carried out as a result of inspections, initiated to counter another types of violation of customs legislation; — customs officers’ knowledge and skills to respond in cases of detection of goods that infringe intellectual property rights, during customs control.

Recommendations on Improvement of the Situation For improving the situation and reducing the volumes of counterfeit, pirated and IPR-infringing products (including counterfeit and pirated goods) in the territory of Ukraine, the transition of the customs offices of the State Customs Service to new principles of work in the course of assistance in IP protection at the customs border should be ensured, and control over this process by the state and stakeholders should be established. To achieve these goals, the following changes are required:

A. Administrative • The Ministry of Finance of Ukraine should take the implementation of commitments under its control. For this purpose, it will need to decide which subdivision in the Ministry of Finance of Ukraine will take responsibilities for the result of customs reform in terms of

Main practice areas: Intellectual Property Law, Anti-Counterfeiting and Anti-Piracy Operations and Legal Support, Media Law, Advertizing Law, Competition Law, Pharmaceutical Law, Corporate Law, Customs Law, Commercial and IP Litigation

Membership of organizations: The company and its members are actively involved in the operation of 28 national and international non-governmental organizations, for example: AIPPI, INTA, PTMG, IBA, Ukrainian Patent Attorney’s Association, ICC Ukraine, American Chamber of Commerce in Ukraine, German-Ukrainian Chamber of Industry and Commerce, European Business Association, Ukrainian Trademark Association, Ukrainian Bar Association, Ukrainian Advocates’ Association and a number of other associations. The company is a co-founder of the Ukraine Alliance Against Counterfeiting and Piracy, which is part of the Global Anti-Counterfeiting Group (GACG Network), which includes 24 national and regional organizations.

Fax: +380 44 451 4048 E-mail: pakharenko@pakharenko.com.ua Web-site: www.pakharenko.ua assisting in IPR protection as a whole and who personally will be the supervisor in charge in this area; • to decide on the name list of officials of the State Customs Service who will be responsible for the practical adaptation of amendments in customs legislation and for increasing the efficiency of Customs Service work in the area of assisting in the protection of intellectual property rights that will be result-oriented; • to provide for subordination of the specialized unit for assistance in the protection of intellectual property rights IP (SU) to the central office of the State Customs Service, forming the independent divisions based on these specialized units (SU) and vesting their officials with an exclusive function to assist in protection of intellectual property rights and to staff such SU with goal-oriented, competent and efficient employees;

B. Technical • to develop modern IP-related software-based risk profiles, considering European experience in developing such systems; • to develop software and information service for right holders aimed at prompt exchange of information between customs officers and right holders and recording of consolidated information on all actions related to suspension of customs clearance; • to choose 2-3 destruction enterprises and create Customs Control Areas on their foundation;

C. Informational • As soon as formation of a new SU team is finalized, the State Customs Service should carry out staff training to ensure a uniform approach to the work of the SU of regional customs authorities, teamwork organization, competence development; • the State Customs Service should arrange for carrying out, on a weekly basis, of online seminars, workshops attended by representatives of SUs of the State Customs Service, right holders, EU representatives, and other interested parties for exchanging information and experience between customs officers.

D. Legislative • to resolve the issue of implementation in customs legislation of Ukraine of the provisions regarding mandatory destruction of counterfeit goods and legalization in the participation of IP rights holder (right holder or his representative) in the administrative case concerning violation of customs rules, which are being brought to the attention of executive and legislative authorities by right holders for the last five years. We believe that the implementation of the said steps will allow introduction of enhanced state border control over the products involving IPR infringements; minimize environmental risks to human health, protect consumers from goods of unknown origin and quality; reduce corruption and organized crime; increase Ukraine’s attractiveness to investors due to their confidence in reliable protection of IP rights.

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Criminal Process

Business vs Criminal and Repressive Apparatus: Symbiosis or Fight for Survival… Every political force that comes and Article 205 of the Criminal Code (fictito power finds it necessary to start its tious entrepreneurship) was decriminalactivities with loud promises about ized. A moratorium was also imposed on improving the investment climate in checks by government agencies. As the Ukraine, simplify the conduct of busileadership of the state intends, liquidation ness, reduce tax pressure and eradicate of the tax police and creation of the Bureau corruption, in particular in the system of Economic Security have to become the of law-enforcement and judicial bodies, final step in eliminating pressure by security which is one of the main factors influagencies on businesses. It is with this aim encing the low level of economic growth in mind that the Verkhovna Rada of Ukraine in Ukraine. adopted the eponymous law on 29 January As a side note, since the declara2021, which specified a 6-month period to tion of independence of our state in liquidate the tax police and establish the 1991, Ukrainian businesses have felt Bureau of Economic Security. “improvements” granted by six PresiTracking down difficult relations bedents of Ukraine (without considering tween businesses and law-enforcement one acting President) and nine convocabodies, it is worth mentioning the leading tions of the Verkhovna Rada of Ukraine. positions of enterprises in the agricultural It appears absolutely logical that sector. Thus, in the period of 2010-2020, after almost thirty years of developfarmers turned from being non-stop conment of the business environment our sumers of government grants into the drivstate could be witnessing a real investing force of economic growth. According to ment boom, with the national economy the official statistics of international grain growing at a furious pace. The situation, Partner, EQUITY Law Firm traders, during the last two years Ukraine however, is just the opposite. Moreover, has been the second biggest exporter in the administrative influence and the impact world, only lagging behind the United States. of corruption on businesses is rather high which, in turn, discourages Of course, since such a sweet spot couldn’t be ignored by lawforeign investors form investing funds in our country. enforcement bodies, the second half of the 2010s featured a great One of the primary reasons why the corruption system in the ac- number of criminal proceedings initiated by law-enforcement bodies tivities of law-enforcement and judicial bodies is flourishing and “en- against agricultural companies. during” is its prompt adaptation to both trends in the economic sphere The scale of the problem was so large that the country’s leaders and regular legislative changes. had to organize meetings of representatives of business associations A sector-wide change of objects exposed to unlawful pressure and owners of agricultural corporations with the Prosecutor-General depending on economic factors is a visual example of transformation and government officials. of “corruption preferences” of representatives of the law-enforcement In addition to that, the aforementioned period some representasystem. tives of the National Police of Ukraine invent truly unique methods to Thus, in the period of mass corporatization of state-owned enter- impose pressure, which painfully ‘hit’ agrarians. Thus, the practice of prises and acquisition of initial capital, law-enforcement bodies were arresting crops in fields gained popularity. Under such circumstances, used to take production facilities by force. Being aware of those threat- land owners or farmers did not have the right to gather crops as such ening trends, the Ukrainian Parliament adopted legislation to directly action could be qualified as non-execution of an injunction (a ruling of prohibit the involvement of representatives of law-enforcement bodies an investigative judge to arrest property). It is known that such stopas physical security in resolving corporate conflicts. pages in gathering crops are critically dangerous for the agricultural Since the middle of the 2000s, in the period of economic growth, producer who often doesn’t even have time to challenge such a ruling. the palm of victory in putting unlawful pressure on businesses has At the same time, while protecting the interests of our clients who been held by bodies of the Fiscal Service of Ukraine. Tax officials pay represent the agricultural sector, our team worked out a clear plan of their utmost attention to large financial-industrial groups as well as action, which is rather effective in such cases. As evidenced in pracindustrial enterprises. As “exemplary” activities of tax officers we can tice, with a well-planned defense strategy, it takes around a week for note the mass attack on the Finance and Credit financial and industrial the investigator or prosecutor to realize that the arrest of crops is the group, which resulted in the opening of 30 criminal cases in a week, shortest path to criminal or disciplinary liability rather than the way to sending the heads of enterprises to pre-trial detention facilities, seizure bringing a farmer to his or her office. As in any other criminal proceedof over 1,000 pieces of computer hardware and the freezing of banking ing, in such a case the main precondition of success lies in using all accounts and assets. possible remedies and approaching each case creatively. At the same time, to have a criminal case for tax evasion or ficAs of today, I can confidently say that IT companies are the most titious entrepreneurship opened it is sufficient for the enterprise in popular with law-enforcement bodies. In the last six months alone we question to submit documents to get a VAT refund or for inspectors took part in more than 15 searches conducted by the Security Service of the State Tax Service to conduct an investigation (often offsite) and of Ukraine or cyber police in offices of the above-mentioned enterforward a report to the tax police. prises. In order to stop exacting from businesses and blackmailing them Furthermore, grounds to institute criminal proceedings may althrough criminal prosecutions, punitive measures (liability) under Ar- legedly be relations (transferring money) with enterprises located in ticle 212 of the Criminal Code of Ukraine (tax evasion) were reduced the temporarily-occupied territories, Internet fraud, involvement in

Oleksandr Lysak

WWW.UKRAINIANLAWFIRMS.COM

Address: 4 Rylskyi Lane, Kyiv, 01001, Ukraine,

Tel.: +380 44 277 2222 E-mail: info@equity.law Web-site: www.equity.law

dubious schemes to launder funds obLaw, the state would simply drown in crime. tained through criminal means, etc. At However, as evidenced by recent practice, the same time, the main purpose of such the number of crimes has not skyrocketed. searches is, in a way, to block the work At the same time, representatives of busiof enterprises, seize computer hardware ness circles claim that, as of today, prosand servers with a view to “holding negoecutors do not impose any pressure with tiations” with the owners of businesses. a view to obtaining improper advantages. Another peculiarity of criminal proOur readers can note that under curceedings with respect to IT companies rent Ukrainian criminal procedural legislais participation of representatives of fortion prosecutors may enter information eign law-enforcement bodies in investiinto the Unified State Register of Pre-Trial gations. Thus, recently defense lawyers Investigations (in other words, institute of Equity Law Firm represented the incriminal proceedings) as well as initiate terests of clients in investigative activior take any investigative and detective acties conducted jointly with investigators tions (measures). of the SBU (Security Service of Ukraine), However, it is quite easy to establish FBI agents (United States of America) the interest of the prosecutor in investigatand Cyber Crime Department of the ing a criminal proceeding. In order to do it French Gendarmerie. Unlike investigais sufficient to obtain an extract from the tive activities conducted independently Unified State Register of Pre-Trial Investiby the SBU, the conduct of SBU investigations, find out who entered the respecgators was exemplary in that case. tive information to the aforementioned Generally, we have to say that, in register, inquire if a group of investigators connection with the spread of trans- Partner, EQUITY Law Firm was formed and forward an enquiry to the national crime, a defence lawyer who chief of a prosecution body or at the adspecializes in the defence of interests of dress of a senior prosecution body with clients within criminal proceedings into economic crimes is supposed a request to explain why it is the prosecutor who is performing the to possess knowledge in the area of international finance, understand function of the body of pre-trial investigation. As evidenced by praccorporate structure and the principles of entrepreneurship in the most tice, after such straightforward steps the prosecutor loses his or her popular jurisdictions such as Great Britain, Cyprus or countries that are passion to conduct investigative actions and investigate a proceeding used as offshore zones. He or she is also supposed to be aware of the single-handedly. principles of Interpol activities, extradition procedure, etc. Hopefully, with the liquidation of SBU units which investigated As far as further tendencies in mutual relations between busi- economic crimes, the situation will result in a similar situation. nesses and the state in the person of the system of law-enforcement Despite a sort of pessimistic tone in this publication, we can conbodies are concerned, we hope for significant reduction in pressure on fidently claim that in the last 5-7 years our state has introduced a large the business community upon implementation of the provisions of the number of effective measures aimed at combating corruption and Law, which specifies liquidation of structural units of the SBU empow- reducing pressure on the business community. It is worth mentionered to investigate economic crimes. ing adoption by MPs of the so-called “stop mask-shows” laws which We remember the public’s reaction to the draft bill, the provisions brought to end the excesses that took place during searches, strengthof which specified vertical deprivation of the prosecution bodies of ening criminal liability for acts of corruption, and simplifying registratheir status of bodies of pre-trial investigation and general supervision tion and conduct of business. We hope such tendencies will get under (changes introduced to Article 131-1 of the Constitution of Ukraine). way in the future and Ukraine will become a really attractive jurisdiction The opinion was imposed on the public that, following adoption of the for the introduction of large-scale investment projects.

Taras Poshyvanuyk

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Cross-Border Insolvency

Cross-Border Insolvency: Introduction Cross-border insolvency issues are often at the heart of insolvency where international elements or participants are involved. Such international participants could be foreign liquidators, foreign companies, directors, beneficial owners or foreign bankrupts. In this article we will focus on the UK framework governing cross-border insolvency which comprises of: The Cross-Border Insolvency Regulations 2006 (CBIR 2006) which give effect to the UNCITRAL Model Law on Cross-Border Insolvency (Model Law) in the UK. 1.1 Council Regulation (EC) No. 1346/2000 of 29 May 2000 on insolvency proceedings (Insolvency Regulation 2000) (for insolvency proceedings that are commenced before 26 June 2017) and Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (Recast Insolvency Regulation) (for insolvency proceedings opened on or after 26 June 2017). 1.2 Section 426 of the Insolvency Act 1986 (IA 1986). 1.3 English common law. 1.4 EU Insolvency Regulation is relevant if the cross-border insolvency is taking place in one of the EU Member States. As neither Ukraine, not the UK are members of the EU (although in the latter, where main insolvency proceedings were opened before the end of the Brexit transition period on 31 December 2020, the EU legislation may apply), however in this article we will discuss CBIR 2006 and Section 426 proceedings which we encounter most commonly where foreign jurisdictions including Ukraine are concerned.

Richard Healey

Partner, Head of Dispute Resolution, Gateley Richard has expertise in restructuring matters and complex and international dispute resolution. He has significant extra-territorial experience in cross-border insolvency, tax avoidance, evasion and fraud, asset protection, tracing and recovery and of representing parties in disputes, both in the High Court and London Court of International Arbitration, as well as numerous overseas courts. Richard is heavily focused on asset tracing assignments deriving from Ukraine, Russia and some Former Soviet Union countries. In particular Richard has been retained in a number of matters involving claims on behalf of ultra-high net worth individuals/ corporations emanating from the region. He has lectured extensively for various UK and overseas organisations including: the St Petersburg International Legal Forum; The EU Advisory Mission in Ukraine; Senior Government Officials in the Republic of Uzbekistan; Sberbank of Russia and others.

The CBIR 2006 provide for the recognition of two types of insolvency proceedings: foreign main proceedings and foreign non-main proceedings. Foreign main proceedings are proceedings that are taking place in the state in which the debtor has its center of main interests. The term “center of main interests” is not defined but there is a rebuttable presumption that the debtor’s registered office is the center of the debtor’s main interests (article 16(3), Schedule 1, CBIR 2006). An application for recognition shall be accompanied by a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign liquidator. An application for recognition shall also be accompanied by a statement identifying all foreign proceedings, proceedings under British insolvency law and requests under section 426 IA 1986 in respect of the debtor that are known to the foreign representative. The advantage of this application is that upon the granting of a recognition order of main proceedings under the CBIR, an automatic stay is imposed in respect of the debtor, and the foreign representative is entitled to request relief, including the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor’s affairs, rights, obligations or liabilities. Upon recognition, the CBIR give the foreign representative certain rights. For example, to be heard in English courts and in some cases to commence proceedings relying on the provisions of the English IA 1986 (IA 86). The CBIR do not expressly permit the foreign representative to apply foreign insolvency law directly in England. If there is an insolvent foreign entity, it may be beneficial to consider applying to have a company’s insolvency recognised in England. Recognition would bring the following potential advantages, including both automatic and discretionary benefits.

Cross-Border Insolvency Regulations (CBIR)

Automatic Benefits

Under the CBIR 2006 a foreign insolvency practitioner can apply to the British courts for recognition of those insolvency proceedings. Foreign insolvency proceedings for which recognition may be sought must be collective insolvency proceedings which are subject to the supervision and control of a foreign court. The CBIR apply without the need for reciprocity which means that, even though we understand that Ukraine has not enacted the CBIR Model Law into its legislation, the UK may nevertheless recognise eligible Ukrainian insolvency proceedings. In this connection, there is a relevant recent (on 11 March 2021) decision by the High Court in England recognising foreign liquidation of the Ukrainian bank PJSC Bank Finance and Credit under the CBIR. Investigations into the bank revealed that the Bank and those controlling it are suspected to have been involved in high value fraud, resulting in funds being sent to many overseas countries, including companies registered in England. Because the liquidation in Ukraine was a “foreign main proceeding” it satisfied the English court that proceedings can be brought under CBIR in England.

The automatic benefits include the automatic provision of permission to a foreign officeholder to bring claims in the English High Court under the following sections of the IA 1986: (i) Section 238 (transactions at an undervalue); and (ii) Section 423 (transactions defrauding creditors), subject to appropriate modifications. Section 238 IA 1986: transactions at an undervalue. Section 423 IA 86: transactions defrauding creditors (putting assets beyond the reach of creditors). An “undervalue” in the context of both of these sections means that the transaction is for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by the company. This, therefore, enables the foreign liquidator to bring claims in the English High Court which have the effect of reversing any transactions which were entered into at an undervalue and/or for the purposes of defrauding creditors and to enable any property transferred to be restored.

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GATELEY Gateley Plc is a pioneering entrepreneurial professional services group at the heart of which is Gateley Legal, an English law firm established in 1808. In 2015 we became the first commercial law firm in the world to be publicly listed on the London Stock Exchange. We are a top 50 UK ranking law firm with 10 offices throughout the UK and Dubai and over 1,100 employees. Gateley has specialised departments in many areas of law, including cross-border dispute resolution and ADR, M&A, real estate, international taxation, international family law, shipping, construction, brand reputation (including defamation) and immigration. We also have a dedicated forensics and corporate intelligence team. We recognise that clients are looking to work with advisers who ‘get’ how they like to do business, the challenges they may be facing commercially or personally (which may include disputes), as well as other legal issues arising across different jurisdictions and time zones, including Ukraine.

Address: One Eleven Edmund Street Birmingham, B3 2HJ

We have recruited market leaders who provide the expertise our clients need in a considered and discreet manner. We are forward thinking and straight-talking advisers. The challenges that our clients face are multi-dimensional. By combining the skills of lawyers, forensic specialists, tax consultants, corporate and cyber intelligence professionals, as well as other specialist teams from across the Gateley group, we are able to think ’outside of the box’ and provide more than just legal advice. We represent several Ukrainian clients in large-scale cross-border disputes and other matters. We understand the culture of Ukraine and have a number of Ukrainian and Russian speaking lawyers within the team. Our colleagues often travel to Kyiv and Lviv and speak at various Ukraine-related events. Our team works closely with Ukrainian counsel and we have strong connections with several leading Ukrainian law firms.

Tel.: 0121 234 0000 E-mail: richard.healey@gateleylegal.com Web-site: www.gateleylegal.com

UK insolvency law or the relevant foreign insolvency law (section 426(5), IA 1986). CBIR also provides for the availabilCase law on section 426 shows that, ity of any additional relief that may be although the court has a discretion regardavailable to a British insolvency office ing whether to provide assistance, and in holder under English law. The potential what form, the general rule is that the court diversity of relief available in principle is should provide assistance unless there are an important and substantial addition to powerful reasons not to: England v Smith the toolkit of options provided to a for[2001] Ch 419; In Re HIH Casualty and Geneign office holder under the CBIR. eral Insurance Ltd [2008] 1 WLR 852. The English High Court is likely to Assistance under section 426 IA 1986 require the foreign officeholder to show can include: that there is a sufficient connection with (iii) An order for injunction. the jurisdiction to make it just and proper (iv) A declaration recognising the rights for it to act despite the foreign element of a foreign insolvency representative to the claim. In principle, a sufficient (Hughes v Hannover-Ruckversicherconnection might be shown by proof the ungs AG [1997] 1 BCLC 49). transaction in question has some link to (v) The making of an administration orthe jurisdiction. For example there is a der (Re Dallhold Estates (UK) Pty Ltd UK holding company in the structure ac[1992] BCLC 621). cepting and/or sending funds or a there (vi) The UK court will provide assistance is a UK domiciled director or beneficial unless there are powerful reasons not owner. to (England v Smith [2001] Ch 419 and The court has discretion in what orMcGrath and Others v Riddell and AnSolicitor, Gateley der is made; but the order must be comother [2008] UKHL 21 (also known as pensatory (i.e. related to the loss caused Elena is a very experienced lawyer who advises Re HIH Insurance)). However, it appears to creditors) rather than penal. clients on all aspects of complex cross-border asset that section 426 of the IA 1986 will not In summary, CBIR brings a variety recovery, both in English courts and Arbitral Tribube used to enforce foreign judgments of benefits to use if the application to nals. As well as working in England, Elena has signif(Rubin and another v Eurofinance SA bring insolvency proceedings under the icant experience of working as part of a cross-borand others and New Cap Reinsurance CBIR in England is recognised. der team in jurisdictions such as Russia, Ukraine, Corporation (in liquidation) and another Cyprus, the Channel Islands, BVI and Cayman. In v Grant and others [2012] UKSC 46. addition to her cross-border asset recovery work, Recognition under There may not necessarily be a great Elena assists clients to manage their international deal to choose between the route of CBIR s 426 IA1986 matrimonial and children disputes. In the course of and application under section 426 IA86 if As an alternative to CBIR, under this work, Elena has gained extensive experience the parties are simply seeking recognition. section 426 of the IA 1986, a court in the in working with ultra-high-net-worth individuals to An application under section 426 to the Channel Islands (Jersey, Guernsey), Isle structure their assets in trusts and to mitigate their English court for assistance must be made of Man, the BVI, the Cayman and some UK personal and corporate tax liability. by first asking the foreign court to issue a other former commonwealth countries Elena is a native Russian and fluent English speaker. letter of request to the English court, so it can apply to the UK courts for assis- She also has basic reading skills in Ukrainian and may be simpler for the foreign office holder tance in insolvency proceedings. In our French. to apply directly under the CBIR 2006. experience, these offshore jurisdictions However, as mentioned above, deare popular with Ukrainian individuals in structuring their personal and business assets, therefore it is worth pending on the circumstances, CBIR brings a variety of potential actions within the English Insolvency legislation, both automatic and disdiscussing section 426 of the IA 1986 in this note. In cooperating with foreign courts in relation to insolvency pro- cretionary. Therefore, depending on the circumstances in many cases ceedings, the UK court has a wide discretion. The UK court can apply it may appear to be prudent to use the CBIR route.

Discretionary Benefits

Elena Solovyeva

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Customs Law

Are Parallel Imports a Privilege or Disaster? general rule, currently parallel imports of genuine products into Ukraine shall not be deemed a trademark infringement. At the same time, according to the Trademark Law, a trademark holder may prohibit the use of its trademark on parallel imported products if upon the first sale the condition of the product has changed or worsened. In addition, parallel importation of the pharma and crop protection products to Ukraine is prohibited unless the parallel imported products have valid market authorization in Ukraine.

Parallel Import Basics

The term “parallel imports” (also known as “gray imports”) refers to genuine branded goods obtained from one market (i.e., a country or economic area) that are subsequently imported into another market and sold there without the consent of the trademark owner. The parallel imported goods are genuine (as distinct from counterfeit goods) in that they have been manufactured by or for or under license from the brand owner. However, they may have been formulated or packaged for a parKey Issues of the Parallel Market ticular market, but then imported into a The first and foremost function of the market not intended by the brand owner. trademark is to indicate the trade origin or Exhaustion of IP rights refers to source of the goods in relation to which it how IP right holders may control the is used, thereby enabling consumers to distribution of their branded goods. Acdistinguish the goods of one trader from cording to the concept of exhaustion, those of others. A trademark also serves once an IP rights holder sells in a parto guarantee quality. If consumers like the ticular market a product to which its IP goods to which the mark is applied, they will rights are attached, it must allow the buy more. If the quality is consistent, the resale of that product in that market. It Founding Partner, trademark will represent that quality and is deemed that the IP rights covering the Mamunya IP, Attorney-at-Law, hence goodwill is generated, which in turn product have been “exhausted” by the Patent and Trademark Attorney enhances the value of the trademark. Thus, first sale. a trademark symbolizes the goodwill which There are two types of exhaustion Since 2003 Oleksandr Mamunya has been practicing a trader has in the goods. regimes: national (or regional) and in- in the area of Intellectual Property, including patents, Brand owners often design their prodternational. The debate as to which is trademarks, trade names, designs, copyright and ucts, packaging, sales and distribution netpreferable has been highly controversial. related rights, domain names, as well as IP enforceworks to meet specific cultural, language, National (or Regional) exhaustion ment, litigation and anti-counterfeiting. Oleksandr is environmental and other conditions in is the regime that, once a brand owner a member of the Parallel Imports Committee of the has sold goods in relation to which the International Trademark Association, a member of the specific countries. They may also authorize particular distributors in those countries, trademark is used in a particular coun- International Association for the Protection of Intelwho earn royalties on the sales, often on try, it has only “exhausted” its trademark lectual Property, Chair of IP Committee of Ukrainian the basis that they will provide warranties rights with regards to those goods in Bar Association, and others. Oleksandr comes highly or after sales service, or local marketing or that particular country. If the same recommended by international and national legal diinformation activities. goods are subsequently sold in another rectories, including Chambers Europe, The Legal 500 As proceeds from the above, goodwill country, the brand owner may rely on its EMEA, WTR 1000, IAM Patent 1000. is built up differently in each country where trademark rights in that other country the trademark is used. Thus, it is inherently to prevent the further sale of the goods (absent consent to such subsequent sale). In some areas of the world, illogical to say that the goodwill is “exhausted” in every country once particularly in the EU, this concept applies regionally, that is, across a the mark has been used in just one of them. Parallel importers generally acquire genuine goods in one jurisgroup of countries which form part of a single trading area. International (Global) exhaustion is the regime that, once a brand diction, and then import them into another jurisdiction, undercutting in owner has sold goods concerning which the trademark is used some- price the trademark owner or authorized distributor. They may be able where in the world, it has exhausted its trademark rights in relation to to undercut the price due to various reasons, including having acquired the product from a jurisdiction where it is sold at a lower price (usually those goods everywhere in the world. Some countries use a hybrid approach that modifies one of the because of differing local economics and sometimes also because of differing quality); or because they do not invest in product research two basic types of exhaustion. For example, they may nominally apply the principle of interna- and development or the provision of warranties, guarantees, after tional exhaustion with some certain restrictions (material differences sales service, promotion, marketing and information distribution, and/ or do not need to support distribution networks. approach). Brands provide a number of important benefits for consumers: The debate over parallel importation focuses on the extent to which a trademark owner should be able to maintain control over its the brand is the “face” of a product, recognizable by consumers and own brands by using its trademark rights in a country (or a region) to indicating qualities they have come to expect and trust. Brand owners, restrict the importation of goods into that country (or region) after the therefore, have a big stake in ensuring that their brands are associated goods have been put on the market somewhere else by the trademark with high-quality and a good buying experience. That is, in protecting owner, or with its consent, or by another person (whether or not related the goodwill associated with the brand. Brand owners invest in their to the owner) who owns the rights in the jurisdiction where the goods brands, and the protection of their brands, in order to ensure this. In addition, brand owners invest in the promotion, development originated. In other words, a discussion is held over which exhaustion regime to apply in a specific country. Ukraine has been an active par- and protection of their brands to attract consumers with the benefits described above. In the same way, they invest in R&D and maintenance ticipant of the debate over recent years. Effective Ukrainian legislation does not explicitly determine a cerof quality on their products which are marketed under the brand. When tain IP exhaustion regime. However, the current jurisprudence tends brand owners have built, with this investment, a valuable brand with to apply the international one with regard to trademarks. Thus, as a good consumer association, they are encouraged to expand into new

Oleksandr Mamunya

WWW.UKRAINIANLAWFIRMS.COM

MAMUNYA IP Mamunya IP is a full-spectrum IP service with a leading depth of expertise and capability across the entire scope of IP work, covering trademark and patent prosecution, strategy, and litigation, as well as attendant issues such as regulatory advice and matters involving copyright, unfair competition, anti-counterfeiting, data protection and the intersection of advertising law and IP. Mamunya IP provides a unique combination of boutique IP specialism and cost-effective structure with top-tier expertise. The essential client portfolio includes large firms, including international corporations, tech start-ups. The firm has brought together a team of IP specialists with extensive experience and a formidable track record in sophisticated matters ready to cover all the most demanding clients’ needs in IP. Lawyers of Mamunya IP are experts in industry sectors and combine extensive knowledge of industry-specific issues with excellent legal skills. Specific sector expertise includes life science

Address: Stand Business Center, 14 Vasylkivska Street, Kyiv, 03040, Ukraine

and pharma, consumer electronics, Internet and e-commerce, as well as wine, spirits and food, fashion and luxury goods, FMCG, automotive, technology, media and telecom, art. The firm aims to provide a high-quality service in accordance with international standards and offer clients flexible solutions tailored to their needs. Mamunya IP offers an international level of client service and ethical standards. Mamunya IP is a member of the leading IP associations, such as the International Trademark Association (INTA), AIPPI (The International Association for the Protection of Intellectual Property), the European Communities Trade Mark Association (ECTA), European Business Association (EBA), Ukrainian Bar Association (UBA).

Tel.: +380 44 495 4500 E-mail: mamunya@mamunya-ip.com Web-site: www.mamunya-ip.com

markets which may not otherwise be serviced, including R&D into the best product formulations or specifications for the new market. Brand extension into new products also receives investment, to the benefit of consumers. If the return on this investment is undermined by parallel imports, the investment will inevitably fall away, leaving: • less choice and availability for consumers; • less R&D for new products and a consequential slowdown in innovation; • less expansion into new geographic markets (especially those where global exhaustion prevails); and • less trade and the benefits associated with it. It is a common misconception that parallel imports are always cheaper for consumers than the goods marketed directly by the brand owner, but research shows this to be an oversimplification. The pricing policy of brand owners reflects their past and future investment. It must necessarily reflect the investment made in R&D, marketing and distribution (all benefits for the consumer), not just the base price of producing the product. Parallel importers do not need to reflect such investment. They “free ride” on the investment put in by the brand owners. Local distributors for the brand owner may also be adversely affected, having negotiated to pay a royalty to distribute the brand owners’ product on a certain territory, and having invested in local marketing, information and provision of after-sales service or warranties, only to find competition from a parallel importer who provides none of this investment or service for consumers. Consumers may be misled into believing that the authorized distributor will honor warranties or provide after-sales services for goods with which it, in fact, has no sales connection. Studies also show parallel imported goods are often mixed or entwined with counterfeit goods. The counterfeits are “hidden” among genuine products. Cases are not often reported, since businesses that are “caught” using counterfeit goods, when they thought they had simply got a good deal on some gray goods, will generally admit liability in the face of action by brand owners and reach a confidential settlement to avoid embarrassment. The channels of trade for parallel imported goods are ideal for counterfeiters. Brand owners ship through regular shipping agents and ports where customs officials have knowledge of the agents and have experience with regular shipments. Both parallel importers and counterfeiters avoid such regular routes and benefit from confusion by using multiple different ports and agents. It has been calculated that billions of US dollars in revenue are lost worldwide every single year to gray market diversion, along with other possible damage, such as negative consumer experiences that damage the goodwill and reputation of a brand and issues surrounding consumer protection, product integrity, service and warranties, and recall notifications. While reducing revenue for brand owners, gray markets can capitalize on surplus inventory, lower manufacturing costs, lower distribution costs, current economic conditions and currency exchange rates by facilitating the export of goods without the brand owner’s permission. Gray market diversion undercuts the prices

of authorized domestic distributors through the sale of goods at lower price points.

Customs Procedures Reform At the end of 2019, the Law On Amendments to the Customs Code Regarding Protection of Intellectual Property Rights at the Customs Border came into effect. It introduced, inter alia, a completely new approach to how customs treat parallel imports. Previously, a customs officer had to suspend customs clearance and notify a trademark owner of any product spotted containing a trademark recorded with the Customs IP Registry being imported without the authorization of the trademark owner. It was the trademark holder who decided on whether to initiate a trademark infringement action (based on either assumed counterfeiting or parallel imports or copycats). Now it is the sole discretion of a customs officer as to whether to suspend customs clearance of the product, which allows the Customs Service to release counterfeits, copycats and parallel imported goods even without notification of the respective trademark owner. Such an approach by the customs authorities is beneficial to the international exhaustion regime and apparently supports parallel imports coming into the country.

Available Remedies There is currently no international treaty or consensus dictating a standard of national (or regional) exhaustion, or international exhaustion. The Paris Convention does not address the issue. The Agreement on Trade Related Aspects of Intellectual Property (TRIPs) is deliberately neutral on the subject. Article 6 of TRIPs reads: “For the purposes of dispute settlement under this Agreement nothing in this Agreement may be used to address the issue of the exhaustion of intellectual property rights.” Remedies for gray market goods are country specific. In Ukraine a trademark owner can mitigate the importation and sale of gray market goods through, inter alia, the following means: • Reviewing the company’s businesses supply chain, including licensee and distributor agreements, and create wording to address parallel importation (e.g., insert provisions prohibiting exports of products to certain jurisdictions, etc.). • Drafting manufacturer’s warranties to limit the ability of purchasers of gray market goods to rely on those warranties unless they return the goods to the place of original purchase. • Collecting information on the source of gray market activity through both internal and external sources (e.g., sales personnel, related entities located in other countries, vendors). • Educating the company’s consumers about known parallel imports and the differences to look for in those imports (e.g., different packaging, absence of the manufacturer’s original warranty). • Registering trademarks and copyrights, record trademarks with the IP Customs Registry, filing complaints against parallel imported goods with consumer protection and local certifying authorities, creating an online system for reporting violations, etc.

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EMI (Electronic Money Institution)

Regulations of the New Economy Major scientific and infrastructural the EU began the respective policy, startbreakthroughs often yield many beneed to adopt regulations and take meafits and improvement, though they may sures aimed at pressing traditional banks come with danger and harm too. The into either purely transactional banking flame, which many philosophers agree business or investment banking, which to be one of the most major (and likely by then was mostly practiced by Swiss one of the first) human discoveries, can banks. From the point of view of the said provide the means to many needs from committee the current traditional banking heat to the combustion engine. Howevsystem must become inexistent per se er, if left unattended they can also bring and be divided into either pure investment destruction and injury. or transactional banking. From this point of view nothing has Therefore, new laws and regulations really changed with humanity’s developbegan to be implemented to address and ment — innovations must be regulated use the issues of digitalization of the finanin order to serve the public good and cial sector. First and foremost, laws (and order. EU directives) introducing Payment InstituThe Organization of Economic tions (or PIs) and Electronic Money InstituCooperation and Development has outtions (or EMIs) were adopted. lined in its most influential document In their essence, despite some severe (or … plan) — Base Erosion and Profit fundamental distinctions in legal and facShifting, the biggest challenges arising tual background, PIs are financial institufrom digitalization of the economy. And tions which have the privilege of engaging indeed, with rapid digitalization of econin transactional banking business — i.e. omies not only will entirely new types of Managing Partner, Stron Legal Services execute payment instructions on behalf of businesses emerge, the basic, principal their clients and respectively effect money notions of regulation like territoriality of transfers/remittances. EMIs can, in addiincome, residency of business, place tion to what PIs are licensed to do, also of supply, permanent establishment get squeezed and turned upside maintain clients’ accounts [in electronic money though]. down to the extent that regulations simply stop working the way they Currently (mostly and in the biggest part), EMI licenses serve as should. a legal basis for the functioning of so-called “neobanks”. For example, What is true is that the approaches and decisions taken by leg- Revolut, Transferwise, Paysera et al. The EMIs and PIs benefit from islators in the past were taken in a different reality when most cross- less regulatory requirements and the respective burden in contrast border transactions were conducted by and between large corpora- to ordinary banks, mainly because they are not licensed to provide intions and/or organizations. The possibility of a cross-border business vestments and savings-related services — most importantly EMIs are to client (an individual, common consumer) supplies were regulated not allowed to grant interest on deposits i. e. cannot offer savings’ acas something out of line, something outstanding that must be so rare, counts, monies on which might be invested (more commonly — lend) and if it happens, something important enough to address significant by the financial institution. If an EMI cannot manage/invest funds of government efforts to, let us say, forcibly create a permanent estab- its clients there are no risks that these monies will be lost due to the lishment. That was adequate for some time, until the means of infra- financial institution’s bankruptcy, insolvency, or simple failure by the structure and, first and foremost, the means of communicating and investor. The funds on current accounts with an EMI are simply there passing data and information were poorly developed. But now most and cannot be ‘touched’ by the EMI. Therefore, they are also not propeople on the planet have a smartphone, which is almost 24/7 con- tected by the deposit savings schemes. nected to the Internet. Any consumer can purchase a service (or a digiSo basically, from a customer’s point of view, an EMI is ‘just a tal service) almost invisibly now and does so daily and thus the core bank’ which offers current bank accounts and cannot be asked to help principles of regulation are being looked at again. with saving and investments. Yet, an Electronic Money Institution is The drastic change has a key factor — invisible [and cross-border] much more than that. EMIs de facto offer current bank accounts, but transactions cannot happen en masse without access to the ability to the legal mechanics behind them are much more intricate. The truth rapidly effect payments to any point of the world with a single click. My is that Electronic Money Institutions … issue electronic money i. e. the thanks to VISA, Mastercard et al. The development of Internet acquisi- instruments of saving value nominated in a certain object. In market tion was the last drop that shook and shred the bucket of regulations. practice, in order to mimic the current bank accounts offered by orThen again, cryptocurrencies started to pop up whereto different gov- dinary banks, an EMI will offer electronic accounts in their own ‘elecernments expectedly took different approaches. tronic euros’, one ‘electronic euro’ nominated and equals one ordinary But what was in the bucket before it was shred? The EU has euro which is held on the EMI’s own bank account (the object). Once been undergoing the Lamfalussy process to reform its financial a customer decides to top up his account in electronic euros, the cussector since 2001. The idea behind it was to implement the USA tomer sends ordinary euros to the Electronic Money Institution, which model of financing where stock exchanges dominated as the main upon receipt issues an equivalent in electronic euros and tops up the means of raising capital. Before it, the financial infrastructure of account of that customer with them. The customer can pay with the EU member states was reliant on conventional banking for raising electronic money he has within the EMI (i. e. to the other electronic acfinance. That is, the banks raised deposits from their customers counts held with the same EMI), or if the customer decides to transfer at a rate lower than they would subsequently lend to a borrower the funds elsewhere — to an account set with another financial institu[at a higher rate], thus creating a margin and de facto making the tion — the customer, upon making the ‘payment instruction’ will, in fact, finance more expensive for the borrower. The said turn of events instruct the EMI to accept back the electronic money from this cushas been en masse inexistent in the US where borrowers tradition- tomer’s account and to send the equivalent in euros to the designated ally borrowed without an intermediary — directly from the ordinary third party financial institution. Therefore, transfers of actual money investor (depositor in the EU) through the stock exchange. In the happen only when the funds are credited with an EMI’s own bank acopinion of the Committee of Wise Men chaired by Baron Alexandre count and are withdrawn from it. Lamfalussy, the bank’s margin [or its absence] was the main reason What possibilities do such mechanics offer and what purpose behind the difference in size of the US and the EU economies. Thus, were EMIs created for? The answer is to provide an alternative to

Oleg Derlyuk

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rdinary money and provide a possibility for the payments to be afo fected in something of ‘more solid’ value than banknotes. For example, in theory an EMI can issue electronic money nominated in Bitcoin or precious metals, and the clients of the same such EMI will be able to transfer such electronic Bitcoin between each other, without having to actually transfer the Bitcoin from one cryptocurrency wallet to another (which is known to be a lengthy and complicated process) — the Bitcoins will be held on the EMI’s crypto wallet and transfers between electronic accounts will be effected only as an accounting operation

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within the EMI’s system. Understandably, if a customer decides to return the Bitcoins to his cryptocurrencies’ wallet — the customer will repay the electronic Bitcoins to the EMI and an EMI will provide the cryptocurrencies in return. There is still a great deal ahead for the modern financial system, which received a considerable push once it began to implement most modern IT technologies and systems. Will ordinary money become a rudiment and its function evolved? Time will show, as the technological and legal frameworks for this are already available.

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Energy

Practices of Provision of General Public Interest on Electricity Market during COVID-19 The onset and further development combined production of heat and electricof the COVID-19 coronavirus pandemic ity; 6) other special duties in compliance had a tremendous impact on all sectors with the provisions of Article 62. of the world economy. At national level it The general public interests that can actually affected all industries, and the be ensured by the Cabinet of Ministers of Ukrainian electricity market was no exUkraine via the imposition of special responception. sibilities on market participants include: In order to prevent the spread of 1) national security, as well as security of coronavirus COVID-19 on 17 March 2020 electricity supply; 2) stability, proper qualthe Verkhovna Rada of Ukraine adopted ity and availability of electricity, including the Law of Ukraine On Amendments to for vulnerable consumers; 3) environmenCertain Legislative Acts of Ukraine Aimed tal protection, energy efficiency, increasing at Preventing the Occurrence and Spread the share of energy produced from alternaof Coronavirus (COVID-19), paragraph tive sources, and reducing greenhouse gas 3 of Section II The “final provisions” of emissions; 4) protection of the health, life which provided for a ban on the period and property of the population. of quarantine and restrictive measures Proposals on the scope and condirelated to the spread of coronavirus tions of special responsibilities will be pre(COVID-19), and within 30 days from pared by the Regulator taking into account the date of its cancellation, accrual and the requirements of this Article and submitrecovery of penalties (fines, penalties) ted to the Cabinet of Ministers of Ukraine for late payments for housing and comafter consultations with the Energy Communal services, termination/suspension munity Secretariat. of provision of such services to citizens Partner, Shkrebets & Partners Special responsibilities should be of Ukraine in the event of their non-payclearly defined, transparent, non-discrimiment or incomplete payment. natory and temporary. Quarantine throughout Ukraine The scope and conditions of the perfrom 12 March 2020 was established by the Resolution of the Cabinet formance of special duties shall be necessary and proportionate to of Ministers of Ukraine from 11 March 2020 No. 211 On Prevention the legitimate public interest and will create the least obstacles to the of the Spread on the Territory of Ukraine of Acute Respiratory Disease development of the electricity market. COVID-19 Caused by Coronavirus SARS-CoV-2. The decision of the Cabinet of Ministers of Ukraine on imposing In these circumstances, the National Commission for State Regu- special obligations on market participants defines: 1) the general publation of Energy and Utilities (hereinafter — NCSREU) developed, at the lic interest, to ensure which market participants are assigned special request of a number of electricity suppliers acting as universal ser- responsibilities; 2) the content and scope of special responsibilities; vice providers, as well as the transmission system operator PJSC NEC 3) market participants who have special responsibilities; 4) the scope Ukrenergo the draft decision On Actions of Electricity Market Partici- of rights of market participants, which are subject to special obligapants during the Period of Quarantine and Restrictive Measures related tions necessary to perform such duties; 5) categories of consumers to to the Spread of Coronavirus Disease (COVID-19). whom special responsibilities apply; 6) the territory and term of perforDue to paragraph 4 of Part 3 of Article 5 of the Law of Ukraine On mance of special duties; 7) sources of funding and the procedure for the Electricity Market the powers of the Cabinet of Ministers of Ukraine determining the compensation provided to market participants who in the field of electricity include the decision to impose special respon- have special responsibilities. sibilities to ensure public interests and conditions (procedure) for the The selection of a participant or participants in the electricity marimplementation of such special responsibilities. ket to whom the Cabinet of Ministers of Ukraine has special responAccording to item 9 h. 2, item 10 h. 3 Article 6 of the Law of sibilities will be made in a transparent and non-discriminatory manner Ukraine On the Electricity Market one of the main tasks of the NCSREU based on criteria approved by the Cabinet of Ministers of Ukraine. in the electricity market is to promote the achievement of high stanThe conditions for the performance of special duties shall ensure dards of execution of special duties to ensure public interest in the that the economically justified costs of the market participant for perelectricity market and the monitoring of such execution. formance of such duties are covered. Article 62 of the Law of Ukraine On the Electricity Market proIn the substantiation of the draft decision On the Actions of Elecvides that in order to ensure the general economic interest in the tricity Market Participants during the Quarantine Period and Restrictive electricity sector of Ukraine, necessary to meet the interests of citi- Measures related to the Spread of Coronavirus Disease (COVID-19), the zens, society and the state, and to ensure the sustainable long-term NCSREU proceeded from the need to ensure that universal service development of the electricity sector and competitiveness of the providers fulfill special responsibilities in the electricity energy marnational economy, this article may be assigned special responsibili- ket in accordance with Article 62, Article 63 of the Law of Ukraine On ties to ensure the public interest in the functioning of the electricity Electricity Market by prohibiting the application to such suppliers of market, in particular: 1) ensuring an increase in the share of elec- penalties and other sanctions for late and/or incomplete payment for tricity production from alternative energy sources; 2) performing the services provided by market participants, the announcement of such functions of universal service provider; 3) performing the functions suppliers “default” during quarantine due to existing cash gap settleof the supplier of “last hope”; 4) provision of services to ensure the ments in different segments of the electricity market, which caused a development of generating capacity; 5) increasing the efficiency of lack of working capital.

Andrey Syvak

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SHKREBETS & PARTNERS Shkrebets & Partners is based at the Shkrebets & Partners law firm, which was founded in 2002. Our team is currently a united team of like-minded people who have reached a high professional level as a result of our copious involvement in resolving disputes in the interests of our clients. The company has 25 members of staff. Major practices: taxation, criminal law and process, energy & natural resources, land and property, commercial law, corporate relations, bankruptcy, representation in courts. Managing partner Evgeniy Shkrebets began the law practice in 1992. In 2002 he founded the law firm Shkrebets & Partner. He has been an attorney since 2002, and that same year he became a member of the Kharkiv Regional Bar Association. He has been the managing partner of Shkrebets & Partners since 2013. Mr. Shkrebets is also a member of the Kharkiv Region QualificationDisciplinary Commission of Advocates and a member of the Board Address: 14 Kaplunivski Lane, Kharkiv, 61002, Ukraine

of the Association of Ukrainian Lawyers in Kharkiv Region. In 2017 he defended his Ph.D. thesis on the topic of Advocacy of Ukraine: Administrative and Legal Support of Activity at the Modern Stage. Specialization: tax law, criminal law and process. Awards in 2020: TOP 50 Law Firms of Ukraine, TOP 50 Largest Law Firms of Ukraine, Top 100 Leading Law Firms of Ukraine, Recognized as Tier-4 Law Firm in White-Collar Crime practice and Tier-3 in Real Estate & Construction practice by Legal 500, Benchmark Litigation (Active Firm), IFLR1000 (Other notable), ITR Tax (Tier 3). Managing Partner Evgeniy Shkrebets was recognized as the best lawyer in tax disputes in Ukraine.

Tel./Fax: +380 57 720 9001; 720 9002 E-mail: office@shkrebets.com Web-site: www.shkrebets.com

The regulator also noticed that without restricting commercial imports of electricity from non-energy countries, in a pandemic s ituation, some producers may decide to reduce capacity by decommissioning. The extent of such a decrease was considered by the NCSREU as unpredictable and could reach critical network operational values. These risks were also clearly linked by the regulator to a possible shortage of able-bodied staff involved in generating and transmitting electricity in Ukraine. Clause 6 of the Resolution of the — NCSREU of 8 March 2020 No.766 On Actions of Electricity Market Participants during Quarantine and Restrictive Measures related to the Spread of Coronavirus Disease (COVID-19) (after amendments by the regulator’s resolution dated 30 March 2020 No.905 — paragraph 7) instructed market participants in their applications for balancing electricity to indicate a price not exceeding 105% of the market price limit “day ahead” for this billing period. Resolution No. 974 of the NCSREU dated 27 May 2020 amended this provision, which additionally provided for the application of the minimum value of the balancing electricity price, namely market participants in their applications for balancing electricity were required to indicate a price not less than the value of 65% of the market price “per day ahead” (hereinafter — RDN) for this billing period and which does not exceed 105% of the price limit on RDN for this billing period. Another resolution of the NCSREU, No. 1107 of 10 June 2020 increased the specified minimum value to 80% of the price for RDN for this calculation period. The next resolution of the regulator of 15 July 2020 No. 1430 item 7 of the Resolution of the NCSREU 8 April 2020 No. 766 supplemented the obligation of the settlement administrator to take into account only the applications of market participants for balancing electricity with the price determined in accordance with the provisions of this paragraph. Based on Article 2, Article 17 of the Law of Ukraine On NCSREU for the effective implementation of state regulation, the tasks of the regulator include the development and, in coordination with the Antimonopoly Committee of Ukraine, approval of regulations in accordance with the Law of Ukraine On the Electricity Market, including Market Rules. According to paragraph 10.11 of Section XI of the “Market Rules”, as approved by the Resolution of the NCSREU from 14 March 2018 No. 307, to the synchronization of the UES of Ukraine with the associations of energy systems of European Union member states (European Community of Trunk Network Operators in Electricity) market participants are, in their applications for balancing electricity, required to indicate a price of not less than 55% of the price of RDN for this billing period and not more than 115% of the established price limit for RDN for this billing period. If the balancing electricity supplier submits proposals for balancing electricity with a price that is outside the specified range, such an application is automatically rejected by the market management system.

Article 3 of the Law of Ukraine On the Principles of State Regulatory Policy in the Sphere of Economic Activity stipulates that its effect does not extend to the implementation of regulatory activities related to the adoption of acts of the NCSREU. In turn, Article 15 of the Law of Ukraine On NCSREU establishes a clear and special procedure for the preparation and adoption of draft decisions by the regulator, which have the features of regulatory acts, particularly prior publication of the NCSREU’s draft decision together with materials justifying its adoption and impact analysis — sites of the regulator, comments and suggestions received within the period established by the regulator (from 10 days to three months), their mandatory consideration with the participation of interested parties, as well as the publication of information on the results of their consideration. Failure to comply with the procedure for adopting and approving regulatory regulations in relation to the electricity market, paragraph 7 of the Resolution of the National Commission for Electricity Market of 8 April 2020 case No. 640/17361/20 and its suspension. The decision of the District Administrative Court of Kyiv from 21 December 2020 in case No. 640/17361/20 on the grounds of noncompliance with the principles of state regulatory policy, disagreement with changes in the rules of the balancing market with the Antimonopoly Committee of Ukraine, paragraph 7 of NCSREU Resolution No.766 from 8 April 2020 (as amended by the resolutions of the National Commission for Regulation of Economic Competition dated 27 May 2020 No. 974; of 10 June 2020 No. 1107; 15 July 2020 No. 1430) was declared to be illegal and canceled. Due to the fact that at the time of appeal proceedings in case No. 640/17361/20 the disputed provision of paragraph 7 of NCSREU resolution No. 766 from 8 April 2020 was excluded from the document by another Resolution issued by the regulator, No. 93 from 27 January 2021, the plaintiff in the case withdrew the claim, and such refusal was adopted by the decision of the Sixth Administrative Court of Appeal from 22 February 2021, the decision of the district administrative court of Kyiv from 21 December 2020 was declared invalid, and the proceedings were closed on the basis of p. 2 h. 1 st. 238 CAJ of Ukraine. Thus, declaring the need to ensure the performance of special duties by universal service providers, the NCSREU, by resolution No.766 of 8 April 2020 for the period of quarantine and restrictive measures related to the spread of coronavirus disease (COVID-19), illegally changed the rules of operation of the balancing market. The example of the crisis caused by the COVID-19 coronavirus pandemic and the situation with the adoption of NCSREU resolution No. 766 of 8 April 2020 shows the lack of a tool at the disposal of the regulator that would allow it, if necessary, to take its own regulatory measures to ensure the public interest in the electricity market without obligatory observance of sufficiently long procedures of adoption of a regulatory act or initiation of assignment of special duties via a resolution issued by the Cabinet of Ministers of Ukraine.

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Enforcement of Foreign Proceedings

Recognition and Enforcement of Foreign Interim Injunctions in Ukraine A Worldwide Freezing Order (“WFO”) is an interim injunction granted by English courts to restrain individuals or companies from dissipating assets until a judgment can be obtained. WFOs and other foreign interim injunctions are considered as powerful tools in crossborder litigation as they enable the restriction of the transfer of money held in bank accounts, shares, tangible or intangible property in different jurisdictions. In Ukraine, the applicable procedural legislation does not provide for a particular procedure on recognizing and enforcing foreign freezing injunctions, although relevant court practice does shed some light.

month. After reviewing the submitted documents and listening to the explanations of the parties, the court will decide on recognizing and enforcing the foreign court decision in Ukraine. In practice, when considering foreign interim injunctions, courts sometimes rely on the Resolution of the Plenum of the Supreme Court of Ukraine No. 9 On the Application of the Civil Procedural Legislation by the Courts for the Consideration of Interim Injunctions of 22 December 2006. According to the Resolution, an applicant seeking an interim injunction shall provide the court with the following: • evidence that a dispute exists between the parties and there is a genuine risk that the final judgment or arbitral award would not be enforced or that enforceProcedure on Recognition ment will be impeded; and Enforcement of Foreign • information on the debtor’s identity; Judgments • statements on the compatibility of the As a rule, foreign judgments are claims to the requested security mearecognized and enforced in Ukraine if Counsel, International Dispute sure in the form of seizure of the debttheir enforcement is provided for by or’s property. Resolution, Hillmont Partners international treaties to which Ukraine Although the above-mentioned reis a party or under the reciprocity prinquirements relate to the consideration of ciple. Ukraine has signed a large number interim injunctions issued by domestic of bilateral treaties on the basis of which foreign judgments in civil courts, they are often taken into account in interpreting foreign court and commercial cases are subject to recognition and enforcement in orders on interim measures. Ukraine.1 Consequently, foreign court orders on interim measures are The civil court also may object to enforcing a foreign judgment if: usually enforced in Ukraine on the basis of a relevant bilateral treaty, 1. a foreign judgment has not come into force; which has come into force. 2. a party was deprived of the opportunity to participate in court proThe principle of reciprocity applies to the enforcement of WFOs ceedings since it did not receive timely and correct notification of and other freezing injunctions issued by courts of common law juristhe hearing; dictions with which Ukraine has not signed relevant international trea- 3. the dispute must be considered by Ukrainian courts; ties. Generally, the reciprocity principle is presumed to exist unless 4. the enforcement of foreign judgment would threaten the interests there is evidence to the contrary. Therefore, Ukrainian courts may reof Ukraine; fuse to enforce foreign judgments if a party demonstrates that there is 5. the decision of the Ukrainian court in a dispute between the same no reciprocity on recognition and enforcement of judgments between parties, on the same subject and on the same grounds has come Ukraine and the relevant jurisdiction. into force, etc. According to part 2 of Article 462 of the Civil Procedure Code of Furthermore, Ukrainian procedural law sets out additional requireUkraine, foreign judgments are recognized in Ukraine based on mo- ments to the types of interim injunctions and the subject matter of the tions which are filed to civil courts defined as based on the defendant’s dispute which is being considered by the court. In particular, Article registered place of residence (if such place is unknown the motion 150 of the Civil Procedural Code of Ukraine does not allow a claim to be should be filed on the basis of the property’s location. In Ukraine, such secured by any of the following means: foreign court decisions are recognized within the civil procedure and • freezing of wages, pension, scholarship and any other social secuthey may normally be enforced in Ukraine within three years from the rity payments; date of their coming into force. • freezing of the property or assets of the clients of an insolvent bank; Along with the motion, a party must file the following documents: • identical provisional measures to the party’s claims, if the dispute is 1. certified copy of the foreign judgment; not resolved on its merits; 2. official document certifying that the foreign judgment has come • suspension of a temporary administration or liquidation of a bank; into force (if the judgment does not specify so); • termination, postponement, suspension or other interference with 3. document specifying that a party which did not participate in the a tender, auction, bidding or other; consideration of the case was duly notified of the proceedings; • public competitive procedure conducted on behalf of the State, etc. 4. document specifying which part of the judgment must be enIn addition, the Commercial Code of Ukraine excludes any applicaforced (if applicable); tion of the following types of interim injunctions in disputes arising out 5. document certifying the powers of the legal representative (if apof corporate relations: plicable); • prohibiting shareholders from holding shareholders’ meetings, at6. duly certified translation into Ukrainian of any documents, etc. tending shareholders’ meeting or — making certain decisions in Five days after receiving the motion, the court will notify the debtsuch meetings; or in writing and request thereof to provide one’s objections within a • prohibiting the production of the register of shareholders or other registers of subscribed securities holders; • prohibiting the provision of information concerning shareholders’ 1 https://minjust.gov.ua/m/4906;

Andrii Chornous

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HILLMONT PARTNERS Hillmont Partners is a leading law firm which was founded by British and Ukrainian partners with a view to providing high-quality legal services to investors and businesses either operating or looking to operate in Ukraine. The firm offers the expertise and insight needed to help clients operate on the complex legal and regulatory landscape. We guide our clients through all stages of the regulatory and permitting process, advise on investment projects, assist with government relations and public affairs, regulatory and risk management, offer corporate governance, commercial, labor and tax law advice, and handle any litigation or arbitration involving our clients. The firm’s lawyers provide commercially focused advice across a variety of industry sectors in the fast-changing business environment in Ukraine. Multinational companies, investors, financial institutions and project developers face numerous challenges in operating and investing in Ukraine. Our team is committed to forward thinking so as to help clients stay ahead of the curve, either identifying opportunities or managing uncertainty. Hillmont Partners is especially strong in complex litigation, investment advisory and government relations and public affairs. Our experts work to defend the interests of our clients when they face the most challenging of threats to their businesses, and we help to ensure that those investing in Ukraine are appraised of all Address: 36-D Yevhena Konovaltsia Street, 5th Floor, Kyiv, 01133, Ukraine; Tel.: +380 44 277 2447 E-mail: office@hillmont.com

meetings for the purpose of holding shareholders’ meetings; • prohibiting public bodies from exercising their statutory powers.

Peculiarities of the Enforcement of WFOs and other Interim Injunctions in Ukraine Although Ukrainian civil procedural legislation provides for general requirements and steps to recognize and enforce foreign court decisions (in particular, an interim injunction), rather sparse court practice reveals the procedural pitfalls and impediments that can arise when enforcing and/or recognising a foreign judgment. Ukrainian courts have different approaches to the enforcement of WFOs in Ukraine and the interpretation of facts established by a foreign court. For example, according to the court ruling adopted by the Holosiivskyi District Court of Kyiv City of 1 June 2012 in case No. 2601/9578/12, a permit was granted to enforce the WFO issued by the High Court of Justice, Queen’s Bench Division, Commercial Court. The court found that the WFO did not require enforcement and should only be recognized in Ukraine. In another case, the claimant asked the court to establish the respondents’ breach of the WFO issued by the High Court of Justice. On 12 January 2021, the Central Commercial Court of Appeal in its Resolution rendered in case No. 904/384/20 analysed the claimant’s argument that by acquiring shares in Southern Mining and Processing Plant PJSC the respondents attempted to avoid the consequences of a WFO. The Claimant argued that the share purchase agreements are not intended to have any real legal effect, since if the funds are transferred to the accounts of legal entities whose assets have been seized by the English court, the ultimate beneficiaries will not be able to dispose of such funds prior to the termination of the WFO. The Central Commercial Court of Appeal rejected this argument on the basis that the claimant’s allegations were not supported by sufficient and admissible evidence. Ukrainian courts usually require foreign courts to provide evidence that no grounds impede enforcement of a foreign judgment. In particular, the Derhachiv District Court of Kharkiv Region in its Ruling of 22 October 2014 in case No. 619/1880/14-ц satisfied the defendant’s motion and ordered to address the District Court of Stara Zagora of the Republic of Bulgaria through the Ministry of Justice of Ukraine with a request to inform whether: 1. the foreign interim injunction had come into force; 2. the defendant has been duly notified about the time and place of the court hearing and whether it was served with a copy of the statement of claim; 3. the defendant was duly informed of the interim injunction granted by the court; 4. the decision entered into legal force. Since timing is of the essence for a freezing injunction the civil court request, as outlined above, may result in an additional 8 months of waiting, thereby diminishing the effectiveness of the freezing injunction.

the risks and are comprehensively protected throughout the life of their projects. Our team is made up of experienced commercial lawyers and criminal defence attorneys, finance professionals who have a wealth of knowledge about distressed investing and strategic communications professionals advising on interaction between businesses and state authorities. We help our clients to navigate Ukraine’s dynamic transformation. Our experienced and professional team offers a full range of services in the field of government relations and public affairs, regulatory and risk management, including development and implementation of comprehensive GR&PA strategies; regulatory and policy analysis and monitoring; crisis communications and issue management; drafting legislation and advocacy. Our firm’s industry-specific expertise covers counselling international and local businesses across many sectors, including mining, energy, metallurgy and machinery, banking and finance, IT and start-ups, agriculture, FMCG and retail, commercial real estate, etc.

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Another thing that should be taken into account is the possibility to recognize and/or enforce a foreign judgment as an interim measure. According to Article 466 of the Civil Procedure Code of Ukraine, an interim decision in the case on enforcing a foreign court decision can be issued. Thus, the Podilskyi District Court of Kyiv City, by its Ruling of 6 May 2019, satisfied the motion on securing the claim on the territory of Ukraine in case No. 758/5786/19. In the meantime, the main civil case subject was the enforcement of the decision of the District Court of the Seventh Judicial District of Idaho, Bonneville County, United States, regarding the collection of USD 2,200,000 from the defendant. In this case, the court satisfied the injunction motion and ordered seizure of the defendant’s property before rendering a final decision on recognizing and enforcing the foreign judgment. In a similar case, the defendant succeeded in challenging the property seizure based on the foreign court decision. In particular, the Zhovtnevyi District Court of Mariupol City, Donetsk Region, with its ruling of 22 November 2016 in case No. 263/2404/16-ц satisfied the motion on enforcing the decision of Kozani city court of the Hellenic Republic (Greece) on property seizure to secure the claim for 42,972 euros. Thereafter, on 22 December 2016 the Zhovtnevyi District Court of Mariupol City, Donetsk Region, with its ruling prohibited enforcing the decision of the District Court in Kozani of the Hellenic Republic on the grounds that it had not come into force due to appeal and, thus, cancelled the previously imposed seizure. The Appeal Court of Donetsk Region agreed with the findings of the court of first instance that there was no basis for maintaining the seizure of the defendant’s property, since the foreign judgment had not come into force. In another case on property seizure, the Husiatynskyi District Court of Ternopil Region, with its ruling of 1 July 2015 in case No. 596/522/15-ц satisfied application on the recognition and enforcement of the decision of the Regional Court of Nicosia (Cyprus) of 5 February 2015 on property attachment. In the case, the court analyzed the applicable provisions of the international treaty between Ukraine and Cyprus on legal assistance in civil cases and decided to attach the defendants’ property and corporate rights with a total value of USD 1.5 mln. It should be noted that the court not only assessed the legal grounds for recognition and enforcement of a foreign judgment, but also analysed the merits of the case.

Conclusion Although the Civil Procedure Code of Ukraine provides a general description of the process of recognizing and enforcing foreign judgments, in practice complainants quite often face different procedural impediments. In the absence of clear guidance, Ukrainian courts apply different approaches to the recognition and enforcement of WFOs and other interim injunctions granted by foreign courts. Therefore, in order to seamlessly recognize and enforce a foreign judgment, an applicant should ensure collection of all supporting evidence required by Ukrainian procedural law and provide it to the respective civil court.

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Environment

Environment in Ukraine The global community is becoming to legal support of this procedure, as it is vimore and more concerned, with every tal to ensure strict compliance with the propassing year, about protecting the envisions of this Law. Omission of even the vironment, ensuring the sustainable deslightest formality is regarded by a court as velopment of countries and regions and the issuance of a permit in violation of the protecting the interests of future genprocedure and leads to the cancellation of erations. In modern conditions there is the decision in court. a provision of ecological and anthropoPreventing such a situation is quite genic safe living conditions for citizens, possible, but it requires consolidated efforts preservation and restoration of the natuof lawyers and environmentalists working ral environment among the priorities of on the commissioned project, because their Ukraine’s national interests. quality overall result is the key to the comToday, there is a direct link between pany’s further smooth operation, avoiding environmental pollution and signifidisputes with regulators and the public. cant deterioration of human health, so Particular attention should be paid to against the background of this probthe fact that today the conclusions of the lem there is the acute issue not only of environmental impact assessment are proproper legal protection of the environvided at the discretion of subjective and ment, but also strict compliance with not always professional officials of a state the law by economic entities, because body. This is due to lack of: violations of environmental legislation • clear legally-established grounds for lead to the suspension of an enterprise’s refusing to issue a decision on the enviactivity via a court. ronmental impact assessment; Among a number of codified regu- Lawyer, Attorney, LES • by-laws that would establish specific lations in Ukraine that regulate the field requirements for writing environmental of environmental protection and the as- Serhii Kolisnyk has 15 years of experience in human impact assessment reports depending sociated minimization of impact on it, rights activities. He has worked in the prosecutor’s on the areas of activity; office of Ukraine, the State Tax Service. Since 2016 he there are laws that Ukrainian and foreign • collegial expert commissions for envibusinesses face before the start of their has been managing partner of two lawyers’ associronmental impact assessment, provided activities, and their provisions must be ations: LES (specialization: business protection, tax for in Article 10 of the Law of Ukraine On taken into account by enterprises and dispute resolution, protection in white-collar crime, Environmental Impact Assessment; legal practice in the field of urban planning) and during further work. Such acts include: • statutory liability for decisions taken on Laws of Ukraine On Environmental Im- Ecosecurity (specialization: protection of the right to a the issuance or refusal to issue decipact Assessment, On Strategic Environ- clean and safe environment, ensuring environmental sions on an environmental impact asmental Assessment, On Air Protection, safety, legal support of enterprises during planned sessment. activities). He conducts scientific work, and publishes On Ensuring Sanitary and Epidemic WelTherefore, in order to avoid negative fare of the Population, On Environmental articles in specialist legal publications and takes an consequences and prevent possible corProtection, On the Permit System in the active part in legislative activities as both an expert ruption situations, it is crucial to cooperand consultant. Sphere of Economic Activity. ate with specialists who, in case of illegal In Ukraine, all start-ups need to unactions by government agencies or the derstand that most activities are found public, will be able to defend the legal powithin the scope of the Law of Ukraine On Environmental Impact As- sition of the company in court. sessment. Therefore, before starting such activities, it is necessary to In support of this, we can cite two examples from our own pracundergo the procedure provided by this law and obtain the first per- tice. The company, taking into account the comments we provided in mit — the decision on the environmental impact assessment, which the public interest, was initially denied a decision on the environmenwill describe the possible risks to the environment from the activity tal impact assessment. The comments submitted by us became the and mandatory conditions of this activity. basis for the refusal, as this activity had a huge impact on the enviThis procedure is implemented in Ukrainian legislation taking ronment. However, approximately within a month, the business entity into account European practice, and aims to prevent environmental submitted a similar report for the re-procedure and not eliminating the damage and promote the rational use and reproduction of natural previous deficiencies and public comments re-submitted the same resources. The law provides for obtaining a decision as a permit for documents and received a positive decision during the re-procedure further planned activities (construction, reconstruction, technical rein the regional department of ecology. This conclusion was challenged equipment, expansion, re-profiling) and subsequent acquisition of per- by us in court. After the court opened the proceedings, the Danish inmits for construction work, subsoil use, etc. vestor realized that it would not be possible to ruin things in Ukraine, as The law also provides for a procedure related to public discus- the local public is extremely active. Even the top leaders of the region, sions of projects and submission of comments and suggestions to who were guarantors and lobbyists of the investor’s activity, could not the public, which must be taken into account by the company, as well help him. as taken into account by the Ministry of Environment and Natural ReAnother example is when our client was denied a decision during sources, regional departments of ecology and regional administra- the environmental impact assessment procedure due to the allegedly tions. insufficiently described impact of its activity on the environment. But It is prohibited to carry out activities without a decision on the we were confident in the quality of the report, as we had worked on it environmental impact assessment. In the event of violation of this re- together with hydrologists, air quality specialists and qualified specialquirement the activity of the enterprise is suspended in a court. ists in the field of ecology, built a quality legal position, went to court Given the constant growth of the urgency of environmental is- and were confident that we would put an end to this issue. sues, as well as the legal personality of public environmental organizaThese examples show that, in both the first and second situations, the latter can, in case of inaction of regulatory authorities, apply tions, it is the lawyers who are the driving force in the event of any to an administrative court to suspend the activities of an enterprise. disputes. There is relevant case law of the Supreme Court on this issue. By It’s unfortunate, but the concept of environmental security for the way, there is also our own practice, which has confirmed the ef- some officials in Ukraine is nothing more than a component of mafectiveness of this rule. Therefore, we advise businesses in Ukraine to nipulation, and all this is possible due to four factors we mentioned pay more attention to the provisions of the Law of Ukraine On Environ- earlier and to correct which the association’s lawyers are already workmental Impact Assessment, and very carefully approach the choice of ing to develop legislative initiatives and test them in expert working companies that prepare reports on environmental impact assessment groups and public councils at central executive bodies. In particular, and other technical documentation. Due attention should also be paid the public council at the Ministry of Environmental Protection and

Serhii Kolisnyk

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LES LES is a lawyer association of concrete actions, progressive decisions and effective measures for which the protection, safety and success of its clients are the highest priorities in work. Endless tax audits, pressure exerted by law-enforcement agencies on business, illegal obstruction of construction is by no means a complete list of the problems which modern business in Ukraine encounters. However, more than fifteen years of experience in the practice of human rights work of partners and lawyers of the association, their professional specialization, time-proven defense strategies and tactics, as well as an individual approach with the implementation of best practices can protect clients and their business in an effective way. Certain legal practices in the areas of criminal, tax and environmental law, litigation and urban planning enable LES clients to receive a wide range of quality services from a team of professionAddress: 3A Leiptsyzka Street, Kyiv, 01015, Ukraine

als in various fields. Their constant communication and joint work on projects enable the result to be attained in the most optimal way for our client. LES partners have a PhD in law, and their experience and knowledge are used in working groups to develop legislation in Ukraine. Alfa Bank, Vodafone Ukraine, Edelburg Development, Arsenal, Ukrzaliznytsya, Ukr Kosmos, Global Money, L`Occitane have already become clients of LES. The firm is one of the 50 best law companies in Ukraine and recognized as the best law company in the field of ecology

Tel.: +380 44 280 2028; +38 050 958 2477; +38 098 958 2477 E-mail: lawyersles@gmail.com Web-site: www.lc-les.com

Natural R esources, which includes the Ecosecurity Lawyers’ Association, is considering and discussing guidelines for developing an environmental impact assessment report, as well as regulations on expert commissions at the Ministry of Environment. Therefore, we hope that two of the four conditions will be eliminated in the near future. Given the considerable experience of our lawyers in environmental impact assessment procedures, it should be noted that we face a low level of preparation of documentation for this procedure. The high demand for such services creates oversaturation of the market with unprofessional and unqualified professionals who, in order to generate income produce, usually for foreign investors, a “product” on the basis of which it is impossible to assess the likely impact on the environment, life and human health due to disregard for the technological features of activity, location of production capacities and other individual factors. This often creates conflicts with the public, prolongs the procedure for issuing negative decisions and encourages entrepreneurs to abandon the procedure altogether, which no-one would be advised to do. Compliance with sanitary and epidemiological legislation is also an important factor. Thus, in accordance with the requirements of Article 15 of the Law of Ukraine On Ensuring Sanitary and Epidemic Welfare of the Population, State Sanitary Rules for Planning and Development of Settlements, approved by Order of the Ministry of Health of Ukraine No. 173 as of 19 June 1996, industrial, agricultural and other projects that are sources of environmental pollution by

chemical, physical and biological factors, when it is impossible to create waste-free technologies, should be separated from housing by sanitary protection zones, which should primarily provide for the creation of the most favorable living conditions, preservation and promotion of public health. The territory of the sanitary protection zone should not be considered as a reserve for new construction, reconstruction, overhaul of the enterprise facilities and expansion of the residential area. Compliance with the boundaries of the established sanitary protection zone is the most relevant subject of discussion at all public hearings, both in procedures for environmental impact assessment and strategic environmental assessment, and in the event of disputes with the local population. Therefore, before starting operations enterprises must be extremely prudent in the way they approach the location of production facilities and potential sources of emissions, pay attention to the distance to the nearest residential buildings, reservoirs, soil conditions, nature reserves, historical and cultural sites, other industrial enterprises, which already have an impact on the environment, as these problems cannot be eliminated during their activity. The conclusion is obvious to me: in order to achieve these goals, entrepreneurs should work exclusively with professionals, environmental experts and lawyers known in the market and reputable among regulatory authorities. This will not only save money and effort, but also make the business safe and successful.

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Financial Services

If You’re a Non-Resident If you are a non-resident legal entity is that the CFC is not obliged to pay taxes and clearly understand the specific feaif its income is less than EUR 1 million per tures of operations on emerging marannum, or if the CFC is a public company kets, then Ukraine, as always, welcomes with shares traded on a well-known stock you with open arms. In general terms, it exchange, or if CFC is a charitable organishould be noted that Ukraine is one of zation. the most stable countries in the world. We would not be doing our duty if we Years pass by, authorities, parties, and were not interested in the following quesideologies change, but if you have a tion: how would the supervising authority closer look, nothing has changed in find out about our control over a non-resibroad terms. In such and precisely such dent company? The law is ready to provide an environment, some particularly motian answer to this pressing question: the vated businessmen managed to earn a obligation to notify the supervisory authorpretty penny. ity rests with all public authorities, banks, As of today, the changes introor financial institutions. Therefore, those duced by the Law On Currency and Curresidents of Ukraine that have opened rency Transactions, the amendments CFC accounts in Ukrainian banks, indicatto the Tax Code introduced by Law No. ing themselves as control officers, should 1210, create new opportunities for inthink twice. It should also not be forgotten vestors. To take full advantage of these that there are public registers of directors, and not to run into the same trap you shareholders, and beneficiaries in most should, first of all, pay attention to the countries, and that they have announced following. the forthcoming exchange of tax inforFollowing Law No. 1210 coming PhD in Economics, Lawyer, LLM, mation within the framework of the BEPS into force, the concept of CFC — conplan, interaction between law-enforcement Managing Partner, trolled foreign companies — will be agencies of different countries, and SCFM introduced to the Tax Code. In plain AMBER Law Company opportunities. language, this means that if a comIt should be noted that for all nonpany has a beneficiary, a shareholder, a resident legal entities that plan to conduct Semen Khanin possesses practical experience in the director, or a secretary that are citizens business in Ukraine, the Law establishes of Ukraine, legal entities of Ukraine or areas of finance and banking law, currency regulation the obligation to register the relevant legal tax residents of Ukraine, or a company and control matters, investment operations, taxation. entities of Ukraine and to conduct all transhas issued a general power of attorney He is the managing partner of the AMBER Law actions exclusively through such Ukrainian Company, providing comprehensive legal support for such persons, or a company is manlegal entities. for business. AMBER Law Company is represented aged from Ukraine, or a control officer If, as is typically the case, a non-resican manage its bank accounts, such a abroad by its two branches in Cyprus and Israel. dent legal entity is not a CFC and does not company is recognized as a controlled Semen Khanin is the team’s leading expert in taxation, conduct business in Ukraine, but only inforeign company. By the way, the men- banking, and finance. With over 25 years of practical tends to open an account in one Ukrainian tioned can also include non-legal enti- experience in the Ukrainian banking system and bank or give a loan to a Ukrainian company, ties — partnerships, trusts, funds, etc. foreign exchange control system, as well as strong the Law permits it. Only a few financial And if a non-resident company is rec- personal charisma and a sense of humor, he has monitoring requirements may interfere. The gained great popularity among his colleagues and ognized as a CFC, it has tax liabilities in following may be required of you: clients, offering unusual and innovative approaches to Ukraine. Moreover, the object of taxation • all the company registration documents, will be an individual-control officer, who matters of concern for them. apostilled or legalized for Ukraine with will be obliged to pay the due part of cortranslation into the Ukrainian language; porate income tax. • final beneficiary certificate; Legislators have even provided for the case when a non-resident • beneficiary CV; company is not required to submit financial statements at the place of • description of the company’s activities with an indication of its its incorporation. If this is the case, the Law obliges the control officer main contractors; to keep such statements in an international format and, what is more, • statement on existing company accounts; the supervisory authority in Ukraine has the right to request an audit • Certificate of Good Standing; opinion on these financial statements. • financial statements certified by an auditor; The procedure for such calculation of tax and payment of tax is • documents confirming payment of taxes; described in detail in Law No. 1210, and, as things go in our country, • data on employees and the company’s office, payment of salaries this description runs to more than one page of print. Of particular imto employees; portance, it should be noted that the supervisory authority may require • documents confirming the origin of the company’s funds; transfer pricing documentation from a CFC. If such documentation • links to public information about the company on the Internet (webis not provided, the supervisory authority will increase the amount site, etc.); of profit by 30% of the value of income or expenses, for which such • certified copies of passports of the beneficiary, director, authorized documents have not been provided. If a CFC makes profits through person; its representative office in Ukraine, such profits will be reduced by the • personal tax statements of the company director, shareholders, amount of the representative office’s profit. beneficiary. In certain cases, described in the Law, a CFC may be exempt And as soon as a happy banker shakes your hand and congratufrom paying taxes in Ukraine. The only thing required is an agreement lates you on the opening of an account, the inviolable law will oblige on avoidance of double taxation between Ukraine and the country of him/her to require business documents from you for each transaction a non-resident company, and such foreign jurisdiction is not included and to credit/debit funds only after an inspection. The bank, by followin the list of offshore zones, the CFC has been paying taxes at the ing these recommendations, not only adheres to the letter of the law place of its incorporation at a rate of at least 5 basis points from and protects itself from possible sanctions from the National Bank of the tax rate in Ukraine, or part of the CFC’s passive income has not Ukraine or other government agencies but, of course, defends its cliexceeded 50% of its total income. By the way, as our legislator has ent. After all, if the NBU detects a violation during the inspection, it may established, if passive income receipt is a CFC’s main activity, such be followed by sending relevant notifications to the law-enforcement income shall be recognized as active income. The only concession agencies of Ukraine: NABU, Security Service of Ukraine, PGOU (now

Semen Khanin

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AMBER LAW COMPANY AMBER Law Company is a multi-function team of experts each possessing significant practical experience in various fields of law and business. The joint efforts of all team members, as well as the ability to analyze all matters from multiple viewpoints, ensure the most efficient and cost-saving case solutions. Established in 2013 and based in Kyiv, Ukraine, AMBER is a rapidly developing law company with its affiliates in Chernivtsi (Ukraine), Tel Aviv (Israel) and Limassol (Cyprus). It renders a wide range of legal services offering innovative solutions to its clients, and it is always among the first who master cutting-edge technologies and up-to-date best practices. AMBER is particularly effective as an anti-crisis team in cases of emergency, when its clients require quick decision-making and a high level of responsibility. AMBER always practices a result-based approach. The AMBER team also includes highly-skilled criminal lawyers who handle defense on white-collar crimes and economic crimes. The company primarily specializes in banking & finance, tax law, corporate law, compliance, commercial litigation, criminal law.

Banking & Finance There are Finders Agreements executed between AMBER and several foreign banks which provide that AMBER brings clients to the bank and verifies them in order to provide evidence that all taxes are duly paid in the country of their incorporation and/or where business is conducted. AMBER is constantly advising top managers of Ukrainian commercial banks on how to properly implement compliance procedures and on financial monitoring-related matters. The lawyers at AMBER are also involved in credit-related disputes and litigation.

Tax The AMBER team renders legal advice on tax-related matters on an everyday basis by providing guidance as to correct implementation and interpretation of applicable acts, regulations, rules and administrative instructions. And furthermore, there are many similar VAT-related cases where the fiscal authorities violate the rights of clients by blocking registration of their tax notes, groundless challenges against the legitimacy of their economic transactions, accrual of additional amounts of taxes and imposition of financial penalties. AMBER clients also face illegal seizures by so-called VAT limits (the term invented by criminal elements and adopted by Ukrainian fiscal service employees).

tection of minor shareholders, handling conflicts between shareholders in legal entities incorporated in Ukraine and other jurisdictions.

Compliance AMBER Law Company acts as an external counsel for several Ukrainian and foreign banks. As combating illicit enrichment and money laundering is one of the main global development trends at the present time, paying close attention to and beneficiaries as a result, one of the current key practices of AMBER is provision of legal support for the development of protective instruments clearly structuring the admissibility of relevant financial transactions and protecting its clients from possible penalties. Such instruments are also helpful for conflicts of interests, market abuse, the “Chinese Wall” approach (strict differentiation of powers), insider lists, watch lists and lists of restrictions, complaints processing and litigation, violation of rules, etc.

Commercial Litigation The AMBER team possesses significant practical experience in commercial litigation related to disputes arising from business transactions performed by its clients. It practices a client-focused approach based on achieving efficient and cost-saving solutions to complex commercial disputes in diverse industry sectors, including, in particular, disputes over complex construction contracts and/or implementation, ownership, recovery of debts for goods delivered/services rendered/works completed, corporate disputes between shareholders and/or partners, as well as other kinds of disputes in various commercial contexts.

Criminal Law AMBER Law Company has broad experience of defending companies and their officials/representatives at every stage of criminal proceedings (criminal investigation, trial, appeal, cassation, execution of sentence) and at each level of the court system, or representing such companies/officials/representatives that are victims of crimes. Some criminal lawyers of AMBER also have significant practical experience of work in prosecution services, which means they definitely know how the system works from the inside. They are able to anticipate all possible legal nuances and to react appropriately so as to ensure that clients are always protected from violation of their rights. AMBER Law Company is mainly involved in rendering legal assistance on white-collar crimes and business-related crimes.

Corporate Law AMBER has rich experience of providing legal assistance in the area of corporate law and corporate disputes pursuant to multilevel businesses with a complex ramified structure. Top corporate experts of the AMBER team possess serious practices in the pro-

Address: 29 Lesi Ukrayinky Boulevard, Office 75, Kyiv, 01014, Ukraine Tel.: + 380 67 325 9582; + 380 44 228 0279

the Prosecutor-General’s Office). And the impartiality of such bodies is widely known even outside our country. Therefore, the entire mechanism that exists of non-resident operating companies, trusts, funds, holdings, etc. did not come to naught.

Fax: + 380 44 285 5286 E-mail:office@amber-corp.com Web-site: www.amber-law.net

It’s quite the other way around! The thing is that using such tools has become more difficult, which means that those who, without fear of difficulties, sift out the truth and get to the ultimate result, may make unprecedented profit.

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Fintech

Fintech Industry in Ukraine: Regulatory Framework and Recent Trends Digitalisation of the world economy, boosted by the COVID-19 pandemic, inevitably leads to the respective transformation of the financial sector and its established foundations. Keeping up with global trends, the Ukrainian fintech sector has also been growing remarkably in recent years and, thus, attracts the special attention of lawmakers and regulators. Since the financial services area is always heavily regulated the authorities also need to adapt and become more flexible to accept the new “digital” reality. The most remarkable recent fintech-related regulatory achievements include: • introduction of the new law on payment services; • introduction of new legislation on use of electronic signatures based on EU standards; • launch of the Bank ID remote identification system by the National Bank of Ukraine to facilitate access for Partner, AEQUO customers to financial and other services; • remote customers identification by the banks, including via video conference and qualified electronic signatures; • liberalisation of foreign currency control regulations. The new Law On Payment Services just passed by Parliament1 is the most anticipated novelty among the above developments. This law is designed to implement the principles of EU Directive 2015/2366 (PSD2) into Ukrainian legislation. This law names and regulates the new payment services and lays the foundations for so-called “open banking” standards, envisaging close cooperation between banks and other market players via banks’ open APIs. In particular, PSD2 requires banks to create mechanisms to enable third party providers to work securely, reliably and rapidly with the bank’s services and data on behalf of, and with the consent, of their customers. By virtue of such cooperation between banks and third party services providers, the payment services which were known as exclusively “banking” ones will no longer be so closely associated with the banks. In fact, a number of market players already offer some of those new services (e.g., account information services). However, both the National Bank of Ukraine and the services providers themselves often struggled to qualify their activities in a context of outdated existing regulations. This problem is remedied by the new Payment Services Law which, on the one hand, recognizes the number of new payment services and concepts, and, on the other hand, implements the idea of a fully-fledged regulatory “sandbox” for testing innovative projects in a friendly environment, whether or not they fall within the existing legal framework. Although implementation of this law will take some time (the law is supposed to be generally applicable one year after coming into force, while “open banking” provisions — in three years), the market should feel the positive effects of the law much sooner in anticipation of this reform. More updates are still to come, as a number of regulatory initiatives, such as legislation on cryptocurrencies, are still being developed.

Yulia Kyrpa

E-money In 2020 the NBU modernised Ukrainian legislation in the e-money area, having brought it into line with EU standards from the standpoint 1

As of the date of this publication the law is pending signing by the President of Ukraine and official publication in order to come into force.

of AML requirements. In particular, Ukrainian banks are now obliged to identify and verify customers, using e-wallets to purchase goods and services. In addition, the AML Law requires identification of the payer and the payee in all transactions where e-money is used. Given the new, stricter requirements prescribed by the AML Law, the NBU cancelled the previously existing limits, applicable to e-money transactions, provided that customers were properly identified and verified. The e-wallets, however, are subject to the following limits: refillable wallet — UAH 400,000, non-refillable e-wallet — UAH 5,000. E-money in Ukraine can only be issued by banks. However, non-banking financial institutions and other companies may act as agents of the banks and render services aimed at e-money distribution, refilling of e-money wallets and effectuation of settlements. The NBU is currently working on elaboration and implementation of e-hryvnia, a digital currency of the central bank. The right of the regulator to issue its digital currency is stipulated by the Law of Ukraine On Payment Services, as passed by Parliament at the end of June 2021.

Personal & Business Lending Ukrainian legislation provides a sufficient legal framework for digital lending. Digital lending, including e-signing of a loan agreement and various ancillary documents, is governed by several core laws of Ukraine, namely On Financial Services and State Regulation of Financial Services, On Electronic Documents and On Electronic Trust Services. These laws enabled Ukraine’s integration into the EU’s digital environment. They recognize electronic documents, signed with simple or qualified e-signatures, as well as MobileID. The above set of laws provides Ukrainians with modern tools to carry out transactions and obtain loans without leaving their homes. Moreover, the new digital approach gives yet another advantage — fixation of the real time signing of electronic documents. P2P lending platforms, which are very popular in the EU, keep gaining popularity in Ukraine. Currently, their activity does not fall within the scope of NBU regulations. The NBU started working on the concept of P2P platforms regulation back in 2018. However, this matter is still at the stage of the regulatory concept development. Hence, while implementing P2P business in Ukraine, special attention should be given to compliance with AML, GDPR and customer protection legislation, as well as to risk assessment tools.

Marketplace The marketplace business model is becoming increasingly popular as people are getting used to the benefits of receiving all they need from various suppliers in the same place. Financial services were always there, given that such online supermarkets inherently require integration of payment gateways to support their purchases. However, this is not sufficient if a customer is looking for a fully-fledged financial service, including money transfers and loans. As banking services are always associated with complicated procedures and requirements, it is much easier for a Ukrainian bank to make its own marketplace rather than join any third-party platforms. Marketplaces are now becoming more sophisticated and include online services which require full-time IT support and maintenance. Therefore, it looks like the banks’

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AEQUO Aequo is one of Ukraine’s top law firms serving industry leaders in transactional and dispute resolution matters. We are fully committed to empowering our clients so as to promote their every success in a challenging and rapidly-changing world. AEQUO’s clients include leading Ukrainian and international companies and organizations, such as Bunge, Corteva, Darnitsa, DuPont, EBRD, EFSE, European Business Association, European Commission, Facebook, GlaxoSmithKline, Google, IFC, Inditex, Instagram, Kernel, Novo Nordisk, OLX, Posco International, ProCredit Bank, Raiffeisen Bank, Schenker, Samsung, Sandvik, UniCredit, Vodafone Ukraine. Address: 32/2 Moskovska Street, Kyiv, 01010, Ukraine Tel.: +380 44 490 9100

Fax: +380 44 490 9102 E-mail: office@aequo.ua Web-site: www.aequo.ua

role in future complex marketplaces will be limited to provision of the banking infrastructure, while the “architecture” of the financial services will be developed and supported by dedicated fintech companies. The newly adopted Law On Payment Services (based on European PSD2 standards) creates legal grounds for such cooperation. Generally speaking, activities on the marketplace may envisage various legal structures and, thus, concern a wide range of e-commerce, consumer rights, banking secrecy and personal data protection laws. Considering that the synergy of the marketplace is often achieved by active cross-selling and, respectively, sharing the data of customers, all these legal aspects require careful consideration.

Neobanks

or a “non-refundable financial assistance”, while the platforms themselves are normally registered as NGOs or charity funds. However, until special legislation is passed, the participants of the crowdfunding process are unlikely be sufficiently protected, and the most promising ideas will keep migrating to Kickstarter and similar foreign platforms. Crowdinvesting, as it follows from the name, has nothing to do with charity. A start-up or developed business in need of capital welcomes “retail” investors to put their money into their project in return for a small piece of equity with any dividends attributable in the future. This model is, in effect, very similar to an IPO, just arranged over the counter rather than at a stock exchange. Hence, it requires much fewer preparatory efforts and resources. The most prominent example of such crowdinvesting in Ukraine is Promprylad. Renovation, an innovative public space in Ivano-Frankivsk located in the premises of an old plant. It focuses on four areas of the region’s development — new economy, urban design, contemporary art, and education. The project follows the impact investing model, where investors contribute to social changes in the region and get a return on investment in the form of dividend payouts. Investments in this particular project are structured through the acquisition of shares in a corporate investment fund, managed by an asset management company.

Denys Kulgavyi

A neobank is a type of a bank that operates exclusively online without the Counsel, AEQUO traditional physical branch networks. The number of neobanks has exploded around the world in recent years, becoming especially popular in 2020 for well-known reasons. A neobank inherently targets individual customers and aims to enhance their user experience. Keeping this primary goal in mind, neobanks often choose not to pursue a banking license themselves, as this is a quite time-consuming and moneyconsuming exercise, but to rely on the banking license of a traditional banking institution, acting as a cooperating partner. In the confines of EU regulatory framework neobanks may operate at facilities of “regular” licensed banks by virtue of the “banking as service” solution. It becomes feasible due to the “Open Banking” approach introduced by PSD2 Directive. As PSD2 is not yet fully implemented into Ukrainian legislation, Ukrainian neobanks invent their own models of cooperation. In particular, Monobank operates on the basis of Universal Bank’s license and facilities, effectively making such a neobank a retail unit of an existing licensed bank. Nevertheless, such an approach is not exclusive. Some European fintech start-ups, which expanded their business to Ukraine in 2020/2021, decided to follow familiar to them the “Open Banking” approach — their neobanks established cooperation with existing traditional banks via APIs. In the absence of sufficient legislation any such innovative structure required thorough attention from the compliance perspective, as well as close cooperation with the NBU, as the regulator.

Crowdfunding and Crowdinvesting In the age of Internet and social media, it becomes much easier for businesses and social start-ups to find their investors and donors. Crowdfunding is a model matching a start-up to be funded with donators supporting the respective idea or project through the online platform that brings the parties together to launch the idea. The first Ukrainian crowdfunding platform, Spilnokosht, was established back in 2012. In the absence of a special legislative framework, Ukrainian crowdfunding platforms have to operate within existing “old school” legal structures. For instance, money donated by supporters and further granted to a start-up are usually qualified as a “charity contribution”

Cryptocurrencies There is no unified approach as to cryptocurrency regulation in the world. Some jurisdictions consider cryptocurrency as a payment method, others as a special type of asset, while the rest prohibits it completely. Most jurisdictions, however, share the view that it is crucial to regulate cryptocurrencies and related activities due to antimoney laundering efforts, customer protection and taxation reasons. As Bitcoin reaches new all-time highs, hedge funds start investing in cryptocurrencies and Visa partners up with crypto wallets, this issue becomes especially topical. However, an extreme volatility and environmental issues associated with this instrument induce most of market makers to keep watching it but not investing yet. Ukraine attempted to regulate this area a few years ago, but the respective draft laws were rejected by Parliament at the early stage. The matter remained fully unregulated until 28 April 2020, when the new AML Law came into force; the new law treats cryptocurrencies as “virtual assets” (in line with terminology used by FATF) and imposes certain reporting obligations on service providers dealing with virtual assets. The next “regulatory” milestone might well be the new Law On Virtual Assets, the draft of which was adopted in its first reading in the Ukrainian Parliament in December 2020. The draft law is designed to protect the owners’ title to virtual assets and regulate the services related to such assets. Notably, the draft law anticipates that the activities of service providers based in Ukraine dealing with virtual assets (exchange, transfer, custody, etc.) require the respective government permit. If the Virtual Assets Law is adopted by Parliament, lawmakers also plan to introduce a tailored tax regime for cryptocurrencies.

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Franchising

What Foreign Companies Should Know about Franchising in Ukraine: Hints and Tips Franchising is no longer a new concept in Ukraine. The country’s market has already seen a number of successful international and local franchising projects that have won the hearts of Ukrainian consumers. However, everlasting legal nuances are still holding back the full potential of the franchising model in Ukraine and repelling many foreign companies.

Scope of Franchisor Control over Franchisee’s Activity

Regulating Legal Acts

In addition to the basic criteria listed above, a franchising relationship in Ukraine is characterized by regular control of the franchisor over the franchisee’s activity under the agreement, provision of various training and consultancy assistance to the franchisee and the necessity for the franchisee to maintain the quality of goods/ services and comply with the franchisor’s instructions. The Civil Code also allows inclusion into the franchise agreement of provisions regarding the exclusivity of such arrangement, the franchisee’s noncompete obligations or the franchisee’s obligation to obtain the franchisor’s approval for store location and design. At the same time, certain provisions limiting the pricing, categories of clients and location of clients might be considered void and trigger antitrust implications.

The franchising legislative landscape is far from being extensive or exhaustive. Despite attempts to adopt a special law devoted to franchising, the Civil Code and Commercial Code remain the main laws regulating this area, though to a very limited extent. Instead of using the term “franchising,” Ukrainian law defines a “commercial concession agreement”, which is an equivalent of a franchise agreement in Ukraine. Based on this definition, it Practical Aspects to be may be logically inferred that from a Considered by a Foreign Ukrainian legal standpoint franchising Associate Franchisor is considered a contractual relationship Baker McKenzie — Kyiv under which a franchisor undertakes To avoid the application of Ukrainian to grant, in return for remuneration, a law, foreign businesses often rely on confranchisee the right to use a set of the franchisor’s rights with the tractual provisions establishing foreign law as the governing law. purpose of producing or selling certain goods and/or providing cer- However, such an approach is not a perfect safeguard, given that the tain services. mandatory provisions of Ukrainian law must still be taken into account in case the agreement is executed in Ukraine. Mandatory Requirements Moving from dry legalese to more practical things, and there is a pool of quite common issues foreign companies regularly face when As follows from further provisions of Ukrainian law, the agree- considering, or entering into, franchising arrangements in Ukraine: ment should meet at least the following criteria to be qualified as fran- • Absence of IP: Foreign franchisors do not always have their IP chising in Ukraine: properly secured in Ukraine. Trademarks, inventions, designs, etc., • Subject: The franchise agreement has a specific subject that inmust be registered in Ukraine either through national or internacludes the right to use the franchisor’s intellectual property (IP) tional procedure so as to be considered valid IP objects in Ukraine. rights, commercial experience and business reputation. The Civil Therefore, the franchisor cannot grant, and the franchisee cannot Code does not limit the scope of IP rights that may be granted, obtain, the rights to such IP if it is not registered in Ukraine. Albut generally lists trademarks, designs, inventions, copyrights though Ukrainian law does not prohibit offering only trade secrets, and trade secrets as possible IP objects. However, the right to use know-how or goodwill as part of the franchise package, in most know-how and other commercially valuable and confidential inforcases trademarks are a key part of the franchise business. It is mation might also be covered by such an agreement. strongly recommended that the respective trademarks rights are • Parties: The parties to the franchise agreement will only be busiproperly secured and granted under the franchise agreement. This ness entities or individual entrepreneurs. Ukrainian law does not alwould protect the franchisor from dishonest third party registralow individuals and other non-entrepreneurial entities to enter into tions and prevent possible tax ramifications arising from payment such agreements. of royalties for non-registered trademarks. • Form: The Civil Code requires that the franchise agreement must • Shortcomings of IP-related provisions: Ukrainian IP laws are quite be concluded in writing. In the event that this requirement is not strict in terms of adequate identification of the IP objects at ismet, such agreement is considered void. Additionally, the Commersue under the agreement. Provisions simply granting the rights cial Code mandates that this agreement must be concluded as one to all of the company’s trademarks or other IP will not do. The single document to be valid. parties must prepare a detailed schedule with sufficient informa• Remuneration: A franchisee is required to pay remuneration to the tion about each IP object covered by the agreement. Moreover, to franchisor for the rights granted under the franchise agreement. make the granting of IP rights, the parties should explicitly set out According to the Commercial Code, such remuneration might be all the rights granted and all the ways in which the IP in question paid as a lump sum, royalties or in another form set out in the can be used. agreement.

Myroslava Koval-Lavok

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BAKER McKENZIE — KYIV Baker McKenzie helps clients overcome the challenges of competing in the global economy. We solve complex legal problems across borders and practice areas. Our unique culture, developed over 65 years, enables our 13,000 people to understand local markets and navigate multiple jurisdictions, working together as trusted colleagues and friends to instill confidence in our clients. Baker McKenzie was one of the first foreign law firms to open an office in Ukraine. Currently, multinational companies, financial institutions, and large Ukrainian enterprises look to Baker McKenzie for legal representation in Ukraine. Our clients have come to rely on the substantial capabilities of the Kyiv office and enjoy the benefits of being able to access the global resources of the firm.

Address: Renaissance Business Center, 24 Bulvarno-Kudriavska Street, Kyiv, 01061, Ukraine

With 29 years of experience in Ukraine, we work closely with our offices around the world to offer domestic and cross-border advice. No matter the business or legal issue, we provide the guidance and support clients need to achieve their commercial objectives. Every year the Kyiv office confirms its top positions in the leading international and national legal directories, namely Chambers & Partners, Legal 500, IFLR1000, World Trademark Review 1000, International Tax Review, Ukrainian Law Firms, Ukrainian Legal Awards, etc. as a top-tier firm across different practices.

Tel.: +380 44 590 0101 E-mail: kyiv@bakermckenzie.com Web-site: www.bakermckenzie.com/ukraine

cies in local IP protection, as well as form • No precontractual disclosures: Unthe full list of IP covered by the franchise like many other jurisdictions, includoffering. As noted above, this will also help ing the US, Ukrainian law does not to prevent dishonest registrations of IP asrequire mandatory precontractual sets by third parties and comply with fordisclosure. This means that the franmal requirements of Ukrainian law. chisor is not obliged to disclose to II. The second step is to carry out due dilithe franchisee the material informagence of prospective counterparties. tion regarding the franchise prior A good partner is a prerequisite of a to entering into a formal franchise sound commercial relationship. Thus, agreement. Without such informathorough checks of background infortion, the franchisee might improperly mation, real estate, corporate, financial evaluate the franchise opportunity and other aspects is a big step towards and, therefore, try to terminate the establishing trust between potential franchise agreement upon receipt of partners and confidence in each other’s more detailed franchise-related ingood standing. formation. To mitigate risks for both III. Another important preparation phase parties, the procedure of precontracis conducting a market sweep investitual disclosure should be agreed by gation to check whether the franchised the parties in due course. Major disIP assets have been used in Ukraine by closure issues include the scope of any unauthorized third party. Any uninformation to be disclosed, the form authorized use may potentially create in which it should be presented, the competition for the future franchisee, term between such disclosure and reduce the price of a deal, or even signing of the franchise agreement, Junior Associate lead to failure to conclude a franchise etc. Baker McKenzie — Kyiv agreement. If any such use has been • Payment deficiencies: It is not undetected, the foreign franchisor should common for foreign businesses to immediately start an enforcement indicate a third party (e.g., another campaign to halt any unauthorized member of the company group) as a beneficiary of the franchise use in order to retain the status of exfees/payments. However, the local franchisee may face serious clusivity for a prospective franchise difficulties with purchasing foreign currency to settle payments in agreement. the absence of formal agreements or acts signed with such third party. In addition, the parties sometimes forget to set out the de- IV. Finally, while it is common for foreign companies to want all their standard one-for-all-jurisdictions terms to be packed into a localtailed payment settlement procedure or do not sign acceptance ized franchise agreement, all mandatory provisions of Ukrainian acts that might result in problems with the tax authorities. law and local specifics must be kept in mind while negotiating, • Termination aspects: Along with the standard causes of terminadrafting and concluding such agreement. However, there is altion (i.e., mutual agreement, court decision), Ukrainian law also ways room for such non-local instruments as pre-contractual provides that the franchise agreement may be terminated in the disclosures, which might help the parties to save both time and event that the franchisor loses the trademark rights granted or one money. of the parties goes bankrupt. Foreign companies should bear this in mind and keep track of trademark renewals. Another important thing to note is that in the event that the franchise agreement is Conclusions and Prospects governed by foreign law with a binding arbitration clause in place, To conclude, the buildout of a franchising model in Ukraine the franchisor will not be able to go to Ukrainian courts to request is hindered by the lack of progress in the regulation of this area. termination of such an agreement. As a result, the franchisor Since the abolition of mandatory state registration of franchise should note that the franchisee might continue using the franchise agreements in 2015, there have been no major developments for some time while the franchisor is getting prepared for arbitrato date. Both franchise-specific legislation and case law remain tion proceedings. scarce and do not allow foreign companies to have all the benefits of franchising schemes on the Ukrainian market. This prevents Tips and Hints on How to Avoid Complications many foreign businesses from entering the local market through Not all of these issues can be addressed and resolved without this model. One of the most famous examples is McDonald’s, a amendments to legislation. However, the lengthy period without suf- franchise-driven business, which does not have any franchisees ficient and consistent regulation has resulted in a few key recommen- in Ukraine. Of course, there are some great cases with global frandations shaping the current practice by which foreign companies can chising leaders, such as IKEA and KFC, which entered the local enter the Ukrainian franchise market. market quite recently. However, the general trend is unlikely to I. First, the foreign franchisor should start with due diligence of its change without a considerable overhaul of franchising regulations IP assets. This will enable it to identify and cure possible deficien- in the near future.

Dmytro Skydan

WWW.UKRAINIANLAWFIRMS.COM

Fraud

Fraud in Ukraine: Trends, Tendencies and Old-New Methods sonal” account, allegedly due to quarantine COVID-19, lockdown, economic remeasures imposed connected with the cession. All these circumstances in 2020 coronavirus epidemic, I filed a corresponding undoubtedly have affected the growth statement with the police and became one of such a phenomenon as fraud. At the of the first victims in the B2B Jewelry case. same time, it is not entirely correct to I actively covered all my procedural steps in shift all the blame only to the epidemiosocial networks and in the media. My goal logical situation and quarantine meawas simple — to educate the public about sures, because there were also other the dangers of such investments. For my acfactors also which implied their impact tive and public position, I have received dirty on the situation. PR campaigns from the organizers of the Nevertheless, we may find some “golden” scheme aimed at discrediting my positive aspects in all the aforemenprofessional reputation. tioned. Indeed, being in the constant fight But at the same time, we have begun with influential fraudsters, the system, to receive numerous appeals from dozens the legislation, we, Ukrainian lawyers in of Ukrainians affected by the actions of the the field of criminal law and White-Сollar organizers of this financial pyramid. People Crime, with each new case get a unique from almost all corners of Ukraine turned to experience in solving problems which our team for legal assistance. might seem to have no solution. We have During the existence of B2B Jewelry, to be not only practicing lawyers, but also according to the Security Service of Ukraine, legislators, detectives, psychologists, PR the organizers of the fraudulent scheme specialists, and the like. have acquired a whole island with real esAs an example, in spring of 2020, the tate on the River Dnipro, dozens of luxury Supreme Court issued a decree which Partner of Criminal Practice, Ario Law Firm cars, and, according to rough estimates, significantly limited the rights of victims were able to get about USD 250 million. in criminal proceedings. In fact, with this Later, numerous searches were carried out decision, the Supreme Court has finally deprived the victims and their representatives of the opportunity to in- in the B2B Jewelry chain of stores, but the organizer of the scheme dependently apply for temporary access to items and documents. Only and his crime partners were restrained with the measure of house arinvestigators and prosecutors are allowed to do it from now on. This has rest. Yet, later it was changed to a personal obligation. According to our put an end to the possibility of the victims and their representatives to information, while the pre-trial investigation continues, the organizers conduct an independent investigation, compensate for the damage and of the scheme have managed to spend a vacation on exotic islands, bring the perpetrators to justice because in our realities it is almost im- returned to Ukraine, and opened several new showrooms in different possible to expect this to be done by law-enforcement authorities. Thus, cities of our country. In my opinion, the state is responsible to a greater extent that such given that we have many clients (banks, enterprises, etc.) who are true victims, the Ario Law Firm team has initiated a broad public discussion a large-scale financial pyramid in Ukraine emerged and functioned. State regarding this issue and also has developed amendments to the Crimi- authorities are in charge of financial market regulation, with the lawnal Procedure Code of Ukraine in the context of the rights of victims. At enforcement system, which has not prevented the organizers of B2B the present moment our proposed amendments are being considered Jewelry from conducting a colossal communication campaign about the possibility of obtaining super profits from dubious investments and by the sectoral Committee of the Verkhovna Rada of Ukraine. systematically expanded the chain of “jewelry stores”. Already at this stage, as a representative of some victims in this fiFinancial Pyramids: nancial pyramid, it is clear to me that the lion’s share of depositors will Post-Traumatic COVID-19 Syndrome never be able to get back invested funds. Only those who were among the At the beginning of 2020, the B2B Jewelry project reached a spe- first to file a crime report and seek legal assistance have chances. Why? cial heyday in Ukraine. Ukrainian cities were overloaded with advertizing I will explain. While working on this project in the period of one year, we of so-called jewelry stores network. The same advertisement with the were convinced that neither the law-enforcement agencies nor the judicial slogan “to live in abundance” was broadcast from the radio receivers, system in the regions is interested in finding and bringing the perpetrators TV screens, social networks. All of that developed at a time when the to justice. More or less chances for justice can be obtained in the capicountry was entering its first lockdown, multiplied by economic crisis tal. Today, our team is seeking the opportunity of seizure and transfer of and massive unemployment. The “golden” project promised Ukrainians the property seized within the framework of the B2B Jewelry production super profits (more than 400% per year with weekly payments) for the to the National Agency of Ukraine for finding, tracing, and management of assets. This is the first step, which opens up an opportunity to settle purchase of special certificates. One day a journalist of a well-known Ukrainian media outlet ap- accounts with some defrauded depositors of the golden pyramid in the pealed to me with a request from a legal point of view to assess the future. In turn, opponents are trying in every possible way to unnecessarily risks for citizens to invest in B2B Jewelry certificates. So, I decided not extend the trial, but we are not giving up. So, we have cast discredit on the actions of the organizers of the just to prepare answers to the information request, but to really “get at the truth” of this business, which contradicts all laws of economics. So gold project. We believe that they have committed not 2-3 crimes, but I bought one of these certificates worth UAH 1,000 (a little over 35 dol- more. Now the defendants in the case have been charged with suspilars) in order to monitor the dubious activities of the “golden” project cion of committing three criminal offenses. The proceedings are opened based on my statement and the statements of the victims whom we from inside. For the purchase of such a cardboard certificate, I haven’t received are advising and are grounded on part 4 of Article 190 of the Criminal any single document or fiscal receipt. You could pay for the purchase Code — fraud committed on a particularly large scale or by an organized only in cash — bank cards were not accepted in the jewelry store. When, group. The sanction of this article provides for up to 12 years of imprisafter a few weeks, the promised payments stopped coming to my “per- onment with confiscation of property.

Eugen Hrushovets

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Address: 7 Panasa Myrnoho Street, Kyiv, 01011, Ukraine

in criminal proceedings Lviv Mayor Andriy Sadovy, State Enterprise Pishchanskiy Quarry, Mr. Maksim Mykytas, former president of a large construction company, and victims of the B2B Jewelry financial pyramid scheme. Our lawyers successfully defend the interests of the Samopomich political party, PJSC Hotel Complex Lybid, IT Company Finik.Pro, Maksim Nefiodov, former head of the Customs Service of Ukraine, Olena Kostenko, ex-head of the State Architectural and Construction Inspection of Ukraine. The firm works closely with highly-qualified arbitration managers, private enforcers, factoring companies, the electronic marketplaces of commodities, loans, and arrested assets as well as the assets of bankrupt banks and companies. Ario Law Firm and its partners Julian Khorunzhyi, Iryna Serbin, Yevhen Hrushovets have received recognition from many Ukrainian and International law ratings, like Сhambers Europe, ULF, The Legal 500, IFLR1000, Legal Awards, Market Leaders, etc.

Tel.: +380 44 247 5577 E-mail: office@ario.law Web-site: www.ario.law

The active media position of our team regarding B2B Jewelry led to the fact that victims of other financial pyramids have begun to contact us. In particular, by the same principle, our other clients were deceived when they invested in a network of electric filling stations and, as a result, they were left without stations and without their money. The situation is classic: law-enforcement officials are in no hurry to investigate the activities of the organizers of the scheme, and the chances of defrauded investors getting back their invested funds are diminishing over time.

Law-Enforcers Can When They Want At the same time, to say that law-enforcement authorities do not know how and do not want to work would be a frank distortion of reality. When the representatives of law-enforcement agencies are ordered to perform a specific task from the authorities, the system works. It works like a road roller that crushes everything that comes its way, not disdaining any even illegal methods. So, over the past year, we have recorded an increase of appeals to us from large business, which works absolutely transparently and legally, observing all the norms of the law. To a large extent, such appeals refer to the fact that law-enforcement officials unreasonably burst into such companies with searches. Typically, the purpose of these investigative actions is to intimidate and cause reputational damage to the company in the interests of competitors. Of course, we work ex post facto to minimize customer losses and bring to justice, including criminal liability, law-enforcement officials, whose actions are described above. However, in such matters it is necessary to act in advance and seek legal assistance before the business has suffered material and reputational damage from the actions of unscrupulous law-enforcement officials. I cannot fail to mention here that from 2019 to 2021 I was a member of the commissions for the selection and re-certification of prosecutors in the Prosecutor-General`s Office, regional and local prosecutors. And if during the selection of prosecutors for the Prosecutor-General’s Office the level of preparation of candidates was quite high and I had a feeling that many candidates really showed understanding of why they have chosen such a difficult career, the situation with the certification of prosecutors of regional and local prosecutors’ offices was quite the opposite. I have clearly seen which global gaps exist today in terms of professional training of prosecutors and their motivation, in terms of understanding of their mission in this profession. I am sure that a similar situation applies to most other law-enforcement agencies. That is why I am not surprised by such frequent cases when some representatives of the law-enforcement system carelessly fulfill obviously illegal orders of the management or higher bodies. So, I can’t avoid mentioning one of the recent cases from my own practice. I am the lawyer of the former president of a large construction company, who is accused of organizing an abduction. Frankly speaking, during my professional activity I have encountered various gross violations and manipulations by law-enforcement authorities, the use of administrative resources, pressure on clients and so on. But the pressure we face in this case has become unprecedented for me.

The whole case looks as if it was crafted in haste, with poor quality and illogically. Yes, my client is accused of allegedly organizing the abduction of a lawyer who owed him USD 800,000. But, as we have learned, the person who has been allegedly abducted has nothing to do with jurisprudence, has no legal education, and has never worked in law. This person does not have large fortunes, so it makes no sense to demand 800,000 dollars from him. In addition, with the help of technical experts, we were able to learn how to fake phone calls, which are partly based on the arguments of the prosecution. We held a press conference and demonstrated the possibilities of modern technologies, with the help of which anyone can be made a suspect in a crime. The active public position of the defense did not go unnoticed and “in response” the lawyers received criminal proceedings allegedly for disclosing the data of the pre-trial investigation. Of course, we are initiating the prosecution of those involved in putting pressure on the defense. The machinations and manipulations of law-enforcement officials in this case did not end there. But the opponents did not have enough imagination for something “new” and decided to put pressure on my client’s wife. Believe it or not, the Unified Register of Pre-trial Investigations registered proceedings on the fact of organizing the abduction of a child. The organizer is assertedly the client’s wife. In addition, among the obvious violations and machinations of lawenforcement authorities within this case, the psychological pressure imposed directly on my client should be highlighted. He was arrested on a holiday night, an hour and a half before the New Year, and was held in a temporary detention center under constant video surveillance for no reason, although no investigative actions were being conducted with him. During the pre-trial investigation, most of the evidence of the prosecution, which was attached to the request to extend the pre-trial investigation, was obtained in December 2020 (at the very beginning of the investigation), and in January and February 2021 no investigative actions were conducted with the client. The fact of keeping a person in a temporary detention center presupposes that investigative actions with him should be carried out. In all other cases, the person to whom the precautionary measure in the form of detention has been applied should be sent to a pre-trial detention center. UPD. On 12 March, 2021, Shevchenko District Court of Kyiv granted the petition of the defendants to change his preventive measure from detention to night house arrest.

Conclusions. Briefly Unfortunately, in Ukraine, such a phenomenon as fraud does not simply exist with the tacit consent of law-enforcement authorities. Often it is the law-enforcement system itself that is the source of fraudulent transactions and schemes. And that’s why I never get tired of repeating: in order to protect yourself from all kinds of fraud, you need to constantly improve your knowledge of Ukrainian legislation. If you see that the situation is getting out of control, and you or your business is in danger, then without the support of an experienced lawyer, you will not manage.

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Free Trade Agreements

Review of 2020 Trade Regimes Against the backdrop of international trade liberalization, 2020 can generally be described as positive. Within the framework of the EU-Ukraine Association Agreement, mechanisms not previously used by the parties were tested and launched for the first time, and further expansion of mutual access to the markets was declared. The progress in bilateral economic cooperation between Ukraine and a number of other states is also worth noting.

The dispute with the EU arose in connection with the introduction by Ukraine of a moratorium on the export of unprocessed timber. Back in 2015, the ban was imposed temporarily, for a period of 10 years, on the export of unprocessed timber of any species, with the exception of pine, for which the moratorium began on 1 January, 2017. In January 2019, the EU requested consultations with Ukraine with regard to a temporary ban on the export of unprocessed timber. The consultations did not result in any mutually-agreed decision, and in June 2019 the EU initiated dispute resoluEU-Ukraine Trade Relations tion through arbitration and sent a request have been Marked by the to establish an Arbitration Panel. Following This was the first dispute within the framework of the EU-Ukraine Association (1) Change in Trade Preferences under Agreement and the second case in the EU’s the Association Agreement history for a case to be resolved by ad hoc At the end of 2019, by adopting arbitration provided for by a bilateral interLaw of Ukraine No. 345-IX of 5 Decemstate trade agreement. The case was about ber 2019, the Verkhovna Rada of Ukraine the legal issues of interpretation of proviratified the Agreement in the form of an Partner, Attorney at Law, sions in the EU-Ukraine Association Agreeexchange of letters between Ukraine ment, particularly with respect to the right and the European Union, amending the Head of International Trade Practice, of each party to establish and regulate the trade preferences for poultry meat and Ilyashev & Partners levels of national environmental protection, poultry meat preparations provided for sustainable forest management, as well as by the Association Agreement. Accordissues of the national policy of Ukraine in ing to the aforementioned agreement, which came into force on 1 Feb- the field of forestry and environmental protection. It should be noted ruary 2020, Ukraine and the EU have significantly increased the tariff that based on the results of dispute resolution, Ukraine was left with quotas for poultry meat from 18,400 tons to 68,400 tons. Given the the opportunity to choose the tools for implementing the recommendynamic nature of the trade quotas that apply under the Association dations of the Arbitration Panel. It is expected that these recommendaAgreement, Ukrainian exporters will be able to supply duty free up to tions will be implemented by Ukraine in 2021 by way of developing and 70,000 tons of poultry meat to the EU market in 2021. adopting a law aimed at regulating the timber market in the country. The signing and ratification of the said Agreement result from the It is worth noting that this arbitration enabled identification of a parties’ desire to improve the provisions of the Association Agreement by number of procedural problems requiring additional attention, and it eliminating all loopholes used by the parties when exporting poultry meat. is likely that in the near future we should expect changes to the existIt is of particular note that further to the 7th meeting of the EU- ing rules for disputes resolution within the framework of the bilateral Ukraine Association Council, held at the beginning of 2021, the parties agreement. In general, the envisaged dispute settlement mechanism reaffirmed their commitment to start consultations on the further re- has demonstrated its potential to become an effective means of proview of trade liberalization for goods under the DCFTA, in line with Ar- tecting the national interests of Ukraine in its relations with the EU. ticle 29 of the Association Agreement, and to continuously update the relevant Annexes to the Agreement. Consequently, over the next two (3) Industrial Visa-free Regime years, EU-oriented Ukrainian business should expect greater access In October 2020, the EU preliminary assessment mission began to the European market, which in turn will contribute to an increase in its work in Ukraine with regard to the conclusion of an Agreement on goods turnover between Ukraine and the EU and further convergence Conformity Assessment and Acceptance of Industrial Products (ACAA, of economies. or industrial visa-free regime). The purpose of this mission is to prepare a list of legislative and regulatory actions that may be required to (2) First Dispute under the EU-Ukraine Association Agreement be fully prepared for negotiations on the ACAA conclusion. An incepOn 11 December 2020, in Lugano (Switzerland), within the frame- tion report will be prepared, which should consolidate all the available work of the arbitration procedure provided for by Chapter 14 of Title IV information and the expected further steps to follow. Later, in Decemof the Association Agreement, the Arbitration Panel awarded a decision ber 2020, Olha Stefanishyna, Deputy Prime Minister for European and in a dispute between Ukraine and the EU in connection with the introduc- Euro-Atlantic Integration, mentioned that Ukraine and the EU had prevition by Ukraine of a moratorium on the export of unprocessed timber ously agreed to sign the ACCA on certain types of products, namely: (round logs). It should be noted that this is the first precedent of the ap- low-voltage equipment, electromagnetic equipment, machines and plication of Chapter 14 of Title IV of the Association Agreement. mechanisms. The Arbitration Panel recognized the lawfulness of the permanent Upon reaching agreements on the state of the relevant technical ban on the exports of timber and sawn wood products of valuable and legislation of Ukraine, standards and infrastructure, the ACCA will be rare types of wood. Supporting Ukraine’s position that forests are an added as a Protocol to the EU-Ukraine Association Agreement. exhaustible resource, the arbitrators acknowledged that the 2015 ban Overcoming the technical barriers to trade in industrial products on the export of round timber does not comply with the provisions of is an important precondition for the effective functioning of the Deep the Association Agreement, and recommended that Ukraine take all and Comprehensive Free Trade Area between the parties, as well as necessary measures to implement this decision, taking into account for an increase in Ukrainian exports of goods with high added value all the relevant provisions of the Agreement, including the provisions not only to EU countries, but also to third countries in the world. of Chapter 13 (Trade and Sustainable Development), especially Article 294 (Trade in Forest Products), which obliges both Ukraine and the EU (4) BREXIT After-Effects to improve forest law-enforcement and governance and promote trade BREXIT made it necessary to revise cooperation with the UK, in legal and sustainable forest products. which resulted in the signing of the Political, Free Trade and Strategic

Olena Omelchenko

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ILYASHEV & PARTNERS Founded in 1997, Ilyashev & Partners is one of the most prominent and authoritative full-service law offices in the CEE region with the largest network representation in Ukraine. We have achieved this by employing leading experts in various areas of practice of law, innovative thinking and strict compliance with ethical standards in our relationships with clients. Ilyashev & Partners provides services in almost every practice area to well-known international companies, leading Ukrainian companies and financial institutions, government agencies, law offices and consulting companies. With offices and representatives in Kyiv, Tallinn, Dnipro, Kharkiv, Odesa, Simferopol and Moscow, the firm employs more than 50 highly-professional lawyers. Ilyashev & Partners is a preferred legal counsel for many Ukrainian branches of multinational corporates, handling ongoing advisory support and transactional work as part of legal support for the presence of its international clients in Ukraine. The team has a strong reputation for delivering on-demand employment advice for global clients.

We undertake a full range of labor law work, including:

ployment agreements of specific employees, internal documents regulating employment relations; • Employment of foreigners, including obtaining work permits; • Organization of trade union activities; • Regulation of relations between employers and trade unions; • Protection of interests of employers and employees in employment relations, during their establishment and termination; • Development of regulations and documents for the labor aspects of business restructuring, redundancies or winding up of busi nesses; • Representation in individual and collective labor disputes; • Advising on wage arrears and compensation plans, payroll tax planning; • Labor law related audits of corporate legal departments to assess their effectiveness, staff competence and risk mitigation. The team is often instructed to support employment aspects in corporate deals, labor contracts, white-collar matters, staff outsourcing, employees transfer and relocation. The special knowledge that Ilyashev & Partners possesses includes employment compliance.

• Drafting of employment agreements and contracts for top management, model contracts for enterprises, individual emAddress: 11 Kudryavska Street, Kyiv, 04053, Ukraine

Tel.: +380 44 494 1919 E-mail: office@attorneys.ua Web-site: www.attorneys.ua

Partnership Agreement between the United Kingdom of Great Britain and Northern Ireland and Ukraine on 8 October 2020. This Agreement, which came into force on 1 January 2021, provides for duty free trade in goods, with the exception of items for which the rates are specifically listed in Annex 1-A, and also sets tariff quotas for certain goods. With regard to the above mentioned, UK tariff quotas were established for 36 types of goods, while Ukraine has provided quotas for only 3 types of goods.

(8) Turkish Gambit Contrary to expectations, lengthy negotiations on a free trade area with the Republic of Turkey reached no logical end in 2020. However, in early March 2021, the Prime Minister of Ukraine announced the finalization of an agreement ahead of the meeting of the Presidents of the two countries. Despite the political statements, the question of conclusion of an agreement in 2021 remains doubtful.

(9) Commonwealth of Independent States Free Trade Area Agreement of 18 October 2011

(5) The State of Israel

In addition to the agreement with Trade relations with the Russian Fedthe UK, on 1 January 2021, the Free eration remained unchanged. Last year Trade Agreement between Ukraine and brought another expanded wave of goods Israel also came into force. The Agreefalling under the embargo list, and the first ment is aimed at the gradual abolition of half of 2021 witnessed the extension of import duties on agricultural and indussanctions against individuals and legal entrial goods. At the same time, the rules of tities. origin of goods will be partly determined Trade relations with the Republic according to the Regional Convention Attorney at Law, Ilyashev & Partners of Belarus became significantly more on Pan-Euro-Mediterranean Preferential complicated. Amidst the political crisis, Rules of Origin (Pan-Euro-Med), which Ukraine unilaterally, at the initiative of suggests Israel’s ambitions to join the business, applied a special duty of 16.08% for fittings and 35% for Convention. motor vehicles (MAZ trolleybuses). According to Ukraine, the actions By this Agreement, Israel canceled about 80% of import duties for of the Republic of Belarus were unfriendly and discriminatory taking Ukrainian industrial goods and more than 9% for agricultural products, into consideration the ban on the Belarusian export of scrap metal, while Ukraine canceled 70% of import duties for Israeli industry and and the application of a recycling fee and a local correction in public more than 6% for the agrarian sector, which is considered to be much procurements. The decisions were taken behind closed doors, withmore than just parity. out any notifications and consultations of the parties, and resulted

Oleksiy Gorbatyuk

(6) Canada

In 2020, the Canada-Ukraine Free Trade Agreement was not disregarded. At the beginning of last year, the Canadian government initiated public discussions of options for improving this agreement. Ukraine may well expect enlarged privileged access of Ukrainian goods to the Canadian market in the near future.

(7) Negotiations with the Republic of Moldova That same January 2020, Ukraine and Moldova started the first round of negotiations to amend the Intergovernmental Free Trade Agreement between Ukraine and Moldova. The parties intended to ensure in their mutual trade relations the application of preferential rules of origin provided for by the Regional Convention on Pan-EuroMediterranean Preferential Rules of Origin, to which Ukraine became a party back in 2018.

in the complete bewilderment and counter measures. In turn, the Republic of Belarus imposed licensing, which is actually a ban on the export of Ukrainian goods exceeding USD 100 million/year, in particular for agricultural machinery, wallpaper, beer, confectionery, radiators, paper, refrigerators, etc. If the parties fail to reach an agreement and do not return to the legal framework of the CIS Free Trade Area Agreement, which is quite a difficult task due to the restrictions on official contacts between the countries, the situation may develop towards conflict escalation and lead to the bilateral blocking of trade, by the example of trade relations between Ukraine and the Russian Federation. Therefore, in the second half of 2021, the government of Ukraine will face the task of not only finding new markets and expanding conditions for trade liberalization with other countries, but also preserving access to long-standing existing markets.

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Gambling

The Game: Rebooted Underregulated since Ukraine beRequirements for came independent in 1991, the gamGambling Operators bling industry developed haphazardly in Those interested in starting a gamthe country, making Ukraine a “grey jubling business in Ukraine are now able to risdiction” in Eastern Europe for games apply to the Gambling Commission for the of chance. A comprehensive ban introrelevant licences. duced in 2009 resulted in winding down legal businesses and boosted the develGeneral requirements for a gambling operator opment of illegal gambling. According • legal form: Ukrainian legal entity in the to some estimates, the approximate form of a form of LLC or JSC (although turnover of illegal gambling operators other corporate forms are also allowed); amounted to at least EUR 1 billion a year. • share capital: the minimum share capiSeveral unfruitful attempts at tal of UAH 30 mil (USD 1.1mil) is formed bringing gambling out of the shadow with monetary funds only and any addiwere made before the Ukrainian Parliational equity contribution can be made ment adopted The Law of Ukraine On in monetary form or in-kind; State Regulation of Organising and Con• guarantee of payment: during the liducting Gambling (Gambling Law) on 14 cense term a gambling operator shall July 2020. have a bank guarantee or a deposit for The Gambling Law came into force the amount of 7,200 minimum wages on 13 August 2020, and after a 10-year (UAH 43.2 mil or USD 1.5 mil as of fight to legalize this industry again, 1 January 2021); Ukraine finally returned to the green • impeccable business reputation: gammap of regulated jurisdictions. Partner, Sayenko Kharenko bling operator managers and owners It is worth noting that the Gambling shall have: (1) clear records regarding Law does not regulate lotteries. They Alina Plyushch specialises in private wealth managebreaches of AML, anti-bribery, financial are not considered games of chance ment, gambling law, corporate law, M&A and capital services legislation; (2) clean criminal and are governed by the existing Law of markets. Alina is a solicitor of the Senior Courts of record, and shall not have Russian citiUkraine On State Lotteries with certain England and Wales. Alina heads a dedicated gambling desk at Sayenko zenship; amendments. • website: a website with a domain name Apart from the Gambling Law, the Kharenko, and has been engaged in the development of new gambling legislation in Ukraine since in the .ua domain area is required. following are key legal acts: • Licensing Conditions for Casinos, 2014. She is a co-founder and board member of Gambling operator may not: Slot Machine Halls, Betting, Online the Ukrainian Gaming Industry Association and a member of the Expert Advisory Council of Ukraine’s • b e controlled by Russian residents; Casinos and Online Poker (Licensing Gambling and Lotteries Regulation Commission. • have Russian residents as Ultimate BenConditions); eficial Owners; • regulations relating to the state moni- Before joining Sayenko Kharenko, Alina worked with • have individual shareholders who are toring system of gambling operators; Norton Rose (London) and leading Ukrainian law also considered UBOs of a Russian resi• technical regulations (to be devel- firms. dent; oped soon); • hold any stake in a Russian resident, and • Law of Ukraine On Preventing and Counteracting Legalization (Laundering) of the Proceeds of Crime, • have corporate shareholders registered in FATF-blacklisted countries (North Korea, Iran). Terrorist Financing, and Financing Proliferation of Weapons of Mass Destruction of 6 December 2019; Additional rules related to specific verticals • Criminal Code of Ukraine, and Land-based casinos • Law of Ukraine On Advertising of 3 July 1996. • may be located (1) in the case of Kyiv, in 5-star hotels with 150 rooms or more; (2) in other cities, in 4-star or 5-star hotels with 100 Gambling Law: Key Developments rooms or more; (3) in recreational locations outside cities with at The Gambling Law regulates five major verticals: least one 5-star hotel; • Land-based casinos; • have a minimum casino area of 500 m² in 5-star hotels; • Slot machine halls; • shall employ at least 50 employees; • Online casinos; • shall install (1) in the case of Kyiv and other cities with a popula• Betting (online and land-based, including on horse racing tracks); tion of over 500,000– at least 10 gambling tables, including two • Online poker. roulettes and 50 slot machines; (2) in other cases — at least five Poker in poker clubs is not allowed, except for sport poker (not gambling tables, including one roulette and 20 slot machines; considered to be gambling). Land-based casinos may offer in-house • may not use slot machines manufactured before 2019 or supplied poker games. by Russian residents. Gambling operators from different verticals shall comply with Slot machines halls identical requirements, although additional rules apply to each of the • may be located in 3-star to 5-star hotels with 50 or more rooms gambling verticals. (in the case of Kyiv), or 25 and more rooms in other cases; The Gambling Law introduced a new regulatory body for the in- • have a minimum area of at least 300 m²; dustry. The Gambling and Lotteries Regulation Commission (Gam- • may not be located in towns with less than 10,000 persons or in bling Commission) is the only licensing body in the gambling industry. proximity (500 m or closer) to educational institutions, in residential It shares an oversight role with the State Tax Service of Ukraine. buildings, etc; The Gambling Commission also issues so-called B2B (servicing) • One license allows installation of up to 250 slot machines. licenses to gambling software providers. Betting The Gambling Law provides for state control and supervision of Betting activities can be carried out both online and offline in betthe gambling market through the introduction of the State Online Mon- ting shops via a single license. itoring System, a set of programmes used to monitor the activities of Betting shops: gambling operators in real time. All operators shall connect their online • may be located in 3-star to 5-star hotels with 50 or more rooms systems to it. The system is currently under design and the Gambling (in the case of Kyiv), or 25 and more rooms in other cases; Commission expects to launch it sometime in 2021. • have a minimum area of 50 m²; • Betting shops may also be placed at horse racing tracks.

Alina Plyushch

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SAYENKO KHARENKO Sayenko Kharenko has been actively involved in development of the new gambling legislation in Ukraine since 2014. The firm`s experts are directly engaged in the new regulatory regime evolvement for the Ukrainian gambling market. Sayenko Kharenko has unrivaled experience in guiding gambling businesses through the intricacies of the Ukrainian gambling market, beyond the reach of competition.

Address: 10 Muzeyny Provulok, Kyiv, 01001, Ukraine Tel.: +380 44 499 6000; +380 44 389 5000

Online verticals: online betting, online casinos and online poker Requirements made of online gambling are unified across all verticals. The main issues to consider are certification of the online systems of gambling operators and the location of their hardware used to provide services of the online system. Online systems shall pass a certification process against technical regulations. As of March 2021, such technical regulations are under development. Before adopting the new ones, the market opted for certification of online systems for conformity with legacy rules that were applicable before the Gambling Law. Please note that the Gambling Commission does not require gambling operators to have their games certified independently. We expect major developments in this area in 2021 with the adoption of technical regulations developed for gambling activities only and emergence of international certification brands in Ukraine. The Gambling Law requires that the gambling operators use hardware based in Ukraine to maintain and operate their online systems. It is an obvious obstacle for foreign gambling operators considering entering Ukraine. The consolidated market position is that these norms will be modified by changing the provisions of The Gambling Law.

B2B Licenses

The firm`s clients represent various gambling verticals, including the top world gambling providers and major Ukrainian betting and lottery operators.

Fax: +380 44 499 6250 E-mail: info@sk.ua Web-site: www.sk.ua

• Online casinos — UAH 39 million (USD 1.4 million); • Betting — UAH 180 million (USD 6.4 million) and UAH 180 k (USD 6.4 k) annually per betting shop; • Slot machine halls — UAH 45 million (USD 1.6 million) and UAH 36 k (USD 1.2 k) annually per slot machine; • Online poker — UAH 30 million (USD 1.1 million); • B2B license — UAH 1.8 million (USD 64 k). In addition, casino operators pay the following annual equipment license fees: • gaming table with roulette wheel UAH 1,000,000 (USD 38,000); • gaming table UAH 540,000 (USD 19,000); • slot machine UAH 36,000 (USD 1,200). Please note that the amount of the annual tranche of a license fee for an online casino license, betting license and annual payment for a slot machine is trebled until introduction of the state monitoring system. It is worth noting that The Gambling Senior Associate, Sayenko Kharenko Law provides for so-called ‘investment liDmytro Hotsyn specialises in gambling law, M&A, pricenses’. Holders of such licenses may opervate wealth management and international sanctions. ate a casino situated in a newly-constructed Dmytro has been participating in the development 5-star hotel with 200 rooms (in the case of of new gambling legislation in Ukraine since 2016. Kyiv) or 150 rooms (in other cases) and enHe is a member of the gambling desk at Sayenko joy a 10-year grace period without payment Kharenko and specialises in creating joint ventures of license fees. It is expected that these libetween international gaming brands and local marcenses will boost interest in developing cerket participants. tain regions and will bring new partnerships between leading casino operators and local developers to bring a world-class experience into one of the newest casinos in Europe. As of March 2021, the Gambling Commission works on implementation of the mechanics for investment licenses.

Dmytro Hotsyn

The Gambling Law introduced B2B licenses (or software licenses) to regulate provision of software-related services to gambling operators. Pursuant to The Gambling Law, resident business entities providing software services shall obtain a B2B license. Despite a vague legal concept, it may be expected that introduction of B2B licenses will contribute to the development of new software solutions (software for fantasy sports, live casinos, etc.) and provide additional protection for those businesses engaged in the development of IT/software. Licensed software providers may provide their services to both Ukrainian and foreign clients.

License Fees Gambling operators may engage in one or several gambling verticals once they obtain the relevant licenses. The license term for each license is five years. Licenses may be reissued freely, subject to the gambling operator’s compliance with the Licensing Conditions. License fees are based on the amount of the minimum wage as of 1 January of the year in which a license was granted and payable in equal tranches during the license term. It means that a license fee for a license issued in 2021 is fixed until expiry of the 5-year term and will not be affected by any increase in the minimum wage. The entire 5-year license fees for the year 2021 are as follows: • Land-based casinos — UAH 360 million (USD 12.9 million) for casinos in Kyiv and UAH 180 million (USD 6.4 million) in other cases;

Taxation of Gambling The legacy tax regime that existed before The Gambling Law provides for a combination of gross gambling revenue tax (GGR) and corporate income tax (CIT). The GGR tax does not reduce profit before tax for CIT purposes. Several draft laws were submitted to the Ukrainian Parliament to update this taxation scheme. In particular, Draft Law 2713-d (recommended by the Ukrainian Parliament’s Committee on Finance, Tax and Customs Policy) provides for the following tax rates: • GGR — 10% rate across all verticals; • CIT — 18% rate (amounts paid as GGR reduce the profit before tax for CIT purposes). It would also abolish the trebling of annual license fees. As to personal taxation, gambling wins above eight minimum wages will be taxed at 19.5% of the excess. It is expected that the Ukrainian Parliament will adopt an updated taxation regime in Q1 2021.

Following Trends The gambling market in Ukraine used to be known far beyond its borders. It is now reappearing on the radars of major international operators. As greenfield as it is now, Ukraine may become an outstanding jurisdiction to test the newest products on a 40-million people market in open communication with the regulator and the market.

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HoReCa

Restaurant Business: Legal Tips to Start and Scale Up It has been a long-popular dream time, business owners need to know about for certain entrepreneurs to open resthe importance of competent corporate taurants, pizzerias, cafés, coffee shops structuring which, among other things, or confectioneries. This goal is becomenables you to reduce the tax burden on ing more and more real every year. And business. this is not surprising, because hospi3. Proper paperwork for the restaurant: tality is written in the genetic code of Here you need to pay attention to Ukrainians. such key points as the absence of encumEven severe quarantine restrictions brances on the premises, the purpose of in connection with the Covid-19 panthe premises, the lease term, whether the demic were not able to destroy such a premises or part of them is a cultural heritcherished dream, only delaying it for age site, and so on. certain restaurateurs. Likewise, over In addition, you should also issue docthe past year, they managed to open uments for the sign of the catering estabmany new catering establishments. For lishment and the permit for the summer example, our client, the burger network platform in the event of its presence sepYudgin Burger, has opened 8 new burger arately. outlets in the last 18 months. So, how do you start a restaurant 4. Registration of capacities of market business to make it successful and profoperators: itable? When do you need to scale and Law of Ukraine № 771/97 provides which way should you choose? It is imfor the obligation to register the capacportant to answer these questions from ities of the market operator before the the views of different restaurant market Managing Partner, MK Legal Service, catering establishment is opened. If you players. The tasks for a novice restaurafail to register them before an inspection teur and the seasoned restaurant owner Attorney finds it, a fine of UAH 66,000 for sole provary, requiring different strategies and prietors and UAH 120,000 for legal entitactics and, therefore, the diverse apties may be imposed. proach of legal support. There are several ways to start a catering business. The first op5. Introduction of HACCP quality control standards: tion is more or less obvious: you can open a catering establishment Law of Ukraine No. 771/97 obliges all market operators to deunder a new unique brand. The second one requires you to join as a partner in an existing velop and apply these standards, train staff and appoint personnel restaurant or a chain by acquiring a stake in the company or by pur- responsible for their observance. In the event of violation of this requirement, fines of UAH 90,000 for sole proprietors and UAH 180,000 chasing a restaurant franchise. for legal entities are expected.

Maksym Kurochko

Legal Aspects of Opening a New Catering Establishment

Opening a catering establishment under a new brand is the most suitable way for those who want to have complete independence in management and absolute freedom to implement their own business concepts. On the other hand, it is both the riskiest and the longest one in terms of return on investment. After all, you need to start from scratch: legalize the business, look for suitable premises, recruit staff, establish relations with suppliers, organize the brand’s promotion, and many other different business processes. Besides, there is no guarantee that the newly-built restaurant will attract visitors, become popular and profitable. We have prepared a list of mandatory steps required for the legal support of the opening of a new catering establishment and its safe and lawful operation:

1. Registration of a legal entity: The most common forms for this industry are sole proprietorship (group II or III single tax payers) and limited liability companies (if annual income exceeds the limits for a sole proprietorship or the owner plans to sell alcoholic beverages other than low-alcohol drinks).

2. Choosing a tax system: The Tax Code of Ukraine provides for several options: • General taxation system (suitable for LLC and sole proprietorship), • Simplified taxation system in the form of a single tax payer under group II (suitable only for sole proprietors) or a single tax payer under group III (suitable for both LLCs and sole proprietors). The best option should be chosen depending on planned annual income, the number of employees, and other factors. At the same

6. Registration of fire declaration: The Civil Protection Code of Ukraine allows a real estate object to be used only after registration of the declaration of conformity of material and technical base to requirements of the legislation on fire safety. In case of the absence of such a declaration, fines of up to UAH 34,000 are imposed.

7. Registration of cash register: This requirement is provided by Law of Ukraine No. 481/95 for the sale of alcoholic beverages and tobacco products. Liability for its violation is a fine in the amount of 100% of the value of goods sold.

8. Obtaining the necessary licenses: The sale of alcohol and tobacco products is legal only with the prior receipt of appropriate licenses.

9. Proper registration of relations with employees and contractors: The current legislation of Ukraine provides for significant financial sanctions for violations of labor standards and accordingly, the status of each worker of a catering establishment must be properly formalized via employment or civil contracts. For clear and coordinated work of a restaurant or café, it is necessary to fix all the essential conditions of cooperation in written agreements.

10. Protection of intellectual property rights: You should protect your catering business from plagiarism and other misuses of the brand, trade names, gastronomic concepts, and other unique designs by registering a trademark, copyright, and obtaining a patent for a utility model or innovation proposal.

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MK LEGAL SERVICE MK Legal Service is a law firm with 10 years of experience in supporting market leaders in the field of IT, TMT, and HoReCa, as well as protecting and advising companies and private clients on investment, corporate security and structuring, and tax audits. MK Legal Service is the main business partner of our clients. And this is not only our slogan but the basic principle and essence of our work. Our company originates from a business and was established by a group of corporate lawyers. That is why our mission is not limited to providing quality legal services. Thanks to our in-house experience, we know what system companies need today, so we support them comprehensively by creating additional partner values for them. We manage a client’s business risks by forecasting, identifying, and minimizing them, so MK Legal Service lawyers are ready to respond quickly and answer questions 24 hours a day, 7 days a week. Having thoroughly researched the needs of our clients, we legalize ambitious business ideas and solve problems with minimum resources and maximum results.

Address: 37V Vasylkivska Street, Kyiv, 03022, Ukraine

In our support of businesses in the HoReCa and TMT industries, we maintain and strengthen their corporate structure and asset security system. In 2020, the team at MK Legal Service supported international business structuring and the successful entry of a Ukrainian TMT leader into the global arena. Our other important set of projects involved providing anti-crisis actions and securing not only survival but rapid scaling, developing franchising models and attracting investments of 4 restaurant groups and individual restaurants despite quarantine restrictions. MK Legal Service’s expertise is highly appreciated by the leading Ukrainian ranking 50 Leading Law Firms of Ukraine 2020 compiled by Yuridicheskaya Practika Publishing. In addition, the Market Leaders. Ranking of Law Companies of Ukraine study by Yurydychna Gazeta Newspaper noted the company as TOP-1 in IT law and TMT in Group 2 in 2020.

Tel.: +380 93 317 1020 E-mail: mk@mklegalservice.com Web-site: www.mklegalservice.com

Partnership as an Effective Way to Invest and Scale a Restaurant Business If you don’t have enough skills and desire to build a business from scratch, a potential owner can become a partner of an existing catering establishment or a network of well-known and successful brands. Popular establishments often look to attract additional investment resources, primarily to scale and generate additional profits. One way to set up a partnership is to acquire a stake in a new establishment of a popular brand. As a rule, in the restaurant business, such a partnership is purely financial, as there is no benefit for experienced owners and it is very risky to delegate management to new investors. However, only a financial partnership requires a detailed examination of possible risks for both parties and, most importantly, the written confirmation of all agreements in writing. After all, partnerships involve many compromises, and in the event of a dispute, written contractual obligations will always prevail over oral statements. Legal support of investments in Ukraine includes a wide range of agreements. The choice of the most suitable contract depends on various factors: the type of investment, the corporate structure of the business, the form of investment, the rights and responsibilities of partners, as well as the goals of all parties. For example, investing in a non-structured business will require additional preliminary agreements and protocols of intent, while acquiring corporate rights in an existing business provides for the conclusion of a share purchase agreement and a corporate agreement. So, for a partnership in a restaurant business to be successful, you need to perform certain mandatory actions: • Carry out a detailed legal inspection of the investment object and partners; • Analyze the corporate structure of the business and, if necessary, carry out corporate structuring, which will provide the investor with control over the investment and the project as a whole, and the owner with smooth management and operational activities; • Develop a package of agreements that will regulate the smallest details of the partnership and areas of responsibility of the parties; • Carry out investment transactions in strict accordance with the law, which will provide the future evidence base and legal position in case of disputes related to investments. Most of our clients in the HoReCa industry invite investors as partners, but the most common and fastest way to scale a catering business is through franchising.

Franchising in the Restaurant Business: Popular, Fast, Efficient A franchise is a set of rights to use the brand, commercial experience, and business reputation, which are transferred by one party (franchisor) to the other party (franchisee) for a fee and under certain conditions specified in the franchise agreement. The process itself is called franchising or, as defined in Ukrainian law, a commercial concession. In essence, franchising is a special type of partnership that benefits both parties. Thus, for the owner of a catering establishment, the opening of a franchise provides the following advantages:

• Fast business scaling with a minimal investment; • Receiving additional income in the form of a lump sum, royalties, and advertising fees; • Saving overhead costs compared to opening a new facility on your own. An investor buying a franchise gets the following benefits: • Minimizing the risk of business failure, because the franchisee receives a successful business model, a popular brand, and, accordingly, a wide target audience of potential visitors at the very beginning. • Free consulting and technical assistance from an experienced team of the franchisor: the turnkey development plan of an establishment, personnel management, detailed description of all work processes, etc.; • Discounts and bonuses from franchisor suppliers; the franchisor can also act as a supplier or train staff and help with the restaurant’s test launch. However, along with the benefits, there are, as always, risks. For example, a franchisor must constantly control high-quality standards and the solvency of the franchisee. The latter should check for hidden payments and restrictions on management. In addition, the opening of a catering establishment under a franchise, as well as under a new brand, implies the need to take almost all the above-mentioned steps. It is simply unrealistic for a potential restaurant business owner to check all the risks and comply with all legal requirements on his/ her own, because commercial issues are always the priority. The solution comes with an experienced legal advisor who has expertise in the HoReCa industry.

An Experienced Legal Advisor is the Key to Successful Business Start and Expansion We would like to share our insights coming from the practice of full legal support for HoReCa industry leaders and newcomers over the past 10 years. Systematic legal support for both the launch of a catering establishment and its further operation and scaling provides guarantees for owners and investors protection of their interests at all stages in relations with all counterparties. In particular, an experienced legal advisor can ensure: • Assessment of the legal risks of a specific business model and business plans; • Development of a scaling strategy in the HoReCa market; • Creation of an optimal corporate model to attract investment; • Support for the turnkey opening of catering establishments; • Receipt of the necessary permits and protection of intellectual property; • Full support of the launch of the franchise business model; • Support of inspections by the State Service of Ukraine on Food Safety and Consumer Protection and other state authorities; • Dispute resolution and protection of interests in court. So plan the creation and operation of your restaurant business wisely, as it is better to rely on an experienced legal partner, who can deal with all regulations and paperwork and let you focus on business development.

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Human Rights

Impact of Human Rights on Arbitral Proceedings During the second half of the XX century, human rights extended their influence on various legal areas previously seen as completely separate and independent. One of these areas was commercial arbitration, which used to be regarded as entirely unrelated to human rights due to its economic and contractual nature. The perception of the relationship between these two systems started changing in the second half of the 1980s, and in the last three decades, the case law of the European Court of Human Rights has been showing that arbitral proceedings are clearly affected by fundamental legal safeguards laid down in the European Convention on Human Rights. This article is an attempt to make a short overview of the last findings of the European Court of Human Rights based in Strasbourg, which apply to arbitral proceedings standards, particularly to the independency and impartiality of arbitrators. It would also be appropriate to first provide a brief introduction to its general approach to the intersection between human rights and arbitration.

Ivan Vashchynets Partner, ARBITRADE

European Convention on Human Rights Applicable to Arbitration Most arbitration-related cases before the European Court of Human Rights concerned an alleged violation of Article 6(1) “Right to a fair trial” during arbitration proceedings. Although in these cases other articles of the Convention are also referred to, in particular Article 13 “Right to an effective remedy” and Article 1 of Protocol 1 “Protection of property”, Article 6(1) is the most frequently invoked by applicants to the ECtHR. The civil limb of the article provides: “in the determination of his civil rights and obligations […], everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law”. According to the interpretation of the ECtHR, based on its approach to the Convention as “a living instrument”, Article 6(1) contains certain fundamental procedural guarantees, including the right to access to an independent and impartial tribunal, the right to a fair and public hearing, the right to a judgment within a reasonable time, etc. At present, it is undisputed that the European Convention on Human Rights is applicable to arbitration. As the European Commission of Human Rights admitted in one of its earliest arbitration-related cases, namely Bramelid et Malmström v. Sweden, the arbitration procedure did have a direct bearing on private civil rights and obligations and, accordingly, concerned civil rights and obligations within the meaning of Article 6, paragraph 1. In the often-cited case Lithgow and Others v. the United Kingdom, the ECtHR stated that access to a court under Article 6(1) of the Convention is not necessarily to be understood as access to a court of law of the classic kind, integrated within the standard judicial machinery of the country; thus, a “tribunal” may be a body set up to determine a limited number of specific issues, provided always that it offers the appropriate guarantees. Later, the ECtHR added that Article 6 does not preclude the setting up of arbitration tribunals in order to settle disputes between private entities. Contractual arbitration agreements present undeniable advantages for the individual concerned as well as for the administration of justice.

Different Approaches to Compulsory and Voluntary Arbitration While recognizing the establishment of arbitral tribunals to be in line with the provisions of the Convention, the ECtHR draws a clear distinction between compulsory, in the sense of being re-

quired by law, and voluntary arbitration. In the former case an arbitration board must offer the guarantees set out in Article 6(1). At the same time, it should be remembered that the right of access to state courts secured by the said article is not absolute, but may be subject to limitations. These are permitted by implication, since the right of access by its very nature calls for regulation by the contracting states. In this respect, they enjoy a certain margin of appreciation, although the final decision as to the observance of the Convention’s requirements rests with the court itself. It must be satisfied that the limitations applied do not restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. Furthermore, a limitation will not be compatible with Article 6(1) if it does not pursue a legitimate aim and if there is no reasonable relationship of proportionality between the means employed and the aim sought to be achieved. Therefore, compulsory arbitration may be required by national laws provided that it pursues a legitimate aim and there is reasonable proportionality between the aim and the means employed. Anyway, local legislation on compulsory arbitration cannot impair the essence of the right of access to the courts, otherwise it is not in line with Article 6(1) of the Convention. However, the situation is much more complicated when parties have voluntarily entered into an arbitration agreement. In the landmark Tabbane v. Switzerland case, the ECtHR found that no real issue arises under Article 6 in the case of voluntary arbitration to which consent has been freely given. The parties to a dispute are free to take certain disagreements arising under a contract to a body other than an ordinary court of law. By signing an arbitration clause, the parties voluntarily waive certain rights secured by the Convention. Such a waiver is not incompatible with the Convention provided it is established in a free, lawful and unequivocal manner. That last three requirements have been consistently determined by the Court as mandatory. As early as in 1962, in X. v. the Federal Republic of Germany, the European Commission of Human Rights underlined that if a party signed the arbitration clause under constraint, it is regarded to be contrary to the Convention. This condition is closely related to the condition of unequivocality. In much more recent case, Suda v. Czech Republic, the applicant argued that he was forced to submit his claims to an arbitral tribunal which he had not consented to, due to the arbitration agreement concluded between the company, of which the minority shareholder was the applicant, and the main shareholder of the same company. Having found a violation of Article 6(1), the Court indicated that the requirements of absence of constraint and unequivocality were not satisfied. The condition of lawfulness has not been elaborated in the case law of the ECtHR. However, it can be ascertained that this condition relates to the requirements imposed by national laws on arbitration agreements, including the subject matter of disputes which can be submitted to arbitration. In the recent and very prominent Mutu and Pechstein v. Switzerland case, the Court concluded that the arbitration proceedings had to afford the safeguards provided for under Article 6(1) of the Convention, since one of the applicants had not freely and unequivocally accepted the arbitration clause. Consequently, if the three requirements of voluntary arbitration are not met, such an arbitration will be viewed as compulsory with respect to all the guarantees set out in Article 6(1).

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Address: Illynsky Business Center, 8 Illynska, Entrance No. 11, Kyiv, 04070, Ukraine

Tel.: +38 044 585 0947; Fax: +38 044 585 0948 E-mail: info@arbitrade.ua Web-site: www.arbitrade.ua

Waivable Rights under Article 6(1) of the Convention Having mentioned in Tabbane v. Switzerland “certain rights” which the parties of the voluntary arbitration can waive, the Court did not clearly indicate these rights. They, nonetheless, can be deduced from its case law. First of all, by signing the arbitration agreement, the parties waive the right to bring their dispute before an ordinary court. In Lithgow and Others v. the United Kingdom, the former Commission held that the right of access to the courts secured by Article 6 para. 1 is not absolute but may be subject to limitations. In addition, they can waive the right to a public hearing. As noted in Suovaniemi and Others v. Finland, this right can be validly waived even in court proceedings. So, it is not surprising that the same can be done in arbitration, the essence of which is confidentiality. Finally, since the contracting states have not been responsible under the Convention for the length of the arbitration proceedings, its parties waive the right to a trial within a reasonable period of time. Nonetheless, this right cannot be waived in relation to the control by state courts over arbitration proceedings.

Most Fundamental Rights Cannot Be Waived The rights under Article 6(1) which are the most fundamental in their nature cannot be waived. One of these rights is the right to a fair trial. As repeatedly stressed by the Court, this right must be interpreted in the light of the Preamble to the Convention, which declares, among other things, the rule of law to be part of the common heritage of the Contracting States. A fair trial is an essential element of the rule of law. The right to a fair hearing is even considered part of procedural public policy. The second non-waivable right under Article 6(1) of the Convention is the right to an independent and impartial tribunal. Although the Court has not directly determined the nature of this right, its case law indicates that the parties cannot waive it when concluding an arbitration agreement. It should also be borne in mind that the right to an independent and impartial tribunal is not absolutely unwaivable. It only cannot be waived in advance. The waiver can be done after the violation of the right occurs. For example, in Suovaniemi and Others v. Finland the Court held that the applicants had lost their right to invoke the arbitrator’s lack of impartiality as a ground for having the arbitral award quashed, since they had approved him as an arbitrator despite their being aware of the grounds for challenging him and thus irreversibly waived their right to an impartial judge within the meaning of Article 6.

Justice Must Be Seen to Be Done This right was the subject of the very recent judgement of 20 May 2021 in BEG S.P.A. v. Italy. In this case, the applicant, an Italian company, alleged that the lack of independence and impartiality of one of the arbitrators constituted a violation of the applicant’s right to an impartial and independent arbitration under Article 6(1) of the Convention. In the judgment, the Court recalled well-established case law on application of Article 6(1) of the Convention to arbitration proceedings. Thus, it was reiterated that in order to ascertain whether a tribunal can

be considered “independent” for the purposes of Article 6(1), regard must be had, inter alia, to the manner of appointment of its members and their term of office, the existence of safeguards against outside pressures and the question as to whether it presents an appearance of independence. A tribunal or a tribunal member must be independent vis-à-vis the executive, Parliament, as well as the parties involved. In order to determine whether a tribunal can be considered to be independent as required by Article 6, appearances may also be of importance. The ECtHR also stated that impartiality normally denotes the absence of prejudice or bias. According to the Court’s settled case law, for the purposes of Article 6(1) the existence of impartiality must be determined according to subjective and objective tests. The former is based on ascertaining the personal convictions and conduct of a particular judge, by establishing whether he showed any personal prejudice or partiality in a given case. The latter is based on determining whether the court offered, in particular through its composition, guarantees sufficient to exclude any legitimate doubt about its impartiality. Having applied the said principles to the case, the Court noted that the arbitrator whose impartiality was questioned had not expressly indicated the absence of reasons that might have had an impact on his/her impartiality and independence, but simply accepted the appointment. The ECtHR agreed in this regard with the applicant’s argument that, in the absence of an explicit negative disclosure, one could legitimately presume that such relationships and/or economic interests did not exist. As to the subjective test of impartiality, no evidence of the arbitrator’s personal prejudice or bias was found. With regard to the objective test, the Court recalled the adage “justice must not only be done, it must also be seen to be done”. Taking into consideration the arbitrator’s senior role in the parent company of the applicant’s opponent in the arbitration as well as his legal representation of this company in domestic courts as counsel, the ECtHR expressed a rather interesting view, namely that the arbitrator’s impartiality was capable of being, or at least appearing, to be open to doubt and that the applicant’s fears in this respect can be considered reasonable and objectively justified. Therefore, the Court found a violation of Article 6(1) of the Convention.

Strasbourg Court’s Case Law Sets Standards of Arbitral Proceedings To sum up, since the second half of the 1980s, the fundamental rights defined in the European Convention of Human Rights have been increasingly influencing arbitration. As the Strasbourg Court has consistently made clear, all the safeguards provided for under Article 6(1) of the Convention must be guaranteed during arbitral proceedings, which is compulsory according to national legislation. If one freely agreed to refer one’s dispute to the consideration of an arbitral tribunal, at least the right to a fair hearing and the right to an independent and impartial tribunal need to be ensured in the course of the arbitration proceedings. The evolving case law of the European Court of Human Rights shows that even a reasonable doubt about the independency or impartiality of an arbitrator can be considered a violation of Article 6(1) of the Convention.

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Industrial Parks

Legislative Framework of Industrial Parks in Ukraine: Quo Vadis? According to the United Nations Industrial Development Organization, the development of industrial parks can stimulate innovation, promote investment and foster industrial development. No wonder that over the last few years Ukraine has considered industrial parks as one of the most effective tools for attracting investment and boosting its further industrial development. Ukraine has developed a certain legislative framework, largely based around Law of Ukraine No. 5018-VI On Industrial Parks of 21 June 2012 and promoted the establishment of industrial parks. Now, almost 10 years after the Industrial Parks Law was adopted, there are 49 industrial parks registered in Ukraine, most of them in Kyiv Region and Western Ukraine. However, only 8 industrial parks actually operate. The reasons behind the lack of operating industrial parks in Ukraine are further analyzed in this article. We also focus on exploring the requirements for establishing an industrial park and the prospects of investing in Ukraine via the establishment of industrial parks.

Land Plot The establishment and development of an industrial park requires a land plot. The Industrial Parks Law provides that an industrial park can be established on state, municipal or private land plots. Such a land plot must be designated as industrial land and have a total area of at least 15 ha and no more than 700 ha. The Initiator or the Managing Company owning or leasing a land plot where an industrial park is located can transfer such a land plot into a lease (or a sublease) to the Member(s). The Member(s) should use the land plot to construct and maintain immovable property necessary to perform its business activity within an industrial park.

Infrastructure

Andriy Olenyuk Partner, EVERLEGAL

Requirements for Establishing an Industrial Park The Industrial Parks Law identifies an industrial park as a land plot equipped with relevant infrastructure where its stakeholders can perform business activity in process manufacturing, science and research, and information and telecommunications. On the basis of this definition, the essential elements in any industrial park are its stakeholders, land plot and infrastructure. These three elements are typical for the majority of industrial parks in most countries.

Stakeholders The most common approach is that there are four key stakeholders in an industrial park: the regulator, developer, operator and the owner. In Ukraine, this approach of four stakeholders is also preserved. In particular, the Industrial Parks Law provides for the following stakeholders in the industrial park: • The regulator is the Ministry of Economy of Ukraine. It is responsible for the governance of all industrial parks, their registration and the monitoring of their activities, etc. • The developer is the Initiator of establishment of an industrial park. It is a state or municipal body, legal entity or individual owning or using a land plot(s) where an industrial park will be located. The Initiator also develops the concept of an industrial park prior to its establishment. The concept provides for the purpose of establishing an industrial park, its development plan, location, term of establishment, requirements for its members, etc. • The operator is the Managing Company of the industrial park in question. It is a legal entity selected by the initiator and responsible for managing, arranging and maintaining an industrial park (Managing Company). The Managing Company enters into an agreement on the establishment and operation of an industrial park with the Initiator. • The owner is a Member of an industrial park. It is a legal entity or private entrepreneur performing business activity within an industrial park under an agreement with the Managing Company (Member).

The infrastructure for the arrangement and operation of industrial parks can be divided into two groups: basic infrastructure and specific infrastructure. • Basic infrastructure is necessary for the arrangement and operation of any industrial park. It is mainly engineering and transportation infrastructure (e.g., access routes, utilities like electricity, water and gas, waste management). This kind of infrastructure is critical from the very beginning of establishing an industrial park. For example, suppose it is hardly likely to set up essential utilities within an industrial park or have proper access routes. In that case, it may prevent potential investors from visiting and exploring such an industrial park as a promising investment asset. • Specific infrastructure may vary from one industrial park to another, depending on the business activities performed in the industrial park under its concept. It is common to establish R&D centers, incubation hubs, logistic centers, factories, laboratories and office premises within industrial parks. In Ukraine, the infrastructure of industrial parks is a weak point. Along with other factors outlined below, they constitute the main reasons for the lack of operational industrial parks.

Lack of Operating Industrial Parks in Ukraine The Initiators and Managing Companies struggle with procuring the proper infrastructure in industrial parks. According to the Ministry of Economy of Ukraine, there is no clear regulation at legislative level on the connection of industrial parks to utilities, particularly — electricity networks. Besides, the Initiators and Managing Companies do not have enough state financing to ensure the proper functioning of basic infrastructure. Another reason behind the lack of operational industrial parks relates to existing state incentives aimed at the financial support of industrial parks. The Industrial Parks Law provides that the Initiator, Managing Company and Members are entitled to specific incentives. These include state incentives (e.g., funding from a state or local budget for the development of industrial parks, provision of interest-free loans, etc.) and tax incentives (e.g., exemption of import duties when importing the equipment necessary to develop industrial parks and perform business activity on their territory). However, in fact, legisla-

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tive provisions are drafted so that there is a right to obtain state incentives, but there is no legal mechanism to enforce this right. Consequently, existing industrial parks do not operate as they lack the funds and support necessary for their development and maintenance. On top of that, these issues demonstrate that the conditions for establishing industrial parks in Ukraine are not quite attractive. Still, Ukraine recognizes issues related to the lack of operational industrial parks. It is actively working to resolve them and establish conditions for attracting investment in this direction.

Prospects of Investing in Ukraine via the Establishment of Industrial Parks Recent legislative developments relating to industrial parks aim to resolve the issue of non-operational industrial

Lidiia Vatutina Associate, EVERLEGAL

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parties and boost the activity of industrial parks in Ukraine. For example, the Ukrainian Parliament recently registered Draft Law No. 4416-1. It provides that the procedure for granting specific state incentives for industrial parks should be determined in separate legislative acts that are yet to be drafted. Regardless of the lack of operational industrial parks, Ukraine has great potential to develop a powerful network of industrial parks and attract foreign investors to its economy. The country is rich with resources and human capital and has many highly developing industries, such as manufacturing and infrastructure, IT, agriculture and energy. It has also been confirmed that several significant players are now entering the Ukrainian market to establish industrial parks for various purposes — from constructing logistics complexes and processing plants to office and commercial premises.

Infrastructure

Road Construction in Ukraine — PPP vs EPC Roads have been an old wound • the concession term should be between in the side of Ukrainian infrastructure 10 and 50 years (the “ordinary” concesfor quite a long time. According to the sion term is 5+ years); EBA’s Infrastructure Index 20201, the av• for toll road concession, an alternative erage mark on the state of roads is 2.6 toll-free road should be made available (out of 5), which means that they are in by the government throughout the lifea “less than average” condition to say time of the concession; and the least. Besides, only 2% of respond• roadside facilities may be owned and ents argued that our roads are in “good” used by the concessionaire in order to shape. receive additional income. Being aware of this issue, the Another important note is that the govgovernment has made substantial aternment limits the tolls. Still, they are mosttempts to improve the state of roads ly the same as in the EU (e.g., EUR 0.023 through various programs and initiaper km for cars weighing up to 3.5 tonnes). tives. The most significant and widely As mentioned above, the Road PPP known among them are the Road PPP consists of 3 phases. Phase 1 of the Road program2 and the Big Construction proPPP covers six segments of highways gram3. Both programs aim to resolve which are planned to be granted in concesthe everlasting problem of bad roads, sion by the end of 2023, namely: although by different means. 1. M-29/M-04/M-18 — Kharkiv — DniThe Road PPP aims to attract pro — Zaporizhzhya — total length of private sector investment in the devel276 km — initial CAPEX around USD opment of roads under the public-pri370 mln; vate partnership (PPP) framework. The 2. M-03 — Boryspil — Poltava — 292 km — scope of the Road PPP covers over USD 180 mln; 4,500 km of highways, which should Partner, Head of the Real Estate and 3. M-14 — Kherson — Mykolaiv — 64 km — be granted as separate segments in USD 310 mln; concession, and consists of 3 phases Infrastructure practice, AVELLUM 4. M-06 — Kyiv — Zhytomyr — Rivne — spread over 2021 — 2030. The pilot ten308 km — USD 370 mln; ders for the first few segments of high5. M-07/M-19 — Yagodyn — Kovel — ways are expected to be held in late 2021. Lutsk — 146 km — USD 240 mln; and On the other end, there is the Big Construction program, which 6. M-04/H-11 — Dnipro — Kryvyi Rih — Mykolaiv — 312 km — USD envisages construction and repairs of several thousand kilometres of 290 mln. roads of state and municipal importance. Such works are performed These are brownfield projects — new construction takes only by the winners of public procurement tenders held on the ProZor- 14 km combined from all of them. ro platform by the State Agency of Automobile Roads of Ukraine These six concessions will be based on availability payments (Ukravtodor) under short-term quasi-EPC contracts. instead of tolls. The sum of availability payments received by the The key difference between the Road PPP and Big Construc- concessionaire will depend on compliance with the performance retion lies in their approaches. Under the PPP framework, the investor quirements set out in the concession agreement. Such requirements receives assets in management with an obligation to carry out cer- may include road availability, its readiness for winter/summer seatain repairs or upgrades, maintain assets in the necessary condition, sons, etc. and provide designated services. The state receives the concession The government’s choice to proceed with availability payments payments, and the investor covers its expenses from availability pay- may be justified by successful examples: upgrading and O&M of ments or tolls. BR116 highway in Brazil (633 km), construction and O&M of Ruta del Under an EPC contract, the investor only performs the agreed Sol Motorway in Colombia (1,071 km), construction and O&M of Alscope of works within the required timeline and receives guaranteed maty Ring Road in Kazakhstan (66 km), etc. compensation. While EPC contracts provide more flexibility and are Availability payments will be paid from the State Road Fund, simpler, the PPP has better risk allocation instruments and is viable for which also finances construction and maintenance of roads, debt serlarge-scale projects. vice payments related to the development and maintenance of highways, and investment in developing road safety measures. In its turn, the State Road Fund is funded by: First Steps towards Road Concessions 1. excise taxes and import duties on vehicles and petrol; The PPP, or rather the concession framework in Ukraine, has 2. tolls for passage through toll roads; made a great leap over the last few years. Following the adoption of 3. certain administrative fines; and the new Law On Concession4, concession legislation became compli4. concession payments from road concessions.5 ant with best EU practices, introduced a new transparent concessionTaking into consideration the fact that the World Bank Group supaire selection procedure, and provided additional guarantees for invesports the Road PPP, upcoming tenders have every chance of being tors and lenders (e.g., direct agreements with step-in rights, free choice successful and becoming a new source of pride for the government. of applicable law and dispute resolution mechanism). Still, there are some gaps in the laws which prevent the start The roads concession under the Concession Law contains cerof the road concession, and the key issue is the absence of a legal tain key points that must be kept in mind: framework for long-term budgetary obligations. Two alternative bills • only public roads may be granted in concession; were registered in Parliament to resolve this issue.6 However, neither of them has been put to the vote in Parliament as of now.7

Maksym Maksymenko

The EBA presentation Infrastructure Index 2020 is available in Ukrainian at: https://eba.com.ua/ wp-content/uploads/2020/12/Infrastructure_2020.pdf.

The Road PPP program website is available at: https://roadppp.in.ua/en/.

The Big Construction program website is available in Ukrainian at: https://bigbud.kmu.gov.ua/#about.

Law of Ukraine On Concession, dated 3 October 2019, No. 155-IX.

Item 1 of Article 242(2) of Budget Code of Ukraine, dated 8 July 2010, No. 2456-VI.

Bills Nos. 5090 and 5090-1 On Amendments to the Budget Code of Ukraine on Settlement of Budget Relations During Implementation of Agreements Concluded under Public-Private Partnership Framework, Including Concession Agreements.

The article was prepared on 21 May 2021.

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Speaking of toll roads, in March 2021 Ukravtodor signed a memorandum with a private Ukrainian company for developing a feasibility study on the concession of the Krakovets-Brody-Rivne highway. Signing the memorandum is the first step towards constructing the first toll road in Ukraine, which is expected to be built in the next few years.

Size of Impact of Big Construction The Big Construction is an extensive program сovering the maintenance of roads and repairs of schools, sports venues, and hospitals. However, roads are both the key marketing point and a major piece of the Big Construction. Ukravtodor regularly holds its tenders for the reconstruction and repairs of roads on the ProZorro platform. ProZorro is a state-owned platform that offers a transparent, competitive, Associate, AVELLUM and simple procedure for the public procurement of various goods and services. To participate and win the tender, the investor must meet the requirements of the tender documentation and give the best price offer during the auction stage. The agreements signed with the winners of Ukravtodor’s tenders are short-term construction contracts (varying from several weeks to 10–12 months). The scope varies from the reconstruction of long sections of highways to minor repairs of several kilometres of regional roads. The cost of road works per km has reportedly increased since the beginning of the Big Construction program. In 2020 average prices per 1 km were as follows8: 1. new construction — USD 3.26 mln; 2. reconstruction — USD 1.38 mln; 3. capital repairs — USD 760,000; and 4. minor repairs — USD 391,000.9

Rostyslav Mushka

USD equivalents here are calculated according to the exchange rate as of 21 May 2021, which was USD1 = UAH27.4665.

According to the research of CoST Ukraine available at: https://portal.costukraine.org/

Besides, the number of tenders held by Ukravtodor increased significantly — rebuilding tenders have doubled alone in number since the start of the Big Construction program. The intergovernmental agreements signed between Ukraine and other countries may make ProZorro tenders much easier for foreign investors from the relevant jurisdiction. Valid international treaties prevail over public procurement laws. Therefore, if an international treaty sets out different rules for procurement other than the law, the rules of the relevant international treaty apply. For example, under the treaty between Ukraine and Poland10 only enterprises from Ukraine or Poland may develop the infrastructure near the border between the countries funded by a loan from the Polish government. Consequently, several Poland-based contractors won the ProZorro tenders for reconstruction of roads in Western Ukraine, mostly without any competition.

To Each His Own The first phase of the Road PPP looks promising, although the fact that the concessionaire’s reward is based on availability payments makes these projects less attractive for investors. At the same time, the priority for the government is to improve the state of existing roads without putting too much of a financial burden on road users. At the same time, the government works on the concession of the Krakovets-Brody-Rivne highway, which should occur within the next few years and will likely prove that toll roads are also a viable road PPP option in Ukraine. The goal of the Big Construction program is slightly different. Its key goal is not only to improve the infrastructure of Ukrainian roads, but also the creation of a strong marketing effect in Ukrainian society. While the Road PPP applies a relatively new (for Ukraine) instrument of cooperation between the state and private investors, Big Construction is an extensive public procurement program with a larger scale and strong marketing. 10

Law of Ukraine On Ratification of a Treaty Between the Government of Ukraine and the Government of the Republic of Poland for Providing a Tied-Aid Loan, of 3 February 2016, No. 977-VIII.

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Insolvency Disputes

Bankruptcy Proceedings in Ukraine. Results of 2020 If we want to go into the year 2020 dance with the public information posted in the field of bankruptcy in Ukraine then, on the website of the Verkhovna Rada of first of all it should be noted that this is Ukraine, the bill is being drafted by the relthe year when the approbation of the evant committee1. specialized law — the Code of Ukraine In addition, the Law of Ukraine of on Bankruptcy Procedures (CUoBP), in5 June 2020 No. 686-IX prohibits banktroduced in late 2019, was completed. ruptcy proceedings of debtors-state-owned In the same year it was realized that enterprises and budgetary institutions from a number of declared know-how dis17 October 2020, as well as the financial reguised similar uncodified provisions of habilitation of such debtors before the comthe Law of Ukraine On Restoring Debtor’s mencement of bankruptcy proceedings. Solvency or Declaring a Debtor Bankrupt But everyone understands that blockin combination with errors that compliing of new bankruptcies and delaying of cate their practical application. existing ones is only temporary — the most On the other hand, the truly prointeresting thing in this area is yet to come, gressive changes aimed at speeding up and to be precise, after quarantine. and improving the bankruptcy process Coming back to the progressive in Ukraine came at a time of circumchanges concerning simplifications at the stances that were impossible to predict stage of initiating bankruptcy in Ukraine, it in principle, namely the COVID-19 relatshould be further noted that the legislator ed lockdown. left the opportunity to refuse to commence That is, the foundations laid in the such proceedings, provided that the crediCUoBP for a healthy economy and in tor’s claims (not supported by a court deciorder to improve the investment climate Senior Associate, sion) indicate a dispute over the right, which in Ukraine, in fact, have become a time is subject to resolution by action proceedbomb for any credit company, whose Alekseev, Boyarchukov and Partners ings2. Logically, such provisions of the law business has become hostage to “weakcreated a wide range of speculations with ening” and “strengthening” of quarantine interpretation by both the creditor and the and does not belong to the category of “privileged”, without which the debtor. As a result, in 2020 the Supreme Court formulated a number life in the period of COVID-19, according to the relevant sanitary institu- of legal positions that, to some extent, put law-enforcement in such tions, is impossible. situations in order. A reminder that the concept of the updated legislation provided First, the Supreme Court explicitly stated3 that the lack of evifor the simplification of the requirements for initiating bankruptcy by dence of taking measures to recover the amount of the debt from the the creditor via: debtor doesn’t indicate prematureness in making a decision to com• elimination of the need to collect the debt through the court and mence bankruptcy proceedings, as the possibility of applying the proits pursuing, waiting for non-execution of the court decision this cedures stipulated by CUoBP to the debtor is an alternative way to satthree months; isfy the monetary claims of the creditor if there is no dispute over the • removal of restrictions on the amount of such debt. creditor’s right of claim. That is, the presence of an undisputed debt As a result, the commencement of proceedings, hypothetically, and the circumstances of its non-repayment are sufficient to initiate became possible not so much as a result of establishing the circum- bankruptcy proceedings. stances of a debtor’s insolvency, as in the absence of satisfaction of Secondly, in its decree of 13 August 2020 in case No. 910/4658/20, the creditor’s claims in full before the preliminary case hearing. Which, the Supreme Court explained what is meant by the indisputability of in turn, entails the consequences of claiming by other creditors, pla the claims under the CUoBP. Thus, in terms of bankruptcy proceedcing of a moratorium, etc. ings, the absence of a dispute over the right is the lack of ambiguity It is clear that such opportunities for the period of the pandemic with regard to resolving issues concerning the parties to the obligation, have become too “progressive”, and along with blocking the business the essence (subject) of the obligation, the grounds for the obligation, itself, the legislator has decided to partially block the bankruptcy pro- the amount of the obligation and the debt structure, as well as the term cess, or at least suspend it. of fulfillment of the obligation, etc. Thus, from 17 October 2020 the Law of Ukraine of 18 June 2020 The Supreme Court also noted that the debtor’s objection to the No. 728-IX prohibits the commencement of bankruptcy proceedings applicant’s claims in the form of an action (the subject of which is the against debtors — legal entities at the request of creditors on claims debtor’s challenge to the circumstances on which the creditor’s claims against the debtor which arose from 12 March 2020, for the period of are based) filed before the creditor’s application for commencement quarantine and for 90 days from the date of its cancellation. Along with of the bankruptcy proceeding implicitly indicate the presence of the this, some important procedural periods in bankruptcy were extended, dispute over the right within the meaning of the provisions of part 6, including the terms of: Article 39 of the CUoBP. At the same time, the court of final instance • preliminary court hearing; does not have the opportunity to resolve such a dispute over the right • application for invalidation of transactions performed by the debtor; during the preliminary case hearing. • moratorium on satisfaction of the creditors’ claims; A similar position is expressed in the rulings of the Supreme • announcement of auctions; Court of 3 September 2020 in case No. 910/16413/19, of 16 Septem• implementation of the debtor’s financial recovery or debt restruc- ber 2020 in case No. 911/593/20 and of 24 September 2020 in case turing plan; No. 916/3619/19. • procedures for disposal of property, liquidation, debt restructuring Thus, it clearly follows from the above-mentioned legal posiand repayment of the debtor’s debts, etc. tions and provisions of the specialized law that although the creditor At the same time, the legislator decided to “play it safe” regarding may initiate the commencement of bankruptcy proceeding in the blocking new bankruptcies. Thus, on 15 October 2020, the President of Ukraine submitted to the Verkhovna Rada of Ukraine as urgent the Law 1 https://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=70179 No. 4220 of 15 October 2020, which already proposes to remove restrictions on the commencement of bankruptcy proceedings against 2 Indent 2, part 6, Art. 39 of the CUoBP debtors on claims that arose from 12 March 2020. Currently, in accor- 3 See decree dated 03.06.2020 in case No. 905/2030/19

Andrii Datskiv

100

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Alekseev, Boyarchukov and Partners has broad experience of representing creditors and debtors in legal cases on bankruptcy and debt restructuring. The team is also actively involved in representing foreign banks with foreign capital on the territory of Ukraine. Thanks to the firm’s lawyers and attorneys a great number of troubled credits with sums running into hundreds of millions of dollars have been successfully returned.

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presence of any outstanding debt, regardless of its size and measures taken for its recovery, at the stage of preliminary case hearing the court determines whether such debt obligations are disputable, whether the debtor has the opportunity to repay the debt, and whether it has repaid it before the preliminary case hearing. In other words, even if it is possible to repay the debt, but in the absence of repayment at the stage of the preliminary case hearing, there is every reason to commence the bankruptcy proceeding. In this case, the court reserves the right to close the proceeding if in the course of the bankruptcy proceedings no signs of the debtor’s insolvency are established. In particular, as noted by the Supreme Court in the ruling of 3 June 2020 in case No. 905/2030/19, filing of the debtor’s financial condition analysis in the commercial court, which handles the bankruptcy case, by the executor of the debtor’s property is an obligation defined by clause 5, part 3, Article 44 of the CUoBP, and will allow the court to establish the presence or absence of circumstances for the closure of bankruptcy proceedings on the grounds specified in clause 8, part 1, Article 90 of the CUoBP. Thus, there is currently a fairly effective mechanism tried out in practice, which encourages the debtor to repay the debt as an alternative to the application of classical enforcement proceedings. Also noteworthy are the conclusions of the Supreme Court, set out in the ruling of 11 February 2020 in case No. 10/5026/995/2012, which ruled out speculation on the suspension of the statute of limitations outside the disputes over creditors’ money claims. In particular, the Supreme Court clarified that the statute of limitations in case of commencement of the bankruptcy proceedings shall be suspended only in the context of creditors’ claims, and not, for example, when disputes over the disposal of the debtor’s property are contested (see additionally ruling of the Supreme Court of 30 April 2020 in case No. 16/137б/83б/22б on this issue). Despite a number of positive legal opinions of the Supreme Court and temporary measures taken by the legislator to prevent the flow of spontaneous bankruptcies during quarantine restrictions, the specialized law still contains a significant number of dubious, controversial (conflicting) and untested provisions. In particular, the absolutely unreasonable redistribution of forces in a bankruptcy case. Thus, previously the provisions of the Law of Ukraine On Restoring Debtor’s Solvency or Declaring a Debtor Bankrupt allowed in practice the possibility of participating creditors with a casting vote at the general meetings with current claims, i.e. claims included in the register of creditors’ claims at the stage of liquidation. Instead, the CUoBP has resolved this issue radically, and at the moment such creditors have only an advisory voice. Moreover, the new counting rules have reformatted existing creditors’ committees in cases dating back to the 1990s. It should also be noted that the decision of the legislator to provide the creditors’ committee with non-appealable powers at all stages of the proceedings is quite controversial. Thus, the creditors’ committee has the right to suspend the insolvency receiver from his/her duties without any justification (see part 8, Article 28 of the CUoBP). Moreover, part 2 of Article 28 of the CUoBP provides for full control by the creditors’ committee over the appointment of candidates for the executor (in case of his removal by the court), as well as the liquidator. Therefore, it is not clear what is the point for the initiating creditor to advance the payment for the insolvency receiver, and to propose his candidacy to the court taking into account the amendments introduced by the Law of Ukraine of 5 June 2020 No. 686-IX. The problem is especially exacerbated when the sale of pledged property in liquidation proceedings is possible only at the will of the liquidator, who, logically, is wholly controlled by the committee under such a model. Thus, this delays at least the satisfac-

tion of the pledge creditor’s claims. In other words, the pledge creditor becomes hostage to the will of the bankruptcy creditors who formed the committee. In addition, in practice, in fact, the simplified mechanism for satisfying the claims of the pledge creditors in the procedure of property disposal has been leveled. Thus, ideally, the legislator provided for in part 8, Article 41 of the CUoBP that the moratorium on satisfaction of secured creditors’ claims at the expense of the debtor’s property, which is the subject of pledge, shall be terminated automatically after the expiry of 170 calendar days from the date of the commencement of the property disposition procedure, unless the commercial court makes a ruling on declaring a debtor bankrupt or introduction of the financial rehabilitation procedure during this period. On the other hand, the satisfaction of creditors’ secured claims at the expense of the debtor’s property, which is the subject of collateral, shall be carried out only as part of the bankruptcy proceedings (part 6, Article 41 of the CUoBP). That is, on the one hand, the moratorium is terminated, but the sale of property is still possible only as part of the bankruptcy proceedings. Thus, the opportunity for the creditor to apply out-of-court settlement as provided for, in particular, in Article 37 of the Law of Ukraine On Mortgage, is not yet clear. In this regard, there is also no practice at the level of higher courts. It should also be noted that the lack of proper transitional and final provisions in the CUoBP creates practical problems in the application of the new specialized law to legal relations that arose before its entry into force. In particular, invalidation of the debtor’s transactions on the grounds specified in Article 42 of the CUoBP is ambiguous in practice, if they were committed before the introduction of the CUoBP. It should be noted that this article of the specialized law expands the grounds for invalidation of transactions, and increases the disputed period of their commission to three years. As a result, the Supreme Court in its ruling of 12 November 2020 in case No. 911/956/17 draws attention to the fact that the Final and Transitional Provisions of the CUoBP do not provide for retroactive effect of the provisions of Article 42 of the CUoBP, as well as any other provisions of the CUoBP. In view of this, the general or special substantive law provisions that determine the grounds for invalidity of these agreements and which existed at the moment of concluding the agreement (transaction) are applied to agreements concluded before the effective date of the CUoBP. On the other hand, the application of Article 20 of the Law of Ukraine On Restoring Debtor’s Solvency or Declaring a Debtor Bankrupt, which contained similar grounds for contesting the debtor’s transactions before the entry into force of the CUoBP, is blocked by part 4 of the Final and Transitional Provisions of the CUoBP, which establishes that from the effective date of the CUoBP the further consideration of bankruptcy cases shall be carried out in accordance with the provisions of the CUoBP, regardless of the date of commencement of the bankruptcy proceeding. Summing up the achievements of 2020 in the field of bankruptcy, it must be acknowledged that it has proved to be rather productive in terms of practical adaptation of the new progressive provisions of the CUoBP, and a number of shortcomings that clearly need to be urgently improved were found. At the same time, the global economic trends caused by COVID-19 will certainly provoke positive statistics on bankruptcy proceedings after quarantine without appropriate measures taken at the legislative level to protect businesses that continue to suffer from “sanitary restrictions”. It should be understood that at the moment new bankruptcies have merely been postponed, while the problem of potential insolvency and its prevention needs a comprehensive approach and solution.

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International Arbitration

The Issue of Appointment of the Same Arbitrator in Multiple Arbitrations The issue of multiple appointments of the same arbitrator by the same party has always been a topical issue in international arbitration. One of the core principles of international arbitration is that each arbitrator must be independent and impartial. At the same time, repeated appointment of an arbitrator by the same party might result in establishment of a certain connection between them, which is not in line with the above principle. One can argue that in such a situation an arbitrator becomes more concerned to provide a good service to the appointing party rather than to act as an independent and impartial adjudicator of a dispute. Before going into further analysis, we should first define the possible scenarios when repeated appointment might lead to the appearance of bias.

Finding the Proper Legal and Factual Standards

To begin with, Clause 3.1.5 of the IBA Guidelines on Conflict of Interest in International Arbitration (Orange list) requires an arbitrator to disclose the situation if such arbitrator “currently serves, or has served within the past three years, as arbitrator in another arbitration on a related issue involving one of the parties, or an affiliate of one of the parties”. This provision is of a rather general nature. There is no explanation as to the degree the two or more arbitration cases should interrelate. The arbitration practice often contains a more elaborate analysis and substantiation. Let us consider the following examples. In the ICSID case Tidewater Inc. v. Bolivarian Republic of Venezuela, the claimant challenged Professor Brigitte Stern, an arbitrator appointed by Venezuela, on the grounds that she was appointed as arbitrator by Venezuela in another three ICSID Scenarios Leading to Partner, Sayenko Kharenko cases. There was no evidence, however, Arbitrator’s Possible Bias Olexander Droug is a partner at Sayenko Kharenko, that those cases were somehow interreThe discussed connection be- which specialises in dispute resolution and restruclated. The other two members of the tritween an arbitrator and a party may, in turing with a focus on international arbitration and bunal rejected the challenge. In particular, particular, manifest itself in one of the cross-border commercial litigation. His experience the decision states that “the starting point following forms: includes advising local and foreign clients at all is that multiple appointments as arbitrator (i) An arbitrator’s appointment by the stages of complex multijurisdictional proceedings, by the same party in unrelated cases are same party in several unrelated ar- as well as commercial and investment arbitration neutral, since in each case the arbitrator bitration cases over a certain period under the arbitration rules of all major international exercises the same independent arbitral of time. In this scenario, the cases arbitration institutions (LCIA, ICC, SCC), CIS-based function”.1 would concern distinct facts, subject arbitration institutions, ICSID Arbitration Rules and ad The decision further continues that matter and evidence. hoc arbitration rules. Mr Droug also advises clients “there would be a rationale for the poten(ii) An arbitrator’s appointment by the on obtaining and implementing interim relief, as well tial conflict of interest which may arise same party in several cases that as on the recognition and enforcement in Ukraine of from multiple arbitral appointments by concern the same or similar issues, arbitration awards and foreign court judgments. the same party if either (a) the prospect of but different facts and evidence. An In March 2017 Olexander was added to the list of arcontinued and regular appointment, with example would be multiple appoint- bitrators elected to settle disputes arising in financial the attendant financial benefits, might crements of an arbitrator by a state in restructuring procedures. ate a relationship of dependence or otherinvestment treaty arbitrations in the Mr. Droug regularly contributes to key legislation in wise influence the arbitrator’s judgment; or event when several investors file the areas of arbitration, litigation and restructuring. (b) there is a material risk that the arbitraclaims arising out of the same mistor may be influenced by factors outside conduct of the state and under the the record in the case as a result of his or same BIT. her knowledge derived from other cases”.2 (iii) An arbitrator’s appointment by the same party in several casThe above rationale is undoubtfully correct and illustrative. It es that concern the same facts, subject matter and evidence. would be unreasonable to suppose that a reputable arbitrator should This occurs, for example, if an arbitrator serves in two or more be barred from participating in a case merely because he or she was related cases arising out of the same commercial transaction appointed by the same party but in an unrelated case. At the same based on one or several contracts between the same or related time, it becomes clear that the arbitrator’s impartiality in the above parties, and at least part of the evidence submitted in each case case could have been called into question if the appointments were is identical. made in related arbitrations. Each of these scenarios is obviously different in terms of an arThe above case can be viewed as addressing the first scenario bitrator’s ability to maintain his or her independence and impartiality. above. In relation to the second scenario, the ICSID case Raiffeisen On the one hand, neither national legislation nor various internation- Bank International AG and Raiffeisenbank Austria d.d. v. Republic of al legal instruments provide detailed guidance for these scenarios, Croatia can be mentioned as an example. In this case, the responexcept for general references to the impartiality and independence dent proposed to disqualify Dr. Stanimir Alexandrov, an arbitrator apof arbitrators. On the other hand, the existing arbitration practice, pointed by the claimant. Among other arguments, the challenge was soft law and legal doctrine address them and, hence, they are subject to analysis. 1

Olexander Droug

Tidewater Inc. v Bolivarian Republic of Venezuela, ICSID Case No ARB/10/5, Decision on Claimants’ Proposal to Disqualify Professor Brigitte Stern, Arbitrator, 23 December 2010, para. 60.

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Ibid, para. 62.

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SAYENKO KHARENKO Sayenko Kharenko has been recognized over 100 times as the No. 1 law firm in key practice areas and named Best Law Firm in Ukraine more than 30 times by the most prestigious professional excellence awards. The firm has provided legal services to over 1,800 clients from over 60 countries around the globe and recognizes that every single client has unique business needs. Sayenko Kharenko tailors its services to best fit the individual profile of each and every client. Sayenko Kharenko is one of Ukraine’s largest law firms, offering comprehensive support in all major sectors of the economy. In order to manage the rapidly evolving Ukrainian legal and business

Address: 10 Muzeyny Provulok, Kyiv, 01001, Ukraine Tel.: +380 44 499 6000; +380 44 389 5000 substantiated by the fact that Dr. Alexandrov was sitting in another arbitration commenced under the Austria-Croatia BIT. In particular, the respondent argued that the issue of the compatibility of the Austria-Croatia BIT with the law of the European Union would be central to both cases.3 The challenge was fully rejected in the same fashion as in the Tidewater case. The Chairman of the ICSID Administrative Council stated that “the mere exposure of an arbitrator to the same legal issue in multiple arbitrations is insufficient to disqualify that arbitrator”, and that there must be a significant overlap of facts that are specific to the merits and the parties involved for the challenge to succeed.4 There are also other cases in the public domain that follow the same approach. All of them establish the same unambiguous standard. It can be framed as follows: no challenge should be upheld, unless an arbitrator’s impartiality is clearly tainted by the facts and evidence submitted by the parties in a related case. Such a standard is, indeed, reasonable. Acceding to the lower standards would definitely compromise the foreseeability and quality of international arbitration. Therefore, coming back to the three scenarios described above, only the third one, in which the facts and evidence of separate cases overlap, may give rise to justified grounds for challenging the appointed arbitrator.

environment, the firm embraces innovation through new products, outof-the-box thinking and creative solutions. The emphasis is on innovation bringing services that enable Sayenko Kharenko’s clients to excel in what they do.

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Andriy Stetsenko

Senior Associate, Sayenko Kharenko Andriy has more than 9 years of experience of consulting clients on international arbitration and cross-border litigation matters. His expertise includes representing clients in international commercial arbitration proceedings under ICC, SCC, ICAC and LCIA Arbitration Rules. He also participated in a number of investment arbitration proceedings, representing clients in disputes with the state, in particular under UNCITRAL as well as ICSID arbitration rules. Andriy is equally experienced in representing clients in Ukrainian courts in commercial and civil disputes, bankruptcy proceedings and cases related to recognition and enforcement of foreign arbitral awards in Ukraine. In particular, he acted for investors in the first ever recognition in Ukraine of an emergency arbitral award rendered under the SCC Rules.

A good example of the third scenario can be found in the recent decision of the ICC Court rendered in March 2021 on the disqualification of arbitrator Klaus Sachs in the case Anaklia Development Consortium LLC v. the Government of Georgia. In this instance, the red line was, indeed, crossed. The claimant filed the claim with the ICC under an investment agreement with Georgia, whereas one of the claimant’s largest shareholders filed essentially the same claim against Georgia but under the Netherlands-Georgia BIT. Both claims concerned the alleged respondent’s misconduct in relation to the same projects, and, hence, involved the same facts and evidence. Nevertheless, the respondent appointed Mr. Sachs as an arbitrator in both cases. The ICC Court upheld the challenge of Mr. Sachs by its decision of 5 March 2021.5 The decision, in particular, states that “[it] suffices for a risk of prejudgment to exist that similar issues of fact or law exist in different proceedings that are pending at the same time involving the same arbitrators. Although the Court has no reasons to doubt that Mr. Sachs would fulfil his duties with fairness and integrity, the risk of unconscious biases resulting from the involvement in two overlapping proceedings cannot be discarded”.6 This very recent piece of arbitration practice from one of the most reputable arbitral institutions once again confirms the standard we have defined above. The parties, arbitrators, as well as arbitral institutions, should not deviate from it in order to ensure the integrity and quality of international arbitration.

Raiffeisen Bank International AG and Raiffeisenbank Austria d.d. v. Republic of Croatia, ICSID Case No. ARB/17/34, Decision on the Proposal to Disqualify Stanimir Alexandrov, 17 May 2018, para 25.

Anaklia Development Consortium LLC v. the Government of Georgia, Decision of ICC Court on Challenge of Arbitrator Klaus Sachs, 5 March 2021.

Ibid, para. 91.

Ibid, para 26.

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International Finance

The New Capital Markets Law — What Should We Expect? On June 19, 2020, the Ukrainian Parliament adopted the Law of Ukraine On Amendments to Certain Legislative Acts Related to the Simplification of Attracting Investments and Introducing New Financial Instruments (Capital Markets Law). The Capital Markets Law is based on the practices and standards of the European Union, including those set out in MiFID II, MiFIR, EMIR, FCAD, SFD and MAR. Most of the provisions of the Capital Markets Law are set to come into full force and effect on 1 July 2021. In this article, we will focus on certain novelties introduced by the Capital Markets Law which, in our view, will have a significant impact on international financial transactions with Ukrainian counterparties. Infrastructure of Organized Capital Markets The market infrastructure is under- Partner, Dentons going significant changes. Instead of trading taking place on stock exchanges, such activities will be carried out on organized capital markets, which include: 1) Regulated markets — where securities, derivatives and foreign exchange assets are traded. Given its nature, a regulated market should serve as a trading platform for major businesses. 2) Multilateral Trading Facilities (MTF) — trading in securities and derivatives; MTF should serve as a trading platform for small and medium-sized businesses. 3) Organized Trading Facilities (OTF) — where non-equity securities are traded, specifically bonds and derivative contracts.

Central Counterparty and Clearing Institutions

Natalia Selyakova

Investment Firms The Capital Markets Law introduces the concept of “investment firms”. On the basis of the relevant license, investment firms may carry out professional activities related to trading in financial instruments, the list of which has been expanded to include sub-brokerage activities and investment consulting. Subject to certain exceptions, all transactions with Ukrainian financial instruments, inter alia derivatives and securities, should be carried out with the mediation of an investment firm.

Trade Repository The Capital Markets Law introduced the institution of a trade repository. The trade repository should consolidate information on derivative transactions and keep records as to concluded derivative contracts, which are executed both in the organized market and the over-the-counter (OTC) market.

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Among the novelties introduced by the new law is an updated clearing model for capital markets, whereby clearing activities are divided into: • Clearing activities related to determining liabilities; and • Clearing activities of the central counterparty. Clearing activities are carried out with respect to transactions involving securities, derivative contracts and money market instruments, which are concluded both in and outside the regulated market, except for the instances when the clearing of these transactions should be carried out exclusively through the central counterparty. Foreign legal entities will be able to carry out clearing activities in accordance with requirements which will be further developed by the NSSMC.

Qualified Investors A separate category of investors in the capital markets — qualified investors — is established. The qualified investor shall assess risks independently and adopt decisions related to transactions with financial instruments. The advantages of qualified investors include, in particular, the ability to invest in securities without restrictions imposed with respect to non-qualified investors, concluding OTC transactions related to financial instruments without the mediation of an investment firm, etc. Qualified investors include: • International financial organizations; • Foreign countries and their central banks; • The State of Ukraine represented by the Ministry of Finance of Ukraine and the National Bank of Ukraine; • Professional participants in capital markets and organized commodity markets, banks and insurance companies; • Foreign financial institutions that meet the criteria set by the Stock Market Commission (NSSMC); and • Legal entities, including those established under the laws of another state, if they meet at least two of the following criteria: (i) the balance sheet total is at least the equivalent of UAH 20 million; (ii) the annual net income for the last financial year is at least the equivalent of UAH 40 million, with the entity’s own funds being at least the equivalent of UAH 2 million. Other entities which meet a number of criteria established by legislation may also be recognized as a qualified investor by investment firms.

Nadiya Shylienkova Counsel, Dentons

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Securities and New Financial Instruments The list of securities is expanding; in particular, option certificates, stock war-

DENTONS Dentons is the world’s largest law firm, delivering quality and value to clients around the globe. Dentons is a leader on the Acritas Global Elite Brand Index, a BTI Client Service 30 Award winner and recognized by prominent business and legal publications for its innovations in client service, including founding Nextlaw Enterprise, Dentons’ wholly-owned subsidiary of innovation, advisory and technology operating units. Dentons’ polycentric approach, commitment to inclusion and diversity and world-class talent challenge the status quo to advance client interests in the communities in which we live and work. Dentons will help you understand and navigate the complexities of the market. Work with us to help you manage the prevailing economic conditions and understand new reforms in Ukraine. Tap into a pool of lawyers that have been serving foreign companies and their local subsidiaries for over than 25 years, ever since Address: 41 Naberezhno-Khreshchatytska Street, 9th Floor, Kyiv, 04070, Ukraine

rants, credit notes, and depository receipts have been added to the list of securities. New types of securities such as interest-bearing bonds for environmental investments (green bonds) and infrastructure bonds have been introduced. It is expected that in Ukraine such securities will contribute to the further development of renewable energy sources and infrastructure projects, including by obtaining funding for such projects from foreign creditors.

Market for Derivative Contracts The Capital Markets Law created the legislative basis for the development of derivative transactions the underlying assets of which are production, securities, currencies, rates, yields, exchange rates etc. Derivative contracts are divided Associate, Dentons into: • Delivery contracts (which provide for delivery of the underlying asset); • Settlement contracts (which provide for settlements between the parties depending on the value of the benchmark); and • Mixed contracts (which provide for the possibility of settlements both via delivery of the underlying asset and settlements, subject to the choice of the parties). Derivative contracts may be concluded both inside and outside organized capital markets. It is expected that the Capital Markets Law will provide for the possibility to use standardized ISDA documentation as well as other standardized documentation, in particular GMRA and GMSLA, when concluding derivative contracts, in particular with non-residents of Ukraine. An important innovation consists in the introduction of the concept and mechanism for close-out netting. Close-out netting should also be applicable in respect of agreements concluded with the aim of securing the performance of undertakings under transactions to which close-out netting applies. At the same time, we see a number of risks in general bankruptcy rules that might affect the enforceability of close-out netting in bankruptcy proceedings. However, there are a number of mitigators introduced under the concept of close-out netting in the Capital Markets Law which, presumably, should address such risks. The law provides: • That the close-out netting is carried out in “out-of-court” order. This may be interpreted in a creditor-friendly manner, namely by implying that close-out netting is beyond the scope of bankruptcy

Artur Savin

Ukraine began attracting foreign investment in the 1990s. With Dentons, you benefit from a partnership that enables you to identify and resolve risks at the earliest possible stage. Dentons provides intuitive thinking to spot commercial opportunities and resolve your problems. Let our Ukrainian and Western lawyers advise you on doing business, from setting up branches to debt and corporate restructuring, from employment to dispute resolution matters. When you are looking for assistance on international matters, you can draw upon our global team to give you cross-border, sophisticated solutions. Let Dentons make your business run more smoothly.

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procedures and which, therefore, there is no requirement to submit creditor claims for inclusion in the creditors’ claims registry, or use the priority ranking rules and other limitations for satisfaction of creditors’ claims set out by the Bankruptcy Code; • The rule whereby provisions of the Bankruptcy Code on close-out netting prevail over any other provisions of the Bankruptcy Code; • The rule whereby instructions in relation to the derivative contract or the commodity transaction served by the party before commencement of bankruptcy proceedings are valid, legal, irrevocable and enforceable and cannot be invalidated by a court. We note that the close-out netting concept is new in Ukraine and at this stage it is difficult to estimate how close-out netting will work in practice. On top of that, there are Ukrainian currency controls and company liquidation rules that may create practical issues in the course of close-out netting enforcement. At the same time, certain fundamental concepts for the functioning of the derivatives market which are used in international derivative transactions, such as the “single agreement principle” and the concept of “outright transfer” of collateral (i.e. transfer of title to collateral), are not specifically addressed in Ukrainian law.

Combating Abuses in Capital Markets Improving the procedure for combating abuses in capital markets is among the key changes in the Capital Markets Law. In particular, this includes: • Regulating the definition of insider information and establishing a list of actions that persons who possess such information are prohibited from taking; • Enabling capital market participants to test the capital markets — to transfer information to the investor(s) in order to determine the investor’s (investors’) interest in a possible transaction, until information about entering into such a transaction is announced; and • Expanding the list of actions qualifying as manipulation of capital markets. It is expected that the new law would allow market participants to elaborate new structures and use new instruments in cross-border finance and capital market transactions. At the same time, there are a number of uncertainties/gaps in the new law which should be clarified by additional regulation, formal clarifications by the Ukrainian authorities, or further amendments to the law (as the case may be). The development of respective court practice is also important.

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International Tax

Implementation of BEPS Action Plan in Ukraine: Limited Tax Reform or Fundamental Game-Changer? The last few years have seen Ukraine make significant progress in the implementation of key anti-avoidance concepts into its national tax legislation. The transformations launched in 2014 culminated in adoption of Anti-BEPS law 466-IX in January 2020, introducing a number of new tax doctrines in Ukrainian tax legislation and significantly revising existing ones. Some of these tax doctrines are completely new to Ukrainian legal realities, such as CFC rules, place of effective management, the Look Through Approach and “constructive dividends” concepts. The others, have been significantly revised and require new approaches to their application, among them PE, RE — clause, and beneficial ownership concepts. In addition, ratification of the FATCA Agreement with the USA in October 2019 along with the adoption of accompanying laws have paved the way for subsequent introduction of the AEI (automatic exchange of information) regime, which will be implemented in Ukraine soon.

Pavlo Khodakovsky Partner, Avidbiz, Advocate, LL.M

Place of Effective Management

New Tax Concepts Implemented into Ukrainian Tax Legislation by Anti-BEPS Law CFC Rules There are no doubts that the most revolutionary change introduced into Ukrainian tax legislation recently is the CFC (controlled foreign companies) regime. New Article 392 of the Tax Code of Ukraine, which deals with CFC rules, will come into effect from 1 January 2022. It is designed to catch the income of foreign companies which are under the control of either individual or corporate tax residents of Ukraine, exercised in legal, economic or factual form. Legal control is in place when the controlling person owns a share in a CFC exceeding 50%, or when the controlling person and other individuals or legal entities — tax residents of Ukraine with shares in a CFC, exceeding 25% (to be further reduced to 10% from 2023 year) each, jointly own 50% or more in such CFC. Factual control implies exercising decisive influence of a controlling person over the activities of a CFC: to conclude agreements, manage assets and profits, manage CFC bank accounts, etc. Persons who own a CFC shall submit reports about the activities of such CFC to the Ukrainian tax authorities on an annual basis. Apart from that, such persons will also notify Ukrainian tax authorities about any significant changes in exercising (gaining or losing) control over CFC. The annual profit of a CFC, calculated according to special rules, is subject to taxation in Ukraine at the hands of its controlling person (proportionate to its share in CFC) unless the following exceptions apply: • the effective corporate tax rate of a CFC equals or exceeds 13% (in case there is DTA or TIEA in place between Ukraine and the jurisdiction where the CFC is registered)

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• the share of the passive income of a CFC does not exceed 50% in overall CFC revenues (in case there is DTA or TIEA in place between Ukraine and the jurisdiction where the CFC is registered) • the total consolidated income of all CFCs under the control of a controlling person does not exceed the equivalent of EUR 2 million • the CFC is a public company and its shares are bought and sold on a stock exchange The CFC tax base is calculated in line with financial standards of the jurisdiction where the CFC is incorporated, adjusted according to specific rules, applicable in Ukraine. Ukrainian legislation provides for the possibility of a tax-free liquidation of existing foreign companies, controlled by Ukrainian tax residents, without paying personal income tax, in case such liquidation starts no earlier than 1 January 2020 and ends no later than 31 December 2021.

Ukraine had, until recently, been applying the place of incorporation as the major criteria for determining the tax residency of legal entities. Respectively, all companies, registered in Ukraine have been treated as tax residents of Ukraine while companies registered in other jurisdictions as tax residents of such jurisdictions not taxable in Ukraine, unless their presence in Ukraine creates PE. This has changed with Law 466-IX amending the list of Ukrainian taxpayers with those meeting the new criteria: legal entities, established according to the legislation of other states (foreign companies), which have a place of effective management on the territory of Ukraine. The criteria for determining the place of effective management follow the OECD–based approach, reflected, inter alia in the OECD Model Convention on Income and on Capital and include the following conditions, which might trigger tax residency status: • meetings of the executive body of a foreign company are held more regularly in Ukraine than in any other country; • management decisions and other current (operational) activities of a foreign company by its officials are carried out in the main from Ukraine; • the actual management of the activities of a foreign company is mainly carried out from Ukraine, regardless of whether such persons have formal (legal) powers for such management. Recognition of a foreign entity as a tax resident of Ukraine in accordance with Place of Effective Management in Ukraine criteria may be performed by the respective company voluntarily at its own discretion or upon a decision adopted by the Ukrainian tax authorities. Importantly, a foreign entity, recognized as having place of effective management in Ukraine and, thus, being a Ukrainian tax resident, is taxed only with respect to income sourced inside Ukraine. Though this creates different tax treatment among various types of Ukrainian tax residents, some taxpayers consider this mechanism as creating interesting opportunities for tax structuring.

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AVIDBIZ Avidbiz is a leading law firm with an international tax practice. A global network of European offices in Estonia, Poland, Austria and Germany provides high-quality services to solve complex business problems of clients in tax matters. Our lawyers have extensive experience in tax planning and business structuring of international holding groups, corporate finance, M&A, supporting international transactions, investments in EU, AML, banking and litigation in resolving tax disputes.

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significant functions with respect to such income and possesses respective resources (qualified personnel, fixed assets, etc.). At the same time, it is also now possible to apply the reduced withholding tax rate according to a double taxation agreement with the jurisdiction where the real beneficial owner resides.

“Constructive” Dividends As a general rule, a dividend is a payment made by legal entity for the benefit of the owner of a share in such legal entity as a distribution of profit (full or partial) gained by such a legal entity. Law 466-IX has extended the definition of dividends to the difference between the contractual price of goods or services and their fair price calculated according to transfer pricing rules in controlled transactions with low tax jurisdictions. Such difference shall be taxed with Ukrainian corporate income tax and additionally with a withholding tax of 15% as deemed (implied) or “constructive” dividend unless otherwise stated in the DTA.

What to Expect Next? Apart from introduction of CFC rules in January 2022, the other two significant initiatives to be expected in coming months are the “tax amnesty” and automatic exchange of information.

“Tax Amnesty”

“Tax amnesty”, or the voluntary disclosure program, is currently under consideration by the Ukrainian Parliament and the Concepts revised by Antichances of its adoption are quite high. The respective draft bills provide that BEPS Law Managing Partner, Avidbiz, Advocate, LL.M any Ukrainian tax resident, who possesses assets acquired with violation of tax, curPE Concept rency control or antimonopoly legislation of With regard to PE provisions, Ukraine, may “legalize” such assets subject Ukraine has updated them according to OECD approaches reflected, in particular, in Articles 12-15 of the MLI, which imply revision of agency to payment of a special contribution calculated as a share of the value PE rules, counteracting artificial avoidance of PE status through spe- of the declared assets. Preliminary rates of special contribution vary from 2.5% to 9%. cific activities’ exemptions and splitting-up of contracts. The tax amnesty is expected to start on 1 July 2021 and to last one calendar year. RE — Clause

Olga Solovyova

Having amended some of its DTAs with a “real-estate clause” earlier, Ukraine finally fixed the respective rules in its Tax Code on a more general basis, stating that any transaction with respect to the sale or purchase of the corporate rights of a Ukrainian company, deriving its value from real estate, located in Ukraine, will be taxed in Ukraine.

Look Through Approach in the Context of Revised Beneficial Ownership Rules Beneficial ownership rules have already been in place in the Tax Code of Ukraine for quite a long time and provide for the possibility to apply a reduced withholding tax rate to passive payments in accordance with double taxation treaties only in case the recipient of such funds is their beneficial owner, i.e. a person eligible to determine the economic destiny of such income. Now, in order to be qualified as a beneficial owner, additional rules have been introduced: a non-resident should also prove it performs

FATCA and Automatic Exchange of Information Ukraine is among quite a few countries that has not yet introduced an automatic exchange of information. Certain steps in this direction were made in autumn 2019 when Ukraine ratified the Foreign Account Tax Compliance Act agreement with the USA and changed its laws, enabling the collection and exchange of financial information received from banks and depository institutions. It is expected that the first exchange of information under the FATCA agreement will take place in 2022 and Ukraine will join the AEI either in 2021 or 2022. To sum up, the next few years will bring a lot of changes into the Ukrainian taxation system, which will have an impact on business models of both international and Ukrainian companies. Hopefully, there is still enough time to face these changes and make the necessary preparations for these new realities.

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Investments

Improving the Legal Framework for Investment: New Opportunities and New Obligations for Investors Attracting investments and creating a favorable investment climate remains one of the key tasks announced by the Ukrainian authorities. To achieve this goal, new rules of legal regulation have been introduced recently which, on the one hand, are aimed at increasing the attractiveness of doing business in Ukraine and, on the other hand, at preventing any abusive practices on the part of individual market players by way of establishing more transparent rules of interaction between business and the state. In such circumstances, in order to be able to take advantage of updated legislation and, at the same time, to ensure compliance with all its requirements, the role of quality legal assistance is increasing. In this article, we will focus on some new benefits as well as new legal requirements that are worthy of attention.

In order to ensure the support and development of significant investment projects that will meet the criteria set by Law No.1116-IX, Resolution of the Cabinet of Ministers of Ukraine of 31 March 2021 No. 295 On the Establishment of the State Enterprise National Investment Fund of Ukraine provides for establishment of the institution (the Fund). The Fund will provide advisory assistance in the implementation of investment projects and interact with government agencies, authorities of local self-government in the interests of investors within the framework of implementation of the investment project. Practical implementation of Law No.1116-ІХ still requires a number of changes and amendments to current legislation, and that is why it is too early to talk about the significant effectiveness of such changes and amendments in the near future. In general, the tendency towards improving legal regulation in the Introducing New Forms and field of protection of investments is posiPartner, Lexwell & Partners Mechanisms of State Support tive, although it should certainly be supfor Significant Investment ported by a simultaneous increase in the Projects role of the rule of law and increase of the On 13 February 2021, Law of Ukraine No.1116-IX On State Sup- efficiency of the country’s judicial system. port for Investment Projects with Significant Investments in Ukraine took legal force and effect. The Law envisages support for investors by Improving the Legal Framework to granting them additional benefits in many areas. In particular, the Law Expand Investment Opportunities introduces such forms of state support as: exemption from certain One positive trend is improvement of the legal framework in sevtaxes and duties in accordance with tax legislation; exemption of new equipment and component parts thereto imported solely to implement eral important areas, which expands opportunities for investment acthe investment project from import duty; ensuring the preemptive right tivities in Ukraine. The procedure for granting special subsoil use permits has been to use a state-owned or communally-owned land plot in order to implement an investment project with significant investments, specifically improved. The sale of such permits at open auctions has already been providing a land plot for the use (lease) to implement the investment introduced on a permanent basis (previously such procedure was approject and the investor’s preemptive right to purchase such land plot plied as pilot and temporary). Resolution of the Cabinet of Ministers of upon the fulfillment of a special investment agreement; ensuring the Ukraine of 19 February 2020 No. 124 sets out the Procedure for Grantconstruction, at the expense of the state, local budgets and other ing Special Subsoil Use Permits in the new wording. In October 2020, sources, of ancillary infrastructure facilities (motorways, communica- Resolution of the Cabinet of Ministers of Ukraine On Approval of the tion lines, heat, gas, water and electricity supply facilities, utility supply Procedure for Holding Auctions for the Sale of Special Subsoil Use Permits of 23 September 2020 No. 993 took legal force. Following introlines) necessary for implementation of the investment project. At the same time, Law No.1116-ІХ establishes a number of crite- duction of the updated legal framework, the order and the procedure for ria that must be met by the investor in order to enjoy the benefits envis- the sale of special subsoil use permits have become more uniform and aged by this Law. Thus, to be able to enjoy the benefits granted by it, transparent. Among other things, subsoil users have been given the the investor must implement the investment project on the territory of opportunity to initiate auctions for the sale of special subsoil use perUkraine in those areas defined by the Law: processing industry, extrac- mits. The previously existing requirement of reaching agreement with tion of mineral resources for the purpose of subsequent processing local councils on the provision of subsoil for the use to extract mineral and/or treatment thereof; waste management; transport, warehous- resources of national significance and for purposes not related to the ing, postal and courier activities, logistics; education, science, and re- extraction of mineral resources has been abolished. The list of subsoil search and technical activities; healthcare, arts, culture, sports, tour- uses for which a special permit can be obtained has been expanded. ism, and resort and recreation sphere. The project must comply with a Namely, it has been supplemented with such areas as geological study number of criteria, specifically it must create at least 80 new jobs with of amber-bearing subsoil, including pilot and commercial development an average salary that is at least 15% higher than the average salary of deposits with subsequent amber extraction (industrial development paid for the relevant activity across the region in which the project is of deposits). In addition, the Draft Law On Amendments to Certain Legislative being implemented for the previous calendar year; the sum of investActs of Ukraine Concerning Support for the Development of Domestic ment must exceed EUR 20 million and the implementation period of Subsoil Use Industries, No. 4187 of 5 October 2020 is pending at the the investment project must not exceed five years.

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Andriy Kolupaev

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LEXWELL & PARTNERS Lexwell & Partners is a Kyiv-based Ukrainian law firm which has been offering high-end professional legal services to major international and leading Ukrainian companies since 2005. Our focus is on complex and high-profile national and cross-border matters and we possess strong expertise in foreign investments, M&A, tax, real estate, litigation and international arbitration. We have earned an excellent reputation, which is highly ranked by the Legal 500, Chambers and Partners, IFLR1000, Ukrainian Law Firms, Kyiv Post, Legal Practice, Legal Newspaper. These are just some of our achievements: • No.1 by gross revenue (Legal Practice/Yuridecheskaya Praktica, 2020); • No.1 by revenue per lawyer (Legal Practice/Yuridecheskaya Praktica, 2020); • No.2 in high-value tax disputes (Legal Practice/Yuridecheskaya Praktica, 2020);

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• Tier 1 for dispute resolution (The Legal500, 2020); • Tier 2 for tax, real estate, commercial, corporate and M&A (The Legal500, 2020); • Recognized Practitioner in Dispute Resolution: Arbitration (Chambers & Partners, 2019). Lexwell & Partners’ key clients are multinational and leading national companies, including ABN Amro, AET, Amstar, ArcelorMittal, Bridgestone, Bunge, Cargill, Chicago Mercantile Exchange, CRH, DuPont, East Metals, Eurobank, Evraz, Honda Trading, ING, Interpipe, Intesa Sanpaolo, Pfizer, PHV (Calvin Klein and Tommy Hilfiger), PwC, Rabobank, Red Bull, Marubeni, Millhouse, Morningstar, Naftogaz (National Oil & Gas Company), Schenker, Sojtz, Subaru, Sumitomo, Suzuki, Toyota, VS Energy.

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Verkhovna Rada of Ukraine. The Draft implementation of BEPS (Base Erosion Law provides for a number of important and Profit Shifting) Action Plan, introduced measures aimed at supporting developa number of novelties aimed at combating ment of subsoil use. Among other things, tax evasion by multinational companies. the Draft Law proposes to enable holdNew rules in the field of taxation of income ers of special subsoil use permits to sell, of controlled foreign companies have also pledge or otherwise alienate the rights, been introduced. Such rules envisage that which are granted to such holders under Ukrainian residents (both individuals and special permits to other persons. legal entities) that own or actually control Despite the impact of the COVID-19 companies in other countries must, in cases pandemic, the financial regulators (Naspecified by law, pay tax on the income of tional Bank of Ukraine, the National Secusuch companies in Ukraine and file reports rities and Stock Market Commission, the with respect to the latter. Punitive sancMinistry of Finance, the Individual Deposit tions for violating such obligations are quite Guarantee Fund and the National Comsignificant, and regulatory authorities are mission for the State Regulation of Finangradually establishing mechanisms for decial Services Markets) are trying to impletecting violations. ment the Financial Sector Development The expansion of the notion of the Strategy of Ukraine until 2025, which permanent establishment of a non-resident includes five strategic areas: financial should be mentioned among notable tax stability, macroeconomic development, legislation novelties. At the same time, the financial inclusion, development of finanestablishment of the fact that the non-rescial markets and innovative development. ident carries out business activities on the The domestic government bond market territory of Ukraine through a permanent traditionally remains active. establishment will result in the taxation of One of the important novelties that profit of such a permanent establishment, will potentially influence investment at- Senior Associate, Lexwell & Partners as a general rule, at the rate of 15%, and failtractiveness is the opening up of the agure to get registered as a permanent estabricultural land market, the first stage of lishment serves as independent grounds for which will take place on 1 July 2021. As you know, in March 2020 the seizing the property of the company. Verkhovna Rada of Ukraine adopted Law On Amendments to Certain Along with the unification of regulatory procedures, there is also Legislative Acts of Ukraine Concerning the Conditions of Circulation of a trend toward stepping up control over their transparency. For exAgricultural Land, No. 522-IX, which is aimed at launching the turnover ample, on 25 March 2021 Decree No.122/2021 of the President of of agricultural land in Ukraine. The Law came into force on 1 July 2021. Ukraine put into effect the Decision of the National Security and DeAs from that date, the current ban on the alienation of privately-owned fense Council dated 25 March 2021 On the State of Affairs in the Field agricultural land will be lifted on a step-by-step basis, with a number of of Subsoil Use. The Decision provides for unscheduled inspections of restrictions, which are mainly reduced to restricting the acquisition of the activities of business entities that have obtained special subsoil land by certain entities, as well as limiting the concentration of a cer- use permits outside the auspices of an auction. It is also planned to tain area of land in “the hands of a single person”. Between 1 July 2021 conduct an audit of individual cases of subsoil use where violations and 1 January 2024 agreements for alienation of such land plots may could potentially have been committed. For example, if the extraction be concluded only between Ukrainian citizens, and from 1 January has not been commenced within two years of receiving extraction 2024 legal entities established under Ukrainian law may be parties to permits. Thus, on the one hand, the mechanisms for granting such such agreements, but with certain restrictions. Alienation of agricultur- permits have been simplified and, on the other hand, they must be al land to foreign legal entities will be possible if the relevant decision transparent and lawful. is adopted at an all-Ukrainian referendum. As a whole, Law No. 522-IX In general terms, we can draw the conclusion that, on the one regulates numerous aspects related to the turnover of agricultural land hand, there is a noticeable trend towards the improvement of legal that should be considered by business entities and are topical not only regulation of investment activities and approximation towards inwhen concluding agreements for the alienation of such land. ternational standards, and towards the introduction of mechanisms aimed at minimizing potential abuses by business and increasing its transparency, on the other hand. Under such conditions, professional Increasing the Transparency of Doing Business and legal assistance will be a reliable guarantee that enables advantage Preventing Abusive Practices to be taken of updated legislation and, at the same time, to prevent Along with improving the legal framework, there is a tendency to- violations. We would like to expect that the positive orientation of legwards the establishment of clearer and more transparent rules for doing islative changes will be supported by subsequent active steps on the business. Thus, for example, on 1 January 2021 amendments to the part of public authorities aimed at strengthening the rule of law in their Tax Code of Ukraine came into legal force which, as part of Ukraine’s day-to-day activities.

Olena Tregubova

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Islamic Finance

Adaptable Financing Anyone can use Islamic finance There might be other peculiarities products and services — you don’t have related to financial transactions such as to be Muslim. when partners co-own a property and one Evolutionary biologists claim that partner will make rent payments to another modern humans were able to eradicate partner (payments for the use of property all their competitors and became the in contrast to paying for using money) and dominant species on this planet due to purchase payments (payments purchasing their extremely strong ability to adapt. part of the property in contrast to returning With a change of climate packs of mamborrowed funds) until the property is purmoths (the main source of food for that chased by the former completely (i.e. until day for homini) became a rarer find. The the loan is repaid). Sapiens had answered by developing A keen reader might have already nofarming whilst the Neanderthals anticed similarities with modern day investswered by continuing to do exactly the ment banking practiced by equity-specialsame thing which had not been working izing investment funds. The similarities so well any longer and, as a result, had became even more obvious in the case become extinct. of musharakhan (joint venture analogue), We cannot say with certainty exwhich can be permanent (in contrast with actly how everything happened back diminishing). then, but what I can definitely agree with However, provided that not all Islamic is that adaptability has always been esfinance products are based on the profitsential for survival, security and growth. share paradigm, there are many other fiIt underpins the ability to look for alternancing contracts that are permissible unnative solutions at least for the most Managing Partner, Stron Legal Services der Sharia law but not strictly profit-share vital problems and especially when the in nature. The following products might be old ones start to fail. highlighted among them: The same applies perfectly to the • murabaha (cost plus) refers to a sale of world of finance, with Islamic finance serving as the [not really so] new, goods and/or services with a pre-agreed alternative solution. amount of profit. Thus, 2 different conSharia law prohibits Muslims from entering into financial agreetracts exist, one between the bank and ments and especially ‘agreements for money’ and, as a result, most the buyer and another one between the Middle Eastern economies were unable to fully access Western capibank and the seller. The bank will buy tal/money markets. But the modern economy cannot function propthe underlaying goods from the seller erly without lending and, therefore, Middle Eastern economies had to and sell them to the buyer with a fixed ... adapt and develop a viable alternative to prohibited lending. margin. The said alternative is currently growing by 15-25% per year and • ijarah (leasing) refers to a transaction between a leaser and lessee. is controlling approximately USD 2.5 trillion. The leaser (the bank) would own the property and lease it to the The main core principles of Sharia law related to finance are lease in exchange for rent payments. In one case the lessee will prohibiting the charging (and payment) of interest and prohibition on keep the property after the contract’s maturity in the other — the participating in speculation (maisir, which means gambling) or excesproperty will return to the bank’s ownership. sive risk contracts, hence transactions with derivatives are treated as • bai’ muajjal (deferred payment sale) refers to a transaction wheregambling, which is, in turn, a prohibited activity. under the bank purchases certain property at the customer’s reThus, the main task that the first Islamic bankers came face to quest and then resells it to the customer at a pre-agreed margin face with was to develop a financial system based according to prin(which must be made obvious to the customer) in exchange for ciples that are drastically different from the above. The said principles allowing deferral of payment. can be compacted into the following: • bai’ salam (forward sale) and istisna (contract manufacturing) Material finality of transaction, i.e. the transaction must be in closely resemble forward contracts — a special contract to buy or substance real and its object cannot be risk itself. Thus, for example, sell property/goods at a fixed price on a future date. These consale and purchase agreements are allowed whilst cash-settled detracts must specify the exact date of delivery and the exact price. rivatives are not. The mentioned problem of differentiation can be Under these contracts such objects as gold, silver or currencies seen as, in essence, similar to the differentiation between gambling cannot be sold/purchased in order to dismiss any possible conflict. contracts (contracts for differences) and financial contracts (in the • tawarruq (micro-financing loan) is used when the customer needs given case — derivatives). Muslim seems to have decided not to recto raise cash quickly. Under tawarruq the bank purchases a certain ognize the difference. In order to deal and manage with the problem liquid commodity (such as grain or metal) from a supplier and sells of differentiating like from like Islamic banks usually incorporate speit to the customer, who is allowed to pay the purchase price to the cialized Sharia law departments or committees; and bank in installments e.g. over the course of 12 months. Then the Profit and loss sharing i.e. Islamic banks do not provide interestcustomer, upon receiving ownership of the commodity, instantly based lending. By contrast they conclude profit and loss sharing agreesells it back to the bank for a price in total lower than the price the ments — mudarabah (partnership) or musharakhan (joint venture) whereCustomer agreed to pay back within 12 months but raises the cash under one partner (rab-ul mal, effectively — the lender) provides capital to instantly. the other partner (mudarib or the laborer, effectively — the borrower), who • Rahn (collateral) is a contract whereunder the borrower transfers is responsible for managing and/or investing the said capital. an asset (the collateral) to the bank as a security (pledge) in order The said practice works both ways — i.e. an investor/depositor to secure a financial obligation to pay a sum and the bank is permit(rab-ul mal) may provide his/her funds to the bank under a mudarabah ted to be paid in the said asset/collateral. The Rahn can be Al-rahn (i.e. de facto enter into a savings deposit contract) and thus the bank al-heyazi (where the property is physically transferred to the bank) will be mudarib, the one responsible for managing the capital and who or Al-rahn ghair al-heyazi (where the collateral is not transferred and will share profit with its investor later on. is kept by the borrower) or Al-rahn al-musta’ar (where the collateral According to the said agreements the profits are split according is provided by a third party). to a ratio pre-agreed in advance. • Takaful would closely resemble a traditional insurance transaction. Nota bene this model of banking makes a more poised financial In order to be Sharia compliant Takaful companies are incorporated system than the traditional one, since investors (depositors) will, in in the manner similar to European cooperatives (cooperative banks case the bank’s venture does not work out, suffer loss and other conand/or cooperative pension funds) wherein the insured becomes sequences jointly with the bank. the member (or [one of] the owner[s]) of Takaful and is obliged to

Oleg Derlyuk

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contribute money to a pool of funds managed by the Takaful in exchange of the repayment or reimbursement [by the Takaful] in the event of a loss. Ideally, the proceeds of the said management must be distributed amongst its members (the insured), but in practice most Takafuls do not give voting rights to the insured or severely limit them and the said proceeds are distributed to selected and specified members of the cooperative (who would be an equivalent in the given case of shareholders/beneficial owners) If truth be told, Islamic financial products can appear similar to the ordinary banking products since, at the end of the day, they serve the same goals and try to solve the same problems.

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But what is important is that in essence the subject matter of the practiced agreements is different, and thus requires different conduct by the parties. Whilst in essence where fixed interest rates are practiced floating rates (based on performance) are de facto used instead. This (as well as loss-sharing issue) requires and promotes more transparency, reporting and control between parties. Moreover, in the case of international financing the principles employed by Islamic banks are likely to lead to extensive works and attention to the field of taxation and anti-hybridization rules. For example, when payments which are in essence interest on the deposit are in the form of profit distribution from a joint venture, i.e. legally in the form of dividends.

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111

IT Law

Diia City: the New Legal Framework for the IT Industry The Ukrainian IT industry has demor an employee breach the non-disclosure onstrated a consistent tendency to grow obligation then the compensation indicated over the past decade and it has become in the NDA should be paid. Such compensaa powerful part of the Ukrainian econtion is not limited, as opposed to existing omy. To make it more attractive for big regulation of similar compensation to labor companies and start-ups the governrelationships. The essential terms of the ment has launched a new project called NCA embody the following: the period of Diia City. its validity, which should not exceed twelve Diia City creates a new legal frame(12) months following the termination of work for the IT industry and has amcontractual or labor relationships; the terbitions to set up in Ukraine the most ritory covered by the NCA; specific list of powerful IT hub in Central and Eastern activities that are treated as a competition; Europe. According to the promoters, compensation for compliance with the NCA there will be no limits to investment, to be paid to the IT specialist. The NSA shall job creation and the development of contain an obligation not to solicit clients new technologies. The government beand/or specialists for the period that should lieves that Ukrainians and entrepreneurs not exceed one (1) year after termination of around the world will be able to quickly the contract. In the event of a breach, the and effectively implement the most breaching party shall pay penalties set out ambitious ideas of innovation and busiby the agreement. ness, which will result in an increase in Furthermore, The Digital Economy IT products and services of up to 10% of Stimulation Law introduces a model that is Ukraine’s GDP. absolutely new for Ukrainian law, like share The proposed legal framework LLM, Head of Department, Attorney, options as a motivation plan for employees consists of two Laws: Law No. 4303 On and gig specialists. Detailed regulation of Stimulating the Development of the Digi- Gramatskiy & Partners Attorneys at Law the share purchase option should, however, tal Economy in Ukraine of 2 November be provided for in separate legislation. In 2020 (Digital Economy Stimulation Law) addition, the new law will explicitly address and Law No. 5376 On Amending the Tax Code of Ukraine to Stimulate cases of misrepresentation and the liabilities incurred as a result of the Development of the Digital Economy in Ukraine of 14 April 2021 such misrepresentation. (Digital Economy Tax Stimulation Law). Thus, the proposed regulation of the above-mentioned agreements and models will become powerful protective means for companies and potential investors in the IT business compared to the existRegulatory Incentives for the IT Industry ing status quo. The Digital Economy Stimulation Law, drawn up by the Ukrainian government, provides a new legal framework for the IT industry in Ukraine. The proposed legislation will create a new IT cluster called Diia City General Requirements Diia City with favorable and flexible regulation making it clearer and Diia City residents are allowed to engage in the following busimore understandable for big companies when they enter the Ukrai- ness activities: nian market. The Digital Economy Stimulation Law consists of specific • Software development and testing, including games; features such as gig contracts and gig specialists that align Ukrainian • Release and distribution of software, applications; business practice in the IT sector (including individual (private) entre- • Provision of the software online; preneurs) with the expectations of big players who often lack under- • Teaching computer literacy, programming, testing, software technistanding of such practices and have high-risk expectations. cal support; According to the Digital Economy Stimulation Law, businesses • Data processing and website management; that meet the legal requirements can be registered as residents of Diia • Digital marketing and adverts using software developed by resiCity and benefit from the preferences of that residence. One of the key dents; changes deals with the recognition of the contractual relationships be- • R&D in IT and Telecom; tween an IT company and its specialists. The residents of Diia City will • Cybersport; have the right to hire gig specialists who will formally receive benefits • Providing services related to the flow of virtual assets. similar to those of employees. For example, annual paid leave for sevThe general requirements for Diia City residency are quite reasonenteen (17) business days, social insurance, maternity leave, sick leave, able and they are aligned with the current position. They consist of the a 40-hour week, etc. At the same time, gig specialists are not consid- following: 1) conducting IT business (as listed above) and receive at ered employees. Moreover, relationships within Diia City are explicitly least 90% of their income from such activity; 2) average monthly remuexcluded from the regulation by the outdated Labor Code of Ukraine. neration of employees and gig specialists should not be less than USD Diia City residents will have the right to terminate the gig-contract with 1,400; 3) the average number of employees and gig specialists should a 30-day notice period, control and monitor the performance of the con- not be less than nine (9) per month. tract, bind the gig specialist via corporate policies, etc. Copyright, an There are also certain restrictions on Diia City Residency. Such important issue in the IT field, has also been given its specific regulation restrictions, inter alia, include the following provisions: in line with the existing legal framework — economic rights belong to • the company should be registered in Ukraine and its beneficial ownthe company and the moral rights remain with gig specialists. ers should be disclosed; To strengthen the position of companies, The Digital Economy • the company should not have shares owned by the Ukrainian govStimulation Law recognizes such agreements as non-disclosure ernment (or local authorities) exceeding 25%; likewise, agreements (NDA), non-competition agreements (NCA), and non-so- • shareholders holding 25% or more should not be registered in the licitation agreements (NSA), which are widely used by the parties but territory included in the FATF-list; currently lack regulatory support and recognition. To be enforceable, • direct or indirect shareholders holding 10% or more cannot be a the agreements should be made in writing. The Digital Economy Stimuresident of the aggressor state (Russia); lation Law allows these agreements to be effective tools for protecting • the company should not be under sanctions under Ukrainian law; businesses. Thus, the NDA should indicate the scope of confidential the company should not be in the process of winding up or bankinformation and the period of non-disclosure. Should the gig specialist ruptcy;

Igor Reutov

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GRAMATSKIY & PARTNERS ATTORNEYS AT LAW Gramatskiy & Partners is known as a trustworthy law firm, which has been successful in providing legal assistance to its clients in various areas of law since it was founded. Gramatskiy & Partners is recognized as one of the leading law firms in Ukraine due to introduction of high standards of legal services and performance of exceptional proficiency. From the time it was founded in 1998, Gramatskiy & Partners has acknowledged business legal practice as its own professional vocation and the mission for its serving the public. The unique experience of a vast legal practice enables the firm to advise today more than a hundred Ukrainian and foreign companies providing complex aid and assistance in legal matters, combining classic legal practice traditions with modern international standards of the legal services market. As a universal law firm, Gramatskiy & Partners has made its name as a qualified provider of comprehensive legal service. Combining a scrupulous approach with a customer-centered orientation in terms of rendering legal assistance enables the firm to individualize a wide range of its services for the business of every client. For over 23 years Gramatskiy & Partners has been successfully developing its practice in the field of business (commercial) law, foreign economic activity, and the practice of international private law.

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• the company should not have an outstanding tax debt exceeding ten (10) minimum salaries (i.e. UAH 60,000 as of 2021) for more than thirty (30) days. The promoters claim that the Diia City regulation will be effective for at least fifteen (15) years. However, if the law changes during that period it will apply to Diia City residents if the changes improve their conditions. For example, decrease in tax rates, decrease in liabilities, etc. To become a resident of Diia City, the company should submit an application with information proving its eligibility for Diia City benefits. The application is to be considered by the state authority for ten (10) business days. Furthermore, if approved, the company will be registered as a Diia City resident in a special register. In addition, Diia City residents have to file a report of compliance with the requirements. For the first time, such a report is to be submitted not later than the last day of the fifth month following the month of registration as a Diia City resident and the report should then be filed before 1 June for the previous year on a regular annual basis.

expenses for any activity of the Diia City resident) in the tax base. The promoters declare that this provision will be postponed for three (3) years. However, The Digital Economy Tax Stimulation Bill (as of May 2021) indicates that this limitation will come into force from 1 January 2024. For this reason, many small and middle-sized IT-outsourcing companies who benefit from cooperation with the simplified (unified) taxpayers oppose the new regulation. It should be observed that the special tax regime is not automatic and it is not enough to merely be registered as a Diia City resident. In order to be entitled to use the benefits of the special tax regime a Diia City resident has to submit an application to the tax authority within ten (10) days after their registration in the Diia City Register. The special tax regime will be effective from the first month of the quarter following the one when the Diia City resident is registered with the Diia City Register. However, the Diia City resident registered with the Diia City Register who failed to file the application for use of the special tax regime will pay regular taxes, i.e. CIT 18%, PIT 18%.

Taxation

Conclusion

Another major feature of the Diia City system is taxation, which will be governed by the Digital Economy Tax Stimulation Bill. The promoters of Diia City insist that the bill on taxation will set out low tax rates compared to the conventional regulation and provide the following tax rates: 5% personal income tax (PIT); 1.5% military levy and 22% social tax of the minimum salary. Moreover, Diia City residents will not be subject to corporate income tax (CIT) with its regular rate of 18%. Instead, certain transactions which result in capital outflow will be taxed at the rate of 9%. Such transactions embrace dividends, royalties, interests and other transactions with foreign parties unless the funds eventually return to Ukraine. One of the most controversial provisions is the inclusion of transactions with simplified (unified) taxpayers (exceeding 20% of

The intended legal framework is aimed at finding a compromise between the interests of state and IT-business — the model, which, on the one hand, includes protection of gig specialists, and provide them with almost the same benefits as regular employees have and, on the other hand, the companies receive flexibility in engaging gig specialists and control over their performance without onerous employment regulations. In addition, reasonable taxes are promised to be an integral part of the Diia City regimen. The authors of the Diia City project do not conceal their primary intention to create attractive conditions for IT product companies, as opposed to IT outsourcing companies booming in Ukraine. For this reason, the IT industry is not unanimous in its evaluation of the proposed regulation.

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Labor & Employment

Ukrainian Labor Law Reform Inspired By Pandemic All of 2020 was dominated by Flexible Hours the global fight against the coronaviThe flexible hours regime provides for rus and its effects on many aspects determining the time of the beginning, end of day-to-day life. Because of that, all and duration of work during the working countries had to develop plans not day, for a definite period or indefinitely, at only for fighting the virus, but also the time of employment or later, by an emfor supporting their economies and, ployee himself/herself, subject to written where necessary, adjusting their legisconsent between that employee and his/ lation to new realities. her employer. At the same time, daily, weekThe first case of COVID-19 was ly or other norm of working hours should be registered in Ukraine on 3 March 2020. observed by the employee. And on 11 March 2020, the Cabinet of Flexible working hours provide for fixed Ministers of Ukraine adopted Resolution hours, during which an employee should be No. 211 On Prevention of the Spread of present at his/her place of work and perthe COVID-19 Coronavirus on the Terriform his/her duties; variable time, during tory of Ukraine, whereby for the first time which an employee can, at his/her discrequarantine was declared in Ukraine in tion, determine the periods of work within relation to COVID-19. the established norm of working hours; and Dozens of pieces of legislation break time for rest and meals. (both laws and secondary legislation) The application of flexible working followed that first resolution. They rehours can, in certain cases, be restricted. lated to various areas of law, including And, where necessary, the employer can taxation, social security, administrative temporarily reassign the work of employand criminal liability, and so on. Counsel, Ilyashev & Partners ees under the flexible hours mode to the Needless to say, labor law had to general regime of work. meet one of the toughest challenges. Interestingly, if an employee violates Businesses (employers) have been struggling to stay afloat, some of them (including, but not limited to the rules for the flexible working hours, his/her employer may reassign restaurants, cafes, shops, cinemas etc.) being forced from time to that employee to the general regime of work. time to suspend their normal operations. Employees, on the other hand, tried to keep their jobs while the state, of course, was interested Work at Home in making sure the unemployment level would not skyrocket. The work at home regime provides for the performance of work As more than a year has passed since the beginning of the pan- by an employee at his/her home or at another place outside his/her demic in Ukraine, it must be admitted that the efforts of the Ukrainian employer’s premises chosen by that employee and having a working government haven’t always been sufficient for overcoming the negative area and the necessary technical means. effects of COVID-19. For instance, the amount of financial support proIn the case of working at home, the employer’s workplace is vided to the business sector has never been anywhere near the amounts fixed and cannot be changed at the employee’s initiative without the spent on the same purposes by the world’s largest economies. consent of his/her employer. Only in cases outside the employee’s As if to compensate its inability to be a reliable source of financial control, where the work at the initially agreed workplace cannot be assistance, the Ukrainian government has been trying to maintain a continued, can the employee change that place for another one withcertain balance between the necessity of keeping the virus under con- out the employer’s approval but with mandatory notification of the trol and keeping the economy running. In this regard, the restrictions latter. applied in Ukraine almost never amounted to the concepts of “complete While working at home and, unless a specific employment agreelockdown” or “closed country”, as operation of only selected businesses ment provides otherwise, an employee is obliged to comply with the was suspended and only where there was absolutely no alternative. general working regime of his/her employer. At the same time, in addition to dealing with current issues, UkraiWorking at home does not result in any changes in the working nian lawmakers managed, with reference to coronavirus-related chal- norms or remuneration of labor, and does not affect the employee’s lenges, to substantially update certain areas of labor law which for a labor rights. long time were in dire need of change. Unless a specific employment agreement provides otherwise, the employer should ensure that its employee has the necessary means, Flexible Hours, Remote Work and Work at Home materials and instruments for working at home. And where an employUntil 2020 there had been no reference to flexible hours, remote ee uses his/her own instruments, he/she is entitled to compensation work or work at home in the Labor Code of Ukraine, which seemed from his/her employer. absurd in a world where flexibility and diversity of employment forms is a norm. Also, work at home was largely regulated by a Soviet-era act Remote Work from 1981 with some methodological recommendations dated 1995, Under the remote work regime, an employee uses information all of which were extremely outdated. and communication technologies to perform his/her work, choses On 30 March 2020, Law of Ukraine No. 540-IX was adopted where his/her workplace himself/herself outside the employer’s premises relevant forms of employment and the rules for their regulation were and is himself/herself responsible for ensuring safe working condiincluded in a single article, namely Article 60 of the Labor Code of tions there. Ukraine. Remote work is not allowed where there is certain dangerous or Nevertheless, it was apparent that such new regulations weren’t harmful production or technological factors pertaining to work. enough and on 4 February 2021, Law of Ukraine No. 1213-IX suppleIn the case of remote work, an employee allocates his/her workmented the Labor Code of Ukraine with new Articles 60-1 and 60-2, ing time at his/her own discretion and his/her employer’s internal labor governing working at home and remote work, respectively, and also regulations do not apply to that employee, unless a specific employprovided some additional amendments to various Articles of the Labor ment agreement provides otherwise. At the same time, the total duraCode in relation to work beyond the confines of the employer’s office tion of working hours of the employee in question cannot exceed the and flexible hours. norms established by the Labor Code of Ukraine.

Leonid Gilevich

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We undertake a full range of labor law work, including:

ployment agreements of specific employees, internal documents regulating employment relations; • Employment of foreigners, including obtaining work permits; • Organization of trade union activities; • Regulation of relations between employers and trade unions; • Protection of interests of employers and employees in employment relations, during their establishment and termination; • Development of regulations and documents for the labor aspects of business restructuring, redundancies or winding up of businesses; • Representation in individual and collective labor disputes; • Advising on wage arrears and compensation plans, payroll tax planning; • Labor law related audits of corporate legal departments to assess their effectiveness, staff competence and risk mitigation. The team is often instructed to support employment aspects in corporate deals, labor contracts, white-collar matters, staff outsourcing, employees transfer and relocation. The special knowledge that Ilyashev & Partners possesses includes employment compliance.

• Drafting of employment agreements and contracts for top management, model contracts for enterprises, individual emAddress: 11 Kudryavska Street, Kyiv, 04053, Ukraine

If agreed between the employee and the employer, the performance of remote work may be combined with the performance of work at the employee’s workplace at the employer’s premises. If a specific employment agreement does not refer to the rules for provision of necessary equipment, software, hardware, information security and other means to an employee working remotely, the relevant obligation lies with the employer who is also obliged to pay all related costs. An employee who performs remote work enjoys a guaranteed period of time for rest (period of disconnection), during which time the employee may interrupt any information or telecommunication communication with the employer. An employee may require the employer to temporarily, for a period of up to two months, establish a remote work regime for that employee if that employee has been discriminated at his/her workplace.

Tel.: +380 44 494 1919 E-mail: office@attorneys.ua Web-site: www.attorneys.ua

Unemployment-Related Measures As stated in Article 47 of the Law of Ukraine On Employment of the Population No. 5067-VI of 5 July 2012, employees who lost part of their salary due to quarantine established by the Cabinet of Ministers of Ukraine, are entitled to receive partial unemployment assistance from the state.

Stoppage

Valeriia Gudiy

Counsel, Attorney at Law, Ilyashev & Partners

General In certain cases (including in case of a threat of an epidemic or a pandemic), flexible working hours, work at home or remote work regimes can be established at the order of the employer. A relevant decision can be taken by the employer also in relation to work at home or remote work in the event of necessity of self-isolation for an employee.

Other Changes to Labor Law The following should be mentioned as being among other changes to labor legislation related to COVID-19.

Unpaid Vacation Article 26 of the Law of Ukraine On Vacations No. 504/96-BP of 15 November 1996, as amended, provides that unpaid vacation can be provided to an employee for the period agreed with the employer, but for no more than 15 calendar days. However, part two was added to this Article 26 in March 2020, providing that the relevant limitation does not apply to unpaid leave during the period of quarantine. Also, in accordance with Article 25 (3-1) of the same Law, certain persons are now entitled to unpaid vacation, if requested by them, for taking care of a child under the age of 14 for the period of quarantine.

Since MPs provided no additional grounds for termination of employment due to quarantine, employers have been using various options for minimizing their expenses in the event of inability to operate fully. These include termination of employees on other grounds (including redundancy) or stoppage, i.e. suspension of work resulting from the lack of organizational or technical conditions required for work, force majeure or other circumstances. In case of stoppage for the period of quarantine established by the Cabinet of Ministers of Ukraine, an employer is obliged to pay to its employees no less than 2/3 of their rates.

Extension of Period for Going to Court Section XIX of the Labor Code of Ukraine provides that in the event of quarantine established by the Cabinet of Ministers of Ukraine, the periods for filing employment-related claims to courts are extended for the duration of that quarantine.

What the Future Holds There is no denial that 2020 was a difficult year for the world and Ukraine in particular. Businesses had to adapt to pandemic-related restrictions and challenges, and there was (and still is) huge demand for legal services to properly navigate through all of those and avoid the many risks they created. Nevertheless, the changes made to labor law during and as a result of 2020 have been really important and long-awaited, as they “legalized” forms of work which have been widespread for a long time. They form, however, only part of continuing labor law reform and 2021 may bring further changes, which could make Ukraine even more attractive as a place with great business opportunities and a professional labor force.

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Land

Ukraine Unlocks its Land Market. What should Foreign Business Focus their Attention on? Summer 2021 is expected to be a hot one for development and for farmers. Ukraine has impressed not only its citizens but also the world. For more than 20 years officials have turned a blind eye to the need to recognize agricultural land as a commodity. And now 1 July 2021 is the date, the starting point of the recent history of land relations. Obviously, the Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine on the Conditions of Circulation of Agricultural Lands, No. 552-IX of 31 March 2020 does not provide for the full authority to sell all the chornozem soils of Ukraine, but it does set out many changes to the course of economic development of our state. And let’s not be deceived by the provision that foreigners are not land market participants.

in this category as well. It will be both easier and more difficult to change the functionality of a land plot. From 1 July 2021, citizens of Ukraine will be able to purchase up to 100 hectares per person. From 2024, this rate will increase to 10,000 hectares. Nevertheless, only private land is a commodity. The state and territorial communities are merely watching. State and communal land may still be transferred exclusively for use but without restrictions on the status of a subject — both individuals and legal entities, regardless of citizenship and concentration.

Ukrainian Agricultural Land Market for Foreigners

Though at first glance it may seem that such changes do not affect the interests of foreign investors, in fact, businessmen who have been operating in Ukraine for a long time, as well as those who only potentialWho are actual Market Attorney-at-Law, Ph.D. (Law), ly regard it as an object of investment, are Participants? supposed to actively come into play. Senior Partner, TOTUM The current version of the Law stipOne way or another, the current govulates that, from 1 July 2021, only citiernment is not going to deviate from the zens of Ukraine will be able to purchase land. course of the real free circulation of agricultural land. State land should Formally, legal entities will acquire legal capacity from 2024. also be sold, including to foreigners. We emphasize that these are legal entities established under the The date of 1 July is not the final one. This is only an intermediate law of Ukraine, and participants are exclusively citizens of Ukraine, ter- stage. After all, active work on accumulating the land bank has been ritorial communities or the state. going on for a long time. At this stage, foreigners are completely excluded from this list. A commodity may be land, which is a direct asset of its own ecoThe latter will acquire the right to purchase agricultural land if it is sup- nomic activity, or an accumulated land bank. ported by the Ukrainian people as a result of an all-Ukrainian referenAnd given practical experience in Ukraine, the second option is dum. quite common. Therefore, it may be beneficial for a foreign investor – The legislative basis for holding it already exists. On 26 January the commodity is a ready-made business. On the other hand, it is a 2021, Law of Ukraine No. 1135-IX On the All-Ukrainian Referendum was way of speculating on the price of such a business. adopted. If you are already an active player in the agricultural market of Another subject of free circulation of agricultural land is a bank. Ukraine, or you are just planning to expand your business limits, do not The law does not specify its residency. Therefore, the right of a foreign be afraid to be active. bank to acquire ownership of chornozem soils is not excluded. HowevCheck your land bank for protection against potential buyers – er, it is limited. The basis for taking over land is foreclosure on soils as how long the proprietary right to the land is valid. It may be worth makcollateral with the obligation to alienate them within 2 years. ing changes to the documents, which, as a result, will be an unpleasant The state and territorial communities, obviously, conclude this surprise for the new owner. No-one wants to have encumbered proplist. erty in favor of third persons, especially if the terms of cooperation Under no circumstances will sanctioned persons, offshore com- between the land user and the previous owner were not very attractive panies, firms without an ultimate beneficiary, non-Ukrainians be able in terms of financial enrichment. to buy land in respect of lands located closer than 50 km from the The existence of a condition of long-term cooperation, as well as state border. unconscionable sanctions for early termination of such obligations, may frighten applicants for such land. This is one of the options to get ahead of this. What is a Commodity under Law No. 552-IX of There are a lot of mechanisms to check and protect your busi31 March 2020? ness. To do this, it is just enough to turn to experts who will analyse This reform undoubtedly affects the agrarian business first and your current situation, forecast the situation on the market today and foremost, since the object is agricultural land. in a year or two, and will provide effective (practical) advice to achieve But if the urban situation permits it, then it is possible to change your goal — to save and accumulate assets. the purpose of such lands and to use them for the construction of It is possible for you to carry out initial analysis even on your own. houses or even industrial facilities. By the way, there are innovations In preparation for the launch of the market, Ukraine is conducting a

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Bohdan Yaskiv

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TOTUM TOTUM is comprehensive support for your business in land and agrarian legislation as well as in building and capital investment. Our main specialization is comprehensive support of business in land and agrarian law and building and capital investment. We are constantly evolving and improving in this area, paying attention to every detail in building and land law, which makes us more flexible and operational, unlike big law companies that provide a wide range of services. If your business faces issues of any complexity related to the construction of sites, land banks or investment — delegate those to us and we will return the best result in response! The presence of our lawyers ensures that negotiations are conducted within the legal framework, avoiding the intensification of conflicts and guarantees clients legal justification of reached agreements. The professionalism of our attorneys ensures successful settlement of most disputes at the pre-trial and non-judicial stages, preservation of land plots, audit of investment attractiveness, etc. We make sure that our customers feel confident and secure in today’s dynamic world and attain their business goals. We have received, as proof of our expertise, a number of honorary awards from the top legal rankings of Ukraine in 2020-2021. Address: 16 Taras Shevchenko Lane, Kyiv, 01001, Ukraine

Our main goal is efficiency and flexibility in solving the problems of our customers. We do not delve into many areas and segments in order to provide our clients with the most expeditious services in land and construction law; We don’t just perform a task, but we find the most effective solution taking into consideration all the risks. There are numerous pitfalls and nuances in land and construction law. As experts, we take into consideration all the details and processes, consider the risks for your business, ensuring the effectiveness of the outcome. We are experts in land, agrarian law, as well as in building and capital investment. Our company has existed since 2011. Our expertise is supported by dozens of complex cases that we have worked on during this time, as well as our clients — both average business and the largest brands of Ukraine, for which we have optimized millions and saved acres in land ownership.

Tel.: +380 67 135 0113 E-mail: info@totum.com Web-site: www.totum.ua

global inventory of Ukrainian lands (of not only agricultural land), which will ensure that the database of the State Land Cadastre contains information about plots, rights and restrictions imposed on them. The public cadastral map is an information system that reflects the national infrastructure of geospatial data. Its data is public and official.

rules, the procedure for prolongation of agreements. However, today the situation is changing somewhat. In particular, the legislator has provided for two options for continuing the cooperation of a landowner with users. We would call the first option the passive one. Nevertheless, it is quite profitable for the land user. In this case, the right is automatically extended each time the term, for which a lease agreement has been concluded, expires without any action being taken to formalize such a procedure. Pre-emptive Right to Sell This is the technical function of the State We have emphasized that the marRegister of Property Rights to Immovable ket will open without the participation of Property, where these rights are directly foreigners only at first glance. registered. After all, both now and in July 2021, This procedure may continue until eiland users will have a privileged position ther party, including the owner, decides to if the owner wants to get rid of his or her terminate the cooperation or change its plot. terms. Regardless of the grounds. This is In this case, the best recommenalways a risk for the land user. Therefore, dation would be to exercise such a it is necessary to ensure effective protecpre-emptive right. No-one can stop you tion with regard to such cases directly in from seeking the support of friendly the actual agreement. Similarly, no-one has citizens of Ukraine, who will be able to cancelled the maintenance of friendly partbecome your business partners as new nerships with landowners. landowners this summer. Attorney-at-Law, Counsel, TOTUM At the same time, if the landowner still However, in this case, you should decides to change the terms of transfer of analyse all the little things — both ways land for use, the previous tenant will have to protect such a partnership and the preparation of a partner. After the pre-emptive right to conclude the agreement for a new term. In this all, the condition for acquiring land ownership is transparency of the case, the reaching of a compromise between the parties is crucial. If buyer’s income. The sale will be carried out in non-cash form with verthe stated conditions are acceptable to the tenant, he or she will have ification of the sources of funds. The price until 2030 is also partially priority in signing a new agreement. If not, this right will be transferred regulated — no less than the level of the regulatory monetary value. to the person who agrees to them. Otherwise, this may be grounds for invalidating the agreement.

Tetiana Onyshchenko

Renewal of Lease Agreements after July 2020 Considering the need to preserve land assets, it is already important to keep abreast of changes in the agricultural sector. Legislation is a changeable thing, so changes are inevitable. Thus, the approach to the procedure for renewal of land lease agreements was changed in 2020. These changes will involve those plots that have been transferred after 16 July 2020, or the old contracts will be amended. Previously, the term «renewal» created a feeling of security of a tenant — it was enough to follow, in time and in accordance with the

Homework Summer 2021 promises a lot of new events and changes. Therefore, you should not go with the flow and watch from the sidelines. Develop strategic and tactical behaviour regarding further plans, development without drastic actions, but with thorough due diligence of your business, with special emphasis on assets and their legal formalization. The application of effective preventive mechanisms will help you not only to make savings but also to increase your profits from Ukrainian business.

WWW.UKRAINIANLAWFIRMS.COM

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Litigation

General Overview of Ukraine’s Judicial System The principles of ensuring jusThe General Court of Appeal, whose tice are declared in the Constitution of jurisdiction extends to the City of Kyiv, Ukraine. The main ones are ensuring deals with cases of recognition and grantjustice exclusively by courts and inading of permission to execute decisions of missibility of delegating functions of international commercial arbitration in courts, as well as of appropriation of Ukraine. their functions by other bodies or ofThe last and highest instance in the ficials; extension of the jurisdiction of system of courts is the Supreme Court, courts for any legal dispute and any which started working on 15 December criminal charge; the binding nature of 2017, and is endowed with the right to rejudicial decisions on the entire territory view court decisions in the order of casof Ukraine. sation proceedings. The Supreme Court Today, Ukraine still finds itself on consists of the Grand Chamber of the Suthe edge of judicial reform, the main preme Court, the Administrative Court of purpose of which is to raise the effiCassation, the Economic Court of Cassaciency of the judicial process, combattion, the Criminal Court of Cassation, the ing corruption in a courtroom and acCivil Court of Cassation. tually creating an independent judicial The Grand Chamber of the Supreme system. Court, in cases determined by law, reviews Ukraine has a three-level system of court decisions in a cassation order in orjustice. Those are local courts, courts der to ensure the uniform application of of appeal and the Supreme Court of the rules of law by courts; acts as a court Ukraine, which is the highest court of of appellate instance in cases considered Ukraine’s judicial system and not only Partner, ANTIKA Law Firm by the Supreme Court as a court of first delivering justice but also performing instance; analyzes judicial statistics and an important task of ensuring uniform studies judicial practice, generalize court application of the rules of law by courts practice. of different jurisdictions. The Law of Ukraine On the Judicial System and Status of Judges Local courts of first instance are the most numerous. Courts of provides for the High specialized courts functioning in Ukraine. On first instance decide on the merits of a case, as they are endowed 5 September 2019 the High Anti-Corruption Court of Ukraine began with the right to establish factual findings of a case via assessment to operate. The jurisdiction of which is the consideration of crimiof evidence collected in a case at their own inner conviction. The nal cases related to corruption crimes investigated by the National judgements of local courts, as a rule, come into force after termina- Anti-Corruption Bureau of Ukraine, as well as cases of recognition of tion of the term for the appeal or after review of the case by a court unjustified assets and their recovery for the benefit of state income. of appeal, if a judgment was not canceled or modified as a result of The High Anti-Corruption Court of Ukraine has The Chamber of Apthe review. peal, which is authorized to consider claims against a decision of Consideration of a particular case by a court depends on the this court. subject matter in a dispute and its nature and is governed, first and The High Court of Intellectual Property was formed on 29 Sepforemost, by the relevant codes of procedure (Civil Code of Procedure tember 2017 by a decree issued by the President of Ukraine. The of Ukraine (2004), Economic Code of Procedure of Ukraine (1991), competition for judicial vacancies of this court and The Chamber of Code of Administrative Justice of Ukraine (2005), Code of Ukraine Appeal, which will function as part of it, is now under way. Accordon Administrative Offenses (1984), Criminal Code of Procedure of ing to the intention of lawmakers, this court will hear cases in disUkraine (2012), with further amendments and additions. putes over intellectual property, rights to such objects and protection Economic courts generally resolve disputes arising from the against unfair competition. conduct of economic activity from corporate relations, of a transIn Ukraine, the Constitutional Court of Ukraine acts as a body action on stakes, securities, rights of ownership or other property of constitutional jurisdiction, which ensures the supremacy of the rights, cases on appeal against decisions of arbitration courts and Constitution of Ukraine, decides on compliance with the norms of other disputes between business entities, cases on the bankruptcy the Constitution of Ukraine, laws, other acts, international treaties of individuals and legal entities. to which Ukraine is a party, issues proposed for adoption at an allThe jurisdiction of administrative courts extends to cases on Ukrainian referendum at the initiative of people, provides official interpublic law disputes, particularly disputes involving individuals or le- pretation of the Constitution of Ukraine and carries out certain other gal entities with subjects of authority regarding the appeal of its deci- functions. The Constitutional Court of Ukraine has a Grand Chamber, sions (legal acts or individual acts), acts or omissions, etc. two senates and six colleges. Local general courts consider civil, criminal, some administraAfter procedural legislation amendments, which were adopted on tive cases, cases of administrative infractions. Cases arising from December 2017, improvements to it have not stopped. Amendments civil, land, labor, family, residential and other legal relations are con- were adopted aimed at preventing abuse of procedural rights by the sidered in civil proceedings, except for cases, which are considered parties, providing prerequisites for unloading the court of cassation in the procedure of other legal proceedings. The system of general with cases of insignificant complexity, giving legal entities the opportucourts is the most ramified, as they can be created in regions, cities, nity to participate in the court case through their employees, etc. city districts. Furthermore, on 21 October 2019, the New Bankruptcy Code Courts of second instance are courts of appeal formed in apof Ukraine came into effect, in which legislators systematized the peal districts. The functions of courts of appeal depend on the spe- rules on the procedure for the recovery of debtors’ solvency and their cialization of the court and the category of the case in question. As bankruptcy. Following the coming into force of this Code, bankruptcy a general rule, the court of appeal reconsiders the case on the evi- proceedings against individuals in Ukraine have emerged. dence it contains and additional evidence and verifies the legality and Legislative changes have, in many aspects, procedurally altered sufficiency of the decision of the court of first instance within the the exercise of procedural rights and the activities of the court. In parframework of the arguments and the requirements of the appeal. The ticular, the implementation of “e-justice” is still under way. The pracdecision of the court of appeal comes into force from the moment tice of filing claims exclusively in electronic form using an electronicof its proclamation. digital signature has appeared. The Council of Judges of Ukraine,

Andrey Kuznetsov

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ANTIKA ANTIKA was established in 2010. Since formation, the firm has built a strong reputation as an independent law firm and continues to grow on the Ukrainian legal services market. It is in the TOP-28 leading law firms in Ukraine. According to the results of research of the legal services market, as carried out by reputable international and Ukrainian guides to the legal profession like The Legal 500 EMEA, Chambers Europe, IFLR1000 Energy and Infrastructure, Best Lawyers, Ukrainian Law Firms. A Handbook for Foreign Clients, 50 Top Law Firms of Ukraine, Client Choice. The Top-100 Best Lawyers in Ukraine, the firm has been recommended in the areas of antitrust, dispute resolution, corporate/M&A, banking, finance and capital markets, real estate, land, energy, subsoil use, energy efficiency and energy saving. The firm received the Legal Award 2012 in the nomination Law Firm — Breakthrough of the Year. The firm is also a Finalist of the Legal Award 2013 in the field of Antitrust, Litigation and Real Estate, in 2014-2016 — in the field of Energy. Partner Alexander Burtovoy was named the best lawyer in Ukraine in the energy field, according to the results of the international assessment The Legal 500 Europe, Middle East & Africa – 2020 Edition. The firm’s Managing Partner, Doctor of Law Alexey Kot, holds the title of Lawyer of the Year in the field of litigation according to The Best Lawyers in Ukraine 2020. Alexey Kot was named the Best Lawyer in Competition according to the Legal Awards 2015 and received The best Scientific Principal Award within the auspices of the Competition Lawyer of the Year — 2017. The firm provides a full range of legal services to national and international companies that do business in Ukraine and abroad. The partners of the firm possess more than 20 years experience in providing business law advice. ANTIKA’s team includes 13 lawyers (4 partners, 5 counsels and senior associates, 4 associates and 11 administrative staff) who have significant experience of various legal practices and provide a full range of legal services to national and international companies that do business in Ukraine as well as abroad in the following fields: telecommunications, heavy machinery, chemical and food industries, automotive, complex development, construction

Address: 12 Khreschatyk Street, 2nd Floor, Kyiv, 01001, Ukraine Tel.: +380 44 390 0920

and real estate, subsoil use, wholesale and retail, media and sports, banks and financial services market, energy efficiency and energy conservation. The firm’s key practices include litigation and arbitration, corporate, construction and real estate, subsoil use, energy and energy efficiency, legal expertise, antitrust. The firm’s main principles are high-quality and timely legal services, strict confidentiality and a bespoke approach to every client’s project. Representative clients include the following: AWT Bavaria, Association of International Automobile Carriers of Ukraine (AsMAP), ArcelorMittal Kriviy Rih, Cadogan Petroleum, Cargill, Chornomornaftogaz (Ukraine), Deposit Guarantee Fund, Enesa a.s., Esan Eczacıbaşı Industrial Raw Materials, Energobank, FC Dnipro, Ghelamco, Heitman, Henkel Ukraine, Henkel Bautechnik Ukraine, Ibis Group of Companies, Imperial Tobacco, International Resources Group, Lantmannen Axa, MF Telecom, Nadra Ukrayny, Nasosenergomash, ViDi Group, Ukrnafta. It also advises the World Bank, EBRD, USAID, TACIS, UNDP, KfW, NEFCO on energy efficiency, utility and the implementation of other projects in Ukraine. ANTIKA is a member of the Ukrainian Chamber of Commerce and Industry, the American Chamber of Commerce in Ukraine, the CanadaUkraine Chamber of Commerce, the European Business Association, and the Alternative Energy Club. The firm’s partners are members of: the Judicial Reform Council, the Working Group on the updating of Ukrainian civil law, the Scientific and Advisory Council of the Supreme Court of Ukraine, the Scientific and Advisory Council of the Higher Economic Court of Ukraine, the Public Council of the Antimonopoly Committee of Ukraine, the Public Council of the State Agency on Energy Efficiency and Energy Saving of Ukraine, the International Bar Association; the Ukrainian Bar Association.

Fax: +380 44 390 0921 E-mail: office@antikalaw.com.ua Web-site: www.antikalaw.com.ua

together with the State Judicial Adminject to authorization on a special Internet istration of Ukraine, is gradually impleplatform through an electronic digital sigmenting the Single Judicial Information nature. and Telecommunication System in It is also appropriate to note the gencourts of all instances and jurisdictions eral trends associated with the change in for the submission of procedural docuthe role of courts in litigation. In particular, ments and evidence in electronic form, courts are increasingly using the status of summons and communications to the “arbitrator”, placing the responsibility for official e-mail of participants in the procommitting, or failing to act, on the parceedings, etc. ties themselves, including in matters of The participants of the case were evidence. given a real opportunity to use so-called On the other hand, there is a strength“electronic” evidence in the trial after ening of the “arbitration” approach of state the rules of procedure for their submiscourts. Among other things, the Grand sion and examination by the court apChamber of the Supreme Court has depeared in the procedural law. clared the principle of immunity and auThere are many cases of use of tonomy of the arbitration agreement, by the right to participate in a case in vidwhich the court must interpret any inaccueoconference mode, which enables the racies in the text of the arbitration agreeholding of court hearings in the event ment and consider doubts with regard to of the physical absence of a party to its effectiveness, validity and enforceabilthe case in the courtroom. This way of ity in favor of its effectiveness, validity and participating in litigation became esenforceability. pecially relevant after the introduction Partner, ANTIKA Law Firm It can be stated in overall terms that of quarantine restrictions throughout changes in the Ukrainian judicial system the country. The participants of cases improve the mechanism of administration were even given the opportunity to of justice and are consistent with the aim participate in the meeting online using their own smartphone, sub- of ensuring effective protection of any violated right.

Maxim Korchagin

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119

Maritime & Shipping

Shipping Business during Pandemic: New Accidents and Challenges Please be reminded that a general average in maritime law means the distribution of salvage costs between the shipowner and the cargo owner. The basic rules on general averages were laid down in the socalled “York Antwerp Rules”, which were first drafted back in 1890 and have been amended several times since. The practical effect of this action on cargo owners is that they will have to make a specified monetary payment (fee) before the container is released. The amount of this payment (deposit) will have to be calculated by the adjusters. The liner bills of lading contain a direct reference to the York Antwerp Rules as the international act to be applied in the event of the shipowner’s declaration of general average. Considering that 800 people, 11 tugboats and two dredgers were involved in the salvage operation of the m/v EVER GIVEN and further considering the claim from the Suez Canal Authority of USD 900 million, which includes direct losses in the form of chanHead of Maritime Law Practice, nel dues, the amount of the fee for each ANK Law Office, Attorney-at-Law, salvaged container could be from several thousand to several tens of thousand US IAC arbitrator under the Ukrainian dollars, depending on the value of the salChamber of Commerce and Industry vaged cargo. This could lead to recipients massively abandoning low-value cargo, which has not been insured. The last time when a giant container ship declared general average was in March 2018 following the fire with m/v Maersk Honam. In that case the cargo owners had to pay 54% of the cargo’s value to get the conClaims from Shippers and Consignees tainer. That percentage consisted of 42,5% of the cargo value for the Pursuant to paragraphs (a) and (d) of Article 10 of the Internasecurity and 11,5% as a deposit on the general average. tional Convention for the Unification of Certain Rules of Law relating to Bills of Lading, 1924 (the Hague Rules), the provisions of the Convention shall apply to any bill of lading relating to carriage of goods Responsibility of the Suez Canal Authority between ports of two different States if the bill of lading is issued in Until official conclusions are published as to the causes of the a Contracting State or the carriage is from a port in a Contracting State. As Malaysia is a party to the Hague Rules and m/v EVER GIVEN EVER GIVEN accident, we cannot overlook the possible responsibility has left a Malaysian port, there is no doubt that the provisions of the of the Suez Canal Authority. In legal terms, it is a state authority with Hague Rules limiting the carrier’s liability can be applied to all bills of legal personality, which came into being on 26 July 1956 as a result lading issued for the cargo carried by this vessel. In this regard, it is of the nationalization of the Suez Canal Company. The Suez Canal worth noting that under paragraph 2 of Article 4 of the Hague Rules, Authority has administrative and financial autonomy and is obliged neither the carrier nor the ship shall be liable for loss or damage aris- to maintain the stated depths and technical characteristics of the ing out or in consequence of: (а) Act, neglect, or default of the master, canal in proper condition. In 1975, Egypt enacted special Law No. 30, mariner, pilot, or the servants of the carrier in the navigation or in the regulating the rights and obligations of the Suez Canal Authority as management of the ship; (d) Act of God. The first case concerns a so- well as the legal status of the canal itself (in addition to the Convencalled navigational error on the part of the captain, while the second tion signed in Constantinople in 1888). According to Law No. 30, the concerns force majeure, the occurrence of which the carrier will still Administration is responsible for managing navigation on the canal, have to prove. Please note that under the Hague Rules, whenever loss maintaining the hydraulic structures in good condition, operational or damage has arisen as a result of unseaworthiness, the burden of dredging and dealing with operational issues. The above-mentioned proof regarding the exercise of reasonable care rests with the carrier functions are made possible by the channel dues paid by each vessel for passing through the Suez Canal. One of the questions raised or other persons claiming exemption from liability. by maritime experts is whether a temporary ban should have been imposed on the passage of vessels such as EVER GIVEN due to exGeneral Average as a Way to Share the Costs of pected adverse weather conditions (strong sandstorm). Another isSalvaging the Vessel and Cargo sue is the assessment of the actions of the pilot (as an employee of One week after the accident, on 1 April 2021, the owner of the the Suez Canal Authority) who was on board the vessel at the time m/v EVER GIVEN (Japanese company Shoei Kisen Kaisha) declared of the accident. If the investigation concludes that the Suez Canal a general average and appointed the world-renowned Richard Hogg Authority did not take reasonable steps to prevent the accident, the Lindley (also known as Charles Taylor) as the average adjusters. case could take an unexpected turn. There is no denying that the main event of the first half of 2021, closely followed by the entire maritime community, was the grounding of the container ship EVER GIVEN (IMO 9811000, flag of Panama), which took place on 23 March 2021. The incident was reported in all the business media, as it brought a new perspective to the role of shipping for the global economy and order. The container ship was on its way from the port of Tanjung Pelepas (Malaysia) to Rotterdam via the Suez Canal, through which, according to various estimates, up to 30% of the world’s container cargo traffic passes daily. The 400-metre-long ship was carrying around 20,000 TEUs worth. The blockage of the Suez Canal led to a queue of 400 merchant ships that were unable to enter the canal at the scheduled time and had to wait their turn in the Red and Mediterranean Seas. During the week after the accident freight rates for transportation of oil products almost doubled. Even after the ship was moved and traffic on the canal resumed, the Egyptian authorities, who own the canal, reported that they had detained the ship and filed a claim for USD 900 million, including USD 300 million in “loss of reputation”.

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Artem Volkov

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ANK LAW OFFICE ANK Law Office was established in 1996 and through years of extensive legal practice has become one of the leading law firms in Ukraine. For over 25 years we have been successfully advising clients on various issues of Ukrainian law and acting as a legal counsel in great infrastructure projects. According to the market research of two leading Ukrainian publishing houses conducted in 2020, ANK was recognized as Law Firm No.1 in Ukraine in Maritime Law and leading law office in the South of Ukraine. Also, starting from 1998, ANK has been listed among TOP-50 law firms of Ukraine. As a result of dynamic development, we combined unique experiences and created a highly-qualified professional team of lawyers. We provide regular legal support to our clients on the most difficult projects and deals. Today the ANK team consists of 25 qualified lawyers including 20 attorneys-at-law, and each of them is an experienced specialist in his/her field of legal practice. Leading Ukrainian business media regularly involve ANK attorneys as experts to comment on the latest legislative amendments and governmental initiatives. In 2020 ANK was selected by the Maritime Anti-Corruption Network as the local partner in Ukraine responsible for the sup-

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port of a HelpDesk for MACN Members during their vessels’ calls at Ukrainian ports. Also starting from June 2020 ANK has acted as the legal counsel for the Maritime Chamber of Ukraine, which is the leading NGO representing the maritime and port community in Ukraine. Through our network of correspondent offices abroad we can arrange effective legal assistance almost anywhere in the world. ANK lawyers are fluent speakers of English, Ukrainian and Russian.

Areas of practice: • Agriculture and Land; • Arbitration and Litigation; • Corporate Law and M&A; • Criminal Law / White-Collar Crime; • International Trade and Arbitration; • Private Clients; • Infrastructure and Real Estate; • Shipping and Maritime Law; • Tax and Legal Due Diligence.

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Ukraine: Wreck Removal of DELFI Tanker: New Issues and Litigation

COVID-19 Pandemic: Shipowners Ask for Seafarers to Be Vaccinated

In September 2020, the bunker The vaccination campaign in Ukraine tanker DELFI, which sank off one of started only on February 2021. However, Odesa’s beaches in November 2019, Ukrainian seafarers were not included in was successfully keeled over and subthe list of priority groups to be vaccinated. sequently towed to the port of ChornoDespite this, many shipowners are already morsk. The lifting operation was the asking to assign to their vessels the searesult of joint efforts by the Ukrainian farers who have been vaccinated. By doSea Ports Administration, companies ing so, the shipowners want to prevent Transship and Brooklyn-Kyiv. Contrary their vessels from spreading COVID-19 to the Harbour Master’s resolutions, amongst the crew and the additional the ship owner of DELFI did not raise costs associated with it. On a separate the vessel on their own within the stipunote, some countries, such as the Philiplated time, so the state, represented by pines, have already made their seafarers the USPA, had to take care of the mata priority group for vaccination purposter. Please be reminded that, under Ares. Since EU countries are far ahead of ticle 125 of the Merchant Shipping Code Ukraine in terms of vaccination rates and, of Ukraine, should the owner of a sunkin some of them, the vaccine is available en vessel fail to raise it within the preto the general public, European seafarers scribed period, such a vessel becomes have an advantage over Ukrainian seafarstate property. However, the Code does Attorney-at-Law, Maritime Lawyer, ers in employment. Given that Ukraine is not answer the question as to which leconsistently among the top five countries gal act should confirm the transfer of ANK Law Office whose seafarers work on foreign ships, ownership of the sunken vessel to the we should learn from the experience of state, given that the rights to maritime the Philippines and include seafarers in vessels are subject to registration. Some of our colleagues insist on one of the priority vaccination groups. the need to establish such a fact in court: in their opinion, the USPA should apply to the court to establish the legal fact. In our opinion, Legislative Changes, which are Expected by the such a decision is an unnecessary measure, as ownership in this Maritime Community case arises on the basis of a direct rule of law, and the contract for First of all, we have to ratify the MLC Convention 2006, which the lifting of the sunken vessel and the act of accepting the vessel as a party to such a contract may be the legal basis thereof. In April acquired legal force in August 2013 and has already been ratified by 2021 the commercial court satisfied the claim of the Ukrainian gov- 97 countries. We should adjoin to the Convention for Management of ernment against the owners of DELFI and recognized the tanker as Ships’ Ballast Waters of 2004, which has already been ratified by 80 state property. However, the mere existence of this dispute prevents countries and requires from contracting states to ensure that their the state (represented by the USPA) from disposing of the lifted prop- vessels comply with high standards and procedures for the manageerty. Moreover, USPA still has to bear the costs for storage of the ment and control of a ship’s ballast water and sediments. We have lifted vessel. In addition to the aforesaid court claim, Ukrainian courts to think of ratification of the Nairobi Convention on Wrecks Removal are considering a claim of the Prosecutor’s Office for compensation 2007, which provides a sound legal basis for coastal states to remove of the damages caused by sea pollution (USD 16,000), as well as the from their coastlines wrecks which pose a hazard to the safety of USPA’s claim for recovery of the liquidation costs (UAH 2.7 million), navigation or to the environment. In addition to ratification of the which has already been satisfied by the court of first instance. There aforesaid international treaties, we have to implement in national laws is obviously no “universal recipe” for preventing accidents such as P&I Club guarantees as alternative security for maritime claims. We DELFI. However, a situation in which a vessel without flag and class should implement electronic tests for seafarers under the CES (Crew documents has been “operating” in Ukrainian territorial waters for Evaluation System) standard, which are widely used in EU, and to enseveral years without insurance is clearly beyond the realm of reason sure full-time operation of a so-called “single window system” during processing of arrival/departure of ships and cargoes in the ports. and requires a response at the highest level.

Kostiantyn Moriakov

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Medicine & Healthcare

Why do Okhmatdyt, Feofania and other Flagships of Ukrainian Healthcare Remain Outside the Law Ukraine continues to have two healthcare systems. One, introduced in 2018, is based on the autonomy of medical institutions and transparency of funding; their services are available to all, and the institutions themselves operate under a contract with the National Health Service. The vast majority of state-funded facilities providing services to the public are municipal and belong to the citizens, but the number of private operators signing contracts with the NHS is also growing with every passing month. All good thus far, but there’s a hitch: Ukraine’s leading clinics, which provide highly specialist services are still unavailable to patients who expect to get these services under the transparent principle of “the money follows the patient”. These are 33 medical institutions under the Ministry of Healthcare (including the well-known Okhmatdyt, over 30 institutions of the National Academy of Medical Sciences of Ukraine, 5 Managing Partner, ILF institutions of the State Management of Affairs, among them Feofania, which Ukrainian President Volodymyr Zelensky called on to open its doors to the general public. These institutions are technically funded by the state, but under the outdated Semashko system whereby the funding a clinic gets depends on the number of beds it has. It is this funding approach that the healthcare reform carried out in Ukraine sought to get rid of. Thus, Ukrainians essentially keep paying for medical services from their own pocket in certain medical institutions that have zero incentive to compete and grow, and the state is unable to give citizens any real guarantee with regard to the quality and accessibility of such services. Let’s try and find out why this problem exists and how it can be resolved. First of all, let us recall how the National Health Service does things. It receives funds from the state budget to pay for the public’s medical services. When Ukrainians require a medical service, such as a liver ultrasound scan, the NHS pays the appropriate medical institution for this provided that the service in question is on the Medical Guarantees Program list. The patients themselves don’t have to pay anything. Their family doctor writes them a referral for this, valid in any medical institution that has a contract with the NHS. When the reform was launched back in 2018, all municipal medical institutions that wished to participate in the state financial guarantees program had to become autonomous, i.e. become independent enterprises able to enter into contracts. This presented a challenge for the vast majority of their owners — local government authorities. Prior to the reform, the owners’ power over these institutions was absolute, since it was up to local government authorities to distribute state funds among clinics. Eventually, however, medical subventions based on the number of beds were removed from the state budget. After the introduction of the state financial guarantees program, subventions were abolished, leaving the owners with a choice: whether to fund medical institutions at their own expense or allow them to become enterprises and sign contracts with the NHS. local government authorities chose the second option. It was then that all small and

large polyclinics, specialist and general regional hospitals joined the new healthcare system. From that point on they have been providing the public with state-guaranteed services, receiving funds for this from the NHS straight to their bank account. This fosters healthy competition between medical institutions in different regions, since the NHS pays under the extra-territorial principle, meaning that the patient can choose any institution, regardless of his or her place of residence: as long as the institution has a contract with the NHS, the service will be paid for by the state. The NHS currently covers a wide range of services for the public, from primary care (consulting a family doctor, treatment of the majority of common illnesses, injuries and poisonings, as well as diagnostics) to complex emergency operations and procedures (e.g. myocardial infarction, chemotherapy, etc.). These services are provided by medical institutions that have contracts with the NHS. However, there are certain services that can only be provided at a high level by medical industry leaders, thanks to the resources that the state has been investing in them for many years. For instance, the National Children’s Specialized Hospital Okhmatdyt performs unique bone marrow transplants. Open heart surgery, neurosurgery and other very specific but no less critical forms of treatment are provided only in medical institutions that are beyond the auspices of the state program of medical guarantees and contractual relations with the NHS. Getting into these clinics is often difficult for the average Ukrainian even with a referral from his/her family doctor, as no transparent mechanism exists for it. This violates the principle of justice and solidarity, since many Ukrainians that suffer from serious conditions don’t have access to the treatment they need under the transparent rules. Of course, there are foreign hospitals that offer such services, which is why we often see fundraising pleas on the Internet: “Help Olenka, Mykhailyk, Natalka”. Complicated operations cost a lot, but German or Israeli clinics will at least perform them as long as they get paid. With Ukrainian state medical institutions it’s not that easy: neither patients nor the NHS can transfer money for services to them since it’s not strictly legal. The issue here is that under current legislation, state medical institutions are not economically independent entities with the status of a service provider, and thus may not sign contracts with the NHS. Reorganization is necessary to make them autonomous, enabling them to participate in the state financial guarantees program. So how can these institutions be turned into independent enterprises with their own current accounts and the ability to sign a contract with the NHS? As with their municipal counterparts, this will require authorization from their owners. For a municipal clinic, this means the local community, but a state one is owned by the state, specifically the Cabinet of Ministers of Ukraine. There’s a catch here though: each medical institution belongs to the jurisdiction of a specific central executive body or state body, which means that the decision on reorganization must be issued both by the Cabinet of Ministers and the

Tetyana Gavrysh

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Address: 22 Shovkovychna Street, Kyiv, 01024, Ukraine

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Tel.: +38 050 339 2307 E-mail: office@ilf-ua.com Web-site: www.ilf-ua.com

State Management of Affairs, or by the Cabinet and the Ministry of Healthcare, respectively. The Cabinet of Ministers even has the power to liquidate an institution and create a new state-owned medical enterprise, although it would lead to mandatory dismissals and loss of license, not to mention the process could take months, during which time the institution would remain idle. That’s why a joint decision by the authorized agencies is so important in order to make reorganization as painless as possible. What’s interesting is that any such attempts at reorganization today are met with protests from the leadership of these leading clinics. The chief doctors (administrators) aren’t happy with the rates that the NHS offers them for their services. It should also be noted that these people have considerable influence as they are in charge of the most prominent medical institutions, which Of Counsel, ILF makes advocating for change here all the more difficult. It goes without saying that a special approach to pricing is warranted when making decisions regarding the future of these institutions. However, there are other considerations to keep in mind here too, such as the effectiveness of management, cost optimization, changes in practices and treatment standards, as well as approaches to service and care. And yet, even with this seemingly insurmountable obstacle, three factors speak in favor of reorganization. First, according to current

legislation, a medical institution must be reorganized into an enterprise to be able to apply for a contract with the NHS. The only clinics exempt from this are those that belong to of the Ministry of Internal Affairs, Security Service of Ukraine and other lawenforcement agencies. Thus, the fact that leading clinics remain in their current state is a violation of the law by the executive branch of power. Secondly, the owners don’t have to ask clinic administrations as to whether they are fine with the rates offered. A chief doctor’s dissatisfaction is not an argument for delaying reorganization. Thirdly, the abolition of medical subventions, which was the final push that forced local medical institutions to go autonomous, simply does not work with the leading clinics, since Parliament maintains the old funding system for these institutions in its yearly budget laws through the budgets of the appropriate executive bodies. If adherence to the law is not reason enough to reorganize these institutions as soon as possible, here’s another: by funding them through the NHS we’ll be able to eliminate the last “gray zones” in the Ukrainian healthcare system, since all payments for services will be cashless and done via bank transfers, making them transparent and traceable. This will be a significant step towards fair competition on the healthcare market, which should improve the quality and affordability of medical services and make healthcare attractive to investors.

Irina Selivanova

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Mergers & Acquisitions

The Impact of Foreign Investment Control on CrossBorder M&A Transactions In light of strategic foreign investments from a range of countries, an increasing number of jurisdictions are adopting foreign direct investment1 (FDI) scrutiny mechanisms and measures in response to potential threats to national interests and security. This article provides an overview of regulatory trends around the world, development of screening mechanisms in Ukraine and their effect on cross-border transactions.

Foreign Investment Screening Regimes In recent years, there has been a global tendency to implement new and stricter investment screening regimes. Given geopolitical factors, national security concerns and the need to protect strategicalPartner, Nobles ly important industries, more Partner, Nobles and more EU and other market Volodymyr Yakubovskyy’s practice focuses on Alexander Weigelt is a qualified lawyer in Germany economy countries have been representing and advising international companies as (Rechtsanwalt), who’s been working in Kyiv since taking steps to enhance their well as major Ukrainian industrial groups in mergers 2008. Mr. Weigelt’s focus is on corporate and regability to screen and review for- and acquisitions and other cross-border investment ulatory advice for international clients, particularly eign investments for compat- and financing matters with reference to Ukraine. Mr. those with their headquarters in German-speaking ibility with national interests, Yakubovskyy’s areas of particular expertise include in- jurisdictions. Mr. Weigelt is an expert in regulated inand to prohibit investments dustries like retail, e-commerce, telecommunications, dustries, particularly pharma, renewables, healthcare, that they perceive as hostile IT, media, agriculture, pharmaceuticals, and financial/ automotive and aviation. or unwanted. Those policies insurance institutions. are largely instigated by the increasing volume of inward investments from authoritarian countries, the attraction of FDI and discourage the readiness of investors to submainly China. ject themselves to complicated screening measures and procedures Foreign investment control regimes have been implemented or that are costly and time-consuming. This is particularly true for crosstightened recently in the United States (FIRRMA, 2018) and Australia border transactions that require approval by more than one national (FATA, 1975; FATR, 2015). In 2019, the EU adopted Regulation (EU) screening authority. As a result, FDI screening regulation may cause 2019/452, which sets a legal framework for EU member states to ad- substantial discouragement and uncertainty for potential foreign indress foreign direct investments. However, the decision on whether vestors contemplating multijurisdictional M&A deals. to set up a general screening mechanism or to screen each particular FDI on a case-by-case basis remains the sole responsibility of each EU FDI Screening Regime in Ukraine member state. The global trend of increasing FDI scrutiny is particularly chalAs of May 2021, 18 out of the 27 EU member states had established national FDI screening regimes, and many of them are taking lenging for Ukraine: On the one hand, external political and security further steps to apply an even stricter approach to FDI. For example, threats require that Ukrainian authorities carefully monitor investment Germany, where Chinese investors had acquired robotics and factory from abroad and, if necessary, prohibit it. On the other hand, the Ukraiautomation specialist KUKA in 2016, has since repeatedly revised its nian economy depends a great deal on foreign investment for its furFDI control regime, with the latest strict rules applicable to all transac- ther development. At present, no special legislation exists in Ukraine that regulates tions signed after 1 May 2021. As regulation of FDI flow has become common practice in many the screening of international investments of strategic importance jurisdictions with the intention of protecting national and security in- from the perspective of state security. A quasi-control function is parterests, there is growing concern regarding its chilling effect on cross- tially performed by the Antimonopoly Committee of Ukraine, which border M&A activities. FDI screening regimes typically provide for as- exercises FDI control on a case-by-case basis in the context of consessment and investigation procedures, require authority approvals, centration procedures. The Motor Sich investment case has outlined deficiencies in FDI set conditions, thresholds and other barriers to foreign investments. The growing level of complexity of regulations can adversely affect regulation, and triggered moves towards development of a comprehensive, more consistent foreign investment screening regime. The frustrated acquisition of a controlling stake in Motor Sich, one of the 1 concepts of “foreign direct investment screening regime”, “foreign investment control”, “foreign world’s largest producers of engines for helicopters and planes by Chiinvestment screening” are used interchangeably in this article, depending on the jurisdictions where nese investors, has demonstrated the lack of legal regulation in Ukraine they are applied.

Volodymyr Yakubovskyy

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Alexander Weigelt

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NOBLES Nobles is a leading full-service corporate law firm in Ukraine that advises public and private companies, commercial and investment banks, private equity firms, funds, government entities and private high net worth individuals in various industrial sectors and practice areas. The firm’s team is trusted for its excellence and efficiency, meeting the expectations and business needs of its clients. A solid team with first-class international experience and exceptional local expertise is committed to providing premium quality advice and uncompromising compliance. Nobles lawyers are acknowledged experts in many fields, with market-leading understanding of different practice areas. The firm has particularly profound knowledge and an extensive track record in areas such as: commercial, corporate and M&A, antitrust and merger control, insolvency and restructuring, real estate and land law, employment, litigation and international arbitration, intellectual property, regulatory and government affairs.

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related to strategically-important sectors of the national economy. It has also shown the destructive potential of sensitive foreign investment for international relations. Subsequently, the government of Ukraine has developed a draft bill that foresees establishment of a foreign investment screening regime for the purpose of protecting Ukraine`s national security. This Draft Bill No. 5011 On Foreign Investment in Commercial Entities of Strategic Importance for the National Security of Ukraine of 3 February 2021 intends to implement foreign investment impact assessment systems and prevent excessive foreign capital in industries of strategic importance, in light of best international practices and Regulation (EU) 2019/452. Draft Bill No. 5011 is currently being considered by the Ukrainian Parliament. Once adopted, this law will not only regulate the mechanism of attracting foreign investments in enterprises of strategic importance but also release the AMCU from its uncharacteristic quasi-control functions in this area.

The firm supports clients on a day-to-day basis, which generates a deep understanding of relevant industries and business areas. Nobles’ team has developed profound insight in the following industries: agriculture, aviation, automotive and machinery, banking and finance, insurance, distribution systems and logistics, retail, energy, renewables, fashion and cosmetics, information technology, pharmaceuticals, health care and medical devices. Nobles holds itself to the highest compliance standards on the Ukrainian legal market. The firm keeps accurate and complete accounting records and adheres strictly to international anti-bribery requirements. Nobles’ experts regularly receive high recognition from reputable legal rankings. The recent editions of The Legal 500, IFLR1000 and Who’s Who Legal recommend Nobles as a leading law firm in commercial, corporate and M&A and banking, finance and capital markets.

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screening, the Commission will either approve or deny the intended foreign investment. In the latter case, the potential foreign investor must refrain from any further actions related to the investment. Procedurally, the current text of Draft Bill No. 5011 links the foreign investment screening mechanism to the AMCU’s existing control mechanism of mergers (concentrations). In particular, the AMCU will only issue its merger (concentration) approval if the Commission has first cleared the respective FDI. Ukraine’s attempt to establish systematic state control over the flow of foreign investments into strategically important industries is considered crucial for national security. However, the screening regime foreseen in Draft Bill No. 5011 requires further sophistication. For example, the following are necessary: precise screening criteria; realAssociate, Nobles istic screening timelines (both for state Yuliia Vavryshchuk is a legal associate focusing on cor- and non-state-owned assets); clear Key Aspects of Ukraine’s porate and commercial law. Ms. Vavryshchuk supports powers of state authorities in FDI conProposed FDI Screening Regime: international companies in their investment projects trol measures; pre-court legal remedies • Notification and approval. Foreign invest- and setting-up their Ukrainian subsidiaries. Her areas to challenge negative decisions of the ment in strategic industry enterprises will of expertise include IT, pharmaceutical, and retail. Commission (besides going to court); be possible only upon notification and streamlining assessment measures approval of transactions underlying such with other Ukrainian laws, etc. investments by the newly-established Interagency Commission on Finally, there is a considerable risk that insufficient implementaForeign Investments Impact Assessment (Commission) after an tion tools under Draft Bill No. 5011 may significantly impede foreign assessment (screening) has been carried out. investment in Ukraine. Therefore, it is essential to balance out the in• List of strategically important and critical industries for the purpos- troduction of restrictive FDI screening instruments with the creation es of FDI screening. Draft Bill No. 5011 provides an extensive list of of favorable conditions and opportunities for unproblematic foreign more than 30 industries that are considered strategically important, investments. The recent adoption of Law of Ukraine No. 1116-IX On including encryption technology, space, nuclear energy, production State Support for Investment Projects with Significant Investments in and sale of weapons and military equipment, extraction of mineral Ukraine of 17 December 2020 is a step toward reaching this objective. resources, etc. The government will separately determine the monitoring procedure of enterprises in such industries for assessment Conclusions of FDI impact and their compatibility with the national security inThe global trend of introducing and expanding foreign investment terests of Ukraine. • List of transactions subject to scrutiny. Draft Bill No. 5011 intro- screening regimes requires potential investors in cross-border M&A duces seven groups of transactions involving entities in strategic deals to contemplate additional aspects, timelines, and measures required by applicable FDI screening rules in all affected jurisdictions. spheres that will be subject to screening. • Two-stage procedure. The screening procedure will be divided Increased attention needs to be paid to the due diligence and deal into two stages: (i) Review of the investor’s request for FDI by structuring stages so as to address regulatory risks. To minimize deal the Ministry of Economy of Ukraine, which shall determine within risks and avoid frustrated costs, potential investors will need to involve 10 days whether the foreign investment requires further screen- specialized legal advisors at an early stage. In a best case scenario, effective FDI screening mechanisms can, ing by the Commission; and (ii) Screening by the Commission (if deemed necessary by the Ministry of Economy), basically assess- if reasonably implemented, provide foreign investors with consistent ing the FDI’s potential impact in accordance with criteria to be fur- rules, predictable procedures and legal certainty for their investment ther introduced by the government. Upon completion of the said decisions, while states are able to protect core national interests.

Yuliia Vavryshchuk

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Natural Resources

Features of Local Mineral Law Legislation in force in Ukraine, par• a plan for the calculation of mineral reticularly Acticle 23 of The Code of Laws sources on a topographical basis with on the Subsoil of Ukraine stipulates delineated boundaries of the category of that extraction of minerals of local sigreserves, boundaries of land and mining nificance and peat with a total depth of (if any), contours of the license area with exploitation of up to two meters within geographical coordinates of the angular a land parcel is permitted, as is underpoints of the subsoil, and for groundwaground water (except mineral water) for ter with water intake structures and their all needs, except for the production of geographical coordinates (error less packaged drinking water, provided that than 1 second) and with geological cut the production of groundwater for each lines; of the water abstractions does not ex• a hydrogeological map (for groundwater ceed 300 cubic meters a day. deposits); However, for agricultural enterpris• characteristic geological sections with es where the share of agricultural comboundaries of categories of reserves modity production exceeds 75% in the and symbols; previous year, the limits on groundwater • copy of the environmental impact asextraction are not applied provided that sessment report certified by the apsuch water is used for own use. plicant in accordance with the Law of The list of local minerals defined Ukraine On Environmental Impact Asby Decree No. 827 of the CMU of 12 Desessment; cember 1994 includes limestone, gyp• for enterprises that start mining — a sum, gaju, sapropel, chalk, sand, loam, program of work on commissioning the soup. We also recall that although water Managing Partner, ANTIKA Law Firm deposit, specifying the individual stages and peat are not minerals of local imporand dates of their implementation, the tance — as noted above — their treatsources of financing until the enterprise ment is similar. reaches project capacity. At the same time, restrictions on extraction without permission The decision to issue a permit is made within 30 days from the make any “unauthorized” extraction commercially unattractive, even date of submission of the documents, and includes obtaining approval if it is extraction for own use — primarily due to the impossibility of an from the local council on whose territory the deposit will be located. effective increase in production. Among the above-mentioned list, we should first highlight the Therefore, the issuing of mining permits is necessary. protocols of the State Commission on Mineral Resources of Ukraine Formally, mining requires: (Ukrainian Territorial Commission for Mineral Reserves, Central Com1) special permission to use the subsoil for industrial exploitation of mission for Mineral Reserves, Scientific and Technical Councils/Techthe deposit. nical Councils) on the approval (validation) of reserves. 2) an oil and gas mining lease. A permit for industrial exploitation of mineral resources is issued 3) approved project documents for construction of a quarry. only if the deposit in question has been explored and an expertise and In practice, however, the issuing of such documents is accom- assessment of the reserves has been carried out. The only exception panied by the need for complicated procedures and the receipt of a to this rule is the extraction of oil and gas, for which both geological exnumber of other documents, the presentation of which is provided for ploration and commercial exploitation can be immediately authorized. by law or is subject to the provisions of other special legislation, parFor other minerals, these are two distinct stages that will actually ticularly environmental. need to be completed twice. The situation is complicated by the fact that, unlike minerals of state importance for which geological exploration of the deposit could have been carried out earlier (for example, Procedure for Obtaining Special Permission in Soviet times), there are almost no approved reserves for minerals. to Use Subsoil In this way, a new additional step is added for the potential subThe procedure for obtaining a special permit for the use of subsoil soil user: resources was approved by the Decision of the CMU of 30 May 2011. 1) to obtain a special permit for the geological study of the deposit; Permission to exploit local mineral resources is granted by the 2) to explore and assess mineral resources; State Geo subsoil without the holding of an auction. To obtain permis- 3) to approve the results and quantity of reserves with the State sion, the following documents are submitted to the State Geo subsoil Commission of Ukraine for Mineral Reserves. through the subsoil user’s electronic office: The procedure for obtaining special authorization for carrying out • declaration of prescribed form; a geological study is generally similar to that for an exploitation per• explanatory note describing the object, the state of its geological mit. However, taking into account the time required for exploration and study, the method of exploitation, the justification for the use of assessment of reserves, this procedure adds between one and a few subsoil, indicating the capacity of the enterprise; years to the total period needed for obtaining an industrial exploitation • results of chemical and bacteriological analysis of water with a pe- permit. riod of not more than six months (for groundwater deposits); Another critical and significant element in the time spent was the • copies of protocols certified by the applicant, State Commission for need to obtain an opinion on the environmental impact assessment Mineral Resources of Ukraine (Ukrainian Territorial Commission for in accordance with the Law of Ukraine On Environmental Impact AsMineral Resources, Central Commission for Mineral Reserves, Sci- sessment. entific and Technical Councils) on approval (appraisals) of stocks; The Act stipulates that in the conduct of an environmental impact • catalogue of geographical coordinates of the angular points of the assessment procedure, a public discussion lasting from 25 to 35 days subsoil (less than 1 second of error) indicating its area, and for is mandatory. In practice, this phase may take up to six months or groundwater extraction, a catalogue of geographical coordinates longer. of water intake structures; Industrial extraction of locally important minerals usually requires • view map (at least 1: 200,000) the construction of a quarry, which itself has a significant impact on • a situation plan with the delineated boundaries of the mining area the environment and is not well received by the inhabitants of the surand the geographical coordinates of its angular points (error less rounding cities or towns. The situation is complicated by the fact that than 1 second) on a scale that verifies the accuracy of the coordi- often a variety of ‘ecological’ public organizations incite residents to nates and for groundwater; A situational plan with waterworks and create a conflict situation, then propose a way to the future subsoil their geographical coordinates; user to ‘solve’ the situation.

Alexander Burtovoy

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In some cases, therefore, the question of whether to go through an environmental impact assessment procedure may be one of the most difficult to solve, and the costs incurred by the subsoil user make the mining of local minerals commercially unattractive. After obtaining a special permit, the subsoil user and the State Geo subsoil sign a subsoil use agreement, which is an annex to the permit and lays down the obligations and restrictions for the subsoil user. Then you can get an oil and gas mining lease. The procedure for obtaining it is regulated by the Decree of the Ministry of the Environment and Natural Resources of 27 January 1995. To obtain an oil and gas mining lease, an application is submitted to the territorial body of State Labor, to which is attached a draft mining recusal form. The decision to issue the document is taken within 21 days. Once the mine is cleared and the approved project documents are in place, the quarry and mining can finally begin. In most cases, however, the construction of a quarry is preceded by a land issue.

Land Registration In the vast majority of cases, the subsoil user is beginning to think about the extraction of local minerals that already own or use land. But what is the purpose of this land? Mining and the construction of a quarry on the land must have an appropriate purpose. In practice, such a target assignment is only granted under a special permission to use the subsoil and to obtain a patch for the purpose of «industrial exploitation of the deposit», and without a permit this is virtually impossible.

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Therefore, in most cases, the land has an agricultural purpose. And before a quarry is built, that purpose must be changed. Alternatively, if there is no subsoil user for the land, it must be allocated in the prescribed manner. On the positive side, the existence of a special permit for the use of subsoil entitles the holder to the right to land without an auction. Both of these procedures could become another significant bureaucratic impediment to mining. For example, refusal by the authorities to grant permission for the development of a land allocation project is very common, but it is necessary for both the change of purpose and its withdrawal. Although a person has a right under a special permit, a refusal is granted on the basis of formal or spurious grounds, which leads to a decision on the land being adopted in court. But the draft objection that has been developed needs to be approved. That is, the decision needs to be approved by the same body that has already refused to approve at the authorization stage. Another problem that subsoil users sometimes face is that they have not taken care of the land before obtaining a special permit to use the subsoil. In the process of issuing a special permit, particularly during public discussion, information about the construction of the quarry becomes public. This enables third parties to obtain ownership or use of the land where the quarry is to be found. And once the permission is obtained, the subsoil user can discover that the land needed by him already has an owner or user with whom to negotiate. In this way, the exploitation of local deposits requires an equally cautious and sensitive approach, as does the exploitation of minerals at national level. In fact, the authorization procedure is no less complicated and certain intermediate stages may become a significant obstacle to getting authorization.

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Outsourcing

Outsourcing in the Financial Services Industry (c) What are the most material legal or regulatory requirements and issues regarding data protection and data security that may arise on an outsourcing transaction?

Basics of Legal Regulation of this Field (a) Are there any laws that specifically regulate outsourcing transactions in the Ukrainian financial services industry?

The law restricts access to three broad categories of data: confidential data (e.g., personal data), secret data (e.g., professional secrecy) and classified data. Moreover, some data categories that are protected under the law (e.g., banking secrecy, insurance secrecy, etc.), must be processed by an integrated data protection system (IDPS), which is a combined instrument of approved software and hardware devices enabling the adequate protection of data.

There are no laws in Ukraine applicable to outsourcing in the financial services sector in general. However, please refer to the response to question "Latest legal trends in the area" below regarding the upcoming general framework.

(b) Are there any additional regulatory requirements for certain types of outsourcing transactions?

(i) Banking Secrecy

At the secondary legislation level, Ukrainian law permits a bank to share the National Bank of Ukraine (NBU) adbanking secrecy with an outsourcer, provided opted an implementing regulation for that it does so to facilitate the outsourcer to outsourcing in the banking industry. perform functions supporting the bank’s acOutsourcing is defined as a transfer of a tivity as it is defined under law. Notably, cerbank’s function to an outsourcer for the Senior Associate tain banks take the view that the relevant propurposes of cost and process efficiency.1 vision of the law only permits banks to rely The regulation makes it clear that Baker McKenzie — Kyiv on this legal basis when sharing confidential the outsourcing bank remains liable for banking information with a resident entity. outsourced functions both vis-à-vis its Hence, it cannot be excluded that if the project entails sharing relevant clients and the regulator. A bank is not permitted to outsource its lidata with a foreign outsourcer, the customer might need to seek addicensable banking activity and risk management function (subject to tional consents from its clients. exceptions). Likewise, a similar regulation issued by the National Financial Services Commission is applicable to the risk managing prac- (ii) Insurance Secrecy tices of an insurance company, which makes any outsourcing subject Unlike banking secrecy, the law does not expressly permit an into full compliance with the requirements of this regulation. surance company to share restricted data with an outsourcer. ThereIn addition, some NBU requirements do not apply to outsourcing fore, it may need to rely on customized data sharing clauses in its clias such though they may have an indirect effect on the same. Thus, ent agreements. the NBU adopted specific requirements pertaining to the operational activity of a bank, which may imply that only a bank’s employees may (iii) Personal Data Protection perform certain functions. In view of this, an outsourcing agreement The Law of Ukraine No. 2297-VI On Personal Data Protection of 1 may need to include provisions to ensure that the service provider’s June 2010 (Data Protection Law) establishes requirements for the propersonnel are appropriately authorized to perform the respective func- cessing of personal data and the relevant obligations of both data controltions under an outsourcing agreement. lers and processors. Given this, a financial institution handling its clients’

Maksym Hlotov

Key Issues (a) Legal structure Please refer to the response to question "Illustrative case studies" below. In the scenario in this question, a local subsidiary of an international or European financial services group may enter into a separate agreement with a shared services entity or service provider outside of Ukraine that provides services to multiple group entities and that is likely to incorporate the terms of the agreement with the parent company. Domestic financial institutions are more likely to contract with local outsourcers.

(b) Procurement Process It is common to procure outsourcing through a competitive process. For example, through a request for a proposal in the event that case functions are outsourced to a third party provider beyond the financial services group. In the public sector (e.g., if a customer were a financial institution owned or controlled by the state or local community), the process is more formal and subject to specific requirements. That said, if a customer were a bank, it may rely on the available exemption for procurement of services supporting banks in the rendering of their banking services and carrying out of banking operations in accordance with the applicable law. 1

Separate NBU requirements are applicable to a bank acting specifically in the capacity of an issuer and/or an acquirer of payment instruments.

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data may be regarded as a controller of such data and an outsourcer — as a processor. The Data Protection Law permits the transfer of personal data on a number of legal bases, including the execution of an agreement with a third party in favor of a data subject. In practice, however, financial institutions in Ukraine tend to rely on a data subject’s consent in the form of a data privacy clause stipulated in a client agreement. If the project entails the transfer of personal data outside of Ukraine, the Data Protection Law permits transfer, without additional conditions, to a jurisdiction affording the appropriate level of protection. European Economic Area (EEA) countries and jurisdictions that acceded to Convention 108 are regarded as jurisdictions providing such a level of protection. The Ukrainian government was meant to adopt a list of other jurisdictions considered to provide sufficient protection, but it has not yet done so. Therefore, where personal data is to be transferred outside Ukraine to a jurisdiction other than an EEA country or a Convention 108 signatory, a customer may need to consider other legal basis under the Data Protection Law. Hence, an outsourcing agreement may need to include customized provisions to ensure the compliance of such transfer with the Data Protection Law.

(iv) Data Residency Requirements The applicable standards pertaining to setting up an IDPS do not prohibit the outsourcing of data processing. However, from a practical perspective, the standards are drafted in a manner indicating that it should be created in Ukraine (please note that the applicable standard may indicate that the respective premises of the data center should be built on Ukrainian soil in accordance with the applicable building

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standards). Given this, the outsourcing of data processing by a bank outside of Ukraine may be subject to additional regulatory coordination with the NBU.2

(v) Data Security Requirements The NBU has started to implement the ISO/IEC 27000 series of standards. Thus, the applicable regulation specifies the requirements pertaining to the information security management system. These include a few requirements that could potentially be incompatible with the outsourcing environment because they need to be implemented within the “perimeter” of the relevant banking organization rather than outside of it. In view of this, an outsourcing agreement may need to include customized provisions to ensure that the service provider’s personnel are appropriately authorized to access the data system(s) of a financial institution in order to perform the respective functions under the outsourcing agreement.

(d) Intellectual Property The regulation of IP rights in outsourcing agreements depends on the particular type of outsourcing operation. It could be as simple as the provisions on the IP right transfer from software developers and corresponding NDA provisions for the benefit of the bank, and as complex as a sophisticated licensing arrangement between a financial institution, third parties (holders or licensees of IP) and software developers/companies providing the service on behalf of the financial institution in relation to all sorts of IP rights, including software, copyrights on visual art work, marketing materials, patents on financial data processing, trademarks, etc. While preparing the transaction it is recommended to get a clear understanding of the structure, the parties involved, rights transferred but also market practice on how the particular software development/service delivery is organized and how the software is being developed or service is being delivered.

(e) To What Extent can a Party Limit Liability under Local Law? Ukrainian law provides for some legislative restrictions on the limitation of liability. Hence, it would be advisable to consider this matter on a case-by-case basis in the context of a specific transaction for the purposes of a bespoke outsourcing agreement.

What Remedies are Available to Customers? Under Ukrainian law, a customer may receive damages for a breach of the outsourcing contract. Parties may also set out specific penalties in a contract (either a fine, i.e., a lump sum defined as a fixed percentage of a failed obligation or an interest charge (Ukrainian 2

Moreover, under the applicable NBU regulation, a bank is required to carry out the processing and storage of banking transaction data on servers and/or other computer equipment that are physically located on the territory of Ukraine. In view of this, the processing of the data controlled by a bank in the outsourcer’s environment outside of Ukraine could technically be regarded as a breach of the above requirement.

Tel.: +380 44 590 0101 E-mail: kyiv@bakermckenzie.com Web-site: www.bakermckenzie.com/ukraine

legislation provides for two different forms: penalty interest (“penia”), which is a form of penalty, and interest (“procenty”))3. In addition, Ukrainian law permits “operational commercial sanctions” to be set out in a contract, which may be applied, among other things, as a preventive measure. Given this, the customer may negotiate measures more conventional for outsourcing contracts such as credits for failing to achieve certain milestones, service levels and service level credits, etc. However, these measures are not common in Ukraine at the present time.

Latest Legal Trends in the Area The Verkhovna Rada of Ukraine recently adopted a draft law on financial services in the first reading, which is designed as a general legal framework for the industry. The objective is for this framework to be adopted together with a set of detailed “deep dive” laws on particular financial services sectors. The draft law provides a general framework on outsourcing in the financial services industry and indicates that a financial services firm can outsource some of its functions and/or processes within such functions, the list of which will be provided in the draft law and aforementioned laws. Moreover, a financial services firm will need to: (i) inform a regulator about its intention to outsource its internal functions/processes; and (ii) ensure that an outsourcing agreement meets the requirements set out by the same regulator. In addition, on 1 July 2021 the new law on capital markets comes into force, which provides for a separate regime of professional secrecy at the capital markets (similar to those described in question "Key issues" (a) and (b) above). The capital market participant may share professional secrecy data with an outsourcer pursuant to the outsourcing agreement. That said, the law contains a little caveat saying that it may share such data provided the outsourcer is required under the law to protect the respective professional secrecy. It is not entirely clear whether such obligation under the capital markets law extends to the outsourcers, hence, it cannot be excluded that the capital market participant may need to seek additional consent from the client.

Illustrative Case Studies A common case in the Ukrainian banking sector is the outsourcing of the provision of IT services to a shared service (a designated special purpose vehicle), which entails the transfer of data controlled and processed by a bank to the respective entity. Therefore, from a bank’s perspective, data protection and other regulatory requirements pertaining to the project are the key compliance aspects. Given this, data management schedules or separate agreements would make up a major contractual element of the transaction. 3

If, however, a customer was a financial institution owned or controlled by the state, depending on the position taken by the customer, the parties might not be able to set out the applicable penalties in a contract because the law sets them out.

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Patents

IP Reform: What’s New in Ukrainian Patent Law? The year 2020 is best remembered introduced by Law of Ukraine No. 816-IX of in Ukraine not only for the pandemic, 21 July 2020 On Amendments to Certain quarantines and lockdowns, but for rapLegislative Acts of Ukraine Regarding the id ongoing reform in the field of intellecPatent Law Reform. tual property. The long-awaited reform The amended patent law introduced of the IP field has progressed, but has the possibility for foreigners (both natural not yet put all things right. persons and legal entities) to independently In general, the reform has affected perform a number of actions aimed at obthe system of state protection of inteltaining a patent, such as filing applications, lectual property. A reminder that on 1 paying fees, receiving notifications, etc. June 2016, the Cabinet of Ministers of Previously, the mentioned actions on behalf Ukraine approved the Concept of Reof a foreign person could be performed exforming the State System of Legal Proclusively by a patent attorney. However, the tection of Intellectual Property in Ukraine. Law nevertheless obliges foreign persons The Concept provided for, inter alia, reto appoint patent attorneys and inform the placement of the three-level system of NIPA of them no later than two months from state administration of intellectual propthe date of performance of the above-menerty with a two-level one. In 2019, the tioned independent actions. Otherwise, the draft National Strategy for the Developapplication will be considered withdrawn. ment of the Field of Intellectual Property The Law significantly expands the list was presented, which highlighted the of objects that may not receive legal protecneed for institutional reform in the field tion either as inventions or as utility models. of intellectual property. It includes methods of treatment and Within the framework of implemen- Partner, Doubinsky & Osharova diagnostics; human cloning processes; protation of the Concept, on 16 June 2020, cesses of changing the genetic identity of the Verkhovna Rada of Ukraine adopted humans and animals; use of human embrythe Law of Ukraine No. 703-IX On Introos for industrial or commercial purposes; ducing Amendments to Certain Laws of Ukraine regarding the Estab- the human body at different stages of its formation and development, lishment of the National Intellectual Property Authority (hereinafter — as well as the mere detection of one of its elements, in particular, a the Law). The Law came into force on 14 October 2020. gene sequence or a part of a gene sequence; a product or process The two-level system of legal protection of intellectual property relating to a plant or an animal, the use of which is limited to a certain in Ukraine introduced by the Law provides for the establishment of: variety of plants or a certain breed of animals; a product or process (1) the National Intellectual Property Authority of Ukraine (NIPA), the relating to a natural biological material, which is not separated from its state organization, which exercises powers in the field of intellectual natural environment or which is not the product of a technical process. property and has the right to represent Ukraine in international and A discovery, scientific theory, mathematical method; scheme, regional organizations; at the same time, the NIPA will perform certain rules and method of holding games, competitions, auctions, physical public functions (authoritative powers) for the implementation of state exercises, intellectual or organizational, in particular, economic, activipolicy (for example, the granting of titles of protection for intellectual ties (planning, financing, supplying, accounting, lending, forecasting, property objects), and (2) the Ministry of Economy will ensure the for- rationing, etc.); computer software; information presentation form; apmation and implementation of state policy in the field of intellectual pearance of products aimed at meeting purely aesthetic needs also no property. longer meet the concept of the “invention (utility model)”. Thus, the two mentioned levels: the National Intellectual Property As regards such criterion for granting legal protection as novelty, Authority and the Ministry of Economy should have provided the pos- it is now not affected by the disclosure of information about the patent sibility of introducing a “one-stop shop” for state services in the field of (utility model) earlier than 6 months before the date of filing of the apintellectual property. plication or, if priority is claimed, before the date of priority. Previously, However, that did not go according to plan. On 13 October 2020, the grace period was twice as long. the Decree of the Cabinet of Ministers of Ukraine No. 1267-p On the An important innovation is introduction of Pre-grant and PostNational Intellectual Property Authority was approved, in accordance grant opposition procedures. A petition for Pre-grant opposition may with which the exercise of the functions of the National Intellectual be filed within 6 months from the date of publication of information Property Authority was assigned to the State Enterprise Ukrainian In- about application for invention. In addition, after the publication of intellectual Property Institute (Ukrpatent). Such wording of the Decree formation about the application for invention, any person may submit raised questions from the very beginning about the adequacy of the to the examining authority a request for carrying out an information NIPA’s “establishment” procedure. To date, the “transformation” of search on the basis of the claims, taking into account the description Ukrpatent into the National Intellectual Property Authority has not of the invention and appropriate drawings, as well observations reactually taken place. The Law stipulates that the Supervisory Board, garding the compliance of the claimed invention with the requirements the Attestation Commission, and the Appeals Chamber, which, in parfor granting legal protection. ticular, shall discharge the functions of “post-grant opposition” should The Post-grant opposition term for a patent for invention is 9 be formed in the structure of the NIPA. As of today, they are absent. months from the date of publication of information on the state regisA competition for the position of the NIPA’s head has not taken place tration of the invention. At the same time, a petition for invalidation of yet, although there was more than enough time for that. rights to a utility model may be filed with the Appeals Chamber within The “reform” also affected the relevant laws on intellectual prop- the entire period of validity of the property rights to the utility model erty objects, which have undergone significant changes. Taking into and after the expiration thereof. account the topic, let’s dwell in more detail on the main changes in The applicant’s rights to amend the claims during the qualifyUkrainian patent law. Therefore, the following amendments have been ing (substantive) examination and to divide the application into two

Victoria Sopilnyak

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DOUBINSKY & OSHAROVA Doubinsky & Osharova is one of the most respected Ukrainian IP boutiques on the legal market. The firm has a highly-skilled team, whose professionalism is based both on deep knowledge of world practice as well as their own experience. The firm is a preferred provider of IP services and partner for international corporations, top law firms around the world and leading Ukrainian companies. Doubinsky & Osharova delivers a full range of IP services, including: • developing corporate IP strategies, programs and use policies; • trademark and patent prosecution (search, preparation of patent and trademark applications, IP portfolio audit and optimization); • drafting various types of IP contracts, including licensing and assignment; • drawing up and deploying IP protection strategies for various types of businesses; • protection IP rights in Pharma; • copyright; • plant variety; • conducting investigations, including monitoring violations (corporate, IP); • IP litigation, including trademarks, patents, copyright disputes, and related unfair competition matters;

Address: 110 Zhylyanska Street, Kyiv, 01032, Ukraine

• protection of IP rights in Media & IT sphere, including domain disputes and copyright; • supporting IP cases in customs including counteracting parallel imports and border control, etc.; • IP crime & Anti-counterfeiting. Doubinsky & Osharova partners and associates are members of the International Trademark Association (INTA), International Association for the Protection of Intellectual Property (AIPPI), Pharmaceutical Trademark Group (PTMG), Ukrainian Trademark Association (UTA), Ukrainian Bar Association (UBA), and National Association of Patent Attorneys of Ukraine. The firm’s leading position in the area of IP has been continuously recognized by numerous reputable national and international rankings such as Chambers Europe, The Legal 500 EMEA, The World Trademark Review 1000: The World’s Leading Trademark Professionals, Managing Intellectual Property IP STARS, Best Lawyers, Ukrainian Law Firms. A Handbook for Foreign Clients, Top 50 Leading Law Firms in Ukraine, The Top 100 Best Lawyers of Ukraine. The Client’s Choice, Leaders of the Market.

Tel.: +380 44 490 5454 E-mail: info@iplaw.com.ua Web-site: www.iplaw.com.ua

or more before the date of receipt of the will be considered as an infringement of NIPA’s decision are also new. the rights of the patent owner remains It should be noted that the widest debatable and has not been confirmed by response was drawn by the amendcurrent judicial practice. The provisions of ments associated with inventions, the the draft law, which directly indicated the objects of which are active pharmaceupossibility of the mentioned registration tical ingredients of a medicinal product. during the last years of the term of the patAt last, legislators took a position ent, were not included in the final version on the need to fight against “evergreen” of the amended patent law. patents and introduced in the patent law In addition, the introduction of supa rule that would afford an opportunity to plementary protection certificates (SPC) the person concerned to prove the “obfor pharmaceutical, animal and plant viousness” of the invention filed for regprotection products is completely new istration. That is, incompliance thereof to Ukrainian law. By introducing the menwith the “inventive step” requirement. At tioned norm, Ukraine has implemented present, the patent law stipulates those the relevant provisions of the European new forms of a medicinal product known Directive and tried to fulfill its obligations from prior art, including salts, esters, under the Association Agreement signed ethers, compositions, combinations and with the EU. other derivatives, polymorphs, metaboThe SPCs can in no way be equated lites, pure forms, particle sizes, isomers, with so-called “extended” patents, the if they do not differ significantly in effiterm of which was extended under the ciency, may be considered evidently folrules of the previously effective version of lowing from the state of the art. It should Attorney-at-Law, Doubinsky & Osharova the patent law. They shall remain in force be noted that the mentioned “substancuntil the expiry of the relevant extension es” are not automatically excluded from term. As regards the SPC, this is, as allegal protection. However, close attenready mentioned, an absolute innovation tion will be paid to them, since they may be considered evidently fol- for Ukraine. At present, Ukraine has received the legal basis for inlowing from the state of the art. troduction of the procedure for obtaining the SPC. However, there One of the most discussed amendments to the patent legislais still a long process ahead in the development of the practice of tion of Ukraine is a Ukrainian version of “Bolar exemption”. In fact, the applying details, resolving points at issue and avoiding the pitfalls of Ukrainian Bolar exemption is reduced to permitting the following ac- the mentioned procedure. tions, which are not recognized as an infringement of rights arising In summary, it should be emphasized that the changes introfrom the patent: (1) importation into the customs territory of Ukraine, duced to Ukrainian patent legislation were long overdue and ultimately in accordance with the procedure established by law, of goods manu- quite expected. However, such changes can in no way be considered factured with the use of the invention (utility model) for research and/ conclusive and finalizing the reform of patent law. In fact, this is only or (2) use of the invention (utility model) in research conducted for the first important step in the process of improving the patent legislathe purpose of preparing and submitting information for the registration of Ukraine and harmonization thereof with European legislation. tion of a medicinal product. In particular, the question as to whether We have a lot of work ahead of us, and any stoppage at this stage can the registration of a generic drug (obtaining marketing authorization) cancel out all the achievements.

Anastasia Kazankina

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Personal Income Tax Compliance

Personal Income Tax Compliance allowances, compensation for children’s education, meal allowance, etc. Certain additional benefits provided by employers may be exempt from taxation in Ukraine, such as, among others: • amounts paid to Ukrainian educational institutions to cover educational costs for the training of their employees connected with business activities, subject to certain limitations; • amounts paid to cover medical assistance to employees, subject to certain limitations; • contributions to non-state pension funds, subject to certain limitations.

With recently adopted controlled foreign companies (CFC) tax rules Ukraine has taken another step in the direction of tax transparency and deoffshorization. The new CFC rules will affect Ukrainians and foreigners, who became Ukrainian tax residents, and who own companies abroad. The said rules will put additional reporting obligations and potential tax burden on the individuals and shall come into effect, at least partially, starting 1 January 2022. In this article we shall take a look at who is liable to file a personal tax return in Ukraine, how various income types are taxed in Ukraine, how to claim a tax discount if you have eligible expenses and will take a deeper dive into the new CFC legislation, including new types of reporting for individuals.

When Do you have an Obligation to File a Personal Tax Return

Passive Income

Halyna Khomenko

Associate Partner, Tax & Law, People Advisory Services, EY Ukraine

Compared to other countries of the European region, it is not that common for private individuals in Ukraine to file annual personal tax returns. According to the tax authorities’ statistics only around 572k private individuals filed annual personal tax returns in Ukraine in 2020. However, what not many people know is that it is a constitutional duty of citizens to submit the tax return to the tax authorities each reporting year, but according to the tax law the duty is deemed fulfilled if all the individual’s taxes were already paid to the state budget by the tax agent, e.g. when employers remit taxes from employment income under Pay-As-You-Earn system, or when banks remit taxes from an individual’s interest income. Still, an obligation to submit an annual tax return remains, among others, in the following cases: • when an individual receives taxable income not from tax agents (e.g. from other individuals); • when an individual receives income from transactions with investment assets; • when an individual receives income from abroad; • when a foreigner becomes a Ukrainian tax resident; • under the CFC tax rules. Even if a taxpayer’s obligation to submit a tax return is deemed fulfilled, a taxpayer may choose to submit a tax return voluntarily. For example, if one wants to claim a tax deduction and receive a rebate from the tax authorities. It is important to remember that Ukrainian tax residents pay taxes on their worldwide income, whereas tax non-residents only out of Ukrainian-sourced income (i.e. income derived from activities performed on the territory of Ukraine, including remuneration paid by nonUkrainian employers for work in Ukraine).

How Income is Taxed The general tax rates applicable to most types of income are 18% personal income tax (PIT) and 1.5% military levy (ML). However, certain types of income are taxed at 0%, 5% or 9% tax rates.

Employment Income and Foreign Income These income types are taxed at the general tax rates — 18% PIT and 1.5% ML. Taxable employment income consists of all the individual’s remuneration, including salary, bonuses, premiums, as well as most of the additional benefits, such as hardship and cost of living

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Passive income in the form of royalties and capital gains, as well as interest income received by individuals from deposits in Ukrainian banks, is subject to tax at the general tax rates of 18% PIT and 1.5% ML. Dividends received by individuals from resident companies are taxed at 5% PIT and 1.5% ML, while dividends received from non-resident companies or collective investment institutions are taxed at 9% PIT and 1.5% ML.

Income from Government Bonds Previously income derived from government bonds was exempt from personal income tax but was still subject to 1.5% ML taxation. According to the recently adopted tax changes, such income is now completely tax-free, which makes this financial instrument more attractive to investors than regular bank deposits.

Income from the Sale of Movable and Immovable Property The first sale of a car, motorcycle or motor bicycle during the year is exempt from taxation. Otherwise, the income is taxed at the 5% rate. The first sale of immovable property, such as, for example, residency house, apartment or a single room is also tax-exempt, however, only under the condition that the seller owned the respective property for more than 3 years before the sale (the 3-year ownership condition is not applied if the property is inherited). Otherwise, the income is taxed at the 5% rate.

What if a Person already Paid Taxes Abroad? Ukraine has signed Double Taxation Treaties with a large number of jurisdictions, aimed at the elimination of double taxation of income. Using the provisions of the Double Taxation Treaty between Ukraine and the respective foreign jurisdiction, an individual, who is a Ukrainian tax resident, may apply foreign tax credit towards Ukrainian taxes levied from the income, which was already taxed abroad. This means that the Ukrainian personal income tax liability may be decreased on the amount of taxes paid by an individual abroad (but in any case, may not be less than zero). That said, Ukraine does not allow foreign tax credit against the military levy. The procedure of claiming foreign tax credit in Ukraine is more burdensome compared to other European countries and requires obtaining official proof of taxation from the foreign tax authorities, which is to be further legalized or apostilled abroad, then translated into Ukrainian and notarized. This may create a problem with crediting taxes paid in certain jurisdictions, where the tax authorities either do not issue a proof of taxation or issue it only in electronic format, which renders impossible further legalization or apostillization of the document, which is the case with the US.

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How to Claim a Tax Deduction

entity. The respective notification should be filed within 60 days from the respective action. To be considered as a controller of a CFC, the tax resident should meet one of the following criteria: • hold more than 50% of shares in a CFC • hold more than 25% (10% or more — after 2023 reporting year) of shares in a CFC, provided that Ukrainian tax residents cumulatively hold 50% or more • solely or jointly with other Ukrainian tax residents control a CFC, meaning that an individual has a significant or decisive impact on a CFC’s decisions to conduct transactions, manage assets and profits or terminate business. Controllers of CFCs are liable to pay taxes out of the CFCs’ adjusted profits proportionally to their shares and report such profits in the annual tax return. A CFC’s profits distributed to the controller are subject to 9% PIT and 1.5% ML. Profits derived from dividends paid by the Ukrainian entity are subject to 5% PIT and 1.5% ML. The controller is not liable to calculate the CFC’s adjusted profit if it is exempted from taxation under the following

Claiming tax deduction allows receiving a rebate if a taxpayer bore certain eligible expenses during the year. Practice shows that this instrument remains largely underutilized, either because taxpayers are not aware of such possibility or because many think that the process is rather burdensome, which overweighs the potential benefits. However, for some expenses, a rebate may be quite significant and the process itself mostly narrows to the collection of the documents confirming expenses, such as agreements and payment receipts, and further filing of the tax return with the tax authorities. Moreover, the deadline for filing a tax return claiming a tax discount is 31 December of the year following the reporting one, contrary to the standard tax return filing deadline of 30 April, which means that there is still time to claim a tax deduction for expenses made in Manager, Tax & Law, 2020. People Advisory Services, EY Ukraine The most common grounds for claiming a tax deduction are expenses for a taxpayer’s or his/her immediate family members’ education in conditions: Ukrainian universities, schools, kindergartens, as well as expenses • CFC is registered in a state which is a party to DTT with Ukraine; with regard to mortgages on immovable property located in Ukraine. • CFC pays corporate income tax at the rate not less than 13% or if However, the list of allowed expenses is much larger, including, among less than 50% of CFC’s total income is passive; others, charity, long-term life insurance contributions, state services • total income of all CFCs controlled by a Ukrainian resident is less related to adoption, re-equipment of a vehicle to run on biofuel. than EUR 2 million; The tax authorities process a tax discount claim within 60 days • CFC is a public company, whose shares are listed at one of the from receipt of the tax return. recognized stock exchanges; • CFC is a philanthropic organization and does not distribute profit Who will be Impacted by the New CFC Tax Rules to its beneficiaries. Nevertheless, the controller is still liable to file two types of CFC The CFC tax rules put new reporting obligations on taxpayers, who have business structures abroad. Any foreign legal entity or en- reports — simplified and complete. In conclusion, although the deadlines for CFC reporting were extity without legal personality, such as trust, partnership or investment fund, controlled by a Ukrainian tax resident (individual or company) tended several times already, individuals who have business structures abroad should already start preparing for the new tax rules, analyzing falls under the CFC rules. Starting 1 January 2022 individuals, regardless of whether they whether the said business structures fall under the CFC definition and are considered as controllers of a CFC, would have to notify the tax what reporting is required. It may also be the best time to think about authorities about any direct or indirect acquisition or sale of a part in potential business restructuring or shifting tax residence from Ukraine a foreign legal entity, establishing a legal entity, liquidation of a legal to another jurisdiction.

Anton Kurach

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Pharmaceutics

Pharmaceutics Closed borders and the lockdown in 2020 made Ukrainian society set its priorities in a different way and review approaches to the implementation of innovations. Naturally, the pharmaceutical industry found itself in the midst of those developments. On the one hand, pharmaceutists should have an incentive to carry out pharmaceutical research and development, which requires huge expenditure; on the other hand, there is the right to the health of a human being, and patients want to have access to modern treatment as soon as possible and at the most affordable price.

New Legal Landscape In response to the long-pending issue of patent reform, the Ukrainian Parliament adopted several key laws in 2020, including Law of Ukraine No.816IX On Amendments to Certain Legislative Acts of Ukraine in Relation to Patent Leg- Counsel, AEQUO islation Reform of 21 July 2020. The adoption of the law is aimed, first and foremost, at the performance by Ukraine of its obligations under the Association Agreement with the EU signed in 2014. The essence of those obligations is the achievement of an “adequate level of protection and enforcement of intellectual property rights”. This is stipulated in Chapter 9 of the Association Agreement. At the same time, the adoption of new legislation is just one of the stages. An adequate and effective level of protection and enforcement is possible when the entire IP infrastructure operates in a coordinated manner and the state is able to guarantee that, in the event of violation of rights, the right holder may count upon the restoration of justice within a reasonable timeframe and by a competent authority. Ideally, when the legal environment makes it possible to act in a preventive manner, by not letting the violation of such rights occur.

for manufacturers of generic drug products. Earlier, the application for extension of the term of a patent can be filed no later than 6 months prior to the expiry of the term of the patent. Manufacturers of generics could not predict when the patent protection would expire: the patent could be extended for a period up to five years at the very last moment. The new law has changed the rules. A patent holder must now file an application for obtaining the certificate of additional protection within 6 months from the date of publication of information on the state registration of an invention or the date of the first state registration of a medicinal product. The formula for calculation of the term for which the additional patent protection can be obtained has also changed. Moreover, to facilitate the fastest market entry of innovative products, the rule has been introduced, according to which one can apply for additional protection if the application for state registration of a medicinal product in Ukraine is filed within one year from the date of such application submission anywhere in the world.

Nataliya Dryuk

What can be Protected by a Patent? First of all, the new legislation is revised to expand the list of objects subject to legal protection. For instance, a number of initiatives on fighting so-called “evergreen” patents have been implemented, which patents artificially extend the term of patent monopoly for the account of improvements of technology, which are not always substantial. Firstly, the new law limits the range of technologies that can be patented. Now, only a device or a process (method) may be the object of a utility model, whereas substances (their compositions) may be protected only as inventions for which there exist stricter patentability criteria. It should become a good instrument to fight patent trolling since the qualification examination of utility models is not carried out. Secondly, surgical or medical treatments, body diagnostic methods are removed from patent protection. Thirdly, a new patentability standard for inventions is introduced in respect of new forms of medicinal products known from prior art (salts, compositions, etc.), such a new form should substantially differ from the preceding ones in terms of efficacy. All of the listed novelties will be applicable after the new law comes into effect, whereas the previously issued patents continue to be in force. Therefore, the market will feel the effect resulting from the new rules that will only come in force in a few years.

Term of the “Patent Monopoly” The term of intellectual property rights to a utility model is 10 years from the date on which the application is filed, and for an invention, 20 years, though such term may be extended for some inventions. In accordance with the new law, the right of extension of the term of intellectual property rights to an invention is evidenced by the additional protection certificate. Due to changes in the rules for additional protection of rights to inventions, the pharmaceutical market will become more predictable

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New Instruments for Pharmaceutical Industry Players The new law has introduced pre-grant and post-grant oppositions. Pre-grant oppositions are available in respect of filed applications for inventions. Within this procedure any person can file a grounded opposition against an application for invention 6 months following publication of information about such application. When a patent for invention or utility model has been already granted, it can be cancelled within the administrative procedure of post-grant opposition. The time constraints for filing a post-grant opposition are different for inventions and utility models: (1) for an invention, any person can file a post-grant opposition to the Board of Appeals of the Patent Office within 9 months of the date of publication of information on the state registration of an invention; (2) for a utility model, a post-grant opposition may be filed during the whole period when the intellectual property rights to the utility model are effective and after the expiry thereof. The advantages of these new instruments include the following. Firstly, by contrast with a lawsuit, pre-grant or post-grant opposition may be filed by any person and does not require proof of an infringed right and/or interest. Secondly, post-grant opposition is considered by the UAPTO Board of Appeals for 4 months only (with a possibility of extension that is clearly regulated, subject to certain conditions), which fact, in comparison with statistically average time periods (of approximately two years) required for consideration of similar issues under a litigation procedure, may influence the overall litigation strategy of intellectual property rights protection by pharmaceutical companies in favor of using the administrative procedure. In any case, it remains to be seen how effective this instrument will prove to be. Patent oppositions are widely used in foreign jurisdictions — this requires much less resources than for challenging a patent in court. To use this instrument effectively comprehensive efforts need to be made to identify new patent applications and address them in a timely manner.

Market Entry Strategy within the Framework of the Bolar Provision The Ukrainian patent reform of 2020 also introduced the socalled Bolar provision. Traditionally, the “Bolar provision” provides for a possibility of a generic product’s entry to the market immediately after the expiry of the patent for a branded medicine. However, in the laws, as adopted in summer 2020, some understatement regarding this issue still remains.

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Address: 32/2 Moskovska Street, Kyiv, 01010, Ukraine Tel.: +380 44 490 9100

Fax: +380 44 490 9102 E-mail: office@aequo.ua Web-site: www.aequo.ua

The new rules extend to the period of the additional protection certificate: the manufacture of medicinal products for export during that period is allowed and, 6 months prior to the expiry of the term of additional patent protection, one may, without infringing patent rights, accumulate supplies of generic medicinal products for the purpose of launching them onto the Ukrainian market immediately after the expiry of such protection. The import of pharmaceutical preparations for research purposes or use of an invention in research for the purposes of preparation for registration of a medicinal product will not be deemed to be an infringement of patent rights. Earlier, when the import of any substances was required to develop medicinal products, companies had to make reference to use “for scientific purpose or by way of experiment”. The complexity of proving scientific pur- Counsel, AEQUO pose resulted in one of the most interesting patent disputes in recent times regarding the import of a pharmaceutical preparation. For a number of pharmaceutical companies, including domestic ones, this is a serious reason for them to revise their strategies and use new opportunities to launch new products on the market.

Moreover, patent disputes arose recently, that are new for the Ukrainian market, under actions brought by patient organizations wishing to obtain lower prices for medicinal products. It is this area where demand for establishment of a specialized intellectual property court is the most acute. As is known, that court was established within the framework of the judicial reform of 20142019 so as to increase the quality of justice in that category of cases. Similar courts exist in more than 80 jurisdictions and are a success story almost everywhere. Indeed, the possibility to have an infringed right protected by a competent court and within a reasonable time when a fair court decision is obtained is one of the most important aspects of a country’s investment potential and the ability to conduct business in a civilized way. However, the competitive selection procedures for vacancies in that court, the procedures for which began in 2017, were actually blocked at the end of 2019 and so far there is, by all appearances, no political will to bring such a good initiative to its logical solution. As regards new administrative procedures, the adoption of subordinate legislation is expected (the Rules of the Board of Appeals of the UA Patent Office and others) in order for them to go live. Furthermore, we expect a new category of disputes to appear: appeals against the decisions of the UA PTO Board of Appeals following on from the results of consideration of patent oppositions (based on the results of pre-grant opposition) and decisions of the UA PTO Board of Appeals following on from the results of consideration of applications for invalidation of patents (based on the results of post-grant opposition). However, several years have to pass until new instruments gain the confidence of market players. Hence, in the days ahead, as before, patent cancellation court actions (this is currently the most popular category of patent cases) and for termination of patent infringement will be the most typical.

Tetiana Kudrytska

Ukrainian-style Patent Wars: What Next? Almost half of all patent disputes in Ukraine are related to pharmaceuticals. A Ukrainian-style patent war means three to five expert opinions and a year and a half (or longer) in courts. Ukrainian courts consider patent disputes between Ukrainian manufacturers and foreign companies, including those involving technologies, disputes about which are going on concurrently in a dozen jurisdictions.

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Ports & Marine Terminals

Ukraine Seeks Private Sector Engagement for Modernization of its Port Infrastructure • Privatization; • Lease; • PPPs and concessions. Despite having the largest port poAlthough the privatization and lease tential in the region, with 13 state-owned of state-owned assets are rather familiar sea ports located on the coasts of the for market players in Ukraine, their effective Black and Azov Seas, Ukraine’s port inuse still requires improvement of the regudustry struggles with various problems, latory framework. Implementation of the including outdated and worn-out equip“port-landlord” model in Ukraine requires, ment, a lack of deep-water anchorages, among other things, a balanced approach the inadequate condition of public transto resolving the land and asset fragmentaport infrastructure, fragmentation of port tion issue without violating the legal rights lands and assets, lack of proper regulaand interests of existing tenants. tion for outer harbour (roadstead) conThe adoption of the new Concession struction works, high port tariffs comLaw by the Ukrainian Parliament in 2019 pared to neighbouring countries, etc. opened the door for the private sector to There is also an urgent need, among engage in modernisation of the country’s other things, to modernise state-owned port infrastructure on a concession basis. port assets and to improve their manageAlthough the Draft Law was criticized by ment, both of which require significant fisome experts during its development, the nancial investments and new approachgovernment—with the assistance of interes using the best international practices. national advisors and including support After years of doubts and disputes from the IFC and EBRD—managed to adopt regarding the policy and strategy for Counsel, Head of Infrastructure, a progressive law that establishes a clear the development of Ukrainian ports, the procurement procedure and grants guarangovernment has decided to proceed Kinstellar Kyiv tees and protection normally expected by with the gradual withdrawal of the state investors in concession projects worldwide, from stevedoring activities, especially in which allows for the structuring and prepasea ports with low cargo flow, and have ration of bankable concession projects. opted to involve the private sector in modernisation of the country’s In the last two years the regulatory framework in Ukraine relatport infrastructure. The relevant plans are explained in the recently ad- ing to concessions and the protection of creditors’ rights has developted National Transport Strategy and Sea Ports Development Strat- oped significantly. The pledge of proprietary rights under a concession egy. Due to the lack of fiscal resources and poor management of the agreement, the execution of direct agreements and the replacement of assets of state ports, engaging with private-sector investors with the a concessionaire in default all became possible, which taken together necessary financial resources, knowledge and technologies appears establish the basis for project financing for concession projects. The to be a reasonable solution and the most viable option for the rapid successful concession of Olvia sea port to Qatari QTerminals, with a modernisation of the country’s state-owned port sector. USD 120 million investment in the modernization of the port, demonThe following private sector projects completed in the past three strates that the concession mechanism may be successfully used by years and planned for implementation in the near future demonstrate the state to attract investments without losing state control over the the capacity and interest of both Ukrainian and foreign investors in the relevant assets. sector: The benefits of concessions for the state compared to privatiza• Portinvest’s announced plan to invest USD 150 million to develop a tion and lease are obvious. The private sector also benefits from congrain terminal at Yuzhniy port; cessions, as they open doors to investment in strategic port infrastruc• Plans announced by Berezan Port to develop an intermodal deep ture that is off-limits to privatization. Concessions also have a number water port in Berezan Lime in Mykolaiv Region; of advantages compared to a lease, such as: • The signing of 35-year concessions for the Olvia and Kherson sea • state assistance in various forms and other obligations of the pubports in 2020; lic partner to the investor; • HHLA’s investment in the development of its Odesa Container Ter- • the possibility for the concessionaire to lease part of the assets; minal and the recent establishment of its own intermodal company; • the possibility to team up with other investors in implementation • The launch of the Neptune terminal by Cargill in 2019; of the project; • Korean Posco Daewoo’s acquisition of a 75% stake in the Mykolaiv • the ability to pledge rights arising from the concession agreement grain terminal in 2019; to attract financing; • DP World’s acquisition of a 51% stake in the container terminal at • broader protection of investor interests, such as stability of law Yuzhniy port in 2020. guarantees, the possibility to transfer disputes to international arbitrage, etc.; • the waiver of sovereign immunity by the grantor; Options for Private Sector Engagement • simplified and faster acquisition of land lease rights without the Ukrainian law provides the following main options for private inneed to pass through the time-consuming land allocation procevestors to invest in state-owned port infrastructure: dure. All land allocation formalities are resolved by the public part-

The Government Now has a Strategy

Oleg Matiusha

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KINSTELLAR Kinstellar is a leading independent law firm in Emerging Europe, Turkey and Central Asia, with 11 offices in Almaty, Belgrade, Bratislava, Bucharest, Budapest, Istanbul, Kyiv, Nur-Sultan, Prague, Sofia and Tashkent. The Kinstellar Kyiv office was launched in 2016 with a team of highly-skilled legal professionals with long-term experience handling major transactions for leading international and domestic clients in Ukraine across a wide spectrum of business sectors. Today, Kinstellar Kyiv is the leading independent international law firm on the market and one of the largest law firms in Ukraine, with 60 lawyers, including 10 partners. Kinstellar Kyiv operates as an internationally oriented full-service practice focused on Antitrust/Competition, Banking & Finance, Capital Markets, Corporate/M&A, CRSI (Compliance, Risk & Sensitive Investigations), Dispute Resolution, Employment & Labor Law, IT & IP, Restructuring & Insolvency, Tax and White-Collar Crime. The expertise of Kinstellar lawyers also allows the firm to make a shift towards the industry focus, offering complex advisory to Agriculture, Automotive & Industrials, Aviation, Banks & Financial Institutions, Energy & Natural Resources, Infrastructure, Life Sciences & Healthcare, Private Equity, Real Estate, TMT (Technology, Media & Telecommunications) sector clients.

Address: Gulliver Business Center, 1-A Sportyvna Square, Kyiv, 01601, Ukraine 77A Velyka Vasylkivska Street, Kyiv, 03150, Ukraine

ner prior to commencement of the concession; • the possibility to perform design and construction works based on the land title documents of the previous balance holder; • a simplified procedure for the write-off and demolition of assets and their reconstruction; • the possibility to work under the permits and licences of the previous balance holder of the concession assets for six months, which allows for an earlier start to business activity, etc. To optimize the success of port concession projects requires the government and various state-owned companies and agencies to work to improve the business environment in the country, including by: • establishing favorable conditions and stimulating project financing in Ukraine. The availability of project financing will be a positive signal for investors and will improve the perception of the country in the eyes of the international business community; • rehabilitating and increasing the capacity of critical port infrastructure, such as engineering and railway networks and automobile access roads, to support the stable growth of cargo to ports and the construction of new port capacities. Any expectations, requirements or plans on the part of the state to increase the capacity of concession assets may break down due to the deterioration and insufficient capacity of Ukrainian roads, railways and power grids.

What’s Next? Inspired by the success of the first pilot concessions, the government now plans for 10 of its 13 sea ports to be transferred under concession within the next 10 years, including Yuzhniy port, the passenger terminal at Odesa port, the ferry and railway complex as well as the container terminal in Chornomorsk, and the Mariupol, Berdyansk and Izmail sea ports.

Kinstellar’s team of Infrastructure experts has unrivalled experience handling the legal aspects of some of the largest (in-land and cross-border) infrastructure and other projects in the region. In the sea port industry, the firm has been providing complex legal advice to port operators, private terminals, dredging and shipping companies, international consortiums doing business in Ukraine. Notably, Kinstellar became the first law firm to advise on Ukraine’s new concession law, supporting QTerminals of Qatar on the concession of the Olvia Black Sea Port in southern Ukraine. Kinstellar Kyiv has been top-ranked in all of its core practice areas according to major international legal directories, including Chambers & Partners, IFLR1000, Legal 500, Who’s Who Legal, Global Investigations Review and Best Lawyers International. Most recently, CEE Legal Matters awarded Kinstellar Kyiv the 2020 Deal of the Year for Ukraine for its work on the QTerminals WLL Port Concession Project for the Olvia Black Sea Port.

Tel./Fax: +380 44 394 9040 E-mail: kyiv.reception@kinstellar.com Web-site: www.kinstellar.com

Three smaller ports — Skadovsk, Bilhorod Dnistrovskyi and UstDunaysk — have been transferred to the State Property Fund of Ukraine and are being prepared for sale (privatization). The announcement of privatization tenders for the Ust-Dunaysk and Bilhorod Dnistrovskyi sea ports are expected shortly, while the Skadovsk tender has been postponed until 2022. The government is now actively preparing the Chornomorsk ferry and railway complex and Chornomorsk container terminal for concession. In the run-up to the concession tender, which is expected by the end of 2021, the government is focusing on restructuring the currently fragmented asset structure of the businesses, resolving issues with court disputes, and procuring the necessary feasibility studies and tender documentation. Meanwhile, due to the lack of capacity on the public side, unsolicited proposals from investors are welcomed. Ukrainian law provides an investor that develops an unsolicited proposal with a pre-emptive right to the project under the same terms as the best bid submitted for the concession tender, as well as the right to the reimbursement of its expenses for the development of an unsolicited proposal from the successful bidder if the initiator fails to win the tender. In this way, not only can the state benefit from unsolicited proposals by reducing state expenses and expediting the preparation of port concessions — private investors may also better prepare for concessions in advance. Understanding such benefits, Asket Shipping, Georgia Invest Group and TIS recently announced plans for the development of unsolicited proposals for the concessions of Berdyansk port, Ismail port and the Odesa passenger terminal, respectively. Our experience of successfully supporting the pilot Olvia sea port concession, together with the preparation of other concession projects, gives us confidence that concessions can be used efficiently by the public and private sectors for joint infrastructure projects in Ukraine.

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Private Clients

Tax Transformation, Partnership, and Corporate Governance — Answers to the Questions of Private Clients The implementation of tax and corporate legislation changes announced and launched in 2019-2020 has already started. Many business people who were previously skeptical about implementing these changes started considering and restructuring their businesses and personal assets. The main areas of concern for businessmen are taxes, joint investment and partnerships, asset protection, and ownership transparency.

However, with appropriate justification, this income is not subject to personal income tax at the rate of 18%, and only the 1.5% Military Fee. This is an alternative option for businessmen to declare their foreign assets, previously accumulated on offshore accounts. Those Ukrainians who prefer to keep saved their foreign structures, starting as from 1 January 2022, will be required to declare their participation in such controlled foreign companies with the Ukrainian tax authorities.

Tax Transformation Tax Reform for Individuals

Tax Transformation for Corporations

On 30 March 2021 Amendments Tax legislation regarding companies to the Tax Code Regarding the Personal has changed — Laws No. 466-IX, No. 786-IX Income Declaration were adopted in the and No.1117-IX made adjustments to the first reading — so-called “tax amnesty” activities of foreign companies on the teror “null declaration”. Proposed Amendritory of Ukraine. ments, known as the tax reform for indiAs from 2021, income generated from viduals, represents changes to the Tax, the sale of corporate rights (shares) of Budget, Criminal and Criminal Procedure Ukrainian companies, where the value of Code, the Code of Administrative Viola- Partner, Legal House 50% or more is formed from immovable tions, and the Currency and Foreign Ex- Lana Golian is an expert in corporate and private asproperty owned or used by such Ukrainian change Transactions Law. This reform is set structuring, tax and wealth planning and residence company under a long-term lease, financial called to stimulate the unshadowing of program. Being certified AML compliance officer, lease, or similar agreement, is subject to income and increase the tax culture of Lana supports its clients with any compliance and taxation in Ukraine. This rule also applies citizens. Another purpose of the reform banking issues as though as international corporate to the sale of corporate rights (shares) of is to introduce a starting point before and personal taxation matters. foreign companies — owners of such Ukraithe mandatory exchange of information In 2020, international publication the Legal500 has nian companies. Therefore, the structuring within the CRS framework. distinguished Lana as a specialist in providing Private of transactions on the sale of assets in All tax residents of Ukraine are client services and Tax. Ukraine is subject to significant changes, offered to voluntarily provide the tax especially when it comes to real estate in department with information on their Ukraine. savings if these savings were not declared before or were previously Furthermore, in 2021, the criteria for recognition of permanent esreceived from undeclared income. The proposed law stipulated retablishment have been changed. Now, neither a branch nor subdivision duced rates for the savings that will be transferred to Ukraine — 2.5% is responsible for the activities of a foreign company in Ukraine but when placed in government bonds for at least one year, 5% — for funds the foreign company itself, and the foreign company should be regisset on deposits in Ukrainian banks for at least one year, and 9% — for tered with the tax authorities in Ukraine. The Tax Code has described assets (in cash or in-kind) declared but placed outside of Ukraine while the types of activities, which constitute the evidence of a permanent the regular tax rate for personal income in Ukraine is 18%. establishment — construction, agency, service, warehouse. Special As part of the declaration campaign, the government guarantees attention requires service and agency of a permanent establishment, exemption from liability for tax and currency legislation violations if where broad criteria of recognition are stipulated. Such as office premone has been committed during formation the assets. And the govises lease, warehouse or other place of business; server availability; ernment introduces a ban on using information received during the use of a foreign company’s corporate e-mail by Ukrainians; conclusion declaration campaign as evidence in criminal and administrative proof contracts on behalf of or in the interests of associated foreign comceedings. panies; provision of services by the personnel located in Ukraine, etc. The campaign is expected to be launched on 1 July 2021, and will And the list of criteria is not exhaustive. last until 1 July 2022. At the same time, the tax authorities were granted broad authorIn fact, the tax campaign on personal income declaration already ity to identify a permanent establishment and to oblige the relevant began before its official announcement. Amendments to the Tax Code, foreign company to get tax ID in Ukraine, with subsequent informing adopted by the Law No. 466-IX in May, Law No.786-IX in August and the tax authorities of the state, where such foreign company was regthe Law 1117-IX on New Year’s Eve, allowed some Ukrainians to deistered. Any public information related to possible facts of conducting clare their “offshore” income already in 2021. business through a permanent establishment in Ukraine may result in The so-called “tax-free liquidation” of a foreign company assumes a tax audit. that income received from the liquidation of a foreign company in 2020 It is important to take these changes into account for those foror 2021 is not included in taxable income of the ultimate beneficiary — eign companies that choose Ukraine for their resource base, R&D cennatural person. In this respect, an individual, resident of Ukraine, is ter, personnel outsourcing location, etc. obliged to include the received income into his/her annual tax return.

Lana Golian

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LEGAL HOUSE Founded in 2013, Legal House has become a law firm specializing in Tax, Corporate, Wealth, and Business Protection. In 2019, Legal House opened a representative office in Warsaw. The company’s mission is to form a conscious attitude to personal and corporate financial and tax history. Legal House offers its clients services in international tax planning, corporate structuring, and management. Legal House’s experts conduct tax audits of business structures and develop the best possible ones. Legal House can adequately arrange investments from the stage of negotiations to secure exit from investments. Legal House works with mature businesses, as well as start-ups. Legal House’s experts support registration of companies in the following jurisdictions: Switzerland, Cyprus, Liechtenstein, Hungary, Estonia, Great Britain, Czech Republic, Poland, Georgia, UAE, USA. Legal House help open bank accounts: Switzerland, Liechtenstein, the USA, Cyprus, Hungary, Czech Republic, Poland. Legal House’s experts know how to achieve streamlined personal finances and the optimal tax burden. Legal House conducts a tax audit of personal assets, develops optimal ways to manage them, helps to maintain and transfer business to future generations, create trusts and private funds. In risk control and business protection, Legal House staff assist in risk audits (corporate, tax, commercial), create a practical company risk map, develop a risk mitigation roadmap, implement risk mitigation mechanisms, accompany tax and other types of disputes with regulatory authorities. Address: 23-V Voznesensky Uzviz, 3rd Floor, Kyiv, 04053, Ukraine

Legal House is a leading company in: • Tax; • International Tax; • Private clients/Wealth Management; • Corporate and M&A; • Due Diligence; • Investments; • Public-private partnerships; • Project finance; • Private Equity; • Compliance; • Business protection.

Legal House is an established practice in: • IT; • Agriculture and Land Development; • Retail; • Infrastructure; • Real estate, construction, land; • Labor & employment; • International Trade; • Energy & natural resources.

Tel.: +380 44 451 7489 E-mail: office@legalhouse.group Web-site: www.legalhouse.groupe

to transfer the “reins of power” to their heirs. This is probably the most critical turning peIn addition to tax stiffening, the riod — when the owner, the head of the famglobal trend towards disclosure of benily, needs to prepare a legal successor, introeficiaries within the framework of the duce him into the business, and ensure the OECD requirements leads to the fact further management of the family business. that it is no longer possible to hide the Many family businesses believe that assets behind the veil of offshore comsuccession means developing leadership in panies. Offshore jurisdictions — British the next generation. And in most cases, the Virgin Islands (BVI), Belize, Bahamas, succession is regulated by certain instruand non-offshore jurisdictions — Great ments of corporate governance: the Board Britain, Austria, Poland, Cyprus created of Directors, the Charter, the Supervisory local registers of beneficial owners. Board’s decisions. In Ukraine, corporate The BVI launched the Economic governance is just starting to develop. NevSubstance Portal integrated with the Benertheless, significant legislative changes eficial Ownership Secure Search System contribute to this. (“BOSS(ES)s”) in June 2020. Information Structuring assets through a foreign about all BVI company beneficiaries shall holding is convenient if the business and be disclosed at the request of the authoassets are located in different countries, rized bodies — the Financial Investigation and the beneficiary can easily travel. But, Agency, the Financial Services Commisif the business is mainly located in Ukraine sion, the International Tax Authority, the or closely relates to Ukrainian assets or reAttorney General’s Chambers. sources, the management of such structure On 12 March 2021 the Registrar becomes problematic. Previously the most Partner, Legal House, Head of Legal of Companies of Cyprus issued Regupopular tool, “shareholders’ agreement”, at latory Administrative Act No.112/2021 Department, Legal House Poland the level of an international holding comand a Guidance note for completing the pany, did not always cover specific issues. For over 10 years Natalia Radchenko has been Electronic Beneficiary Record System. Holdings with a significant value of accompanying clients in matters of personal and Initially, only customs and tax authoriUkrainian assets are structured through corporate tax planning, structuring and protection of ties have access to the UBO register. corporate and mutual investment funds private wealth. Natalia is an expert in international The Cyprus Beneficiary Register will, registered under Ukrainian law. Small holdbusiness, residency and personal assets. however, not include the beneficiaries ings are usually structured through limited In 2020, international publication the Legal500 has of Cyprus International Trusts. liability companies. And new changes in distinguished Natalia as a specialist in providing Ukraine has already begun the imcorporate legislation make it possible to apPrivate client services and Tax. plementation of trusts, as structures of ply corporate governance tools within the common law, into Ukrainian legislation framework of Ukrainian legislation. by definitions of the trust, settlor, trustee, protector, and ultimate benThe corporate agreement as a corporate governance vehicle has eficiary in the Law On Financial Monitoring and in the Tax Code. been implemented by the new Law On Limited and Additional Liability Trusts allow protection of the interests of beneficial owners and, Companies recently, and is still underestimated. In particular, corporate with the proper structuring, to reduce the tax burden. Asset protection agreement may offer a solution for disagreement points, voting proceissues have great relevance in Ukraine, especially as to relations be- dure, terms for the purchase and sale of shares, determine a succestween the owners and their heirs. sion procedure, and other matters that the Charter cannot provide for. The implementation of corporate agreements and corporate governance Partnership and Corporate Governance will help to structure assets and ensure assets ownership transparency, The period of initial accumulation of capital in Ukraine is com- which is in line with global de-offshorizations. For structuring family asing to the end. The first generation of businessmen, which appeared sets and to keep assets saved for future generations, the use of corpoalong with the revival of Ukraine’s independence, has already started rate governance in family businesses is highly recommended.

Transparency and Protection

Natalia Radchenko

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139

Privatization

Privatization in Ukraine It has been three years since the • persons who used to be a party to a new rules for the privatization of state privatization agreement that was later and municipal property took effect. terminated as a result of violations by Originally, the aim of the upgraded legal these persons and by their affiliates. framework was to speed up the overall If the winner of the auction refuses to process of selling state and municipal sign the sale and purchase agreement in reproperty, and it certainly reached that spect of an LPA or SPA, the winner and its goal regarding the sale of small privatiend beneficiary will not be allowed to parzation assets via an e-auction system. ticipate in any future auction for the sale of The types of small privatization assets such asset. This approach allows the govvary from certain abandoned real estate ernment to cut off disreputable investors located on the fringes of the country to and requires buyers to think more carefully fully functioning businesses with strong when selecting a partner for a privatization customer relationships. As of the end of project. 2020, total revenue from the sale of all Furthermore, the buyer attracting the small privatization assets amounted to financing to purchase the privatization asUAH 3.89 billion. Among the small privaset must provide information on its creditization assets sold in 2020 was the tor, who must meet the requirements of Dnipro Hotel with a winning bid of UAH buyers of privatization assets stipulated in 1,111,111,222 (approximately USD 41 the law. million) while the starting price was UAH 80,923,400. The privatization of the DniSale of LPAs pro Hotel was provided in a fair, transFollowing the advent of the COVID-19 parent and open way and demonstrated Managing Partner pandemic, at the end of March 2020 the that Ukraine provides equal opportuniUkrainian Parliament introduced a tempoties to all investors (except those related Baker McKenzie — Kyiv rary prohibition on the privatization of LPAs. to the aggressor state of Russia). Yet, in September 2020 it limited this to a Unfortunately, there was not a ban on carrying out auctions for the sale of LPAs, thereby allowing the single sale of any large privatization assets in 2019 and 2020, and, preparation of LPAs for sale. However, starting from 1 May 2021, the therefore, none of the instruments provided for by the new frameban on the sale of LPAs was partially lifted, which allows for the privatiwork have been tested yet. The updated list of large privatization zation of large-scale assets until the end of government-imposed panassets for coming years includes companies such as Centrenergo demic restrictions via the following means: (power generation), UMCC (mining of non-ferrous metals), Electro• through a Dutch auction or an auction with a preliminary examinavazhmash (manufacturing of power generators), Krasnolymanska tion of potential bids; Coal Company (coal mining), Odesa Portside Plant (production of • by way of a buyout to a single bidder fertilizers), Indar (insulin product manufacturing), Ukragroleasing Regarding the sale of LPAs, implementation of the new rules re(leasing of agricultural machinery), several regional power distribuduces the risks associated with determining the starting price; the tion companies (e.g., Kharkivoblenergo and Mykolaivoblenergo), price is determined by a professional adviser engaged by the privaTPPs (e.g., Odesa TPP, Kherson TPP and Dnipro TPP), President Hotization authority. This should eliminate the conceptual conflict that tel and other companies. used to be embedded in the law when the starting price was determined by valuation, which should have reflected the fair market value Assets and Buyers of the asset, while, in principle, the fair market value would be deterAll of the privatization assets are divided into two groups: large mined as a result of the auction. However, this only applies where an privatization assets (LPAs) and small privatization assets (SPAs). LPAs investment adviser is engaged, since, if no adviser wishes to support are shares in joint stock companies and key assets of companies, the the sale process, the starting price would still be determined by the asset value of which exceeds UAH 250 million and where the state privatization authority based on the results of an independent valuowns a stake of 50% or more. All other assets fall into the SPA cat- ation. egory. As for the actual sale process, the default option is an “English” The privatization regulations embed a principle pursuant to which auction with at least two bidders. However, if only one bidder is qualiall assets that are not prohibited from privatization can be sold. From fied, the LPA may be sold directly to that buyer at a price not less than a buyer’s perspective, this means that any asset not prohibited from the starting price. If the LPA is not sold by auction or direct buyout, the privatization by virtue of the law can be sold. For example, at the buy- sale will be made via auction where the starting price should be deterer’s initiative, regardless of whether it is listed as an LPA or SPA. mined by indicative bidding with the bid secured by an auction deposit As for the qualification criteria for buyers for the purposes of (either in cash or as a bank guarantee). privatization, the law sets out a list of persons who cannot qualify as The law expressly provides for cases when an LPA may be sold buyers, particularly the following: with a 25% or 50% decrease from the starting price via an “English” • buyers with non-transparent ownership structures registered in off- auction; however, it is not entirely clear when the privatization authorishore zones; ties will announce the indicative bidding auction. That is, immediately • buyers registered in states included in the FATF blacklist and their following the very first auction where the LPA has not been sold or 50% direct or indirect subsidiaries; after two failed auctions when the starting price has been reduced by • the aggressor state of Russia and legal entities where such state 25% and 50%, respectively. These tools give a certain degree of flexibilholds an equity interest, as well as other entities controlled by such ity to the privatization authorities, allowing them to choose the method legal entities; of sale appropriate to each particular asset depending on its individual • legal entities whose beneficial owners holding 10% or more of the characteristics. shares (equity) in such legal entities are residents of the aggressor The law allowed the privatization agreement to be governed by state (except for companies whose shares are traded on foreign the laws of England and Wales at the buyer’s request. This option was stock exchanges other than those located in the aggressor state); available before 1 January 2021. Parliament has not, for the time be• individuals (citizens or residents) of the aggressor state; ing, expressed an intention to extend this option. • persons coming under the national sanctions regime and their afThe key point of the new regulations is the issue of protection of filiates; buyers’ rights. The provisions governing the content of a privatization • Ukrainian legal entities whose beneficial owners have not been disagreement, even if governed by Ukrainian law, may include a set of closed in breach of applicable law; warranties of the seller as to information on the LPA, and the respec-

Serhiy Piontkovsky

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Address: Renaissance Business Center, 24 Bulvarno-Kudriavska Street, Kyiv, 01061, Ukraine

tive liability for breaching them. Furthermore, after a privatization agreement has been signed, the target company will not conclude any agreements that are beyond its ordinary course of business without the buyer’s prior consent, e.g., asset pledge, set-off or suretyship. Given that many state or municipal enterprises have a significant amount of (typically simulated) indebtedness, the law prescribes an important mechanism of protection: no bankruptcy proceedings will be brought within one year following completion of a privatization deal, against a privatized company based on grounds that relate to a period prior to completion of the deal. On top of that, once a privatization agreement has been signed, no changes to the custody account relating to the arrest or placement of other encumbrances will be made until the title to the LPA has passed to the buyer. These protection measures would allow buyers to directly control any cash-out from the target company after signing of the sale and purchase agreement, and would also increase the overall attractiveness of the asset.

Tel.: +380 44 590 0101 E-mail: kyiv@bakermckenzie.com Web-site: www.bakermckenzie.com/ukraine

Sale of SPAs In relation to the privatization of SPAs, all SPAs are sold via an electronic auction system. The privatization authorities conclude agreements via e-platforms that are functionally capable of holding privatization auctions. All of the processes relating to the submission and acceptance of bids as well as the determination of the winner of the e-auction are largely automated and do not require the involvement of the privatization authorities until the binding sale and purchase agreement is actually being executed. In terms of the auction process, the default scenario is an “English” auction with at least two bidders and if there is only one bid submitted in respect of an SPA, the asset will be sold directly to that bidder. If the SPA is not sold, the starting price for the asset will be reduced by 50%. If the SPA still does not sell, the starting price will be decreased again by 50% and the asset will be Senior Associate sold at a Dutch auction. The protection of buyers’ rights is also Baker McKenzie — Kyiv applicable, to some extent, to the sale of SPAs. The prohibition of bankruptcy within one year following completion of the deal, as well as the placement of an encumbrance over the shares, remain in place for the sale of SPAs.

Nataliya Tyschenko

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141

Procedural Actions

Development of NewlyDiscovered Circumstances Institution to Effectively Restore Rights Violated by Illegal Sanctions New sanctions legislation, a lack of the issue of amending the company’s Arexperience and positive judicial practice ticles of Association. As a result, the maall give rise to a distorted notion of unjority shareholder with a stake of 60+% restricted state intervention in individual voted in favor of amending the above arrights and freedoms. There is an urgent ticles of association, reducing the number need for efficient judicial protection (by of members of the Supervisory Board and the Supreme Court of Ukraine) of indiliquidating the Audit Committee. The forvidual rights from interference by the eign company’s proposals on candidates state which neither pursues a legitimate and Articles of Association were not conaim nor is properly justified. sidered at all, and the Supervisory Board In 2020, the Supreme Court, for the was formed entirely of representatives of first time ever, invalidated and revoked the majority shareholder. in some cases Presidential Decrees imThe Law On Joint Stock Companies posing sanctions on business entities. sets a reduced three-month limitation periThe Law of Ukraine On Sanctions od for appealing against decisions adopted defined the purpose, grounds and prinat a meeting of a joint stock company. The ciples for applying these temporary shareholder appealed to the Commercial restrictive measures. However, neither Court against the decision taken by the this piece of legislation nor case law General Meeting on approving the amendhave so far determined the legal conseed and restated Articles of Association quences of invalidating sanctions. and electing members of the Supervisory The state should ensure the right Board. However, courts of all instances of a person to an effective means of dismissed the claim solely on the basis of restoring violated rights. Therefore, the imposed sanctions. consequences of invalidating sanctions At the same time, the shareholder should be determined in the light of in- Attorney-at-Law, Partner, VB PARTNERS appealed to the Supreme Court against ternational law, Ukraine’s obligations unPresidential Decrees imposing sanctions. der the European Convention on Human Despite simplified proceedings, the trial Rights, case law of the Supreme Court lasted for more than a year. The initiator and ECtHR, and the rule of law. of the imposed sanctions was involved in consideration of the case. Let’s consider the situation and case law. In 2020, the Administrative Court of Cassation of the Supreme In 2018, an extraordinary general meeting of a joint stock com- Court found the Decrees illegal and invalid in terms of imposing sancpany was held, convened and held by a majority shareholder owning a tions on company-shareholder, since it did not establish such circumshareholding of 60+% in shares. Another shareholder, a foreign com- stances that could serve as a basis for imposing sanctions on the pany (EU), owns a 25+% stake. plaintiff, and concluded that the Decrees did not meet the criteria of The Law of Ukraine On Joint Stock Companies and Commercial legitimacy. Code of Ukraine enshrines the right of a shareholder to participate in According to legal conclusions, as made by the Supreme Court, the management of a joint stock company, which provides, inter alia, a the fact of recognition of the acts as illegal and invalid testifies to the shareholder’s right (authority) to submit proposals and vote at general illegality of such acts from the moment of their adoption (Clause 60 meetings. of the Resolution of the Chamber for Land Relations and Property Prior to the imposition of sanctions, the foreign company had Rights of the Commercial Court of Cassation of 28 April 2020 in case its representatives in the Supervisory Board and Audit Commission No. 904/164/19, Clauses 23, 88 of the Resolution of the Administrative through the cumulative voting procedure, and had guaranteed influ- Court of Cassation of 10 March 2020 in case No. 160/1088/19). ence over the decisions requiring a qualified majority, particularly on Subject to the foregoing, the shareholder filed an application for making amendments to the Articles of Association. reviewing the Commercial Court’s decision on the general shareholdA representative of the foreign company arrived at the venue of ers’ meeting taking into account newly-discovered circumstances. an extraordinary general meeting and was registered to participate in Such newly-discovered circumstances are illegality of the Decrees of the meeting. However, the List of Shareholders stated that the number the President of Ukraine, which imposed sanctions on the Company of his voting shares is “0 ***.” The relevant note referred to the deci- and, accordingly, the illegality of sanctions resulting in violation of the sion as taken by the National Security and Defense Council of Ukraine, foreign company’s rights to put forward proposals and vote at sharewhereby such sanction as “asset blocking and temporary restriction holders’ meetings. of a person’s right to use and dispose of property as owned by it” was The illegality of Presidential Decrees and sanctions has existed imposed. throughout their validity, including when convening shareholders’ Accordingly, the shareholder did not receive ballot papers and meetings and the commercial court of first instance when adopting was unable to vote on the agenda. Moreover, the blocked shares its decision, but it could not be established by a court, since in acwere not taken into account to determine the qualified majority on cordance with procedural law Presidential Decrees may be invalidated

Volodymyr Vashchenko

142

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VB PARTNERS VB PARTNERS — is a boutique law firm, founded in 2005, with specialization in White-Collar Crime and Dispute Resolution. Thanks to this niche, our clients receive the highest level of expertise, individual approach and personal involvement of partners in projects. VB PARTNERS`s attorneys protect business structures and private clients in criminal proceedings, both in cases of their involvement in criminal proceedings by mistake or the threat of criminal prosecution, and in cases where the client is accused of committing a crime. Our key expertise includes investigation of fraud, money laundering, misappropriation of funds and assets, tax evasion and fictitious bankruptcy, abuse of office, negligence and illegal enrichment. Our team developed practice in the sphere of compliance and conducts our own corporate investigations, including with the aim of bringing dishonest partners, contractors and management of companies to responsibility. We have significant experience in representation of clients’ interests in anti-corruption bodies.

Address: Business Center Bashta № 5 22 Rybalska Street, Porch 13, Kyiv, 01011, Ukraine

only by the Supreme Court (Article 266 of the Code of Administrative Proceedings of Ukraine). Consequently, only a decision of the Supreme Court could be and is a substantive legal expression and admissible proof of the fact that the newly-discovered circumstances mentioned above actually exist. The Commercial Court of First Instance refused to review its decision on the general shareholders meeting. In the meantime, the Court referred to the fact that the decision, as taken by the Supreme Court, is new evidence, and Presidential Decrees are acts related to particular persons and, therefore, their invalidation determines their illegality only “for the future.” However, it is impossible to agree with the above justification. Firstly, newly-discovered circumstances are the illegality of Decrees issued by the President of Ukraine, whereby sanctions were imposed on a foreign company, and, accordingly, the illegality of sanctions. The Supreme Court’s decision is only proper and admissible evidence of their existence. Secondly, the reference to the fact that invalidated Presidential Decrees are acts related to particular persons is unfounded and, therefore, they determine the consequences only in perspective, but not retrospectively. Since there were no grounds for this at the time the sanctions were imposed, they are illegal from the moment of their imposition and remain illegal during the entire period of their validity, regardless of the nature of the act whereby they are imposed. Another approach leads to the impossibility of restoring the rights of a shareholder against whom sanctions have been illegally applied for more than two years, which does not comply with Article 13 of the European Convention and Article 1 of the First Protocol. In particular, the ECtHR concluded in its judgment in Stebnytskyi and Comfort v. Ukraine that the fact of recognition of the claimant company as bankrupt by a court resolution which was later annulled by the court as unlawful, showed that the company’s business restrictions were unlawful throughout the entire validity period of the respective Resolution (clauses 62 to 65 of the Decision of 3 February 2011). Similarly, the fact of imposition of sanctions on a company in the absence of grounds, as confirmed by the Supreme Court, indicates the illegality of restrictions as imposed on shareholder rights due to the imposition of sanctions. A company should have access to an effective procedural remedy of restoring its rights, and the only way to restore them is to annul the decisions taken by the General Meeting in 2018.

Our аttorneys are recognized national experts on cross-border investigations, extradition and Interpol. We can help at every stage, from responding to extradition requests and Interpol Red Notices, bail proceedings, extradition hearings and appearances in courts. Several decades of experience have formed unique expertise on the resolution of economic, administrative and civil disputes regardless of the instance and geography. The firm accompanies disputes both in Ukraine and in foreign jurisdictions. Most recent work includes ICSID cases and challenging sanctions imposed on European companies. Thanks to years of successful practice and implementation of complicated projects, the firm and partners have been recognized by all international and national professional ratings (The Legal 500 EMEA, Chambers Europe, Best Lawyers, Who is Who Legal, Ukrainian Law Firms. A Handbook for Foreign Clients, etc.). Among our clients — shareholders and top managers of large Ukrainian business, world corporations, banks, foreign investors, key government officials and private clients.

Tel.: +380 44 581 1633 E-mail: office@vbpartners.ua Web-site: www.vbpartners.ua

It should be noted that the Supreme Court has already broadly interpreted the newly-discovered circumstances and ascribed to them not only the facts of objective reality, but also other facts affecting proper dispute resolution, including legal assessment. In particular, the Civil Court of Cassation recognized as a newlydiscovered circumstance the fact of invalidity of the insurance certificate forged by the defendant to avoid civil liability (Resolution of 21 October 2020 in case No. 726/938/18): “The Court of Appeal did not take into account that the newly-discovered circumstance, being a legal fact that is important for the case, but was not and could not be known at the time of the challenged court decision, which the claimant refers to in the application for review, is the invalidity of the Green Card Insurance Certificate, which existed when considering the case, and the court’s decision, which it requests to review, but not the documents themselves, whereby the circumstance of the invalidity of such Insurance Certificate was established.” Moreover, the Commercial Court of Cassation recognized the fact of the agreement’s invalidity as a newly-discovered circumstance (Resolution of 12 November 2020 in case No. 910/23892/16). “Newly-discovered circumstances are, by their legal nature, the factual data refuting the facts that were the basis of the court decision and give rise to procedural consequences, affect the legality and validity of the court decision adopted without taking them into account. Newly-discovered circumstances include facts of objective reality, on which the parties’ claims and objections are based, as well as the other facts being important for the proper resolution of dispute.” Subject to the foregoing, conservative understanding by the courts of lower instances of provisions of procedural law with respect to newly-discovered circumstances leads to the impossibility of restoring the rights of a person which were violated during the period of validity of illegal sanctions. Therefore, it is necessary to further develop the institution of reviewing cases based on newly-discovered circumstances, and transit from a superficial conclusion “court decision=new evidence” to the understanding that the illegality, as established by the court decision, is a newly-discovered circumstance. The above understanding does not contradict the provisions of procedural law, but is organic awareness of the fact that newly-discovered circumstances are not only facts of objective reality, but also other facts that are important for proper dispute resolution.

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143

Property Rights

Where has the Money Gone? For the last 5 years, the state-run from the Law of Ukraine On The Deposit Deposit Guarantee Fund (hereinafter — Guarantee System for Individuals. However, the Fund) has become a significant the reference to this concept in Article 52 player on the banking services market. remained, which might add uncertainty to The reason for this situation was the the regulation of accountability of bank-recollapse of around 100 Ukrainian banks. lated persons, which was a far from perfect World history encompasses only a few one. such cases. In Ukraine the scale of crisis After the legislative changes made in in the banking sphere has, indeed, been 2015, the Fund (in view of lack of voluntary staggering. According to the Fund, the recovery of damages caused to the banks), liquidation of 48 banks (14 of them in began the process of applying to the courts 2020) had been completed as of 1 Januof Ukraine with respective claims for recovary 2021, and a further 47 banks are enery of damages caused to the banks. gaged in the liquidation procedure to be At the same time, when resolving this completed in the near future. category of disputes, a number of both proAlong with objective factors of cedural and material controversial issues deterioration of the financial health of arose to be discussed in detail. banks (such as crisis phenomena in soThe first such claims referring to Arciety), there are also subjective factors, ticle 52 were filed in 2017. They were sent in particular, performance of high-risk to courts of general jurisdiction. It was quite transactions by banks, including excespossible to understand the logic of the Fund sive lending to bank-related persons and as, after all, all defendants in the cases were concealment of these transactions from individuals. the regulator via the submission of unre- Partner, Attorney at law, However, not all judges agreed with liable financial reporting. this logic. Some of them decided that since The total amount of claims from MORIS GROUP Law Firm the Fund controlled and disposed of bank creditors against insolvent banks Andriy is recognized by Best Lawyers 2021 as being assets during the liquidation procedure, claimed for refund reached 287 billion among the best lawyers in Ukraine which in effect was inherent in the owner of hryvnias (more than US dollars 10 bila legal entity, the dispute between the Fund lion). A little over 100 billion hryvnias of and bank officials for recovery of damages these claims have been repaid. Such a caused to a third party should be considlow level of satisfaction of creditors’ claims is closely connected with ered under commercial law. Finally, the Grand Chamber of the Supreme the critical insufficiency of assets in liquidated banks and the low level Court made just this conclusion in its ruling dated 19 June 2018. After of asset quality. Moreover, the actions of bank owners and manage- that, all initiated cases were closed by courts of general jurisdiction, and ment have become a common reason for bank insolvency. Realizing the Fund had to re-initiate proceedings in commercial courts. “the beginning of the end”, quite often bank management has actively After passing to economic jurisdiction, new procedural problems withdrawn assets from a bank, and sometimes — outside Ukraine be- arose. In order to save time and, apparently, court fees, the Fund defore introducing administration of it by the Fund. cided to prosecute claims on the “all-to-all” principle. That is, the whole In order to enhance accountability of former owners and other amount of insufficiency was taken as the price of the claim, all who corbank-related persons responsible for the problems in financial insti- responded to the “bank-related person” criterion — as defendants and, tutions, in 2015 the Ukrainian Parliament adopted respective amend- in fact, the claim for joint and several recovery of damages was filed. ments to Ukrainian legislation. Thus, the new Article 52 appeared in Some judges did, nevertheless, commence proceedings for such the Law of Ukraine On The Deposit Guarantee System for Individuals. It class suits. However, most of them saw it as a violation of the rules for established that the Fund or an authorized person of the Fund should, consolidation of claims. The courts came to such conclusions taking in the event of insufficiency of bank assets, set up a claim for recovery into consideration the fact that each transaction was an independent of damages caused to the bank against a bank-related person, whose legal relation, being the basis for emergence of civil rights and obligaactions or omissions caused damages to the creditors and/or bank, tions for the parties of this legal relation. The establishment of the cirand/or against a bank-related person, who as a result of such actions cumstances of each of these transactions was evidenced with uncoror omissions received material benefit directly or indirectly. related facts (different agreements, decisions of different divisions of At the same time, existing normative-legal regulations are obvi- the bank, etc.). Thus, according to the judges, the claims for recovery ously insufficient for proper practical implementation of all mecha- of damages in the amount specifically determined by the plaintiff for nisms of such accountability. each particular loan agreement were independent claims uncorrelatThus, in 2015, the Law of Ukraine On The Deposit Guarantee Sys- ed not by grounds of emergence nor by pieces of evidence provided, tem for Individuals, introduced such a concept as “insufficiency of bank and were not basic and derivative from each other, as satisfaction of assets” — exceeding the amount of bank liabilities in accordance with claims of one kind did not depend on the satisfaction of claims of anthe register of accepted creditors’ claims over the estimated value other kind. This, in turn, complicated their joint consideration. of the insolvency estate of the bank, except for bank assets being a Eventually, the situation once again became the subject for conpledge and used exclusively for priority satisfaction of the pledgee’s sideration by the Supreme Court of Ukraine. The first was the ruling of claims. the Commercial Cassation Court dated 15 February 2019 (the claim A very simple algorithm was used to calculate the insufficiency against related persons of the Professional Financing Bank, which conof assets: firmed the violation of rules for consolidation of claims). The Cassation 1. The register of accepted creditors’ claims was approved (within 90 Court then stated the same position in the ruling dated 25 July 2019 days from the beginning of the bank liquidation procedure). (the claim against related persons of Imexbank). In the end, a similar 2. The estimated value of the insolvency estate of the bank was de- conclusion was made by the joint chamber of the Commercial Cassatermined (within 14-20 days from the approval of the insolvency tion Court in its ruling dated 16 October 2020 in the case of Delta Bank. estate of the bank, for which the Fund had 6 months from the beHowever, the biggest problem for courts in the Fund’s disputes ginning of the liquidation procedure). with former bank owners and managers was the issue of determin3. The Fund defined the difference between the first and second fig- ing the term when the Fund acquired the right to apply to a court with ures as insufficiency of assets; in the opinion of the Fund the result claims for recovery of damages. of such a difference was damages caused to the bank. There are two approaches of judges to this issue. The Grand It should be noted that by 2020 the Law of Ukraine On Amend- Chamber of the Supreme Court has to decide on the legitimacy of one ments to Certain Legislative Acts of Ukraine for Improving Mechanisms of them in the case of Ukoopspilka Bank (as of the time of writing of of Banking Activity Regulation (better known in Ukraine as the “anti- this article, the case was still ongoing and scheduled for consideration Kolomoiskyi” law) excluded the concept of “insufficiency of assets” on 30 March 2021).

Andriy Savchuk

144

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MORIS GROUP MORIS GROUP is one of the leading law firms in Ukraine, which provides high-quality legal services with a special focus on Dispute Resolution, Tax, Banking and Finance, Corporate and M&A, Investment and Business Support, Data privacy and Cybersecurity, White-Collar Crime, Anti-Corruption, GR and strategies, IP and Technologies, Real Estate, Financial Restructuring, Forensic, Labor Law, Forensic, Capital Markets, Special Situations, Defamation and Reputation Management, Legal Design and Sports Legislation. We offer a wide range of legal solutions for our clients. The full scope of the firm’s legal services makes it proficient at such industries as Banking & Finance, Information Technologies, HORECA, Engineering & Automotive, Agriculture, Energy & Natural Resources, Manufacturing & Construction industry, Oil and Gas & Chemical, Telecommunications, Retail & Food Industry, Public sector, Construction & Development, Insurance, Investments, Sport, Defence & Aerospace, Life Sciences & Health Care, Arts & Culture, Logistics & Infrastructure. MORIS GROUP, with its extensive expertise, is recognized on the Ukrainian legal market as a reliable and trustworthy partner. Our clients implicitly trust our competence and experience in the

Address: 8-B Moskovska Street, Kyiv, 01010, Ukraine Tel.: +380 44 359 0305, 359 0306

resolving of any legal matters. Our lawyers have been confirming this status through successful legal practice and recognition among the leaders of the legal market of Ukraine since the company was established back in 2004. Professional, secure and efficient application of legal solutions for attaining the business goals of clients is a significant advantage held by MORIS GROUP. The search for the most convenient ways to solve and carry out clients’ legal tasks is the main peculiarity of MORIS GROUP, as well as comprehensive defence and understanding the business interests of clients. MORIS GROUP is recognized among the leaders on the Ukrainian legal market and among the best law firms in key practice areas by the most prestigious professional excellence awards, namely Best Lawyers, The Legal 500 EMEA, IFLR1000, World Tax, Benchmark Litigation.

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The first approach. In the course of conducting the inventory (i.e. actually before the end of the liquidation procedure) the Fund is already aware that the satisfaction of all liabilities of the Bank is impossible and that damages have been caused. Therefore, the statute of limitations begins at the end of the inventory. There is a certain logic, because after forming the insolvency estate and determining the number of creditors’ claims, the Fund is already able to understand whether the bank’s assets are sufficient or not, even without understanding the exact amount of claims (to be adjusted in the course of legal investigation). The second approach is that before the liquidation procedure has actually been completed, the Fund has no legal grounds to state the damages caused to the bank. That is, the judges, in fact, come to the conclusion that the claims are premature. There is also logic, because until the end of the liquidation procedure it is impossible to predict how much money the bank will receive from the sale of assets (in view of the sale by auction, the sale price is not fixed, and in practice — it is obviously less than the estimated one) and what the size of the final insolvency estate will be (it is often adjusted in the course of the bank liquidation procedure). At the same time, some creditors, whose claims have not been recognized by the Fund, recognize such rights in court, which leads to the making of adjustments to the register of creditors. It seems that in the case of Ukoopspilka this interpretation of the law by the Supreme Court of Ukraine is more probable, especially in view of the exclusion of definition of the concept “insufficiency of assets” from the Law. The situation was such that the same judge applied the first approach in one case, and the second approach — in another case (in another bank). Now everything is in the hands of the judges of the Grand Chamber of the Supreme Court, which has to solve this exceptional legal problem. Despite the absence of progress in Ukrainian courts, the Fund decided not to wait for something to happen and started actively seeking its fortune in foreign jurisdictions. Former top managers of the banks and their beneficiaries are not only wealthy people, but also cautious individuals. Realizing that sooner or later they would be “asked” for the damages caused to a bank, most of them quickly became “poor” in Ukraine, and instead they acquired assets abroad, and sometimes even moved abroad as far as possible from Ukrainian courts.

Therefore, in 2019, the Fund began looking for foreign experts through open tenders to carry out work in order to establish damages, determine those accountable for each episode of their task with the most important thing being recovery of these damages in courts of foreign jurisdictions. Foreigners actively participated in competitions, as a result of which, as of the beginning of 2021, the related persons of the banks Delta, Finance and Credit, Imexbank and National Credit received related teams of foreign “hunters”. In particular, according to open source data, the team in the case of Delta is headed by the British firm DWF Law, and in that of Finance and Credit by British firm Gateley PLC. A few more tenders for other banks are on their way. Several tenders are scheduled to take place in 2021. MORIS GROUP is not standing aside from these processes and, as a member of the team (the leader is a top international law firm), also participates in some of the announced tenders. The tender itself, or more precisely the evaluation of submitted proposals, consists of three stages. At the first stage the experience and capabilities of a participating team and its compliance with formal requirements of the law are analyzed. At the second stage the strategic plan of future services with regard to the prospects and methods of team work is evaluated. The third and decisive stage stipulates evaluation of price proposals from those participants who have successfully come through the first two stages. The valuation method can be described in short like this — the lowest price wins. The law regarding the liability of bank-related persons certainly needs to be improved. It is impossible to regulate complex issues running into hundreds of billions of hryvnias by means of one paragraph in the law. This will inevitably lead to complex litigations and the absence of results for the Fund. In fact, this is what we are seeing now. The more precise the way that recovery rules and mechanisms are stated, the fewer abuses there will be in the future on the part of unscrupulous bank owners. I would solve the problem of caused damages by creating an effective mechanism of voluntary compensation of damages in exchange for a certain “discount” of such damages and termination of criminal prosecution of bank owners. I think many would agree. Moreover, it will be much more effective for the state to receive recovery of a part of the damages here and now than to waste time and resources on cases heard in courts around the world.

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Public-Private Partnership

PPP in Ukraine: Legal Framework, Trends and Prospects to allow unsuccessful bidders to challenge the award decision, and establish an independent administrative authority in charge of complaints review. Transparency also needs to be enhanced by the publication of the full text of PPP contracts and their further amendments. It should also be noted that many of the areas identified for development have been addressed in recently adopted bylaws and draft laws which are at the development stage; however, some issues still need to be worked out. In addition, the development of a detailed legislative framework with respect to forms of PPP other than concessions should also be highlighted as a priority for lawmakers.

Legal Framework Over the last few years, significant improvements have been made in Ukraine towards building a legislative and institutional framework with the aim of enhancing the country’s investment attractiveness. Recent achievements in this area deal with a set of investment incentives introduced with the adoption of the so-called “investment nanny” law, commencement of large privatization, reconsideration of benefits for industrial parks. Successful reforms in the publicprivate partnership (PPP) area, which is an absolute must for sustainable development of the country, introduced best world practices into Ukrainian legislation and provided investor protection mechanisms. Public-private partnership is generally defined as the contractual arrangement between a public entity or authority (either state or municipal) and a private entity — to provide a public asset Partner, AEQUO or service, where a private party bears significant risk as well as management and operational responsibility. In Ukraine, PPP can be implemented in different forms, including through entry into concession, joint activity or asset management agreements. The PPP framework legislation consists of the Law of Ukraine No. 2404-VI On State and Private Partnership, Law of Ukraine No. 155-IX On Concession. Trying to support private partners in an intention to cooperate, the government has established offices in the Ministry of Infrastructure — SPILNO PPP Office, and in the Ministry of Economic Development — PPP Agency. Their goal is to develop PPP mechanisms and ensure successful implementation of scheduled projects.

Yulia Kyrpa

Key Issues In 2020, the World Bank Group presented the results of the assessment of the quality of regulatory frameworks for the preparation, procurement, and management of large infrastructure projects. Based on the relevant Benchmarking Infrastructure Development 2020 report, Ukraine established good regulatory practice in the preparation of PPPs but needs to improve in (i) the inclusion of PPPs in the national public investment system and medium-term budgetary framework; (ii) the development of methodologies for market assessments of potential interest from contractors, methodologies for identifying the technology available and opportunities for innovation, methodologies for social impact assessment. There are also many areas for development in the field of the PPP procurement process, including the need to stipulate the standstill period after the contract has been awarded and before the signing of the contract

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Available Remedies The PPP framework provides for various guarantees and advantages both to private and public partners, such as: • long-term contractual relationships (from 5 to 50 years), • risk-sharing between partners, • possibility of state support for private partners in particular projects. For example, through purchase of goods or services, • access to some highly-competitive or highly-marginal operating businesses, • guaranteed right of private partners to obtain a lease title to land plots and obligations of the public partners to obtain all required documents for the land lease, • possibility of alternative dispute resolution and international arbitration. Private partners can also use the unsolicited proposal option — a proposal to undertake the PPP at their own initiative, rather than in response to a government or municipal request. The private partners may initiate the projects that have already been included in the pipeline, but not developed, or propose totally new options.

Latest Legal Trends

Mykhailo Soroka Senior Associate, AEQUO

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In furtherance of reform of PPP legislation and based on the World Bank’s recommendations, a set of subordinate legislation was adopted in 2020 regulating (i) the replacement procedure of private partners or concessionaires (“step-in-right”), (ii) the procedure for involving advisors in the preparation of a concession project, (iii) the procedure for submission by state partners of the annual report on the implementation of the PPP/concession agreement; (iv) the procedure for returning concession objects after the termination of concession agreements. Moreover, many effective regulations were updated, so they are now aligned with the new approach to PPP regulation, such as contest procedure for determining the winner of the competition for PPP, and procedure of analyzing the efficiency of PPP. Furthermore, on 20 May 2021, Parliament adopted in the first hearing the Draft

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Law No. 5090 aimed at bringing into line the PPP and budget legislation, as well as ensuring the feasibility of providing state support for the implementation of PPP. By adopting the said changes, the long-term budget liabilities for PPP projects will be feasible. This Draft also enables allocation of funds from the State Road Fund as availability payments, to private partners for roads built in the course of PPP, which is essential for implementing pilot projects within the Great Construction Program.

Illustrative Case Studies According to the Ministry of Economic Development, as of 1 January 2021, 39 PPP contracts were implemented in Ukraine, mostly in the area of water and waste management (29 concession agreements, 6 joint venture agreements, 4 other types of agreements). The success story of PPP in Ukraine is represented by the two pilot Associate, AEQUO concession projects of the Olvia and Kherson Sea Ports. On 26 June 2020, the concession agreement regarding Kherson Sea Port with the private partner Risoil-Kherson LLC was signed. The private partner will invest about UAH 300 million in the port’s development and around UAH 18 million into the local infrastructure. On 20 August 2020, the concession agreement regarding Olvia Sea Port was signed with the private partner — QTerminals. The sum of private investment will come to UAH 17.3 billion over 35 years of concession, and the annual concession payment will be at least UAH 80 million.

It is expected that the invitation for potential investors to participate in these tenders will be announced in the fall of 2021. Maritime Infrastructure. The project on the modernization of existing capacities of the Rail-Ferry Terminal in Chornomorsk, being the only terminal in Ukraine specializing in servicing railway and auto-ferry lines, has passed the feasibility study stage. Another opportunity is the concession of the First and Container terminals in Chornomorsk port. The objective of the project is to create modern transship containers and general cargoes terminals by renovating existing facilities, updating/ modernizing transshipment machinery. The project has passed the initial stage — pre-feasibility study (development of concept note). The preparation of the next concession projects in the ports of the Berdyansk, Odesa and Izmail is under way. A preliminary feasibility study for the project in the Bilhorod-Dnistrovsky Sea Port has been developed and adopted. In addition, the Ministry of Infrastructure is looking for financing of concession projects in the ports of Mariupol and Reni from private investors and for technical assistance and investment in the modernization of navigation locks on the River Dnipro in order to increase their capacity. Airports. The four concession projects regarding the Rivne, Chernivtsi, Vinnytsia, and Kherson airports are at their initial stage. Railways. In December 2020, the Ministry of Infrastructure initiated the market assessment research within the pilot project of the concession of railway stations in Kharkiv, Dnipro, Vinnytsia, Khmelnytsky, Mykolaiv, Chop, Kyiv to find out whether international or local investors are interested in such projects. The railway stations of Kyiv and Vinnytsia are expected to be the first potential concessions. Other spheres for PPP. As an example of PPP mechanisms becoming more popular, in January 2021, a meeting on the prospects for the pilot PPP project in the field of healthcare on the basis of the Clinical Emergency Hospital in Lviv facilities was held. Importantly, interested investors can initiate the implementation of other PPP projects in any area of economy or public services, either included in the list of priority investment projects or not.

Yevhenia Chernetsova

Future Plans On 16 December 2020, the Cabinet of Ministers of Ukraine approved the list of priority investment projects for the period up to 2023, which includes around 100 items. Infrastructure projects on this list can be implemented within the PPP framework. Roads. In 2020 the Cabinet of Ministers launched the national Great Construction Program aimed at using modern highways to connect the country. The six pilot road sections to be upgraded and maintained on the PPP basis were identified. All of them are included in the list of priority investment projects for Ukraine. The PPP procedure envisages that the private partner finances the rehabilitation and long-term operation and maintenance of the road. In turn, it receives availability payments — a contractually agreed upon amount, that is contingent on the KPI’s fulfillment and output specifications. The program expects to be implemented in three phases by 2030. The first phase of six pilot projects is aimed at rehabilitating the existing road network and contains only brownfield projects, such as repairing the Kharkiv-DniproZaporizhzhya road; Boryspil-Poltava road; reconstruction, repairs and construction of a new bypass of the settlement along the Kherson-Mykolaiv road; repairing the Kyiv-Zhytomyr-Rivne road and the Yahodyn-Kovel-Lutsk road; reconstruction, overhaul and construction of a new bypass of the settlement along the DniproKryvyy Rih-Mykolaiv road.

Further Prospects Recent reforms that have taken place in PPP regulations resulted in promotion of foreign and local investments, mainly in the area of infrastructure (ports, roads, airports, railways). The scheduled legislative changes regarding the medium-term budgetary framework for government support in PPP projects will only increase the attractiveness of this area. The above first-of-a-kind projects vest additional responsibility on government agencies and require extra effort from the private side in the preparation of tender documentation and assess the risks related to the subject of PPP. The established PPP advisory offices show efficiency in this regard, though the involvement of a local counsel, who would prepare a bulletproof package of tender documents, will give an advantage in winning the bid.

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Railways

Port Railway Terminals: Resolving Bottlenecks With its unique geographical location, Ukraine has 13 operational sea ports, 11 of which are served by 17 railway terminals where most cargos are delivered and dispatched. The port reform launched in 2013 has boosted investment activities. The enhancement of marine terminals and growing interest on the part of investors in container transshipment necessitate upgrading of the country’s rail infrastructure. The business community intensely follows the government’s agenda for developing the rail infrastructure related to sea ports. The motivation to move the reform forward is obvious. However, more and more experts are starting to regard rail terminals as a bottleneck for the development of sea ports. Let’s take a closer look at existing concerns, why they are raised, and how these issues can be addressed.

Thirdly, the law does not provide for a possibility to compensate costs incurred by private investors. It seems that legislators considered private investments as a kind of grant money, which obviously would be unacceptable from a private investor’s perspective.

Critical Gaps

Having reviewed the practical application of rail transport and PPP legislation, we identified the following challenges. • Anachronisms in the legal framework do not allow for compensation of costs incurred by investors in rail terminals at sea ports. This gap also concerns PPP projects developing adjacent facilities at sea ports. In particular, the concession project in the Olvia port has been hindered by the very same reason. • Narrow interpretation of legal provisions on public representation in PPP Core Problems Managing Partner, AGRECA Law Firm and concession contracts. Legislation Experts highlight two critical facdefines public authorities such as the tors hindering the development of rail Ministry of Infrastructure, public transterminals adjacent to ports. The first one is the financial situation at port operators such as USPA and UZ, state rail operator Ukrzaliznytsia (UZ). The lack of funds for capital or any combinations of them as being investments is one issue. As a natural monopoly operator, UZ must potential contractual parties. However, obtain government approval for its financial plans on an annual baalthough the operators are directly insis. In practice, getting approval is a complicated procedure with an volved in infrastructure development, unpredictable outcome. For example, the financial plan for 2020 was it is typically the ministry that has been approved in the middle of 2020. Therefore, the time for disbursement defined as a contractual party. of the planned capital expenditure by UZ was too short. According • Weak interaction between rail, road, and maritime transport into company statements published in autumn 2020, UZ intended to frastructure operators. We can observe some efforts to deepen finance rail terminals in 2021. However, the company’s financial plan collaboration. Notably, in 2018 UZ’s Odesa regional branch esfor 2021, which was approved at the end of the first quarter, does not tablished a directorate responsible for liaison with USPA. Howenvisage sufficient funds for investment. ever, such steps seem to be insufficient and interaction probThe second negative factor is weak interaction between raillems appear to be much more profound. Not least of all, USPA way and port authorities, which prevents the development of conshould play an important role by designing development policies necting points for the port and railway infrastructure. According to for sea ports on the basis of the short-term and medium-term the National Transport Strategy, the integration of the port-related needs of marine terminals. Meanwhile, a quick look at its fiveinfrastructure and the development of the traffic capacity of ports page plans for the development of sea ports should suffice to are among general challenges that need to be addressed. Similar understand that there are no serious grounds to expect such challenges and tasks are outlined in the Port Development Strategy, policies. USPA could be more proactive in promoting the interwhich puts emphasis on the development of transshipment capaciests of port operators in their relations with UZ. ties and the road and rail infrastructure. It is proposed to harmo- • The shortage of reliable sources of financing. This aggravates nize plans for the development of rail tracks and railway terminals, the problem of the short-term budgeting approach currently roads, inland waterways, and traffic capacities of ports within the applied by UZ. It is difficult to map out any long-term developnational and local development programs. Improving coordination ment projects on the basis of one-year budget planning. UZ’s between UZ and the Ukrainian Sea Port Authority (USPA) remains dependence on governmental approval of financial plans makes a pressing issue. investment in the development of rail terminals almost impossible. Let’s take a look, in this context, at the Draft Law on Railway Legal Framework Transport and other related developments. The existing legislation, as inherited from the Soviet era, in which all enterprises were state-owned assets. In this context, it is worth Upcoming Developments mentioning a couple of provisions governing the rail sector. Firstly, the law defines railway terminals as so-called strategic asThe Draft Law On Railway Transport (RN 1196-1) was regissets with a special regime for usage and disposition. These assets tered in the Ukrainian Parliament in 2019. Since then, the draft has cannot be alienated and should be operated exclusively by UZ. Accord- not been officially put to the vote but has become an object of coningly, the terminals cannot be transferred into private ownership or to tinuous discussions between MPs, the government, and the busiprivate partners within PPP projects. ness community. One of the sticking points is private investment in Secondly, the law specifies that the construction, reconstruction strategic infrastructure. Let’s take a closer look at the main governof rail terminals, other railway facilities supporting construction or re- ing rules in this area. construction of industrial enterprises will be financed from the funds In legal terms rail terminals remain to be qualified as strategic of those enterprises or from the State Budget. Typically, the State Bud- assets and their alienation is explicitly prohibited. These assets will get does not provide any funds for these purposes and private invest- be transferred to a single rail infrastructure operator, a company to ment remain the only possible solution. be set up within the upcoming unbundling of UZ.

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Andrii Pidhainyi

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AGRECA LAW FIRM AGRECA has been one of the most strategically focused legal market players in Ukraine since 2005. The firm’s team has unique practical experience and credentials in the sectors of transport, infrastructure and logistics, which is proven by years of legal advisory experience and transactional work for the most reputable national and international industrial companies, as well as the firm’s expert input in reforming the transportation regulatory framework. The firm’s expertise covers the whole range of transactions related to state property, such as privatization, joint venture, lease, public-private partnership, including concession. AGRECA has, over the last 10 years, positioned itself as a highly-specialized legal adviser in the transport and infrastructure sector, which relates primarily to sea ports and waterways, railways, airports and motorways. In particular, the firm’s experience focuses on two key areas: (1) advising on the regulatory framework, which includes constant monitoring of sectoral policies and legislative developments; drafting laws and regulations; contributing to the efforts of international financial organizations and institutional investors in upgrading the sector’s regulatory framework; and counselling private businesses

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on building up a strategic relationship with the government and state monopolies in the sector; (2) attracting private investment, providing direct legal advisory support for transactions on privatization, lease, PPP and concessions. AGRECA is among pioneering law firms in Ukraine to launch comprehensive legal support of major national and international investments in the transport and infrastructure industry. Today, the firm’s lawyers retain their practice focus as advisors on investment in and protection of sector-related assets. In addition to this, AGRECA’s lawyers are renowned for their experience in drafting sectoral laws, as well as developing procedures for privatization, lease, and management of state assets. While dealing with law drafting and regulatory updates, the firm’s experts focus their efforts on identifying and minimizing transactional and operational risks for all parties involved in sector-related projects with state property.

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According to the draft bill, the construction, modernization, and acquisition of infrastructure facilities can be financed by the infrastructure operator, the state or local budgets, or any other legitimate sources. Moreover, the draft stipulates that private financing of infrastructure facilities should be provided in accordance with Ukrainian legislation. However, the problem is that there are no specific rules and procedures, including the draft law itself. It means that private financing will remain impossible. This issue is mentioned in the Infrastructure Index 2020, an expert study of the general state of transport infrastructure development conducted by the European Business Association in Ukraine. “Introduction of legislative opportunities to attract private investment in public railway infrastructure” has been listed among the four most critical reforms. Besides, the draft law includes some positive novelties. For example, it introduces a five-year investment program for the construction, reconstruction, modernization, and maintenance of infrastructure facilities. The investment program is inextricably linked with the all-new tariff policy outlined in the draft. Access to public infrastructure is the only aspect that will be covered by regulation. According to the draft law, the access tariff shall include an investment component, and the government is not going to stop there. In 2020 the business community came up with the idea of a special fund for the development of railways. Things began to move fast from January 2021 and we witnessed some practical steps: the Ministry of Infrastructure approved a decision on establishing the Railway Development Fund. In its turn, the EBRD has already allocated funding and selected consultants to study relevant international experience, develop a concept, and draft the necessary legislation. In this regard, finding sources of funding for the fund is the most complicated issue. Currently, in the view of experts in the sector the only realistic revenue will be the diesel excise tax, but it will hardly suffice. Another key issue is the distribution of available funds. According to Mr. Kryklii, Minister of Infrastructure, the fund may be used for availability payments within PPP projects. No other possible allocations of the fund have been mentioned to date.

What Can Be Done The development of rail terminals requires substantial financial resources and well-coordinated management. Fund-raising activities must be accompanied by legislative changes, and the success of specific projects will depend on timely and strategic interaction on the part of monopolists. Finding alternative sources of financing is a vital task. Since strategic assets cannot be used as collateral, debt financing is too complicated or even impossible. In this respect, it would make sense to introduce rules for investment in rail terminals similar to those applied for investment in port infrastructure. According to the Sea Ports Law, private investment in publicly-owned hydro-technical facilities can be reimbursed. The law establishes that port fees may be used to compensate private investment. UZ could use the fees for various services of a rail terminal to refund investments. Such a mechanism could attract businesses whose activities depend on the efficiency of rail terminals, such as stevedoring companies, suppliers of natural resources, agro-producers, metal producers. The establishment of the Railway Development Fund is just part of the solution. It is important to effectively use the resources of the fund not only for the availability payments within PPP projects but also as additional financing for reconstruction of rail terminals. With regard to the difficulties of management, a more holistic approach to collaboration of monopolists is required. It is crucial to empower UZ and USPA to implement PPP and concession projects in which the development of strategic port and rail facilities is envisaged. It means that these enterprises should act as direct contractual parties in relevant projects. Another important issue is the coordination of relevant infrastructure development plans between UZ and USPA with taking into consideration growth of port traffic capacities. Against this background, the USPA’s mission in long-term planning of the port infrastructure becomes even more important. Ukraine should introduce the landlord port model as soon as possible. However, this will be the subject of a separate publication.

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Real Estate

Four Influential Trends in Construction — 2021 Development of the construction sector is not possible without transparent regulation. Recent global trends show a revival of the construction sector and recovery from crisis caused by lockdown restrictions. Ukraine has been trying to improve its investment climate for a long time now, and that includes the construction sphere. This article deals with the main developments that have taken place and those which are in the pipeline for implementation shortly. So, what has changed recently in the regulation of urban planning and what opportunities do they provide?

Reform of Governing Authorities in Construction

These funds should have been provided for the development of infrastructure in settlements where the construction was to take place (roads, schools, kindergartens, etc.). Unfortunately, there were frequent incidents when developers not only paid these contributions, but also repaired / built roads and other infrastructure facilities at their own cost. So share contributions were cancelled on 1 January 2021. The share contribution will also be cancelled for developers which began construction in 2019 or 2020, but will continue construction works in 2021. Agreements made before 1 January 2020 are valid and remain effective until the full performance thereof. As was mentioned, the fixed amounts of share contributions were established by the municipal authority, and now not all such decisions are withdrawn. For example, this procedure is still valid in Kyiv. Municipal authorities are not excited about the prospect of cancelling such contributions, as they formed a sizable part of local budgets. Therefore, the possibility of court disputes arising in this sphere remains possible, at least in 2021.

Thus, in mid-March 2020, the Cabinet of Ministers of Ukraine (the CMU) liquidated the State Architectural and Construction Inspection of Ukraine (the SACI), an authority that exercised gov- Partner, Attorney, PhD in Law, ernment control over compliance with ADER HABER urban planning law, and established Key specialization: real estate, construction, agribusiseparate authorities in its place, which ness, land law should cover its functions, in particular: 1) the State Service of Ukraine for Change of Land Plot Purpose by Urban Planning (Urban Planning Service), which shall register docuApplication and Geospatial Data Law ments entitling the performance of construction works, as well as documents for commissioning of facilities; 2) the State Urban PlanLaw of Ukraine No. 711-IX On Amendments to Certain Regulations ning Inspection of Ukraine (Urban Planning Inspection), which shall of Ukraine in Respect of Land Use Planning (the 711 Law) was pubperform control and supervisory functions, and 3) the State Agency lished on 24 July 2020. The 711 Law amended the range of regulations for Technical Regulation in Urban Planning. aimed at facilitating the change of designated use and functional purAt the same time, the Procedure for State Architecture and Con- pose of a land plot. This Law shall come into effect on 24 June 2021 struction Control was terminated, which led to blocking the possibility (with certain exceptions). The transition period lasts from 24 July 2021 of carrying out control in construction. to 1 January 2025. It was only on 30 December 2020 that the Procedure for the State A reminder that Ukraine currently has a principle whereby the deArchitecture and Construction Control was renewed and it was made velopment of a land plot is possible only in accordance with the despublic that SACI inspections were resumed. However, only at the end ignated use of such a land plot, which shall be determined by land of March 2021 was control renewed after the nesessary changes had survey documents, as developed, agreed and approved in accordance been adopted by the CMU. with land legislation. In its turn, development shall also comply with The fact that the CMU, by its Resolution No. 1340 On Some Is- the town planning documents available in a particular settlement. This sues of the Functioning of Architectural and Construction Control and issue is also regulated by the other range of regulations in respect of Supervision Authorities of 23 December 2020 decided to liquidate the urban planning. There are cases quite often when the designated use Urban Planning Service, Urban Planning Inspection and to establish of a land plot does not match with its functional purpose according to the State Inspaction of Architecture and Urban Planning of Ukraine on urban planning documents. their basis, causes even more uncertainty. A draft bill in respect of the The 711 Law aims to rectify this situation. Thus, a new type of final liquidation of the SACI will be submitted to the Verkhovna Rada document — a comprehensive plan of spatial development of the terof Ukraine in a few weeks. The SACI will proceed with control function ritorial community (the Comprehensive Plan) — has been introduced, till the State Inspection of Architecture and Urban Planning of Ukraine which shall determine planning organization, functional purpose of the start its work. area, boundaries of the functional zones, road network, engineering Therefore, the reform continues, and what about construction and transport infrastructure, etc. within a particular territorial commupermits? nity. The provisions of other local urban planning documents shall be Permits and registration in urban planning are possible, for the aligned with the Comprehensive Plan. transition period, via the Unified State Electronic System in the Field The Comprehensive Plan shall be developed during the transition of Construction (the Electronic System), whose operation is currently period. Functional zones established by the Comprehensive Plan shall incomplete. list the permitted types of designated use of the land plots. The classifier of types of designated use of areas and the types of designated use of land plots permitted within their boundaries shall be approved Share Contributions by the CMU by 24 January 2021. All this data will be recorded with the Until 1 January 2021 a developer in Ukraine was obliged (with State Land Cadastre. Accordingly, the designated use will be changed certain exceptions) to pay a share contribution for the development not in accordance with the land management project, whose developof infrastructure in the amount determined by the municipal authorment and approval requires considerable time and funds now, but by ity (not exceeding 10% of the total estimated cost of the construcsubmitting an application to the cadastral registrar. tion for non-residential buildings and structures, and 4% of the total It is worth noting that the Law of Ukraine On National Infrastrucestimated cost of the construction for residential buildings and ture of Geospatial Data of Ukraine was enacted on 1 January 2021. structures).

Aleksandra Fedotova

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into the lease agreement in respect of the land plot, where such facility is located, without the necessity to take part in a land auction. Draft Law No. 5091 On Guaranteeing Proprietary Rights to Future Immovable Property is also currently registered. Its aim is to fight fraud in respect of circulation of individual apartments and non-residential premises in facilities which are under construction. It proposes to introduce registration of the rights to such facilities that will prevent their double or treble sale and to simplify the procedure for creating a mortgage over such facilities.

This Law aims to unify data recorded with the different registries and information databases in one system. That will enable any developer to save time and costs required to find information about a land plot and the real estate underlying it.

Improvements of Circulation of Incomplete Construction

In this block of issues, we would like to draw your attention to the fact that currently enacted Draft Law No. 0850 On Amendments to Certain Regulations of Ukraine (in Respect of a Single Legal Share of the Land Plot and Findings the Real Estate Underlying it) dated 29 Reform of the construction sector is August 2019, inter alia, stipulates that ongoing. Please note the following key rewith the sale of an incomplete concent developments: struction facility the buyer shall acquire 1. The regulatory authorities had been detitle or right to use (lease, superficies, activated for the period of one year. This etc.) in respect of the land plot where could lead to an increase in the number such facility is located, to the extent of illegal developments and court disand under conditions set for the previ- Senior Associate, ADER HABER putes arising in this sphere. In addition, ous owner. In such a case, the will of a Key specializations: real estate and land disputes, the Unified State Electronic System in landowner shall not be required, and the antitrust and competition proceedings the Field of Construction has been intransfer of title or right to use in respect troduced, which will enable the receipt of the land plot to the buyer, in particuof construction permits and registration lar, of the incomplete construction facility, shall be registered under of documents for the commissioning of the sale and purchase agreement. facilities. What is the point of such changes? Such changes, in particular, shall provide for the opportunity to alienate an incomplete construc- 2. The share contribution has been cancelled. This means developers will save from 4% to 10% of the total estimated cost of construction. tion facility that is under construction on the leased land plot, without passing all the bureaucratic stages required to re-register the lease 3. Unification of land and urban planning legislation with respect to determination of designated use of land plot will be implemented from agreement. Basically, the right of lease can be registered on the same mid-July 2021. This will make it possible to determine such purpose day as the title to the purchased incomplete construction facility. by filing an application to the cadaster registrar and will significantly In the past the sale of an incomplete construction facility did facilitate the preparation procedure in respect of construction. not cause, in particular, automatic transfer of the right of lease to the land plot. The buyer should have entered into a new lease agree- 4. At present the procedure on re-registration of the right to use a land plot in the event of acquisition of an incomplete construction facilment and the seller to terminate his agreement. In many cases the ity is greatly simplified. In addition, it is planned to introduce regland fee was “doubled”, since the tax authorities required the seller istration of proprietary rights to immovable property to be built in to pay a lease payment and the buyer to pay the land tax. In addithe future. This will enable the protection of the rights of investors tion, an incomplete construction facility was not always considered in construction and facilitate the possibility to conclude mortgage an immovable property and, therefore, the buyer of an incomplete agreements regarding such facilities. construction facility did not always have an opportunity to enter

Dmitriy Nikolov

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Renewable Energy

Renewable Energy in Ukraine Since the introduction of the feedin tariff in Ukraine, the renewable energy sector has been growing every year. The positive growth trends of the sector intensified in 2017-2019. Thus, 2019 is likely to remain for some time the peak year in the number of investments and commissioned facilities of renewable energy power generation. In 2020, RES electricity producers faced new challenges, primarily related to arrears in payment of the feed-in tariff by the state-owned Guaranteed Buyer, which began to accumulate from March 2020. Overall, in 2020, the Guaranteed Buyer paid only 63% of the projected feed-in tariff to RES electricity producers. This situation could not but have had a negative effect on the pace of implementation the renewable energy projects. In 2020, just 1.34 GW of generating capacity was put into operation, which is many times less than in 2019. Uncertainty in the market still has a negative effect on the pace of construction of new facilities. A little over 90 MW were put into operation in the first quarter of 2021.

Besides, the rapid development of renewable energy in Ukraine in 20172019 and the uncontrolled issuance of Technical Conditions have led to the commissioning of many facilities producing renewable energy. Thus, the amount of feed-in tariff payments to be made by the Guaranteed Buyer has also increased.

Reduction of Feed-in Tariff In spring 2020, due to regular arrears in payment of the feed-in tariff, the state and major renewable energy producers began talks and consultations to resolve debt issues and reduce the financial burden on the Guaranteed Buyer. After long-term negotiations on ways of overcoming the crisis, the government of Ukraine and Ukrainian associations of renewable energy producers came to agreements on the basis of which the Law of Ukraine On Amendments to Certain Laws of Ukraine on Improvement of Conditions of Support of Electricity Production from Alternative Energy Sources was adopted, which came into effect on 1 August 2020. The main amendments made by the Law:

Igor Dykunskyy LL.M., Managing Partner, DLF Attorneys-at-Law

Causes of a Difficult Situation The electricity market of Ukraine switched to a new model from July 2019. Different models for funding the Guaranteed Buyer were planned during the transition: at the expense of work on the electricity market and sale of energy produced by NAEGC Energoatom; funding from the state, etc. However, for various reasons, these funding sources were ineffective. Thus, instead of selling electricity on the market, NAEGC Energoatom was obliged to supply electricity to the population (to keep prices low for the population and to cover social tariffs). Funding from the state was also not provided in the agreed terms and the specified amounts.

• Reduced feed-in tariffs; • Introduced liability for imbalances for RES producers. From January 2021, there is a partial liability of RES producers for imba lances — about 50%, and from 2022 it will be 100%; • The possibility of financial support of the Guaranteed Buyer from the state budget in the amount of no less than 20% of projected electricity generation from renewable sources for the respective year; • Clarified procedure for feed-in auctions; • Determined the transmission system operator responsible for compensation for electricity lost due to the execution of operator commands to reduce and/or limit the load; • Provided state guarantees regarding the invariability of legislation in force on the day of the Law’s adoption for electricity producers under the feed-in tariff.

The feed-in tariff rates (in EUR) are currently as follows: Type

Capacity, kW

Date of commissioning 01.01.2017 — 01.01.2020 — 01.11.20 — 01.01.2021 — 01.04.21 — 01.01.2022 — 01.01.2023 — 01.01.2025 — 31.12.2019 31.10.2020 31.12.20 31.03.2021 31.12.21 31.12.2022 31.12.2024 31.12.2029

≤600

0.0538

0.0504

0.0494

0.0483

0.0478

0.0441

>600 — ≤2000

0.0628

0.0588

0.0578

0.0567

0.0557

0.0515

>2000

0.0941

0.0882

0.0772

Biomass

0.1239

Biogas

0.1239

Wind turbine for private household

SPP

<1000

0.1390

0.1097

≥1000

0.1277

0.1097

0.1061

0.1024

0.0987

0.0950

1000-75000

0.0788

0.0761

0.0435

0.0420

0.0405

0.0390

>75000

0.0450

0.0435

0.0420

0.0405

0.0390

0.1185

0.1147

0.1104

0.1066

Rooftop or facade SPP

0.1637

Micro HPP

0.1745

0.1573

0.1395

Mini HPP

0.1395

0.1255

0.1115

Small HPP

0.1045

0.0942

0.0835

Geothermal energy

0.1502

0.1352

0.1201

152

0.1228

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DLF ATTORNEYS-AT-LAW DLF Attorneys-at-law is a Ukrainian law firm that provides consultancy services to mainly English-speaking and Germanspeaking clients on various matters of doing business in Ukraine. We have vast expertise of corporate, M&A, insolvency, antitrust, labor, competition, IP, renewable energy law, advertising law, privatization, agriculture, real estate and tax law as well as in litigation and dispute resolution. Our core customers are SMEs from various fields. We offer them tailor-made, economically viable solutions. We are also a reliable business partner for a number of listed corporations and their subsidiaries in Ukraine. We represent our clients in a wide range of industries: IT, engineering, agriculture, life sciences and healthcare, renewable energy, foodstuffs, pharmaceuticals and chemicals, management consulting as well as home appliances. Our multilingual team is led by Igor Dykunskyy, LL.M., managing partner, who has over 15 years of experience in consulting foreign businesses. Most of our lawyers graduated from Ukrainian law universities and successfully continued their studies abroad, particularly in England and Germany. Our experts are held in high

Address: IQ Business Center, 13-15 Bolsunovska Street, Kyiv, 01014, Ukraine

esteem in professional circles thanks to their expertise on the special features of doing business in Ukraine. Our attorneys understand not only the needs of clients, but also their business philosophy and the specific needs of their respective business models. We have a close working relationship with various business associations in Ukraine. We also come recommended by an array of foreign embassies in Ukraine.

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The feed-in tariffs were reduced Feed-in Auctions from 1 August 2020. The reduction of Those “green” energy producers who the feed-in tariff was actually carried fail to put their facilities into operation on out only for solar and wind power statime and are unable to receive a feed-in tartions. Notably, feed-in tariffs were reiff for produced electricity may participate duced not only for new RES electricity in feed-in auctions and, in the event of winproducers, but also for existing ones at ning an auction, sell the produced electricthat time. ity on the agreed terms. The law on feed-in The tariff limit for biogas/biomass auctions was adopted in spring 2019, but it has not been set. However, Part 3 of the is still not functioning. According to inforFinal and Transitional Provisions of the mation available, the first feed-in auctions Law On Amendments to Certain Laws of in Ukraine will be held in summer 2021. Ukraine on Improvement of Conditions All wind power producers with an inof Support of Electricity Production stalled capacity of over 5 MW and solar from Alternative Energy Sources stipupower stations of over 1 MW shall take part lates that the feed-in tariff for producin auctions. ers of electricity from biomass and/or There is also a clear starting price for biogas is set exclusively for electricity feed-in auctions: generated by facilities commissioned • for wind and solar power plants for before 1 January 2023. feed-in auctions, held by 31 December After the reduction in the feed2024 — not more than 9 eurocents per in tariff for net energy producers, the 1 kW/h; situation with payment of the feed-in • for wind and solar power plants for tariff has slightly improved. In the first Associate, Insolvency Administrator, feed-in auctions held from 1 January quarter of 2021, the level of feed-in tar2025 — not more than 8 eurocents per iff payment by the Guaranteed Buyer DLF Attorneys-at-Law 1 kW/h; was about 90% of planned payments. • other types of renewable energy sourcHowever, the arrears in payment of the es – not more than 12 eurocents per feed-in tariff for 2020 are still due. 1 kW/h. The feed-in tariff is fixed in EUR until the end of 2029 and is paid The government of Ukraine sets the annual quota and the schedin the national currency. All generated electricity, except for volumes for personal needs, shall be paid for under the feed-in tariff (except ule of auctions for each subsequent year. The annual quota can: for blast furnace and coke gas, and for hydro plants with a capacity of up to 10 MW). The amount of the feed-in tariff depends on the • define separate areas (regions) for construction of renewable energy facilities; date when the electricity generation facility was commissioned into use. The Guaranteed Buyer is obliged to purchase “green” energy • define the maximum values of the capacity of the electricity facility or the order of its construction (start-up complex), in respect of produced under the feed-in tariff and make full payment for the cost which the electricity producer can acquire the right for support at of electricity, regardless of the installed capacity or supply volume. the relevant auction; The use of equipment of Ukrainian origin by the investors is stimulated by the relevant premium to the feed-in tariff (throughout • propose land plots for the construction of renewable energy facilities with certain technical parameters and technical conditions for all term of its validity), if the electricity objects are commissioned connection to the electricity grid; by 31 December 2024. Therefore, if equipment of Ukrainian origin is used at least on the level of 30%, the premium to the feed-in tariff • propose roofs and/or facades of buildings and other capital structures that can be leased for the construction of renewable energy shall be 5%. If equipment of Ukrainian origin is used at least on the facilities that produce electricity from solar power with certain level of 50%, the premium to the feed-in tariff shall be 10%. If equiptechnical parameters and technical conditions for connection to ment of Ukrainian origin is used at least on the level of 70%, the the grid. premium to the feed-in tariff shall be 20%. Contracts concluded as a result of the feed-in auction will be valid for 20 years, which is a compelling condition, as the feed-in tariff is valid only until the end of 2029. The existing system of support via feed-in tariffs will also apply to “green” energy producers which commissioned or signed a preliminary agreement (prePPA) before 1 January 2020.

Yaroslav Anikeev

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153

Retail

Retail in Ukraine: Strategies and Updates in New Market Realities There is no doubt that the retail sector has been largely affected by the global pandemic, and Ukraine is no exception. Stores are being closed during lockdowns, product patterns and customers preferences are changing, buying power is falling and generally not stable, and other irregularities are taking place. Although the situation may change further as the pandemic is expected to slow down with time, this has already become a new reality which retailers must learn to accommodate. Interestingly, retail is one of those business areas which isn’t subject to overly strict government regulation, which gives it the benefit of low level interference by the state. This factor, in addition to all the efforts of marketing and other business people, helps retailers to develop and address various challenges with a remarkable level of flexibility, at least in comparison with some other businesses. As a matter of fact, this Partner, Asters seems to be true even in the current turbulent period caused by pandemic and other issues that most industries are facing. For example, many retailers have reported positive sales results in 2020, either maintaining some growth or keeping any falls at the low end. The way retailers act in these circumstances suggests that they are effectively mixing two business strategies. Firstly, an all-times strategy that historically has been inherent in retail business implies a central role of location for the operation of retail stores. Real estate factors are, therefore, essential for this strategy, so many successful retailers have built up strong expertise in real estate development and related matters. As we see it, this strategy remains in place and we will point out some of the relevant legal updates below. Secondly, as commonly known, many if not all retailers have started or expanded their online presence by launching e-commerce operations. Although this strategy is not entirely new, it has certainly become trendier over the last year and continues to grow. Going online is mostly a marketing and logistical challenge, and less legal. However, one should remember that it is no longer a grey area, which is why we consider it important to summarize in this article as well.

the main leading to temporary discounts or other concessions agreed by the parties. So prevailing practice suggests that amicable solutions to such situations have become quite common and that parties are generally willing to avoid further implications by starting legal proceedings, etc. (although exceptions are not uncommon). It should be noted that Ukrainian legislation is not very clear with regard to the impact of various restrictive measures taken by the government on property leases. Initially, when the pandemic began, parties could rely only on general concepts provided by the Civil Code, including material adverse change and full or partial impossibility to use leased property. Also, there were numerous attempts to invoke force majeure clauses in such cases, but such practice has not developed much. Several sets of amendments to laws were introduced then, in order to make the applicable rules more specific and essentially protect tenants, whose position was largely seen as weaker in the new circumstances. The latest amendments were introduced by the Law of Ukraine No. 692IX On Amendments to Certain Legislative Acts of Ukraine Concerning State Support of Culture, Creative Industries, Tourism, Small and Medium-Sized Businesses in Connection with the Restrictions Related to Spreading of Coronavirus Disease COVID-19 of 16 July 2020. This law provides that, with regard to immovable properties in lease, the sum of rent shall be reduced during the entire period when the property could not be used in the tenant’s business in full as a result of the restrictions and (or) prohibitions caused by COVID-19. Furthermore, in such cases, the sum of rent shall not exceed the total amount of costs that the lessor has borne or will have borne for the relevant period to pay for land, real estate taxes (other than land plot) and utility bills. As a matter of fact, this law has led to a number of further uncertainties. For example, there is no clear criteria for determining “full” or “not full” use of leased property, while in practice there are a lot of “middle-ground” situations where operation is restricted in part (e.g., restaurants being closed for visitors, but operating in “take out” mode, etc.). Another example is the issue of retrospective application of the law, especially in cases where the parties have already agreed on the specific lease terms during quarantine. Under this law such cases fall into a grey area. Nevertheless, this law has helped tenants and given them additional arguments to demand concessions from landlords.

Oleg Boichuk

Major Real Estate Updates Relevant to Retail Business While real estate is certainly a separate topic, there are several factors that have a significant impact on retail business at the present time.

Impact of Pandemic on Property Leases Since the initial outbreak of the pandemic in March 2020, tenants and landlords in Ukraine have been in regular negotiations with regard to their lease terms. Typical issues raised are: whether rent and other related payments (utilities, marketing and other services) must be paid by tenants during or between lockdowns (as their possibility to use the leased premise is limited) and what are the concessions that tenants are entitled to in these circumstances. While this applies to almost any industry, retailers and their respective counterparties (shopping malls, etc.) are among those who have been affected most. To the best of our knowledge, the vast majority of lease negotiations, driven by the above-mentioned issues, have been successful, in

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New Zoning Regulations Ahead As mentioned, retailers often interact closely with developers, or act as developers themselves. In this context, apart from the widely discussed reform of the State Architectural and Building Inspection (which deserves separate coverage and is intentionally not covered here), an interesting effect might be expected from the Law of Ukraine No. 711-IX On Amendments to the Land Code of Ukraine and Other Legislative Acts on Land Use Planning of 17 June 2020 (set to come into force on 24 July 2021). This law addresses a number of problem areas with regard to formal designation and use of land, privatization and lease of state and municipal land, as well as some other issues. The key takeaway from this law is that, unless its implementation is jeopardized by political or other issues, it should facilitate commercial real estate development both within and outside urban territories by eliminating a number of

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ASTERS Asters is the biggest law firm in Ukraine operating since 1995. With offices in Kyiv, London, Brussels and Washington D.C. the firm provides efficient transactional legal advice and client representation on a broad spectrum of matters arising in the course of doing business in Ukraine. Asters combines established world-class quality, international recognition and strong local presence. Asters keeps high standards of its expertise in the the full range of legal services. Our established history, manpower and extensive industry-specific experience allow us to play a leading role in advising clients in various market sectors. Asters’ lawyers regularly handle a variety of complex matters and the largest transactions for foreign and local blue chips, governments, state-run companies, investors, banks, international financial institutions, HNWI, pro athletes and sports clubs, for instance: Ateliers de France, Bayer, Black Sea Trade and Development Bank, China Machinery Engineering Corporation (CMEC), EBRD, ED&F Man, Facebook, Ferrero S.p.A., General Electric, IFC, L’Oreal, Millennium & Copthorne, Microsoft, Molson Coors, Nielsen, Philip

Address: Leonardo Business Center, 19-21 Bohdana Khmelnytskoho Street, Kyiv, 01054, Ukraine

Tel.: +380 44 230 6000, Fax: +380 44 230 6001 E-mail: info@asterslaw.com Web-site: www.asterslaw.com

tomers and increasing sales. When sending marketing emails, retailers must adhere to the rules of Ukrainian e-commerce legislation. These rules include providing customers with direct and simple access to information about the retailer’s company, as well as a clear way to unsubscribe from further receipt of such communications.

technical and formalistic burdens that currently exist. Moreover, this law goes in line with the policy, which was launched earlier, to raise the significance of planning and zoning documentation at all levels. All together, these factors should lead to economically-substantiated and socially-oriented urban construction and development. More specifically, retailers may expect more commercially sensible locations to appear on the market in the future, including as a result of re-development of former industrial and otherwise outdated territories into modern mix-use or similar solutions.

Social Networks Social networks are another effective tool for approaching potential customers. Retailers may introduce identification on their websites using the visitor’s ID from a social network and then process its network history to issue personal recommendations given the preferences of the profile.

New Opportunities from Potential Concessions and PPP Projects The start of concessions and PPP projects is another hot topic in Ukraine. Retailers should keep an eye on these matters as well, since many such potential projects entail commercialization Associate, Asters of infrastructure objects with a huge retail potential. For example, pilot projects have been announced with respect to railway stations, roads and airports, and are currently at different stages of preparations. Obviously, concession and PPP projects of this kind are, at this stage, mostly of interest for specific industry operators and investors, so retailers will probably come next once the projects actually start. However, we would expect major market players to consider preliminary arrangements with future bidders to ensure a presence at the most interesting locations.

Data Protection Data privacy and security remains a hot issue, especially for online buyers who fear that they are going to be scammed out of money or share their personal information online reluctantly. Therefore, it’s vital here to display a commitment to the security of website visitors. In particular, retailers must ensure protection of personal data, including payment cards data, which became known to them in the course of electronic transactions. In addition, retailers should bear in mind that any personal data processing shall be based on the consent of customers to such data processing. In the area of e-commerce, consent can be provided during registration in an online store by ticking the box for permission to process his/her personal data in accordance with the purpose set out for processing, provided that the online store does not create opportunities for the personal data processing before ticking the mark. Prior to obtaining consent, retailers must provide comprehensive information about the contemplated personal data processing, which is usually incorporated in the Privacy Policy posted on the website. Online stores are closely connected with the delivery of orders to customers. In this respect, if sellers use the services of third party couriers, they have to make sure that the customer’s consent allows them to provide such couriers with information about the customer’s order and location. In the event that retailers transfer personal data to countries other than EEA countries or member states of the Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data, they shall have a separate customer’s express consent, which is normally included in general consent mentioned above.

Olena Kozhokar

Digital Transformation in Retail Business The complex economic environment currently compels retailers to respond quickly to the challenges caused by the pandemic and generate effective solutions such as e-commerce. Businesses that were able to adapt to digital platforms showed financial performance, while traditional retailers with weak online strategies exited the market. To stay on the radar, sellers constantly interact with customers in the virtual space to offer the most comfortable conditions for shopping and provide services online. This is usually attained by using the following tools.

Email Marketing Email marketing is one of the most effective ways to promote products or services while developing relationships with potential cus-

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155

Role of Experts in International Arbitration

Expedited Procedure as a Trend in the Development of International Commercial Arbitration One of the key directions in the Swiss Rules, Part 6 of Article 45 of the development of international commerICAC Rules at the Ukrainian Chamber of cial arbitration is, without exaggeraCommerce and Industry establish the tion, the introduction and application presumption of dispute resolution by one of expedited procedures at institutional arbitrator if the parties have not agreed level. UNCITRAL has been working on on a peer review. Part 1 of Article 2 of the harmonization of the relevant rules Annex VI of the ICC Rules permits the arfor several years. Many arbitration tribitral tribunal to appoint a sole arbitrator, bunals around the world have provided bypassing the agreement of the parties. for separate regulation of cutbacks in The imperative requirement of Article 17 response to the growing business need SCC Expedited Arbitration Rules states for fast and efficient proceedings even that a dispute must be resolved by a sole before the outbreak of the COVID-19 Arbitrator. pandemic. The global quarantine has When considering expedited arbitrasignificantly updated the choice by tion, it is difficult to overestimate the imcounterparties of accelerated arbitraportance of shortening procedural terms. tion as the optimal procedural form. In This procedural feature especially attracts the sphere of influence of these trends international business, seeking efficiency is the figure of an expert, whose parand speed in protecting their property ticipation in the process of resolving interests. It is noteworthy that the issue an arbitration dispute acquires its own here is the possibility of a significant respecifics. duction in all procedural terms (appointExpedited arbitration rules can be ment of an arbitrator, filing a response to a enshrined in the general rules (AAA Ar- Partner, ANTIKA Law Firm claim and other written statements, holdbitration Rules, ICC Arbitration Rules, ing hearings, making an arbitral award). In CIETAC Arbitration Rules, HKIAC Arbithis context, the most important thing for tration Rules, SIAC Arbitration Rules, the parties is to shorten the term for makICAC Rules at the Ukrainian CCI, Swiss International Arbitration ing an arbitral award. A six-month period for making a final decision, Rules, Vienna Rules, etc.) or as a separate document (SCC Expe- which is calculated from the date of transfer of the case, is given dited Arbitration Rules 2017, AIAC Expedited Arbitration Rules 2018, to the court in accordance with Part 8 of Article 45 Vienna Rules, ACICA Expedited Arbitration Rules 2016, etc.). Some rules do not paragraph (d) part 1 of Article 42 of Swiss Rules. A three-month contain specific rules for expedited procedure at all (for example, the period (instead of six months in accordance with the general proceLondon International Arbitration Court has a general duty to ensure dure) is provided for by Article 43 of the SCC Expedited Arbitration due process, which includes avoiding unreasonable delays or costs Rules. The new edition of the ICAC Rules at the Ukrainian Chamber under Article 14.4 (ii) of the LCIA Arbitration Rules). of Commerce and Industry in Part 7 of Article 45 contains a rule on The distinctive characteristics of expedited arbitration are the a twenty-day period for making a decision, which is calculated from special conditions for its application, the sole consideration of the the date of completion of the hearing of the case (the total period dispute, the reduction of various procedural terms, the change or ab- for consideration of a case is 6 months). sence of certain procedural stages, and the reduction of arbitration The question of the expert’s role in expedited arbitration is costs. A special form of expedited proceedings is documents-only closely related to the general characteristic of it. Changes in the proarbitration, in which hearings are not held. cess of providing evidence and shortening the stages of proceedThe generally valid conditions for the application of the acceler- ings inevitably affect this participant in the process. As you know, the ated procedure should be recognized as the consent of the parties, most important form of expert assistance is his/her participation in the cost of the dispute, as well as exceptional urgency. The rules of the hearing, during which, as a rule, cross-examination of experts is arbitration institutions contain different approaches to the definition carried out on the basis of submitted written opinions. of such conditions. However, the restriction on the holding of hearings is one of the Thus, the Vienna Rules and the new edition of the ICAC Rules at main features of expedited arbitration. Support for this understandthe Ukrainian Chamber of Commerce and Industry are limited only ing has been voiced repeatedly by UNCITRAL Working Group II durby the consent of the parties to the application of an expedited pro- ing preparation of the draft of expedited arbitration rules. The general cedure. A multiple criterion, each of the elements of which provides approval of Working Group II (Dispute Resolution) also received a for the application of expedited arbitration, is used, i.e., in Article 30 proposal to clarify that the court should have discretion to restrict ICC Rules, Article 5.1. SIAC Rules, Article 42.1 of the HKIAC Rules, Ar- the provision of documents and cross-examination of facts and inticle 42 Swiss Rules. For example, according to Article 30 of the ICC terviews of expert witnesses. The Note by the Secretariat dated 13 Arbitration Rules, the provisions on the expedited procedure apply if January 2020, containing the Draft Provisions on Expedited Arbitrathe amount of the dispute does not exceed USD 2 million (in the case tion, proposes the provision of written expert testimony as a general of the conclusion of the arbitration agreement on 1 March 2017 or rule. At the recently announced 73rd session of UNCITRAL Working after this date, but before 1 March 2021) or USD 3 million (in the case Group II, which was scheduled for 22-26 March 2021, it was planned of conclusion of the arbitration agreement on or after that date), or if to continue work on the Project precisely on the basis of the above the parties agree to apply the expedited procedure. Note by the Secretariat. An essential feature of expedited arbitration is the rule of a The approach developed by the Working Group follows in the single arbitrator. In particular, Article 45 Vienna Rules, Article 42 wake of the previously formulated and enshrined rules of individual ar-

Alexey Kot

156

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Address: 12 Khreschatyk Street, 2nd Floor, Kyiv, 01001, Ukraine Tel.: +380 44 390 0920

bitrations. Thus, according to Part 1 of Article 33 of the SCC Expedited Arbitration Rules, a hearing will only be held if one of the parties requests it and if the Arbitrator considers the reasons for such a request to be compelling. The rule of paragraph (c) part 1 of Article 42 of Swiss Rules stipulates that the arbitral tribunal holds the only hearing during which it hears witnesses and experts, as well as the oral statements of the parties, unless the parties have agreed that the dispute should be resolved solely on the basis of written evidence. Thus, the expert’s participation in the expedited procedure may be limited to the provision of a written opinion. In cases of absence from the hearing process, it may be about conducting arbitration on documents as a form of expedited procedure. So, according to Part 5 of Article 3 of Appendix VI of the ICC Rules, the arbitral tribunal may, after consultation with the parties, resolve the dispute solely on the basis of documents submitted by the parties, without holding a hearing and questioning witnesses or experts. The Chartered Institute of Arbitrators issued a Guide to Arbitration on Documents in 2016. As one of the possible conditions for conducting such arbitration, the possibility of considering a case without oral testimony of witnesses and/or expert witnesses is determined.

Fax: +380 44 390 0921 E-mail: office@antikalaw.com.ua Web-site: www.antikalaw.com.ua

Expedited Arbitration is a simplified procedure with a shorter time frame to achieve a final settlement in a cost-effective and timeefficient manner. The relevance of such a procedure for business can be confirmed by the successful experience of its application by various arbitration tribunals. In particular, the Arbitration Institute of the Swiss Chambers conducted 454 expedited procedures between the implementation of the expedited rules in 2004 and 2018. The Singapore International Arbitration Center had received 499 expedited applications as of 31 May 2019, and since the introduction of the relevant rules in 2010, of which 291 have been granted. As evidenced by the rules of arbitration courts and UNCITRAL approaches, the specifics of expedited arbitration (including arbitration by documents) undoubtedly reduce the activity of an expert in the course of proceedings. This fact is explained by the possible absence of hearings, during which expert testimony is heard during the general procedure. However, the role of the expert should not be diminished. When disputes are resolved under the expedited procedure, there is often demand for the opinion of a qualified expert, and the latter’s participation in the case can be ensured through the traditional provision of a written opinion.

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157

State Aid

State Aid in Ukraine: What Next? State aid regulations have been in place in Ukraine since 2017. Thus, for almost half a decade, the Antimonopoly Committee of Ukraine should have been developing and perfecting all the necessary regulations as well as applying them in practice. Let’s discuss whether the real developments (especially the most recent) meet the relevant expectations of EU and state aid practitioners who understand how vital the relevant regulations are for Ukraine.

Only Practice Makes Perfect

As has been stressed many times by state aid practitioners, a state aid monitoring and control system could be tested and improved in the event that the AMCU begins to review big, high-profile cases. In the meantime, it still spends a lot of time taking care of numerous notifications made by local authorities. Of course, it is necessary to review day-to-day issues. Nevertheless, it is also important to stress test the relevant rules and instruments in terms of truly important cases and to State Aid in Ukraine: show that Ukraine is ready to perform its Now More Important than Ever commitments. State aid regulations in the EU beThe pioneering Ukrposhta case, which came an indispensable part of the EU was triggered by a complaint from Nova legal system. State aid regulations are Poshta, doesn’t have all the necessary important because they allow both for elements to be called a model one. Morethe establishment of a level playing field over, the AMCU hasn’t yet completed any for private companies not backed up by high-profile cases involving leading private government subsidies and other types market players having disputes against of support and controlling the flow of each other or state-owned companies, so public resources by making sure that there is still a lot of room for improvement. they are spent on projects that don’t enEven more, the AMCU somehow managed tail overcompensation of certain market Partner, Marchenko Partners to avoid significant deliberations in 2020, players which may lead to ineffective while making decisions that the state aid public spending. provided for the development of the logistic network recently granted If properly set, a state aid monitoring and control system could al- to Ukrposhta was compatible. low Ukraine to attract more private investment (of course, proper state Another state aid case that has yet failed to meet the high exaid control would serve as a plus for investors, but wouldn’t be a cor- pectations is the one involving Philip Morris (as an alleged recipient nerstone for them in deciding whether to invest in Ukraine), to manage of state aid). The relevant case started in January 2020, triggered by efficiently available public funds and to ensure that foreign monetary a complaint of unlawful state aid filed by Vynnyky Tobacco Factory — support to Ukraine wouldn’t be useless. a local competitor of Philip Morris. This time nothing prevented the While some of the deadlines set by the EU-Ukraine Association AMCU from formally opening a case and assessing allegedly unlawful Agreement get closer (e.g. the deadline for establishing a comprehen- or even incompatible state aid. By comparison, in the Ukrposhta case sive inventory of aid schemes), it is time for Ukraine and the Antimo- where the aid in question already existed before the adoption of the relnopoly Committee of Ukraine to draw some preliminary conclusions evant legislation, the AMCU maintained the slow pace of case review. on how it worked for the past four years and to speed up the relevant At the same time, after more than one and a half years, one cannot processes for the time that remains. observe any significant improvements or considerable progress in the Philip Morris case. Now state aid practitioners rely on EU practice (applicable in Are We Ready to Rumble? some cases under the EU-Ukraine Association Agreement) as well as One should note that, in terms of legislation, Ukraine generally on a small number of AMCU state aid cases (including few reviewed has most of the relevant acts in place. Unfortunately, for a long period by the courts) to assemble the puzzle, understand how state aid works now there have been a number of state aid compatibility criteria develin Ukraine and to advise stakeholders on the relevant matters. oped but not yet approved by the government. These include criteria For example, there is an interesting case on state aid granted applicable to environmental protection, banking, and general state aid by the Construction and Housing Department of Kyiv City Council to compatibility criteria. several communal enterprises. The mentioned case may be of speMoreover, the need to modify the regulations which are already cial interest due to being the first in which a court turned down the in place will most likely be constant and the Antimonopoly CommitAMCU’s decision on state aid. The latter ruled that certain aid granted tee of Ukraine and legislative bodies will have to address the issues to several communal enterprises was incompatible and subject to rewhich appear in terms of enforcement of state aid rules to make sure covery from such enterprises. Such a decision was further appealed the control and monitoring system works properly and effectively. For to the court by the Department. The court of first instance examined example, it is necessary to bring some clarity to the procedural rules the evidentiary basis used by the AMCU to adopt its decision and acgoverning the provision of information related to state aid issues. As cepted plaintiffs’ arguments on services of general economic interest of now, there are no clear rules which may help the AMCU to enforce and Altmark criteria. The appeal and cassation courts further upheld receipt of the information necessary to review state aid cases. Fortuthe greater part of the conclusions drawn by the court of first instance. nately, it recently announced that it has already prepared a draft bill It is not enough to simply review the court decision as shown in that may at least partly address the mentioned enforcement issues. the public registry to have an opinion on how the Ukrainian state aid Additionally, the AMCU lacks the powers to fight against state aid system works. However, it is good that we now understand that courts grantors which manifestly ignore state aid rules. will be ready to review and double-check the AMCU’s decisions, not Although it might seem that minor legislative drawbacks do not leaving the latter to decide everything on merit and taking care only influence the overall pace of reform, it is important to understand that of the procedural aspects. With more of such cases to come, we will only a systematic approach may bring us somewhere near the level of have a better understanding of the arguments which should be used in EU state aid regulations and practice. Thus, even minor issues should state aid cases during review by both the AMCU and the courts. Such be properly dealt with in order to avoid any big trouble which might ocpractice is vital for assembling the puzzle we mentioned above. cur right before the deadline.

Oleksandr Aleksyeyenko

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MARCHENKO PARTNERS Marchenko Partners is an independent law firm based in Ukraine with expertise in the following practices: Antitrust & Competition, Arbitration & ADR, Banking & Finance, Corporate and M&A, Employment, Intellectual Property, Litigation, Public International Law, Regulatory & Compliance, Treaty Disputes. The firm helps multinational and national clients to manage and resolve their vital regulatory and commercial issues and disputes, which often involve high stake public policy issues, within the framework and at the crossroads of national and international laws and government relations. Practicing law in a highly challenging business and regulatory environment, the team is committed to the rule of law and integrity in all its practices and dealings.

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attempts to circumvent state aid regulations. This is partly because of the pioneering injunction imposed by the AMCU in the Additionally, the COVID-19 panrecent Dnipro Airport state aid case, where demic and other factors which influence it suspended UAH 1.5 bn worth of financing the AMCU’s activities should not be igin order to first review the state aid aspects. nored. The rise in state support, includOne may consider this to be a positive sign ing the extension of state aid programs, in terms of the development of state aid became a common thing for EU counpractice in Ukraine. tries, and Ukraine was no exception. AlAnother hot topic that may soon arise though much later than expected, only before the AMCU is the state aid-related asin spring 2021, the Cabinet of Ministers pects of the green tariff in Ukraine. There of Ukraine adopted compatibility criteria are already some public activists trying to for the state aid granted to mitigate the push this issue forward with the AMCU, and negative consequences of COVID-19. it has already asked energy market regulaThe granting of state aid related tors to submit state aid notifications in orto COVID-19 is extremely important, der to review the issue properly. Additionaland one may understand some cases ly, some experts already claim that Ukraine when state aid rules weren’t fully enmay try to use the state aid system as a forced because some critical support legal instrument to at least reduce green was granted. However, it looks rather tariff payments, while the previous methstrange and even outrageous when the ods used by Ukraine to stop or cut the relUkrainian Parliament adopts laws that evant payments failed and have already led provide some exclusions from state aid Senior Associate, Antitrust to investor-state disputes. In the latter case, rules. This is how Parliament invented a the AMCU may face one of its most chalnew method on how to grant state aid & Competition, Marchenko Partners lenging and complex state aid processes. (probably to fulfill some political promIt is very difficult to summarize the reises) and to avoid lengthy compliance cent developments in the field of state aid procedures with the Antimonopoly Committee of Ukraine. in Ukraine. On the one hand, we see some reluctance on the part of the We hope that the AMCU will further enhance its efforts to fight AMCU and other government bodies, while on the other, we witness such “inventions” before they lead to either the non-performance or groundbreaking state aid injunctions and plenty of state aid advocacy breach of the EU-Ukraine Association Agreement and undervalue the activities. Thus, we can but observe these developments and keep state-aid-related progress already made in Ukraine. We strongly be- up with the new challenges which businesses might face due to the lieve that the AMCU will be able to do so and effectively oppose these changeable nature of the development of state aid in Ukraine.

New Challenges and Further Improvements

Sviatoslav Henyk

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Tax

Game-Changing Tax Rules for Non-Residents In 2021, amendments to tax legisConsequences of a Nonlation that pertain directly to the work resident’s Refusal to Register of non-residents in Ukraine came into with the Tax Authorities legal force and were introduced in accordance with the Law of Ukraine On The Tax Code of Ukraine provides that Amendments to the Tax Code of Ukraine checks on the fulfilment of registration obto Improve Tax Administration and Elimiligations by the non-resident may be connate Technical and Logical Inconsistenducted starting from 1 July 2021. cies in Tax Legislation No. 466-IX of On the basis of the results of such a 16 January 2020. check, the controlling body shall: The first and most shocking register the non-resident if the check change that came was all non-residents results confirm the existence of economic operating in Ukraine were required to activities carried out through the permaregister directly with the tax authorities nent establishment in Ukraine; as taxpayers. Initially, a deadline was set take measures to deregister the perfor registration until 31 March 2021, but manent establishment if it finds that the later on it was extended until 19 May non-resident’s activities in Ukraine have 2021. been terminated and the permanent esFrom now on, foreign companies tablishment has fulfilled its obligations as and organizations that conduct busia taxpayer. ness in Ukraine through their detached Failure to fulfil registration obligations units, including permanent establishmay serve as grounds for the seizure (arments, either acquire real estate or acrest) of the non-resident’s assets (Article quire ownership title to such property in Head of Tax Practice, Ilyashev & Partners 94.2.5 of the Tax Code of Ukraine), which Ukraine or open accounts at Ukrainian will significantly complicate the fulfillment banks or acquire ownership title to an by the permanent establishment of its obinvestment asset are required to regisligations (settlement with contractors, payter with the controlling authorities. ment of wages, and making other mandatory payments). The conseRegistration of a non-resident with a controlling authority must be quences of the seizure of assets may provoke new penalties from the carried out subject to the following terms: contractors and public authorities. • within 10 days following the accreditation (registration, legalizaThe aforementioned seizure is lifted after the non-resident has tion) on the territory of Ukraine of a detached unit — with the con- been registered with the tax authorities based on the results of the trolling authority at the detached unit’s location; check conducted by the tax authority and upon the issuance of the • before acquisition of immovable property or acquisition of owner- relevant certificate (act). ship title to such property in Ukraine — with the controlling authority In the said case, the non-resident will be fined UAH 100,000 for at the location of the immovable property; operating without proper registration. • before opening an account in Ukraine — with the controlling authorThe second change that affected non-residents was a change in ity at the location of an institution (branch) of the bank or other tax legislation, aimed at tracking down unregistered permanent estabfinancial institution, where an account is opened; lishments in Ukraine. • before the date of the first payment for the acquired investment The Tax Code of Ukraine defines a non-exclusive list of facts that asset — with the controlling authority at the location of the Ukrai- confirm the existence of an authority to carry out activities in the innian legal entity, whose shares or corporate rights subsist the terests, at the expense and/or in favor of a non-resident, which in its value of an investment asset that is the subject of such transac- turn indicate the emergence of a permanent establishment in Ukraine, tion. including: In order to register, the company shall submit the relevant appli- • issuance by a non-resident of instructions that are mandatory for cation and copies of the following documents (with the presentation performance (including electronic communications or by transferof their originals): ring the electronic media) and their further performance by an indi• an extract from the relevant business register (trade, banking or vidual or a legal entity; other register containing the records of state registration of com- • possession and use by an individual or a legal entity of the corpany/organization), issued in the country of registration of a forporate e-mail address of a non-resident to communicate with him eign company/organization, legalized according to the prescribed and/or with third parties, with which legal transactions have already procedure and accompanied by the notarially certified translation been executed or shall be executed with in the future; thereof into the Ukrainian language; • entitlement of an individual or a legal entity to either possession or • a document confirming the assignment of an identification (regisdisposal of the stock (goods) or other assets of a non-resident in tration, business) number (code) of the non-resident in the country Ukraine of a material part hereof subject to the appropriate instrucof its registration, if the extract from the relevant business register tions of a non-resident; does not contain the information about such number (code), ac- • availability to an individual or a legal entity of a premise to store the companied by the notarially certified translation thereof into the property that it has taken on lease on its own behalf, purchased Ukrainian language; at the expense of a non-resident or if such property is beneficially • the document confirming the authority of the non-resident’s repowned by a non-resident or to third parties and which is subject to resentative. If the said document is issued in the country of regtransfer to third parties subject to a non-resident’s instructions or istration of the non-resident, it shall be legalized according to the for other purposes designated by a non-resident. prescribed procedure and accompanied by the notarially certified Today, the permanent establishment is a permanent place of translation thereof into the Ukrainian language; business through which the economic activities of a non-resident in • the document on accreditation (registration, legalization) of a sepa- Ukraine are carried out in whole or in part, inter alia, the place of manrate subdivision of the foreign company/organization in the terri- agement; branch; office; factory; workshop; installation or structure for tory of Ukraine, if the non-resident carries out activities in Ukraine exploration of natural resources; mine, oil/gas well, quarry or any other through its separate subdivision (Certificate of Registration of a place of extraction of natural resources; warehouse or premises used Representative Office of a Foreign Company). for the delivery of goods, server.

Nina Bets

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ILYASHEV & PARTNERS Founded in 1997, Ilyashev & Partners is one of the most prominent and authoritative full-service law firms in the CEE region with the largest network of offices in Ukraine. We have achieved this by employing leading experts in various areas of law and through innovative thinking and strict compliance with ethical standards in our relationships with clients. Ilyashev & Partners provides legal services in almost all practice areas to major international corporations, leading Ukrainian companies and financial institutions, government agencies, law firms and consulting companies. With offices and representatives in Kyiv, Moscow, Tallinn, Dnipro, Kharkiv, Odesa and Simferopol, the firm employs over 50 highly professional lawyers. Due to a comprehensive approach and understanding of our clients’ expectations in tax planning, we offer effective solutions to present-day problems with options to eliminate or minimize potential tax risks. Our extensive client base enables us to address the smallest nuances of taxation not only for individual operations within the country but also for complex cross-border transactions and business models in general.

Address: 11 Kudryavska Street, Kyiv, 04053, Ukraine

Our services include: • Тax planning of investment activities and business at both national and international scale; • Tax structuring of transactions, analysis of tax risks of individual transactions; • Comprehensive legal support for tax audits; • Administrative and judicial appeal against decisions of tax authorities; • Tax advice on issues relating to application of taxes and fees; • Tax due diligence of agreements; • Tax audit.

Tel.: +380 44 494 1919 E-mail: office@attorneys.ua Web-site: www.attorneys.ua

For tax purposes, the term ‘permanent establishment’ includes a building site, a building, assembly or installation facility or a related supervisory activity if the duration of works associated with such site, facility or activity exceeds six months; the provision of services by the non-resident (except for staffing services), including consulting services, by the employees or other personnel hired by it for such purposes, but only if such activities are carried out (within the auspices of one project or a project related to it) in Ukraine during a period or periods, the total duration of which exceeds six months in any period of twelve months; the residents having the authority to act exclusively on behalf of such non-resident (negotiate essential terms and/or conclude the agreements (contracts) on behalf of such non-resident), which leads to the emergence with such non-resident of civil rights and obligations; and/or to keep (store) the stocks of goods belonging to the nonresident, from whose warehouse the goods are delivered on behalf of the non-resident, except for residents having the status of temporary warehouse or licensed customs warehouse. However, the status of a permanent establishment shall not apply to the use of buildings or structures solely for the purpose of storing, displaying or delivering goods or products belonging to the nonresident; the storage of stocks of goods or products belonging to the non-resident solely for the purpose of storage or demonstration; the storage of stocks of goods or products belonging to the non-resident solely for the purpose of their processing by another enterprise; the maintaining of a permanent place of business solely for the purpose of purchasing goods or products or gathering information for the nonresident; the referral to the entity of individuals within the framework of implementation of any agreements on staffing services; the maintaining of a permanent place of business solely for the purpose of carrying out — for the benefit of the non-resident — of any other preparatory or ancillary activities. By virtue of the next change to tax legislation that came into legal force on 1 January 2021 — a unified method for determining the prof-

its of a permanent establishment has been introduced — on an “arm’s length” basis. From now onwards, when calculating the amount of taxable income, a permanent establishment shall have to use the “direct” taxation method, taking the rules of transfer pricing into account. That is, at present a permanent establishment needs to determine the amount of taxable profits as an independent supplier of services to a non-resident (the headquarters) under the conditions similar to those existing between independent companies (with regard to the functions performed by a permanent establishment). In other words, a permanent establishment must, for taxation purposes, be considered a separate independent company. For instance, if a permanent establishment is promoting the products, manufactured by a non-resident (conducts market surveys, provides marketing services, etc.), then the amount of its profits shall correspond to the amount of profits of a company acting independently that would have been providing similar services. Appropriately, permanent establishments shall need to prepare transfer pricing documentation, even if their transactions with a nonresident would not exceed the margin of UAH 10 million that is required to designate the transactions as controlled. In connection with such changes, permanent establishments that conduct business on the territory of Ukraine are advised: • to revise their activities and to minimize the factors that could evidence a permanent establishment’s participation/mediation in executing contracts between a non-resident and Ukrainian counteragents, as well as promotion of products manufactured by a nonresident; • to carefully prepare transfer pricing documentation to justify the amount of taxable income reported by an established representation.

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Tax Controversy

The Impact of Tax Reform on International Business in Ukraine The year 2020 was one of fundamental changes in Ukrainian tax legislation directed at bringing it into compliance with the BEPS Plan and best international tax practices. Thus, international business operating in Ukraine shall learn how to work accurately under the new tax rules and avoid attracting negative attention on the part of Ukrainian tax authorities. This article is about the main tax changes that should be taken into consideration by non-resident companies carrying out their activities in Ukraine.

Taxation of Activities of PEs The amended norms of the TCU set out the new rules of taxation of PEs’ earnings: the PE shall determine the amount of its taxable income in accordance with the arm’s length principle applying transfer pricing methods. This means that the taxable income of a PE shall correspond to the earnings of an independent company carrying out the same (or similar) activities under the same or similar conditions. Such approach applies to tax (reporting) periods starting from 1 January 2021 and shall be taken into consideration when reporting on such periods.

Definition of the Term “Permanent Establishment”

Significant changes that came into Registration of Non-residents force from 1 January 2021 are related with Tax Authorities to the definition of the permanent estabNew TCU rules provide for registration lishment (PE) of a non-resident stated in with the Ukrainian tax authorities of those the Tax Code of Ukraine (TCU). It became non-residents which carry out their activibroader and more detailed. According to ties in Ukraine through the branch: either the new rules the PE, inter alia, includes: Partner, Head of Tax Practice, commercial or non-commercial represen• Ukrainian persons negotiating the estative office. Non-residents which carry sential terms of juristic acts as a re- Attorney at Law, GOLAW out the economic activities in Ukraine by sult of which the non-resident enters means of a PE shall be registered with the into agreements (contracts) without tax authorities as a payer of income tax at the location of the PE. After significant change of such terms and/or entering into agreements such registration the non-resident becomes the payer of income tax (contracts) on behalf of the non-resident. Such activities will constiinstead of its PE and is obliged to file tax returns and pay taxes into tute a PE if carried out in the interests, at the expense, to the benefit the Ukrainian budget. of only one non-resident and/or affiliated persons — non-residents. Those non-residents who only have a non-commercial represen• Ukrainian persons which have, and usually exercise, the authority to tative office in Ukraine are also obliged to be registered with the Ukraihold (store) stocks (goods), owned by a non-resident, and from the nian tax authorities as taxpayers in general. Such registration will not warehouse of which the supply of stocks (goods) is carried out on lead to the obligation to pay income tax. behalf of the non-resident, except for residents-holders of tempoIt should be mentioned here that there are other grounds for the rary storage warehouse or customs warehouse. It is worth noting registration of a non-resident with the Ukrainian tax authorities. These that such features of a PE are not brand new in taxation. A number include the purchase of real estate or acquisition of property rights to of double taxation treaties have already contained similar provireal estate in Ukraine, the opening of banking accounts in Ukrainian sions before their introduction into Ukrainian legislation. banks, acquisition of ownership rights to investment assets (shares Also, the TCU additionally specifies a number of “markers”, which of non-residents mainly formed by shares in a Ukrainian legal entity may evidence the performance of the above-mentioned functions by where the latest are mainly formed by Ukrainian real estate) from ana Ukrainian resident to the benefit of a non-resident. These include the other non-resident which has no PE in Ukraine. following, respectively: In this respect, regardless of the reason of a non-resident’s reg• provision of mandatory instructions by a non-resident, by e-mail for istration with the tax authorities, it may be de-registered after closing example, and their implementation by a Ukrainian resident; of representative offices or PEs, alienation of real estate, closing of all • the Ukrainian resident has and uses the e-mail address of the coraccounts in banks of Ukraine, provided that there are no other objects porate e-mail of the non-resident and/or its affiliates for communiof taxation and objects related to taxation located on the territory of cation with the non-resident or with the non-resident’s contractors; Ukraine. • realization by a person of the right to possess or dispose of the Therefore, non-residents shall keep in mind that carrying out a stocks (goods) or other assets of a non-resident in Ukraine or their number of activities in Ukraine requires registration with the Ukrainian significant part on the basis of the respective non-resident’s intax authorities. structions; • the person has the premises leased on his/her/its own behalf for storage of the property purchased at the expense of a non-resident Tax Audits of Non-Residents or owned by a non-resident or third parties, and is to be transferred Changes to the TCU provide for carrying out tax audits of nonto third parties under the non-resident’s instructions or for other residents. In the event that the Ukrainian tax authorities suspect that a purposes defined by the non-resident. non-resident is actually conducting economic activity in Ukraine withIt should be emphasized here that the list of such “markers” is out registration with the respective Ukrainian tax authorities, they may non-exhaustive and the tax authorities are free to use other arguments appoint a tax audit of these activities. to prove that certain activities fall under the definition of PE. Such audits will be carried out under the procedure established by Therefore, it is important for non-residents to review their busi- the Ministry of Finance of Ukraine. ness relations with affiliated companies in Ukraine, other Ukrainian In particular, if it is found out within the audit that a non-resident counteragents as to whether or not they may be potentially treated conducts its business activities in Ukraine without tax registration, the as a PE. tax authorities may draw up a tax audit act and send it directly to the

Iryna Kalnytska

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GOLAW GOLAW is an international full-service law firm with offices in Kyiv (Ukraine) and Berlin (Germany). The firm is recognized by the most prestigious international and Ukrainian rankings, such as The Legal 500, Chambers & Partners, IFLR 1000, Best Lawyers, Who is Who Legal, Legal Awards, GRR 100 etc., and continuously ranked in the TOP 10 Leading Law Firms of Ukraine. The client portfolio of the firm includes large and mediumsized, national and foreign companies, banks and financial institutions, as well as private investors doing business in Ukraine or entering local and/or foreign markets.

Key Clients: TIU Canada, Inditex Group (Zara, Pull&Bear, MassimoDutti, Bershka, Stradivarius, Oysho, ZaraHome, Uterque), Fiba Retail (Marks & Spencer, GAP), ProCredit Bank, Expobank CZ a.s., Oriflame, Red Bull, Reckitt Benckiser, Syngenta, Export Guarantee and Insurance Corporation (EGAP), Azelis, Enkom a.s.,

Address: 19B Instytutska Street, Office 29, Kyiv, 01021, Ukraine, Tel.: +380 44 581 1220/1221/

KBPP Management Ltd., Georgian International Energy Corporation (GIEC), Mercator Medical, Ubisoft, etc. Main areas of Practice: Anti-Corruption & Anti-Bribery; Antitrust & Competition; Banking & Finance; Compliance, Corporate Governance & Risk Management; Corporate Law & M&A; Criminal Law & White-Collar Defense; Employment; Energy; Environmental Protection; Government Relations (GR); Insolvency & Corporate Recovery; Intellectual Property; International Trade; Litigation & Dispute Resolution; Maritime Law; Private clients GOLAW is a member of the leading Ukrainian business associations (American Chamber of Commerce, European Business Association, Ukrainian Network of Integrity and Compliance, German-Ukrainian Chamber of Industry and Commerce) and leading legal associations (Ukrainian National Bar Association).

Fax: +380 44 581 1222 E-mail: info@golaw.ua Web-site: www.golaw.ua

non-resident or hand it over to its representative in Ukraine. Such act will be a ground for the registration of such a non-resident with the Ukrainian tax authorities without the non-resident’s consent, application or any other objections to the tax audit act. Thus, non-residents shall properly fulfill the requirements of the TCU on registration with the tax authorities so as to minimize the risk of the tax audits described above.

buyer shall withhold WHT from the actual price of the shares.

Application of Double Taxation Treaties

Several new anti-avoidance rules have been introduced into the TCU preventing companies from abusing the provisions of double taxation treaties. First, to receive the reduced WHT rate under the relevant double taxation treaty, the transaction with the non-resident shall meet the “principal purpose test”. It means that the primary Sale of Shares in Real Estate purpose of the respective business transRich Companies action of a non-resident with a resident of Starting from 2021 the indirect sale Ukraine shall not be the mere receipt of taxof Ukrainian real estate through sale of ation benefits. Such transaction shall have shares in legal entities will be subject an economic effect and be reasonable for to withholding tax (WHT). In particuthe Ukrainian company. lar, new regulations of the TCU directly Second, transactions with non-resspecify that the income of non-residents idents which fall under transfer pricing earned from the sale of shares in foreign must meet the “sound economic reason” legal entities will be subject to taxation or “business purpose” principle. It shall be in Ukraine when the following require- Associate, Tax Practice, GOLAW deemed that there is no business purpose ments are met at any time during the if the principal purpose of a transaction is year preceding the deal: non-payment of tax, or if a resident would • the value of shares of a foreign legal entity is formed by 50% or not enter into such an agreement with a non-related non-resident on more by shares in a Ukrainian legal entity owned directly or indi- the same conditions. rectly by such foreign legal entity and This rule, however, will be modified from 2022, and will also apply • the value of shares in a Ukrainian legal entity is formed by 50% and to uncontrolled transactions with non-residents registered in low taxamore by real estate located in Ukraine and owned by such Ukrainian tion jurisdictions or of special corporate forms (like partnerships) and legal entity or used by it on the basis of an operating or financial also uncontrolled operations on royalty payments from Ukraine. lease or via a similar agreement. Therefore, the sale by a non-resident of shares in another foreign Conclusion company requires a check as to whether such a foreign company has Taking into consideration the large number of new introductions, any relation or not to Ukraine (as mentioned above) for the purposes we recommend that businesses take measures that will help them to of taxation. avoid fines and potential disputes with the Ukrainian tax authorities. If this is the case then, as we mentioned above, the non-resident In particular, we suggest conducting an audit of all agreements with buyer shall register with the Ukrainian tax authorities before execution non-residents and determining and confirming that such agreements of the deal and pay WHT to the Ukrainian budget from the income of contain a business purpose. As a result of such an audit, it will be posthe non-resident seller. What is interesting here is that the seller has sible either to change the structure of a transaction or to determine the rights to provide documents proving his expenses for the acquisithe correct withholding tax rate. It would also be advisable for nontion of the shares. residents to check their actual presence in Ukraine for PE risks and to In such case the WHT will be paid from the investment income of either register with the tax authorities or change the actual corporate the seller (profit from sale minus expenses for purchase). If the seller structure of their business. does not have such documents or is not willing to provide them, the

Viktoriia Bublichenko

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163

Trade Defense Remedies

Trade Defense Remedies: The Most Frequently Used Protectionist Measures of 2020 2020 was, indeed, one of the most unpredictable years, providing numerous challenges to businesses and governments. Nobody was ready for the COVID-19 pandemic or for the unparalleled restrictive measures applied by governments around the globe. As a result, international trade in goods and services fell sharply in 2020. To save the economy, governments have applied unprecedented state aid and other protectionist measures, including trade defense remedies, a brief overview of which is set out in this article.

WTO Statistics

origin in Russia; in May, anti-dumping duties to imports of matches with their origin in Belarus and Russia, as well as anti-dumping duties on imports into Ukraine of seamless hot-finished pipes originating in China; in November, safeguard duties on imports of polymer materials. Additionally, last year Ukraine extended the following anti-dumping duties for the next 5 years: in September, anti-dumping duties applied to imports of ropes with origin in China; in December, anti-dumping duties applied to imports of corrosionresistance pipes with origin in China and anti-dumping duties applied to imports of switches with origin in Russia. It is noteworthy that last year was unique because of application of preliminary measures, namely: in May, preliminary safeguard duties related to imports of polymer materials and preliminary anti-dumping duties related to imports of bolts from China were applied.

2020 has demonstrated a boost in trade remedies around the globe, as confirmed by the Overview Of Developments In The International Trading Environment Annual Report By The Director-General (Mid-October 2019 to mid-October 2020). Specifically, looking at relevant Partner, Sayenko Kharenko WTO statistics for the periods from Benchmark Trends of Trade 2012 to July 2019 — June 2020, it is evi- Ms Makhinova is recognized as being among the Defense Proceedings in Ukraine dent that during the latest period WTO leading individuals for International Trade by The members had initiated different trade Legal 500, “Best in international trade” by the LMG Public Refusal to Initiate a Case defense proceedings much more often Europe Women in Business Law Awards; in Interthan ever before, i.e. 32.7 initiations per national Trade for Ukraine and in Franchising by Under Ukrainian law, if the Interdemonth. During the latest period, 303 anti- Client Choice Awards; in Franchising by Who’s Who; partmental Commission on International in Trade by the Best Lawyers International; in Trade dumping investigations (as compared Trade (i.e. a state authority responsible for with 203 and 178 investigations in July and Customs by Who’s Who: Trade & Customs. She adoption of key decisions in the course of 2017 — June 2018 and in July 2018 — is a country expert on franchising, distribution and investigations, e.g. on initiation, application agency for the International Distribution Institute and June 2019, respectively); 48 anti-subsidy of measures etc.) adopts a decision to rea Chair of the Working Group on International Trade investigations (compared with 52 and 37 ject an application on initiation of an antiinvestigations in July 2017 — June 2018 of the ACC. subsidy investigation in the absence of jusand in July 2018 — June 2019); and 32 tified grounds, it shall oblige the Ministry of safeguard investigations had been initiated (compared with 9 and 21 Economy of Ukraine (i.e. a state authority responsible for conducting investigations in July 2017 — June 2018 and in July 2018 — June 2019). investigations) to notify the applicant on the adopted decision. UkraiThe vast majority of such measures are traditionally applied against im- nian law requires only publication of the official notice on initiation of ports of steel products, chemicals, textile, wood, machinery, etc. an investigation, but not on its rejection. The said trend is predictable and could be easily explained by the Notwithstanding the above, in July 2020 the Commission’s deglobal crisis caused by COVID-19 and the intentions of governments to cision to reject an application on initiation of an anti-subsidy investisave their economies and jobs. gation related to imports of oil products from Russia was published for the first time in the history of Ukraine. This was done in response to enormous public reaction to the news on potential initiation of the Statistics in Ukraine Ukraine also actively initiated trade defense investigations and case and further application of countervailing measures. applied different remedies in 2020. Termination of Investigations Without any Measures As for the new proceedings, the following ones were initiated in Before 2020, almost all investigations were terminated with appli2020: in January, interim review of anti-dumping measures applied to imports of ammonium nitrate with origin in Russia; in February, cation of measures. However, 2020 brought quite bad news for Ukraisafeguard investigation related to imports of polymer materials and nian domestic producers. Particularly, five investigations were termianti-dumping investigation related to imports of turning-opening mech- nated without any measures, namely: safeguard investigations related anisms for windows with origin in Turkey; in May, safeguard investiga- to imports of caustic soda; related to imports of nitrogen fertilizers; tion related to imports of freshly-cut roses; in June, anti-dumping in- related to imports of complex fertilizers; related to imports of syringes. vestigation related to imports of plywood with origin in Belarus; in July, At the very beginning of January 2021, the anti-dumping investigation safeguard investigation related to imports of cables; in November, an related to imports of auto aluminum wheels with origin in China and anti-dumping investigation related to imports of heat-insulation mate- Russia was also terminated without measures. The vast majority of rials with origin in Russia and Belarus; in December, an anti-dumping the said investigations were terminated without measures because investigation related to imports of galvanized steel with origin in China. the latter do not comply with national interests or in the absence of a The year 2020 was also rich for application of different remedies. causal link or unforeseen developments. This trend is very important Namely, over the last year the following remedies were applied: in Feb- for foreign producers and their customers because it clearly demonruary, anti-dumping measures to imports of gas concrete blocks with strates that the latter must actively participate in investigations and try origin in Belarus and anti-dumping measures to imports of ropes with to prove their position.

Anzhela Makhinova

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SAYENKO KHARENKO Sayenko Kharenko has been recognized over 100 times as the No. 1 law firm in key practice areas and named Best Law Firm in Ukraine more than 30 times by the most prestigious professional excellence awards. The firm has provided legal services to over 1,800 clients from over 60 countries around the globe and recognizes that every single client has unique business needs. Sayenko Kharenko tailors its services to best fit the individual profile of each and every client. Sayenko Kharenko is one of Ukraine’s largest law firms offering comprehensive support in all major sectors of the economy. In order to manage the rapidly evolving Ukrainian legal and business

Address: 10 Muzeyny Provulok, Kyiv, 01001, Ukraine Tel.: +380 44 499 6000; +380 44 389 5000

Recall of Applications on Investigation/Review Initiation Ukrainian law directly stipulates the possibility to recall an application on investigation/review initiation only at the initial stage when official proceedings have not been commenced. However, in 2020 the sunset review and the interim review of anti-dumping duties related to imports of ammonium nitrate with origin in Russia was terminated because the domestic industry recalled the relevant application on initiation of review almost at the final stage of review. This is a widespread practice in other jurisdictions because such an option is better for domestic producers. The fact is that if the application is just recalled, the domestic industry could again initiate the case as soon as the situation improves and does not need to wait at least a year as in the case of termination of an investigation due to absence of the relevant grounds.

Preliminary Measures Ukraine has not applied preliminary measures in trade defense proceedings since 2008. However, in May 2020 Ukraine applied preliminary safeguard duties to imports into Ukraine of polymer materials and preliminary anti-dumping duties related to imports of bolts with their origin in China. Such practice is good for domestic producers as they could expect application of preliminary measures shortly after initiation of an investigation.

Anti-dumping vs Safeguards Previously, the Ukrainian producers have followed the well-established practice of other WTO countries and in the vast majority of cases have initiated anti-dumping investigations to protect the domestic market against imports. However, 2020 has demonstrated a different trend. Particularly, Ukraine initiated 3 new safeguard investigations and only 4 anti-dumping ones, which was not typical for Ukraine during the last 8-9 years. At the same time, due to strong opposition from the side of foreign trade partners, specifically the EU, as well as termination of 3 safeguard investigations without measures, one could expect that in 2020 the era of safeguard investigations had already passed.

Publication of Final Reports in Safeguard Investigations It is worth emphasizing that Ukrainian law does not stipulate the obligation of the Ministry and/or the Commission to publish the whole final report following the results of safeguard investigation even though such a publication is directly set out by the Agreement on Safeguards. The practice of the Ministry in respect of publication of reports differs considerably from investigation-to-investigation. In some safeguard investigations the Ministry publishes such reports in electronic case materials available only to interested parties of investigations and only upon the request of such parties. In other cases, the Ministry refuses access of the interested parties to the reports and they can gain such access only through a court.

Liberalization of Safeguard Quotas Ukrainian law stipulates a possibility to review safeguard measures in order to either liberalize them or abolish before expiry. In practice, such possibility has not been used yet, because the law does not set out the relevant implementation procedure. However, in 2020 the relevant decision was adopted for the first time in the history of Ukraine. The decision set out that the general quota shall replace the country-specific quota applied to imports into Ukraine of sulfuric acid. This is an important example for the interested parties that now can try to apply for early expiry liberalization/termination of the safeguard measures.

Fax: +380 44 499 6250 E-mail: info@sk.ua Web-site: www.sk.ua

Shall the Ministry/the Commission Take Into Account Position of Non-interested Parties or Not? Before 2020 the Commission and/or the Ministry took into account only evidence and arguments submitted by duly registered interested parties (i.e. domestic producers, foreign producers, importers, end customers etc.), the list of which was defined at the very beginning of the investigation. However, in safeguard investigations related to imports of nitrogen fertilizers, and complex fertilizers the position of the Commission/the Ministry has changed. Particularly, the Ministry has made its conclusions and prepared its final report with recommendations to apply quotas based on the position of the interested parties, but while adopting the final decision, the Commission has also considered the positions of several associations of end customers that have not participated in the course of investigations and have not been duly registered as interested parties. Now the said decision is challenged before the court and the latter should drive the nail into the head in this regard.

Recent Case Law Much of 2020 case law once again related to the special limitation period for challenging decisions on application of measures before the courts. Under the Law of Ukraine On Foreign Economic Activity, a one month limitation period shall apply in such cases. But the law itself does not explain precisely from which date such period is calculated (i.e. adoption of a decision on imposition of a measure, official publication of the notice on the above decision or entry into force of the measure, which in Ukraine usually takes from 30 to 60 days). In case 826/7768/17, the Supreme Court of Ukraine clarified that the one month limitation period shall start from adoption of a decision on imposition of a measure by the Commission. This approach was confirmed in numerous cases in 2020. The courts have rejected all cases where the said period was missed even by a few days, e.g. 7 days. The case law of 2020 once again confirmed that the courts are reluctant to apply interim remedies (interim suspension of measures) for the period of court proceedings. The fact is that while challenging trade defense measures, claimants often submit motions on interim remedies to the courts. The court of first instance grants such motions in certain cases. In 2020, there were several examples of application of such measures at the level of appeal courts, but in any case, the Supreme Court of Ukraine did not accept such an approach and abolished the said measures. In certain cases, the courts began to request from the Ministry all confidential case materials, even questionnaires of certain interested parties. This is quite dangerous for interested parties because under Ukrainian law all documents submitted during a court proceeding are available for all participants of disputes (usually rivals). It goes without saying that this loophole must be regulated as soon as possible. Moreover, in 2020 courts interpreted due submission of questionnaires and additional questionnaires in several disputes. Under Ukrainian law any document shall be regarded as submitted within the deadlines set out by the Ukrainian investigative authorities provided that such a document is submitted and the most important registered by the end of the working hours of the relevant registry in the last date of the set deadline. The courts have agreed on the Ministry’s approach not to take into account questionnaires/additional questionnaires even if the latter are submitted on the last day of the deadline, but not duly registered. Therefore, companies, participating in trade defense proceedings in Ukraine, must take into account the above peculiarities and always check the working hours of the registry, that could be changed from time-to-time, especially in the COVID-19 situation.

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Trademarks

Securing a Claim in IP Cases: from Expectations to Reality New versions of procedural codes have been in effect in Ukraine since 2017. Compared to the previous versions, the codes regulate the institution of secure claim in significantly more detail. According to the new procedural codes, courts have much broader powers, both in terms of upholding a right to secure a claim and to prevent abuse in using such right. The legislator lifted the ban on using remedies not directly provided by legislation and introduced the institution of counter security. Claims related to protection of intellectual property can be secured by suspending customs clearance of the goods or objects containing disputed intellectual property based on the direct norm in law. As reflected by court practice, such a norm has been applied and has already contributed to protection of intellectual property rights during the movement of goods across the customs border of Ukraine. However, courts of lower instances predominantly refuse to apply interim measures in other categories of cases related to protection of intellectual property rights. In the absence of a direct norm, there is a lack of unity at the level of courts of first and appellate instances on interim measures.

Essence of Claim Determines the Basis for Security

Securing the Claim Factor

Yaroslav Ognevyuk Partner, Sayenko Kharenko

Yaroslav Ognevyuk advises clients on all intellectual property issues with a special focus on building strategies of IP portfolios, IP litigation and brand protection. His areas of expertise cover suppression of unfair competition, trademark disputes, patent and utility model disputes, design disputes, copyright disputes, domain name disputes, plant variety disputes, etc. Yaroslav is one of the most experienced experts in Ukraine in anti-counterfeit cases, customs’ seizures as well as the cancellations and recognition of wellknown trademarks.

According to case law, when deciding a motion for securing a claim, a court must assess the applicant’s arguments regarding the need for such security in terms of their reasonableness, validity and adequacy, as well as proportionality of the measures with the stated claim. To analyse the proportionality, the court should compare the negative consequences in case the motion for security is granted with negative consequences, which may occur as a result of failure to secure the claim. For the last three years, the unified legal position of the Supreme Court of Ukraine has rested on the nature of the claim defining the grounds for securing thereof. In case of a non–pecuniary claim not requiring enforcement if satisfied then, according to the Supreme Court, such grounds for security as “significant complication” or “impossibility” should not be considered or applied. Instead, the court shall consider and the claimant, accordingly, has to prove a sufficiently reasonable assumption that failure to take such measures may significantly complicate or prevent effective protection or restoration of any violated rights. In non-pecuniary claims, the court should answer the following question: would the failure to apply security measures violate the requirement of fair and effective protection of violated rights? In particular, would the claimant be able to protect their rights in one such proceeding without the need of a new appeal to a court? Notwithstanding the above, courts of the first and appellate instances that consider non-pecuniary disputes in the field of intellectual property continue to analyze whether а probable court decision would be impossible to execute. Due to the fact that such courts ignore the actual subject matter of the claim, the claimant bears an unreasonable burden to prove that execution of a probable court decision would be complicated. As a result, granting security for a claim in non-pecuniary intellectual property claims is the exception rather than the rule.

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Directive 2004/48/EU on the enforcement of intellectual property rights requires Member States to provide for the right to secure a claim in order to prevent infringements of intellectual property rights. In Ukraine, such right is declared in effective procedural codes and is actively exercised by applicants. At the same time, the share of claims secured in a timely manner, including in cases involving infringements of intellectual property rights, remains critically low. One possible reason is the damaged reputation of the institution of secured claims, which was once used as a tool for unlawful interference in the activity of private entities, as well as wide use of their discretionary powers by government authorities. In addition, the specifics of intellectual property law require deep knowledge not only of procedural law but substantive law as well from the judge considering the security motion. In the absence of a functioning Higher Court for Intellectual Property, an incompetent approach towards resolving cases in this category has been a problem. While the Supreme Court of Ukraine corrects the errors of courts of lower instances, not all court decisions related to securing a claim can be reviewed in cassation.

When Rejection Becomes an Argument

The ambiguous practice of the courts of first, appellate and cassation instances in considering applications for securing claims in IP disputes is due to the cassation filter established by procedural law. For example, a decision by a court of first instance to refuse to secure а claim and the judgment of the appellate court which left such decision without change cannot, according to the Commercial Procedural Code of Ukraine, be appealed in cassation. Furthermore, an appellate court decision cancelling a decision of the court of first instance to grant an application for securing a claim (and, consequently, refusing the said application), is not subject to cassation review. The above position on cassation appeal expressed by the Grand Chamber of the Supreme Court on 15 September 2020 has been applied to all commercial disputes. However, legal relations in the field of intellectual property have specific features distinguishing them from other categories of cases. Thus, legislation provides for nonexclusive ways to protect IP rights and establish the peculiarities of regulating such legal relations, reflected at the procedural level by establishing special measures to secure the claim. If the courts of the first and appellate instances were to unreasonably refuse to satisfy an application to secure a claim by suspending customs clearance of goods or objects containing intellectual property, and if there is no possibility to appeal such refusal, then unimpeded entry of counterfeit goods into Ukrainian markets would be allowed. Apparently aware of such threat, the Commercial Court of Cassation of the Supreme Court stressed in its decision of 15 December 2020 that the existence of this cassation filter complicates access to a court by the plaintiff’s chosen method of protection. The essence of the law is distorted as the claim loses its meaning due to the possibility of distribution, manufacture or entry into civil circulation of goods whose import or export is carried out with a probable

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infringement of intellectual property rights. The above circumstances served as the basis for referring the case to the Grand Chamber of the Supreme Court. However, before a case is heard by the Grand Chamber of the Supreme Court, refusal is still the common practice.

Light at the End of the Tunnel Based on the analysis of the current case law of the Supreme Court, it generally does not support the courts of first and appellate instances in establishing an extraordinary and previously unattainable standard of proof when considering applications for securing claims. In disputes over protection of intellectual property rights, the Supreme Court regards, taking into account specific circumstances, the following remedies to be effective: • a ban on the use of a trademark or patent by putting the goods into circulation, offering them for sale on a site and their use in advertizing; • A ban on the respondent transferring the right of ownership to the intellec-

Tetiana Yushchenko Associate, Sayenko Kharenko

Tetiana has over 10 years of professional experience and specializes in advising clients on contentious IP legal issues and litigation in courts of all instances. Tetiana is a Juris Doctor (Doctor of Law) and has been heavily involved in the reform of the Ukrainian judicial system. Furthermore, Tetiana was engaged as an expert in formation of the National Strategy for the development of Intellectual Property in Ukraine. On top of that, she has a strong scientific interest in Intellectual Property Law.

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tual property object and/or to grant permission (license) for its use; • in case of contesting the trademark, establishing a ban on carrying out any actions to transfer rights to other persons before the case’s consideration on merits or a ban for a state body to take action on the state registration of a certificate for a trademark for goods and services; • arrest of a trademark for goods and services in a dispute over the invalidation of an agreement on the alienation of intellectual property rights; • in a dispute on the termination of the violation of the rights to an invention (medical product), imposing a ban on a state body carrying out state registration of a medical product before a court decision comes into force. Therefore, it is safe to say that the general direction for the effective protection of intellectual property rights is gradually entering the Ukrainian judicial procedural environment, as evidenced by satisfaction of applications for securing a claim in the above category of cases.

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Transportation

The Revival of Inland Water Transport in Ukraine On 3 December 2020, the Ukrainian Charges for Navigation and Parliament passed the Law of Ukraine Funding of River Infrastructure On Inland Water Transport No. 1054-IX, According to the Law, vessel navigation which is one of the most expected transon inland waterways shall be exempt from port regulations since the independence charges. of Ukraine. As of now, river transportation Passage through the navigation locks is basically regulated by the Inland Water and lifting of drawbridges are also free of Transport Charter of the USSR of 1955, charge for all vessels and will be covered which is not consistent with the modern by the owners of such objects, which corworld and national trends of the industry. responds to European practice generally. Adoption of this Law is also providGiven that most bridges are operated by ed by the EU-Ukraine Association Agreestate-run Ukrainian Railways, it is conceivment, establishing Ukraine’s commitment able that the costs involved in lifting bridges to implement 6 acts of EU legislation (Anmay be subsequently included in railroad nex XXXII to Chapter 7 Transport, Section freight rates. V Economic and Sectoral Cooperation of The Law provides that the financthe EU-Ukraine Association Agreement). ing of maintenance and operation of the These acts should bring Ukrainian inland strategic inland water transport infrawater transport legislation into line with structure will be exercised from the State EU legislation with regard to operation Inland Waterways Fund (the Fund) as part and market access, shipping safety, proof the special fund of the State Budget of vision of river information services, etc. Ukraine. The Fund will be held by the MinisGovernment officials expect the try of Infrastructure and formed from, inter Law will revive the cheapest and most Head of Odesa Office, Attorney-at-Law, alia, the special water use rent, settled by eco-friendly way of transporting cargo hydroelectric power plants. The relevant and create effective river logistic chains. Ilyashev & Partners provisions will be introduced to the Budget According to the Minister of InfrastrucCode of Ukraine via the special law. ture, the Law will increase river freight traffic to 30 million tons a year, which will bring UAH 13-16 billion to the state treasury annually. The logistic capabilities of Ukraine’s major Port Dues and Charges river, the Dnipro, are used by no more than 10%. The Law should help The Law does not provide for any river dues payable by shipownincrease to this rate, the Minister of Infrastructure said. It is expected ers, though there are some important aspects in relation to the settlethat the river will take some freight traffic from the country’s highways, ment of port dues. which should be helpful in easing the burden on the roads and signifiThe administrative, canal, tonnage and sanitary port dues in a cabcantly reduce repair costs. otage voyage, as well as the canal port due in an international voyage Let’s review the key issues of the Law. will not be collected from the vessels with a draft up to 4.5 meters. If the

Sergey Nedelko

Opening up the River Transport Market As of now any vessels flying a flag of states, which have not concluded an international agreement on navigation on inland waterways with Ukraine, will obtain a one-time permit for calling at a Ukrainian river port. In order to obtain such a permit, the shipowner should apply in advance to the State Service of Maritime and River Transport of Ukraine (Maritime Administration) with the relevant submission. In practice the procedure may be delayed, thereby leading to significant damages and losses incurred by shipowners and cargo owners. Moreover, foreign flagged ships are entitled to carry cabotage voyage only subject to obtaining the special permit from the Ministry of Infrastructure, which creates bureaucratic obstacles and corruption risks. The Law closes these gaps and opens up inland waters for foreign shipowners. It provides that the carriage of passengers and cargo both on international and cabotage voyages may be carried out by Ukrainian and foreign vessels (except vessels of Russia, the aggressor state) without obtaining any permits. In the meantime, the Law clarifies that transportation by foreign vessels in cabotage may be carried out only if the vessel is operated by Ukrainian companies (shipowners). This requirement is intended to create a more effective mechanism for bringing to account those shipowners that committed any violations in Ukraine. It should be noted that the European market of inland navigation (cabotage) is arranged in a similar manner, as long as access is provided to river carriers registered in a EU Member State and granted the appropriate permit (Council Regulation (EU) No. 3921/91 of 16 December 1991). The carriage of passengers, dangerous goods and waste by inland waterways is subject to licensing. The relevant terms and conditions shall be developed and adopted by the Ukrainian government during the transition period before the Law comes into force.

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vessel’s draft exceeds 4.5 meters, the river port (terminal) shall provide cargo operations and storage, passengers handling, bunkering, garbage acceptance from ships and other services only subject to the settlement of tonnage, canal and administrative dues in the nearest sea port. Therefore, it would be reasonable to develop and establish an appropriate procedure for information exchange between river and sea ports in order to clarify the payment status of port dues.

Pilotage Services The Antimonopoly Committee of Ukraine has repeatedly stressed the need to demonopolize the pilotage services market, both in sea and river ports. The Committee maintains the position that the state function of pilotage arrangement must be separated from the provision of pilotage services, which should be opened up for private pilots. The revocation of the monopoly should contribute to the reduction in port call expenses, making Ukrainian goods and port terminals more competitive on the international market. However, the Law provides for a state monopoly over the pilotage services on inland waterways, just as in sea ports. The business sector expects that the government must follow the Committee’s findings and the monopoly will be revoked in the near future.

Development of Inland Water Transport and Investment According to the Law, the basis for the development planning of inland water transport will be the Strategy for the Development of Inland Water Transport of Ukraine (the Strategy), which includes short-term, medium-term and long-term development plans. The Strategy should be developed taking into account forecasts for cargo traffic, investment, main financing areas and sources, development plans of the national transport system, river ports (terminals), other inland water transport infrastructure facilities, strategy for the

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Our services include: • Legal support at all stages of carrying out investments in port infrastructure, including tender procedures, preparation, conclusion and performance of investment agreements (lease, concession, servitude, etc.);

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• Legal support of stevedoring, freight-forwarding and transportation companies; • Protecting interests of major shipowners and P&I Clubs in maritime disputes; • Arrest and release of ships; • Legal support in enforcement proceedings, including the process of forced sale of ships; • Handling cargo claims, arrest of cargo; • Financing, sale and purchase of ships; • Drafting and executing charterparties, ship management agreements, agency agreements and other agreements in the maritime sector; • Registration of ships under Ukrainian and foreign flags; • Handling marine insurance disputes; • Legal assistance in relation to the construction and repair of ships; • Disputes with port authorities. Our team is well-known for its unique hands-on experience in protecting the rights of investors in Ukrainian and foreign courts and international arbitrations.

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evelopment of sea ports of Ukraine, as d the relevant extract being obtained by the well as shipping safety and environmental port. However, this requirement will come protection. into force on 9 January 2024, so the stakeThe Law provides for the option to holders will have enough time to make all invest in the strategic facilities of inland the necessary arrangements. water transport infrastructure by means Therefore, the Law introduces a new of public-private partnership mechaauthorization document for river ports (ternisms such as concession, rent, joint venminals), which is the extract from the Registure and other types of investment agreeter. The failure to comply with the procedure ments. The priority areas of investment will result in a fine of about USD 1,850. will be determined by the Strategy and should include the adoption of innovative, Vessel Arrest energy efficient and eco-friendly technolThe Law provides that the vessel may ogies, development and modernization of be arrested or released by a court or triinland waterways, construction of stratebunal, if provided for by the contract. The gic inland waterway infrastructure, toursubject matter of such contract is not deterism and sports infrastructure, etc. mined by the Law, but we assume it means The effective implementation of any contracts concluded by the shipowners these provisions also depends on the in the course of a vessel’s operation and extimely development and adoption of the ploitation. Strategy, as well as the procedure for The Law does not provide an exhauscompensation of investments in strategic tive list of claims that can be secured by the infrastructure, which must be done bearrest of a vessel. However, it states that fore the Law comes into force. Attorney-at-Law, Ilyashev & Partners such claims should arise from ownership It is expected that the investments and other property rights to the vessel, conwill be compensated from the state budstruction, management, vessel’s operation or get, rent and other sources subject to the commercial use, mortgage or salvage of the vessel. Thus, in this regard provisions of the relevant agreement. the Law draws a certain analogy with the concept of maritime claim used The compensation for investments in strategic facilities is still an in maritime law and determined in the International Convention Relating to extremely important issue in the sea ports industry and has been widely the Arrest of Sea-Going Ships of 10 May 1952, the Merchant Shipping Code discussed since the adoption of the Law of Ukraine On Sea Ports of of Ukraine and mentioned in the procedural law of Ukraine. Ukraine No. 4709-VI of 17 May 2012. However, the relevant procedure is The Law introduces no amendments to the procedural law, which still in the course of being developed. means the vessels may be arrested in the river port under the standard procedure without specific requirements based on the special legal staRegister of Inland Water Transport Infrastructure tus of the vessel. Therefore, the claimant may face obstacles when provFacilities ing the proportionality of the claim amount to the ship’s price, which is In order to ensure the safety of navigation, nature protection and not applicable when securing maritime claims. The arrested vessel may be released on bail or other type of sufexchange of information on river ports (terminals), the Law provides for the establishment of an electronic database of inland waterway facili- ficient security at the discretion of the parties or as decided by the court ties, which is called the Register of Inland Water Transport Infrastructure or tribunal as per procedural rules. Facilities (the Register). The Maritime Administration is authorized to administer the Reg- Summary ister, which will be available on its official web-site. The river port (terAll stakeholders expect the Law to serve as a way of reviving river minal) will provide the Maritime Administration with exhaustive details transport, stimulating the transportation, shipbuilding, agriculture, interabout river port facilities upon the relevant declaration and obtain the national trade and other related industries. The Law will enter into force extract free of charge. on 1 January 2022. During the transition period, the government will deThe Law prescribes that river ports (terminals) are entitled to pro- velop and adopt regulations to implement the Law’s provisions, and the vide services and carry out commercial activities on inland waterways business sector will be able to adapt its commercial processes to the only subject to information being entered into the Register resulting in legislative changes made.

Mykola Skvortsov

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Unfair Competition

Abuse of Monopoly Position during Quarantine: How to Avoid Fines from AMCU The situation with the COVID-19 As a result, it is easy for a company virus and all the quarantine measures to suddenly become a monopolist if there had a significant impact on the Ukraiare no competitors on the local market denian economy. In these conditions a fined by the AMCU. lot of different businesses have found At the same time, it should be noted themselves without their usual comthat just having a monopoly market share petitors and after the lifting of quardoes not make a company an automatic antine measures adopted aggressive transgressor. Only certain actions by a marketing strategies to try to recover company with such a position are considtheir losses. And in many cases such ered to be unlawful. strategies are subject to Ukrainian anArticle 13 of the Law of Ukraine On timonopoly legislation and considered Protection of Economic Competition stipas violations. ulates that abuse of a monopoly (domiOne of the most widespread misnant) position in the market is the actions takes that is presumed by company or omissions of an economic entity that managers is that their company can in holds a monopoly (dominant) position no way be regarded a monopolist and, in the market, which have led to, or may therefore, it is free to act in its sales lead to, the prevention, elimination or and cost decisions. Unfortunately, as restriction of competition, or infringethe AMCU’s longtime practice sugment of the interests of other entities or gests, this is not the case. Moreover, consumers that would be impossible in with the mass closure of business as the face of significant competition in the well as transportation and travel remarket. strictions imposed by quarantining, the Partner, ANTIKA Law Firm The law also indicates a few actions possibility of recognizing a company which are recognized as abuse of monopas a monopolist on some local market oly (dominant) position in the market by is higher than ever. default: We would like to remind people that according to Article 12 of 1) the establishment of such prices or other conditions for the the Law of Ukraine On Protection of Economic Competition a compurchase or sale of goods that could not be established in the pany shall be considered as occupying a monopoly (dominant) posipresence of significant competition on the market; tion on a commodity market if: 2) application of different prices or different other conditions to • it has no competitors on this market; equivalent agreements with business entities, sellers or buyers • is not subject to significant competition due to limited access of without objectively justified reasons; other entities to purchase raw materials, materials and sales of 3) stipulating the conclusion of agreements through the accepgoods, the presence of barriers to market access of other entitance by the business entity of additional obligations, which ties, the availability of benefits or other circumstances. by their nature or in accordance with trade and other fair cusThe law sets the “standard” monopolistic market share threshtoms in business activities, do not relate to the subject of the old at 35%. Having a market share of more than this is considered a contract; monopoly position unless it is proven that the company is subject to 4) restriction of production, markets or technical development, significant competition. which has caused, or may cause, damage to other business enBut how are these legislative norms transferred into practice? tities, buyers, sellers; First of all, it should be noted that calculation of the market 5) partial or complete refusal to purchase or sell goods in the abshare impacts the territorial (i.e. the geography of sales) and goods sence of alternative sources of sale or purchase; borders (types of goods/services which are considered as inter- 6) significant restriction of the competitiveness of other economic changeable) of a market. entities in the market without objectively justified reasons; The AMCU tended, for a long time, to narrow down market bor- 7) creating barriers to market access (exit from a market) or ders, whether territorial or goods borders. This led to the birth of removing sellers, buyers and other business entities from a some very impossible from the economic view, but justifiable from market. the consumers point of view, markets, like the market of car techniThe most common violation from this list is setting additional cal services for cars during the warranty period. The AMCU’s justi- or unusual conditions for the purchase of goods. fication for this is very simple; car owners do not want to lose their For example, setting as one of the conditions for purchase buywarranty (which will happen if they come to unofficial service sta- ing in bulk or only by adding other goods or signing an additional tions), thus they are limited in their choice of service. service agreement. Territorial borders are also significant as the AMCU does conAt the same time, possible violations are not limited to the sider the actual possibility of buying goods/services elsewhere rath- above-mentioned. For example, in 2019 the AMCU fined an insurer than just if there is another seller of similar goods. As a simple ance company for abuse of monopoly (dominant) position due example, for foods the market borders can be limited to several to the sale of insurance only through agents. The AMCU has destreets in a city, as consumers are unlikely to travel far to buy bread, creed that including agents into the scheme of concluding insurmilk, etc. ance agreements (with the absence of the possibility to conclude

Alexey Kot

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an agreement directly) increased the price of the insurance due to the agency fee paid by the insurance. Another widely spread violation recognized by the AMCU as abuse of monopoly position is submitting knowingly inflated tariffs for approval to the regulator. This violation is often committed by a carrier on the route where the one carrier is selected by the local authorities. Another violation is that of recognized actions by one electricity provider which demanded from customers who wanted to connect payment for using electricity without an agreement before the signing of a new agreement — which is not allowed by Ukrainian legislation. The AMCU concluded that such actions were abuse of the monopoly position as in the

Fax: +380 44 390 0921 E-mail: office@antikalaw.com.ua Web-site: www.antikalaw.com.ua

Alexander Tretiakov

presence of competition the electricity company would not have demanded this from customers. By way of conclusion, we can say that the AMCU can recognize as abuse of position practically any unlawful action carried out by a company which may affect the interests of customers. Under these circumstances any aggressive marketing or sales strategy implemented by the company needs to be checked for compliance with antimonopoly legislation. Otherwise, the risks and possible fines for violation may practically finish off a company. It should be remembered that the maximum fine for this violation is 10% of last year’s income. While in practice the actual fine is lower due to various mitigating circumstances, and may generally come to 2-5% of a company’s income.

Senior Associate, ANTIKA Law Firm

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Virtual Assets

The History of Virtual Assets in Ukraine, or What’s up With Crypto Ukraine rarely gets a chance to be system. Some tanks or ships exist in a better in something than others. We are computer game. It means that a virtual asusually among the outsiders in ratings, set does not exist without its interaction in but with enviable consistency we lead a system of similar assets. the anti-ratings for inflation and corSecondly, the law will also provide a ruption. Fortunately, the situation is a number of definitions relating to the basic bit different with virtual assets coming concepts of a virtual asset transaction. This forward now. includes storage services, administration, The paradox is that in the niche of exchange and transfer of virtual assets, as virtual assets Ukraine has, without any well as services related to a public offering support from the government, taken a and/or sale of virtual assets (ICO). very noticeable position. The circumThirdly, unlike Switzerland, where the stances developed as follows. attempt to categorize virtual assets ended At the beginning of 2016, a signifiin failure, in Ukraine one managed to divide cant number of Bitcoin mining capacivirtual assets into two large groups. Virtual ties were concentrated in Ukraine. By assets are usually divided into asset tokens December 2016 we had hosted one of and payment tokens. In Ukraine, because of the first crypto conferences on the Euthe rapid development of technology, the ropean continent — BlockchainUA. Dedisystem is more flexible. For example, at the cated to the latest inventions in the field time when the law was being written, there of financial technology, it gathered more was no NFT (Non-fungible token), there than 1,000 people in the city of Dnipro. was no Initial Exchange Offering, which has Thus, a community of blockchain debecome irrelevant today. So, it was decided velopers gradually began to form in Managing Partner, Juscutum law firm that grouping tokens by meaning and their Ukraine, which is now a proactive and essence makes absolutely no sense. Moreinfluential community. Then, our govover, the biggest problem arises when the ernment agencies decided to join in the token has a mixed nature. That is, it can be consolidation of Ukraine’s success in the crypto world. used to pay, to vote, or to implement any other activity. Here, Ukrainian There is no denying that any influence of the government on busi- law seems inherently simpler. But this simplicity is more reasonable ness is not very pleasing to its representatives, nor is the interaction because it provides flexibility. with government agencies, for that matter. And all because the state Thus, the division of virtual assets in the Ukrainian system of is slow and almost always fiscal-minded. Nevertheless, we all under- reference provides for secured and unsecured assets. Unsecured virstand that big capital of the emerging market is rarely kept in the coun- tual assets are assets that are not tied to the material world. In other try without state regulations. And though cryptocurrency is something words, there is no promise in them: you have taken them and you canabout freedom, the capital goes where there are special licenses, and not claim anything else. For example, Bitcoin and Dogecoin are unsestays where there are transparent rules of the game and more or less cured virtual assets. acceptable tax rates. Ukraine started its way in this race 3 years ago. Secured virtual assets are assets that are in some way tied to tanIn 2018, the first bill aimed at state regulation of virtual assets gible assets. By owning a secured virtual asset, you can assert claims was written: the draft law on amendments to the Tax Code of Ukraine against the third party. Consequently, the law defines the basic rules regarding the taxation of transactions with virtual assets in Ukraine. for tying them to the rights of claim on other objects of civil rights. For It was created under the supervision of MP Oleksii Mushak. The bill example, a Brocard certificate can be a token on the basis of which amended the Tax Code of Ukraine by giving the definitions of virtual you are entitled to receive goods for an amount that is covered by that assets and cryptocurrency. The Ministry of Digital Transformation of token. Ukraine has now taken over the legislative initiative in this area and Then, the law has requirements for professional participants of proposes to bring the regulation of virtual assets into a separate law. this market. These are exchanges, funds, where a new type of license The bill has passed its first reading. All indications are that in 2021 we is created and the regulatory boundary between the Ministry of Digital may have a law on virtual assets adopted and in force in Ukraine. Transformation of Ukraine, the National Bank of Ukraine, and the U.S. So what should we expect from the law on virtual assets? It Securities and Exchange Commission is defined. doesn’t really have a lot of innovation and a very strong regulatory It is also worth noting that if an asset is subject to any special policy. But it does have four goals. legislation, special rule and restrictions, it must be displayed and fully The first goal is to define the term cryptocurrency, virtual assets, applied to tokens. and other related concepts and definitions. Virtual assets are becomFourthly, the last aspect refers to taxes. Virtual assets and their ing a separate object of regulation, which takes its special place be- turnover are not subject to VAT, which makes it possible to calculate tween intellectual property items and information. That is, virtual as- expenses. The tax rate is 5% on the difference between the purchase sets are a type of intangible asset, which makes it easy to extrapolate and sale of the virtual asset. On the one hand, these rules are quite all sorts of accounting rules to them and, therefore, removes all ques- simple but, on the other hand, they meet the requirements of FATF. tions in this area. This solves one of the main problems for businesses The latter, along with the developed banking system of our state, make related to cryptocurrencies at the present time, that of accounting on Ukraine one of the most attractive jurisdictions in the crypto world, at the balance sheet. It is currently impossible to do this because there is least for the near future. simply no way to define and classify cryptocurrency. The text of the Draft Law On Virtual Assets is ready and well deTherefore, the law defines a number of characteristics and cri- veloped. Another sign of its quality is the fact that a number of major teria of what can be attributed to virtual assets. Among these is that international exchanges have already supported the law and gave a a virtual asset must necessarily exist in some system of circulation clear signal that as soon as the law is passed, they will enter Ukraine of virtual assets. For example, Bitcoin exists in the Bitcoin blockchain immediately.

Artem Afian

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JUSCUTUM Juscutum was founded in 2008 to provide legal support to innovative domestic, foreign and international companies. As a classic law firm, Juscutum offers not only a full range of legal services, but also has unique industry specializations such as IT, media, business security. Furthermore, Juscutum has been providing legal services to various blockchain projects since 2014. Juscutum is a team of more than 80 dedicated experts, including attorneys, financial analysts, accountants and auditors. We accompany our clients through all aspects of complicated legal world: regulatory aspects, conflict management and dispute resolution, mergers and acquisitions, corporate law, taxes and audit, issues of competition, finance, services of attorneys on business protection and others. Most importantly, as a result of cooperation, our clients often become our long-term partners, since we treat their business as our own. 2013 — Juscutum was ranked among the Top 5 law firms in the field of intellectual property law according to Yuridicheskaya Practika Publishing 2014 — Our IT law practice was singled out for recognition by the Ukrainian Law Firms Handbook 2015 — Juscutum entered the ranking of Top 5 companies in the country in the field of IT law and business security 2016 — Juscutum was recognized as the first company in the field of IT and media 2017 — Juscutum was ranked No. 1 in the field of telecom along with other achievements 2018 — Juscutum was ranked No. 1 in IT and No. 5 in the field of business security

Address: 35 Olesya Honchara, Kyiv, 01034, Ukraine

2019 — Juscutum was ranked No. 1 in Ukraine in the sphere of business protection 2020 — Juscutum was recognized No. 1 in IT and among the Top 5 law firms in the country in White-Collar Crime and noted in The Financial Times Innovative Lawyers: Europe.

Services: • IP & Data Protection; • International Business Administration; • Family Disputes; • Full legal support of Initial Coin Offering; • Jurisdictional analysis and recommendations on the choice of jurisdiction to register ICO company; • Investment protection; • Dispute management; • White-Collar Crime; • Legal assessment of risks in a company; • Anti-corruption compliance; • Consistent procedures (audit); • Corporate Taxation & Business efficiency. Juscutum in rankings: Legal awards, Chambers and partners, The Legal 500, Ukrainian Law Firms, Who is Who Legal, Attorneys of the Year.

Tel.: +380 44 359 0896 E-mail: office@juscutum.com Web-site: www.juscutum.com

The law has just passed the Verkhovna Rada committees stage and is being prepared for its second reading. The Ministry of Digital Transformation of Ukraine will become the main regulator of virtual assets. This is somewhat unusual practice, because in other jurisdictions the function of cryptocurrency regulation is performed by financial authorities: the U.S. Securities and Exchange Commission (SEC), the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC), the Financial Conduct Authority in the United Kingdom (FCA). However, the bill does strike a balance between the SEC and the National Bank of Ukraine. The Commission will deal with all projects that are securities, whilst the National Bank will deal with Stablecoin (a digital currency that is linked to an underlying asset like a currency or precious metal). It is also worth mentioning that the project on the crypto hryvnia is being actively developed in Ukraine, though it hasn’t yet been included in this law.

However, it is quite possible that very soon we will have the CBDC (Central Bank Digital Currency) in Ukraine. As of today, China is closest to implementing this project. We expect Ukraine will also succeed in this area. As far as I know, working groups have been already created and a draft law with amendments to the Tax Code is currently being developed. The amendments describe the procedure and rates of taxation of virtual assets. In addition, internal orders, regulations and other bylaws that will regulate the virtual assets field are being developed. Taking this into consideration, as well as the fact that the Law On Virtual Assets will take effect three months after its adoption by the Verkhovna Rada, we can expect the launch of the legal crypto market and the entire area of virtual assets in Ukraine by the end of 2021. This is the state of things on the Ukrainian virtual assets market. Everything points to the largest crypto exchanges being situated in our country.

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WTO

World Trade During COVID Pandemic, Trade Protectionism and Deadlock in the Multilateral Trading System: Quo Vadis? The COVID pandemic has hit the economies of many countries around the globe. According to the IMF’s estimates, as of January 2021 the global economy contracted by 3.5% in 20201. One of the first victims of the crisis was International Trade. In April 2020, the WTO forecast that world trade would fall by between 13 and 32% in 20202. Luckily, the worst-case scenario did not occur. Moreover, the decline in 2020 was even less severe than projected under the optimistic scenario. In October 2020, the WTO estimated a 9.2% decline in the volume of world merchandise trade for 2020, followed by a 7.2% rise in 20213. Thus, the global recovery seems more robust than it was feared, but the current situation has still impeded trade in goods and services quite severely.

Trade in Goods

my after the pandemic would be a descent into protectionism7.

Trade in Services

Anzhela Makhinova

Trade in services has been also affected by the COVID pandemic. According to estimates by the WTO Secretariat, the decline in trade in services has been at least as strong as the fall in merchandise trade8. For instance, trade in services remained depressed, down 17% year-onyear in September 2020 after registering declines of 23% in July and 22% in August compared to the same months in the previous year9. The impact varies across different services sectors and modes of supply. The most affected services sectors are those that depend on physical proximity between suppliers and consumers (such as tourism, artistic, recreational, transportation, construction services, etc.)10. Tourism is the most affected sector due to lockdown measures and travel restrictions, and the contraction for 2020 is expected to be around 70%11. At the same time, various services sectors (including retail, health, education, business services) have reoriented to the online format and remained unaffected by the COVID pandemic or even seen increases.

With the start of the COVID pandemic, many countries introduced Partner, Sayenko Kharenko export prohibitions or restrictions to Ms Makhinova is recognized among the leading indimitigate critical shortages of these viduals for International Trade by The Legal 500, 2021, products at national level. The prod- as “Best in International Trade” by the LMG Europe ucts covered by the export restrictions Women in Business Law Awards 2020; in International mostly included medical supplies (face Trade for Ukraine and in Franchising by Client Choice masks and shields), pharmaceuticals, Awards 2020; in Franchising by Who’s Who Franchise medical equipment and some food- 2020; “The Lawyer of the Year” in Trade by Best stuffs4. Export bans are generally not Lawyers International 2022; in Trade and Customs by Support Measures in Response allowed by WTO-covered agreements. Who’s Who: Trade & Customs 2020. She is a Country to the Pandemic However, the measures adopted during Expert on Franchising, Agency and Distribution in According to WTO estimates, in rethe COVID pandemic may be carved out Ukraine in the International Distribution Institute and sponse to the pandemic, governments from the general rule. In particular, WTO the Chair of the American Chamber of Commerce in implemented an unprecedented number members can introduce export prohibi- Ukraine working group on International Trade. of general economic support measures tions or restrictions on a temporary ba(over 1000 in total), collectively worth sevsis ‘to prevent or relieve critical shortageral trillion US dollars. The number and vaes of foodstuffs or other products essential to the exporting [Member]’ (Article XI:2(a) of the GATT 1994). Nevertheless, one of the main chal- riety of COVID-support measures is greater than was implemented lenges for business from the very beginning of the COVID pandemic during the 2008-09 global financial crisis. For example, in response was the lack of transparency and high degree of uncertainty: export to the pandemic, the US Congress adopted the COVID-19 Aid, Relief restrictions were being implemented by governments on a daily ba- and Economic Security Act, which is ‘a USD 2.1 trillion fiscal stimulus sis, and in many cases it was unclear which country introduced which package, inter alia, providing loans businesses, direct payments to individual taxpayers, unemployment insurmeasures5. At the moment, the situation is more stable and, accord- lower and middle-income 12 ing to WTO estimates, around 40% of COVID restrictive measures had ance, and tax deferrals’ . As notified by various governments to the been removed by mid-October 20206. At the same time, as observed WTO, these measures are of a temporary nature and were designed by the WTO Secretariat, one of the highest risks for the global econo1

https://www.imf.org/en/Publications/WEO/Issues/2021/01/26/2021-world-economic-outlookupdate

https://www.wto.org/english/news_e/pres20_e/pr862_e.htm

Ibid.

https://www.wto.org/english/news_e/news20_e/stat_04dec20_e.htm?fbclid=IwAR1d-_LnxvcJtzP5 4lKgnfsltZGWnNqcIJz7uqLxFpl5G3nz8JfpUTbbG_o

https://www.wto.org/english/news_e/pres20_e/pr855_e.htm

https://www.wto.org/english/news_e/pres20_e/pr862_e.htm

https://www.wto.org/english/tratop_e/covid19_e/export_prohibitions_report_e.pdf

Ibid.

Overview of Developments in the International Trading Environment, Annual Report by the DirectorGeneral (Mid-October 2019 to mid-October 2020), WT/TPR/OV/23, available at: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/TPR/OV23.pdf&Open=True

Overview of Developments in the International Trading Environment, Annual Report by the DirectorGeneral (Mid-October 2019 to mid-October 2020), WT/TPR/OV/23, available at: https://docs.wto. org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/TPR/OV23.pdf&Open=True

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to p repare the ground for the post-pandemic economic recovery13. The sectors covered by the support measures include the most heavily-affected sectors of the economy, like health, aviation, tourism, catering, cleaning and security, agriculture, fisheries etc14. Potentially, some COVID-support measures may be qualified as subsidies under WTO law. In the event that a subsidy causes adverse effects to the interests of other WTO Members (as the case may be here if we take into account the number and variety of measures), it is ‘actionable’ (i.e. challengeable before the WTO Dispute Settlement Body) and must be withdrawn or its adverse effects removed. Moreover, the affected domestic industry could initiate anti-subsidy investigations and request the application of countervailing measures. As to Ukraine, no COVID support measures were communicated to the WTO as of the time of writing (March 2021)15.

Sayenko Kharenko is one of Ukraine’s largest law firms offering comprehensive support in all major sectors of the economy. In order to manage the rapidly evolving Ukrainian legal and business environment, the firm embraces innovation through new products, out-of-thebox thinking and creative solutions. The emphasis is on innovation bringing services that enable Sayenko Kharenko’s clients to excel in what they do.

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against it. At the moment of writing, 18 appeals remain pending: 10 appeals were pending in December 2019 when the Appellate Body became non-operational and 8 appeals were ‘appealed into the void’ by March 202117.

Quo Vadis?

Notwithstanding the above, there is a little progress in the mitigation of the current crisis in the multilateral trading system. In April 2020, WTO Members agreed on a Multi-Party Interim Appeal Arbitration Arrangement under Article 25 of the DSU (MPIA) in order to secure an appeal mechanism among the parties to this arrangement. Ukraine is among MPIA Members. The MPIA is an alternative dispute resolution mechanism. MPIA parties committed not to appeal panel reports to the nonoperational Appellate Body, but to resort to appellate arbitration under the special procedure18. Though more needs to be done Senior Associate, Sayenko Kharenko and the MPIA mechanism cannot be an equivalent to the function of the Appellate Ms Mykuliak focuses on International Trade law, Body, WTO dispute settlement is functionincluding WTO-related projects, trade remedies ing. There are also hopes that the situation (anti-dumping, safeguards, subsidies), market access The Trade Protectionism and will change with the Joe Biden Administraissues, contractual structuring and regulatory advice. Multilateral Trading System tion, and that WTO Members will unblock Recognized among the rising stars for International the functioning of the Appellate Body. It should be noted that a slowdown Trade by The Legal 500, 2021, Expert Guide's Rising Despite the fact that the Appellate in world trade was evident even before Stars 2021 by Legal Media Group, and Best Lawyers Body became non-operational, governthe COVID pandemic began. In 2019, due in Ukraine Awards in 2022. ments still bring disputes before the WTO to rising trade tensions and weakening as there is no alternative. Some disputes economic growth, the volume of world merchandise trade declined for the first time since the financial cri- have even been initiated between non-MPIA Members. In this context, sis of 2008-200916. At that time, businesses around the globe were the experience of the old GATT system in the resolution of trade disalready facing an unprecedented and turbulent trade environment, as putes could be of guidance. The old GATT system, operating for almost more and more governments were introducing various protectionist 50 years, envisaged the possibility of the responding party blocking the measures to close their internal markets and decrease import flows outcome of the dispute. However, this occurred rarely due to political (such as active use of trade remedies and invocation of national secu- reasons. Currently, the situation is similar. Even though there is a risk of an appeal into the void, there are also political considerations that could rity exceptions as justification of import restrictions). The same is relevant for the WTO. The crisis of the multilateral prevent governments from doing so. Moreover, even an unadopted retrading system began well ahead of the COVID pandemic. US trade port can be used by the winning party as a negotiating tool. The US had been also blocking the selection of the WTO Directorpolicy under the Trump Administration was the major trigger. Starting from mid-2017, the US has been blocking the appointment of Ap- General. However, after the recent US elections, consensus to appoint pellate Body members. Due to the position taken by the US, all seven the new head of the WTO was eventually reached in February 2021. After accession to office on 1 March, newly-elected Director-General seats of the Appellate Body remain vacant at the moment. WTO disputes are settled through adjudication, involving exami- Ngozi Okonjo-Iweala called on WTO Members to ‘do things differorder to achieve necessary reforms so as to ‘keep the WTO nation of a case by panels and, if applicable, by the Appellate Body. ently’ in 19 Since the effective paralysis of the appellate stage, the key problem relevant’ . Reform of the WTO is undoubtedly needed. The WTO rules is not the absence of the Appellate Body per se. The danger is that were negotiated in 1980s, and they must be adapted to the economic the ‘losing’ party is now able to ‘appeal into the void’ — to the non- realities of the 21st century. There are hopes that with the coming of existing Appellate Body and, thus, easily block the adoption of the the new Director-General the negotiation process will be accelerated panel’s report. No adoption means no enforcement. Thus, by appeal- and the WTO will once again20become ‘a vital component of healthy ing against a panel report, the ‘losing’ party may escape from a bind- global economic governance’ . ing ruling and, as a result, the authorization to adopt countermeasures 13 14 15

Victoriia Mykuliak

Ibid. Ibid.

https://www.wto.org/english/tratop_e/dispu_e/appellate_body_e.htm

https://trade.ec.europa.eu/doclib/docs/2020/april/tradoc_158731.pdf

The list of COVID-support measures communicated to the WTO is available at: https://www.wto. org/english/tratop_e/covid19_e/trade_related_support_measures_e.htm https://www.wto.org/english/res_e/statis_e/wts2020_e/wts2020chapter03_e.pdf

https://www.wto.org/english/news_e/spno_e/spno1_e.htm

European Commission, ‘EU Trade Policy Review — An Open, Sustainable and Assertive Trade Policy, Annex I “Reforming the WTO: Towards a Sustainable and Effective Multilateral Trading System”’ 1 <https://trade.ec.europa.eu/doclib/docs/2021/february/tradoc_159439.pdf>.

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Who is Who

Agribusiness Baker McKenzie is highly sought after by major international investors and large Ukrainian agricultural holdings to handle sectorrelated transactions such as M&A and establishment of joint ventures. This past year the Kyiv office acted for Remington Seeds with respect to a strategic agreement with MAIS to purchase its seed plant and farming operations in Ukraine; represented ADM and Marfrig Foods S.A. in connection with several merger control and concerted action filings in relation to establishment of a joint venture in the USA, which will be active in the development, production and commercialization of vegetable protein-based finished consumer food products. The office is highly active in advising projects related to the infrastructure of Ukraine ports extending agrarian export capacities. The team recently advised Glencore Agriculture Limited, an agricultural commodities giant, on its acquisition of LLC Everi port terminal from the Orexim Group. The firm is known for acting for international financial institutions on their project finance transactions in agriculture. Tax issues and the structuring of supply chains are among other recent areas of growth. The agricultural industry group is led by corporate and M&A partner Viacheslav Yakymchuk. Other partners involved in industry related projects are Oksana Simonova (competition), Lina Nemchenko (real estate and construction), Hennadiy Voytsitskyi (tax). The agribusiness offering of AEQUO provides industry expertise coupled with core practice areas — corporate and commercial matters, financing, competition, intellectual property, litigation and arbitration, real estate, land regulation and tax. Renowned for its expertise in transactional agribusiness mandates, the firm consistently supports investment in Ukrainian agriculture, and recently represented Agartha Fund (UAE) at the AMCU in connection with the acquisition of 13 agro companies, holding a significant agricultural land bank and active in Chernihiv and Sumy Regions from Kernel Group; represented one of the beneficiaries of Rostok-Holding in obtaining merger clearance for a number of concentrations due to the course in the further sale of shares of Rostok Agroinvest Ltd. It is worth noting that the team advised the European Business Association on the establishment in Ukraine of the first container management system for disposal of empty pesticide containers. The firm boasts knowledge of sector-related finance matters, and acted for Posco International on secured USD 36 million financing from KEXIM to Grain Terminal Holdings, which controls the grain terminal in Mykolaiv; advised Alma Strong in connection with a loan to GNT, a grain supply chain and export logistics group that operates in Odesa port. The firm is also addressed by agroholdings for representation in GAFTA arbitrations. The big team is led by Anna Babych (M&A, corporate and commercial), Yulia Kyrpa (financing, debt restructuring), Denis Lysenko (tax, investment), Sergey Denisenko (competition).

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Full-service law firm Sayenko Kharenko commands a broad spectrum of work in the field of agribusiness and agrarian infrastructure, including M&A, finance, intellectual property, litigation, international arbitration and trade, tax, etc. The firm supported Ukrainian impactinvestment initiatives by providing structuring advice to the Family Dairy Investments project, which provides financing to small Ukrainian dairy businesses and also invests in the education of family milk producers and in the quality and safety of dairy food products. The firm is regularly mandated by international lenders in capital market deals of agrarian issuers. It advised on the USD 300 million Eurobond issue by Kernel. The firm’s litigation successfully represented Selektsiya LLC, a part of the Monstera group of companies, in the second round of court proceedings on invalidation of a decision of the local authority to terminate its right of permanent use of land. Client instructions are led by various partners, namely Oleksandr Nikolaichyk (corporate and M&A), Igor Lozenko (finance, capital markets), Olexander Droug (international arbitration), Svitlana Musienko (tax). AVELLUM, a full-service Ukrainian law firm, advises on major corporate deals involving agricultural assets, including M&A, corporate restructurings, and takes in a broad range of finance mandates. The team historically worked on all major capital markets deals in agrarian sector and acted on significant acquisition financing. Thus, the previous year the firm acted as Ukrainian legal counsel to Kernel Holding S.A. on its USD 300 million Eurobond offering; advised BSTDB in connection with financing to the Prometey Group used for the acquisition of a new silo in Mykolaiv Region. The tax team demonstrated strong performance representing sector clients in a set of disputes with Ukrainian tax authorities. For example, the practice team represented LLC Urozhaina Kraina at the Supreme Court regarding cancellation of tax assessment notices. Other areas of industry-related expertise span competition, intellectual property, insolvency. The team’s client roster includes Kernel, MHP, Mriya Agro Holding and variety of lenders and investors. The admired multidisciplinary team is led by Mykola Stetsenko and Yuriy Nechayev (corporate and M&A), Glib Bondar (finance and capital markets), Vadim Medvedev (tax and litigation), Anton Polikarpov (intellectual property). Domestic law firm ADER HABER draws upon its strong regulatory expertise in land law, including property protection and management, sector transactions and litigation. The firm assists with M&A in the agrarian sector, advising on extension of land banks. Another area of standing demand from agroholdings is their representation in tax disputes. Recent highlights include advising an agricultural holding company that unites agricultural and sugar industry enterprises on the risks of registering the majority of employees as sole proprietors. Lead partner Aleksandra Fedotova is known for her sector specific advice in land regulations.

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Who is Who

Agribusiness AGA Partners has long-standing experience in supporting the world’s largest agrarian holdings across a wide range of issues, in particular, commodities trade and arbitration, shipping, etc. This past year the team advised Astarta Holding on its trading model and developed a sale contract template governed by English law for the sale of agricultural commodities; EFKO Group, one of the biggest Russian trading companies, regarding trade contracts with Egyptian buyers; represented the State Food and Grain Corporation of Ukraine in the GAFTA arbitration in a dispute on the recovery of the price for delivered goods under English law; JSK Novosibirskkhlebproduct in a complex quality dispute, which arose out of the supply of goods from Russia to Kazakhstan. The firm has three partners on board — Aminat Suleymanova, Ivan Kasynyuk and Iryna Moroz. Renowned for its strong performance in international arbitration, ARBITRADE is sought after for assisting projects in agricultural commodities trade, which encompassed arbitration cases under the auspices of such rules as GAFTA and ICAC at the UCCI, as well as consulting and pre-arbitral settlement negotiations in disputes arising out of international contracts for the sale and purchase of agricultural commodities. In a recent highlight the team advised Agrotrade AG, a German cattle and crops exporter, on the consequences of its non-delivery of soybean meal of Argentinian origin to a Turkish counterparty; represented Bunge SA in a dispute with the subsidiary companies of Agroprosperis Group on the late delivery of soybeans; provided legal advice at the pre-arbitration stage and has initiated arbitration under the GAFTA arbitration rules on behalf of the client Grainfor Trade Ltd, an international trader, supplier of agricultural commodities from the Black Sea region to global customers. Dr. Ivan Vashchynets took over the leading role in this practice. Asters, the largest Ukrainian law firm, is instructed by key agribusiness industry players and financial institutions across the entire range of sector-related issues, acting on transactions and regulatory assignments, corporate and contractual matters related to operations in Ukraine. The firm is a long-lasting legal counsel to international financial institutions in providing finance to Ukrainian agrarian and food enterprises. This past year the firm advised the IFC in connection with a loan of up to USD 20 million to Nyva Pereyaslavshchyny, a leading Ukrainian pork producer; and the EBRD with regard to its financing to Grain Alliance Group and leading yeast producer Enzym. The firm advises on contracts for the purchase and sale of agricultural products, and is preferred by players from the sugar industry. The firm’s industry work is managed by Vadym Samoilenko, Gleb Bialyi, Anzhelika Livitska and Anton Sintsov. CMS Cameron McKenna Nabarro Olswang is sought after to handle sector-related transactional matters, such as M&A, joint ventures, financing, as well as on regulatory matters in Ukraine. Over the last couple of years the office has been active in the area of infrastructure, extending the capacities of agrarian corporates. The firm is a point of choice for Ukrainian agricultural pre-export, commodities and trade finance. Among recent highlights is advising longstanding key client ING Bank N.V. on various aspects of financing ViOil, a significant vegetable oil producer and exporter; KEXIM on refinancing for a Ukrainian grain port terminal. The firm continues to act for MV Cargo on all aspects on the ongoing establishment of a joint venture with Cargill, and acted for the EBRD in the acquisition of a minority stake in Korzinka, a leading food retailer. Industrial expertise was strengthened with the English-qualified senior hire of Orest Matviychuk. The partners involved across their core practice areas are Ihor Olekhov, Graham Conlon, Tetyana Dovgan, Natalia Kushniruk.

LEADING FIRMS 1. Baker McKenzie 2. AEQUO 3. Sayenko Kharenko 4. AVELLUM 5. ADER HABER

Other established PRACTICES

Listed in alphabetical order

AGA Partners ARBITRADE Asters CMS Cameron McKenna Nabarro Olswang Eterna Law EVERLEGAL EUCON Legal Group Gramatskiy & Partners Ilyashev & Partners INTEGRITES Jurline

Eterna Law is historically followed for its expertise in international commercial and commodities arbitrations, especially GAFTA, FOSFA, LMAA, having producers and traders in its client roster. In a recent highlight the firm acted for ALCODIS SA in international arbitration in connection with the default of the debtor and waiver of its monetary obligation; acted for a client in a USD 20 million India-seated arbitration matter arising from fraudulent misappropriation of cargo. The firm maintains an active role in corporate and M&A areas, resolution of corporate conflicts and tax. The client list includes EFKO, Ukrenergy Trade, Barbara Krom, Soufflet Negoce SA. The practice is headed by the arbitration partner Eugene Blinov. EUCON Legal Group utilizes the wide-scope practice for the agricultural sector, including land law regulations, operations with land and other real estate, sectoral construction, corporate and M&A, taxation. The firm enjoys an established project history of supporting investors on entering the agricultural markets of Ukraine and Poland, formation of land banks and their management (property, lease, emphyteusis), receipt of state and communal land plots for ownership. The group is sought after for comprehensive legal support of farm enterprises. For example, the firm provided legal support for the establishment and operational activity of a goat dairy farm in Volyn Region. Another notable project is advising Louis Dreyfus Commodities Ukraine on the construction of an elevator. The list of clients includes Greenyard Ukraine, Agricultural company Dobrobut, Agricultural company Dovzhenko. Anatolii Miroshnychenko, senior partner and practice head, was appointed first deputy head of the State Service of Ukraine for Geodesy, Cartography and Cadastre. Yaroslav Romanchuk took in the role of practice head. The agricultural and land law practice at EVERLEGAL is made up of multiple practice areas, inter alia, corporate and M&A, banking and finance, commercial and dispute resolution practices. The strong side of the team is protection of property rights on land plots. The team continued to provide legal support for Agromino in a complex dispute regarding the restoration of lease rights on 800 hectares of land illegally taken from the client as a result of resonant raider attacks in 2018. The Louis Dreyfus Company Ukraine enlisted the team to resolve disputes with several unscrupulous suppliers. This past year the firm launched legal support of financing agricultural products’ suppliers through the mechanism of crop receipts. Svitlana Teteria heads the practice. A ndriy Porayko supervises the practice.

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COUNSELINK AGA PARTNERS

Kuznetskyi Business Center, 16/64 Fedorova Street, Kyiv, 03150, Ukraine Tel.: +380 44 237 7933 +380 44 237 7943 +380 48 738 0893 E-mail: reception@agalawyers.org Web-site: www.agalawyers.org

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Who is Who Gramatskiy & Partners represents the interests of all participants in the agricultural market, from agricultural producers to logistics companies, traders and financial institutions. The firm’s expertise includes crop farming, production of agrochemicals, logistics, processing and agricultural export, certification, joint activity, taxation of agrarian sector. The previous year the firm was sought after by Ukrainian agrarian exporters for structuring their cross-border export contracts. Other areas of advice are agrarian land regulation, land and production facilities lease. Among the main clients are Samurai LLC, Sunrise Agro, Lavinia LLC, AgroTechnologies, Shenzhen Ruiben Import and Export Service Co., AgroAlliance Group, Ufrain, VPG Agro Trade, United Landing, Boros, Agriconsulting, Technomontazh LLC, Green Farm, Selkhozmechanizatsia PJSC, Interagrostandart, Fly Harvest LLC, NewGen Organic, United Grains, Zaporizhzhya Land, Kendo Plus, Krem K LLC, Vigro Trade Ukraine LLC and others. Mykola Voitovich is the core force of this practice. Ilyashev & Partners performs a wide offering for agricultural companies related to property rights, asset protection, insolvency, lands plots and production facilities, tax, sectoral competition. This past year the team advised TAS AGRO on the restoration of property rights to land plots; assisted CHS Ukraine on collection of penalties from Agroalliance LLC in connection with non-fulfillment of a supply contract; supported bankruptcy proceedings of Group Creative. The team also advised CLAAS, one of the largest German producers of agricultural equipment, on termination of its agreement with a dealer in Ukraine. Other public clients include GrainCorp, Bunge Ukraine, Myronivsky Hliboproduct, Al Ghurair Investment, COFCO Agri Ukraine, RONLY, Ascania Group of Companies, Agrotrade, LU Invest. Mikhail Ilyashev heads the multidisciplinary team. INTEGRITES provides an extensive legal offering, being particular sought after for international arbitration and litigation support, corporate, competition and M&A, tax consulting and litigation. The firm’s clients include agroholdings, grain exporters and traders, sunflower oil and grain producers, and processors of milk and dairy products. The recent project portfolio of the firm’s dispute resolution practice included multijurisdictional debt recovery, enforcement of a GAFTA arbitral award in Ukraine, litigation due to breach of supply agreements and settlement negotiations in respect of prospective disputes. The corporate team acted for foreign investors on the acquisition of farms in Ukraine, and advised Savencia Group, one of the world’s leading milk processors, on various corporate restructuring matters. The competition practice represented Gals Agro in the investigation related to the abuse of dominant position initiated by the AMCU against the Gals Agro sugar refinery. Notably, the firm represented the large Ukrainian sunflower oil producer Dniprooliya and its Turkish majority

shareholders in a multimillion corporate dispute with a local partner. The multidisciplinary team is led by several partners, namely Olena Perepelynska (CIS arbitration practice), Dmytro Marchukov (crossborder litigation), Viktoriya Fomenko (tax and customs practice), Illya Tkachuk (corporate and M&A). Odesa-based law firm Jurline renders legal assistance to agricultural business and food industry enterprises, the largest grain traders in Ukraine, as well as grain terminals, agro-industrial enterprises and enterprises providing custody services and transportation of grain. The main focus lies on land issues; taxation; complex support of agroindustrial enterprises; consumer protection legislation, legislation on food safety and quality, antitrust. The unique niche of the firm is providing services to the largest wineries in southern Ukraine. Among the major clients in 2020 are TIS-Grain Ltd, TIS-Mindobryva Ltd, Illichivsk Grain Terminal, Glencore Agriculture Ukraine, PJSC Odesawinprom (Frantsuzky Boulevard TM), LLC PTK Shabo, Arus Trade LLC. Volodymyr Zubar runs the practice. KM Partners is primarily known for sector specific advice in land relations and taxation in the agrarian sector. The firm has a wide practice of representation in disputes with tax authorities on cancellation of tax notices, including challenging the amounts of VAT refunds. The recent offering includes due diligence before acquisition, debt collection, employment matters. Alexander Minin, Maxim Oleksiyuk, Alexander Shemiatkin lead the projects. ANK Law Office, one of the largest firms in Odesa, traditionally provides legal support to grain traders, whose major part represented in Ukraine through the world leading agricultural holdings like ADM, Bunge, Cargill, COFCO, Glencore, Louis Dreyfus Commodities. The firm is known for its capacities in handling significant infrastructure p rojects on construction, reconstruction and modernization of internal and port silos and grain terminals. Oleksandr Kyfak is the main contact. Krolevetskyi & Partners, one of the most vivid law firms in Kharkiv, provides comprehensive legal assistance to agricultural producers, particularly with settlement of land and tax disputes, commercial agreements, sector M&A, representation in relations with public authorities and local governments, litigation. The firm also assists with the purchase and sale of agrarian equipment. Clients include farming enterprises Vidrodzhennia, Astarta, Nove Zhyttia, farming enterprise Nyva 2013. Viktoriia Zaitseva is the key figure. Market players single out Law Offices of OMP for its experience in assisting agroholdings and separate landowners.

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Who is Who

Antitrust and Competition Asters, the largest internationally renowned Ukrainian law firm, has a distinguished full-circle antitrust and competition team with the largest capacities on the market and an office in Brussels. The firm has unrivalled capabilities in merger control work sought after by blue-chip companies, advising on concerted practices, abuse of dominance, conducting antitrust investigations, representation in courts. Furthermore, the firm is approached for matters on state aid and public procurement review instructions, and bid rigging cases. The firm has recognized strength in handling multijurisdictional merger filings, inter alia, obtained merger clearance for concentration from the European Commission and the Turkish Competition Board, in connection with the creation by Natixis and La Banque Postale of a fully-functional joint venture that will carry out activities in the field of asset management and administration of funds; obtained merger clearance for the merger of Fiat Chrysler Automobiles and Peugeot S.A., which involved merger filings in many jurisdictions, including the EU. The firm is present in the majority of resonant investigations conducted by the Antimonopoly Committee of Ukraine (AMCU), in all sensitive markets — pharmaceuticals, tobacco, energy, retail and FMCG, agrochemicals, automotive and transportation sectors. Among notable public clients of Asters are Acino, Allergan Plc, Bayer, General Electric Company, Iveco, L’Oréal, Mironivsky Hliboproduct, Microsoft Corporation, Robert Bosch GmbH, Philip Morris, Sanofi, Siemens AG, State Savings Bank, Teva Pharmaceutical Industries Ltd., Visa, and many others. The big team has three partners on board. Leading market figure Igor Svechkar is known for his extremely broad experience in merger filings and strategic role in practice development. Oleksandr Voznyuk is one of the most experienced practitioners in Ukraine, with prowess in sophisticated investigations. Alexey Pustovit is involved extensively in competition and international trade matters. Pavlo Verbolyuk, senior associate, is praised by the market as a rising professional. Sergiy Glushchenko, Tetyana Subbotina and Tetiana Vovk are senior members of the strong executive team. The seasoned antitrust and competition team of Sayenko Kharenko is highly sought after by big multinational clients and domestic industry leaders on the antitrust aspects of international M&A and landmark Ukrainian transactions, and handling antitrust investigations. Among the highlights of merger control work is advising Saudi Arabian Oil Company (Saudi Aramco) in obtaining merger clearance for its USD 69.1 billion acquisition of a 70% stake in Saudi Basic Industries Corporation; AbbVie Inc. in obtaining merger clearance for its acquisition of Allergan plc; Fiat Chrysler Automobiles for combination of FCA and PSA to create a leader in sustainable mobility; Creatio in obtaining Ukrainian merger clearance for raising investment from private equity funds; ADM, Bunge, Cargill, COFCO, Louis Dreyfus Company and Glencore Agriculture in formation of a joint venture, and other solid matters.

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The firm is currently representing several multinational corporations in relation to unfair competition and anticompetitive concerted practices investigations before the Antimonopoly Committee. Among notable ongoing representations is acting for Japan Tobacco International in the course of a case probe by the AMCU on anticompetitive concerted practices between tobacco product manufacturers and their Ukrainian distributor. The firm also received clearance from the AMCU for an advertising campaign. The sizeable team is led by three partners. Praised for his proficient performance, Maksym Nazarenko is active in merger control and abuse of dominance matters. Valentyna Hvozd, recently promoted to partner, is noted for her long-term experience in handling merger clearances work. The founding partner, Vladimir Sayenko, is highlighted for being an incumbent professional, and plays an important role in competition and corporate and M&A practices. The reputable full-service competition law practices of AEQUO are retained by an impressive roster of clients featuring well-known companies from energy, retail, agriculture, pharmaceutical and real estate sectors. The firm has a strong portfolio of merger clearance instructions, including multijurisdictional and domestic transactions; abuse of dominance, anticompetitive concerted actions and unfair competition investigations; vertical agreements, regulatory and compliance advice. Among recent areas of practice growth is handling competition compliance training for large industrial enterprises. This past year the team represented Agartha Fund (UAE) at the AMCU in connection with acquisition of 13 agro companies, holding a significant agricultural land bank and active in Chernihiv and Sumy Regions from Kernel Group; represented Dragon Capital in obtaining merger clearances for a number of transactions related to acquisition of real estate objects; acted for Novus in a landmark case on acquisition of Billa, and merger clearance regarding establishing of an “alliance” for the joint purchase of products along with two other regional retail chains. The team has recognized strength in unfair competition cases, most recently representing Darnitsa against one of its competitors, Zdorovye, in a complex case regarding illegal use of Citramon’s packaging design. The firm navigates clients throughout implementation of discount and rebate schemes, pricing and advertising. The practice was strengthened in 2020 by the return of Mariya Nizhnik following four years of service at the AMCU. Her recent focus includes regulatory investigations. Acclaimed for his strong knowledge of highly-regulated industries, Sergey Denisenko led the firm’s antitrust and competition law projects, including merger clearance, unfair commercial practices, and competition compliance. Denis Lysenko preserves his strategic guidance in competition law practice. Yevgen Blok, senior associate, is highly active across projects, and confirmed his position as a well-established practitioner.

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Who is Who

Antitrust and Competition DLA Piper Ukraine1 has solid expertise in handling merger control cases in high value national and multijurisdictional mergers and joint venture arrangements. The practice team enjoys a remarkable following of international brand names, advising on the antitrust aspects of commercial agreements and trade practices, competition compliance matters, pricing regulations and marketing strategies, dawn raid regulations, assistance in investigations. Industry knowledge spans key sectors within the IT, telecom, consumer goods, food and beverages, pharmaceuticals and healthcare, manufacturing, aerospace and defense, as well as energy sectors. The latest disclosable mandates include advice to VFU Funding PLC on competition law matters during preparation of a prospectus for its debut USD 500 million loan participation notes listed on Euronext Dublin and funded through proceeds from the Ukrainian telecom business of NEQSOL; advising ALD S.A., a French fleet management and operational car leasing company on obtaining merger control clearance for establishing a joint venture with Mitsubishi UFJ Lease & Finance Company Limited. It is noteworthy that the team is taking part in the development of a new law on the screening of foreign investment. The practice is headed by Galyna Zagorodniuk, partner, navigating clients throughout competition law matters within a variety of complex landmark deals, and significant mandates in the aerospace and pharmaceutical sectors. Danylo Rudyk is the key executive practitioner focused on merger clearances and general competition law advice. Baker McKenzie has unrivalled capabilities in handling competition law advice in terms of international transactions, as well as competition compliance programs for the offices of big multinationals in Ukraine. The team’s sectoral experience provides clients from various industries, including pharma, agribusiness, consumer goods, IT services, pumping equipment, tobacco, heavy industry and automotive companies, with advice on the implications of vertical arrangements with Ukrainian customers, as well as regulatory investigations. Most recently the Kyiv practice team advised Sumitomo Corporation in connection with a merger control filing relating to the establishment of a new JV with AAR Corp., a provider of aviation and expeditionary services to the global commercial, government and defense aviation industries; represented ADM and Marfrig Foods S.A. in connection with several merger control and concerted actions in relation to the establishment of a joint venture in the USA; Bayer AG on merger control filing relating to the disposal of its Animal Health Business to Elanco; Hitachi, Ltd with regards to merger control and concerted actions relating to acquisition of power grids division of ABB Ltd. The practice group in Kyiv is led by partner Oksana Simonova, with extensive expertise in merger control work. Another key figure is Olga Mikheieva, who is recognized by peers for her long-term commitment in competition practice.

LEADING FIRMS

Celebrated PRACTITIONERS

1. Asters

Listed in alphabetical order

Olexander Martinenko (Kinstellar)

2. Sayenko Kharenko

Vladimir Sayenko (Sayenko Kharenko)

3. AEQUO 4. DLA Piper Ukraine* 5.

Other notable PRACTITIONERS

Baker McKenzie

LEADING INDIVIDUALS

Oleksandr Aleksyeyenko (Marchenko Partners)

1. Igor Svechkar (Asters)

Olga Belyakova (CMS Cameron McKenna Nabarro Olswang)

2. Oleksandr Voznyuk (Asters)

Yevgen Blok (AEQUO)

3. Sergey Denisenko (AEQUO)

Oleksandr Fefelov (Ilyashev & Partners)

4. Maksym Nazarenko (Sayenko Kharenko)

Andrii Gorbatenko (Legal Alliance Company)

5. Galyna Zagorodniuk (DLA Piper Ukraine*)

Valentyna Hvozd (Sayenko Kharenko)

Other established PRACTICES

Listed in alphabetical order

Dr. Alexey Kot (ANTIKA Law Firm) Listed in alphabetical order

ANTIKA Law Firm AVELLUM

Denis Lysenko (AEQUO) Olga Mikheieva (Baker McKenzie)

CLACIS

Mariya Nizhnik (AEQUO)

CMS Cameron McKenna Nabarro Olswang

Mykyta Nota (AVELLUM)

Dentons

Alexey Pustovit (Asters)

Ilyashev & Partners INTEGRITES Kinstellar Marchenko Partners Redcliffe Partners * Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

Serhiy Shershun (INTEGRITES) Oksana Simonova (Baker McKenzie) Anastasia Usova (Redcliffe Partners) Antonina Yaholnyk (CLACIS)

ANTIKA Law Firm is retained for antitrust audit; risk assessment, competition compliance, unfair competition, promotion and advertising, investigations, public procurement and antitrust litigation. The firm 1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Who is Who has a consistent following of significant market players from FMCG, tobacco, automotive and construction industries. The firm recently assisted clients in compliance policies, advertiSement and marketing programs, and handles representation in AMCU investigations in sensitive industries. Managing partner Dr. Alexey Kot has antitrust among his core specializations. Senior associate Alexander Tretiakov is another important figure in this practice. Ukrainian law firm AVELLUM exhibits a notable track record in connection with merger clearance instructions, being constantly mandated by blue-chip clients. In addition, the firm also advises on unfair competition and respective investigations by the competition authority, anticompetitive concerted practices, compliance and audits, state aid, litigation. The firm benefits from its market leading M&A and corporate practice, also advising on merger clearance issues. In particular, the firm acted on the first merger control clearance in the course of privatization of alcohol production facilities in Ukraine, having advised LLC LVN Limited, a part of the Nemiroff Group, on obtaining merger control clearance for privatization of a part of the assets of Ukrspyrt. Among the recent highlights is advising Mr. Sergei Probylov on obtaining merger control clearance and on further AMCU approval for the acquisition of Riverside Energy Kft; advised Diligent Capital, an independent mid-market private equity firm, on obtaining merger control clearance for the acquisition of control over a Ukrainian producer of animal feed. This past year the firm diversified its practice portfolio with antitrust litigation. For example, it acted for British American Tobacco in connection with challenging a EUR 245 million fine imposed on the Ukrainian subsidiaries of four leading international tobacco producers and their distributor in Ukraine for alleged anti-competitive concerted practices. The team was strengthened with arrivals from Kinstellar: Mykyta Nota has rejoined as antitrust counsel, and Valeriia Lepska joined as mid-level associate. Mykola Stetsenko is lead partner. CLACIS, a Ukrainian competition law boutique-firm, is mandated for high-profile assignments, including merger clearance matters, abuse of dominance, unfair competition, investigations of the AMCU and follow up litigation, regulatory and compliance. Notable highlights include merger control approval for acquisition by COSCO of shares in Terminales Portuarios Chancay from Glencore Group. The firm boasts an impressive client roster of international companies, among others, British American Tobacco, MasterCard and T.B. Fruit. Founding and managing partner Antonina Yaholnyk is a recognized professional. Anastasiia Zeleniuk, who focuses on antitrust investigations and litigation, is another key figure. CMS is represented through two offices in Kyiv. CMS Cameron McKenna Nabarro Olswang is among top legal counsel in M&A and joint ventures transactions, and regularly assists clients with merger control and concerted actions approvals. Further expertise of the firm covers advisory on unfair competition practice and public procurement matters. The firm represented Primo Collect Group on regulatory matters of the Financial Services Commission and the AMCU to obtain its approval for the acquisition of a substantial shareholding in a financial institution, and advised shareholders of Primo Collect Group in connection with a potential transaction with a new group of investors and obtaining financing for expansion of an NPL portfolio in Ukraine; obtained merger control approvals regarding setting up a joint venture between TIS Group and DP World. Olga Belyakova is lead partner. CMS Reich-Rohrwig Hainz handles merger control work alongside its corporate and M&A practice, and provides competition advice related to vertical distribution agreements. The office advised Quadient, Inc. on obtaining merger clearance for acquisition of YayPay Inc., an IT start-up in Ukraine; advised ALPLA-Werke Alwin Lehner GmbH & Co KG, a global leader in the development and production of plastic packaging solutions in connection with launching a joint venture to develop a fully biobased and recyclable paper bottle. The team also supported a high-profile EBRD project aimed at capacity building of the Antimonopoly Committee of Ukraine. Maria Orlyk is lead partner. Dentons advises on competition aspects of M&A, joint ventures and combination transactions, including Ukrainian and EU merger control advice, and enjoys a proven track record in dealing with agreements and long-standing business relations terminations as well as unfair competition, misleading advertising and distribution. The firm is particularly followed by players in the pharma, retail, energy and tobacco industries. The firm has a well-versed compliance offering,

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including multi-level training and testing, drafting of internal policies, and conducting mock dawn raids. This past year the firm advised VLC Renewables on competition law matters in connection with its investment in the first phase of an onshore wind farm in Zaporizhzhya. Volodymyr Monastyrskyy is lead partner. Evgenia Prudko joined as a legal advisor from CMS Reich-Rohrwig Hainz. The solid antitrust and competition practice of Ilyashev & Partners gained an impressive following among big domestic industry leaders and business groups, and handling instructions for obtaining merger and concerted clearances; unfair competition and abuse of dominance cases. The firm is well-known for its work in transport, pharmaceuticals and healthcare sectors, and extended presence in agrarian, energy and real estate. Most recently the firm represented the interests of OmniFarma Kyiv in the case on termination of unfair competition by Bovios Farm, manufacturer of the OLISID bio-additive; advised Ukrrichflot in the case of abuse of the dominant position by rail operator Ukrzaliznytsia in connection with the provision of services for raising railway bridges across the River Dnipro. The team currently advises Bunge Ukraine on the settlement of legal relations pertaining to the use of berths in Mykolaiv Sea Port. Being a dispute resolution leader on the market, the firm also offers litigation support to clients. For example, the firm represents Biopharma in litigation with the Antimonopoly Committee in challenging imposed fines. Oleksandr Fefelov, practice head and lead partner, guides the workflow of the practice. Olga Samoilenko is another active practitioner. The antitrust and competition team of INTEGRITES has a wellversed practice portfolio, with notable focus on competition enforcement, including concerted practices and abuse of dominance investigations, merger clearances, unfair competition and litigation. Being fueled by corporate and M&A mandates, the firm maintains a steady pipeline of merger control assignments. This past year the team obtained a merger clearance for the acquisition by Sibelco Group of two Ukrainian clay producers — Euromineral LLC and Kurdyumovsky plant PrJSC. The highlights of the firm is ongoing representation of Ostchem, a part of DF Group, on challenging the forced separation of the Group by the AMCU and a significant fine that was imposed; represented AKW Ukrainian Kaolin Company, a part of the global Quarzwerke Group, in a case on abuse of dominant position by the KyivDniprovske MPPZT PJSC. Among other cases, the practice team advised the Ministry of Finance of Ukraine, which acted as the majority stakeholder in Ukrgasbank, which obtained financing from the International Finance Corporation, on state aid issues. Well-rounded partner Serhiy Shershun is praised for representing clients in investigations. Vyacheslav Korchev took over the role of the relationship partner in this practice. Kinstellar is mandated to handle merger control, commercial practices, abuse of dominance, unfair practices and competition litigation. The client profile of the Kyiv team consists of such sectors as agriculture, aviation, defense, financial institutions, food and beverages, energy, industrials, real estate, telecommunications, tobacco. The firm represented Turkey Wealth Fund on obtaining merger control approval for acquisition of a controlling interest in Turkcell Iletisim Hizmetleri A.S.; provided antitrust legal advice to Pegasus Hava Taşımacılığı A.Ş. in relation to its discount campaigns, advising on compliance with the general requirements for avoiding unfair competition and false advertising. The firm also represented the Wizz Hungary Representative Office at the Antimonopoly Committee in connection with the authority’s recommendations to major Ukrainian carriers alleging unfair competition practices during pandemic restrictions. Olexander Martinenko, a renowned market old-timer, joined as a partner and head of dispute resolution and commercial. Mykyta Nota, counsel and practice head, left for AVELLUM. Marchenko Partners possesses a depth of expertise on state aid, unfair competition, abuse of dominance and compliance, as well as antitrust risks related to marketing arrangements. In terms of merger clearance proceedings in Ukraine, the team advised DP World, a Dubaibased provider of worldwide smart end-to-end supply chain logistics, on merger clearance and various other competition-related aspects of the deal in connection with acquisition of TIS Container Terminal in Odesa Region. State aid proceedings, where the firm acts for both complainers and defenders, is its standout feature. The firm continues to represent Ukrainian express delivery operator Nova Poshta in a pioneering state aid case against state-owned Ukrposhta. Recent projects involved conducting a competition compliance spot check at the request of Carlsberg’s headquarters. The recent portfolio was extended by a number of unfair competition cases. Clients include Ecosoft

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Who is Who

Antitrust and Competition Group, Ferring, NEXT Retail, ISTIL Group and others. Oleksandr Aleksyeyenko leads the practice, deepening the team’s experience along core competences of the practice. The antitrust team of Redcliffe Partners has a vivid presence in large-scale multijurisdictional M&A, widening the portfolio of its merger control work, and notable presence in unfair competition and misleading advertising issues, non-compete obligations and competition compliance. The team assisted Saudi Basic Industries Corporation (SABIC), one of the world’s largest petrochemicals manufacturers, and Clariant AG in obtaining merger clearance in Ukraine for the acquisition of a minority stake in Clariant, a leading company in specialty chemicals. With regard to sectors, clients come from agribusiness, chemicals, energy, financial institutions, FMCG, pharmaceuticals, IT and telecommunications. Competition practice is led by Anastasia Usova, who was promoted to partner in 2020. The key executive team includes Denys Medvediev and Nataliya Kovalyova. In 2020 the core activity of AMBER Law Company was centered on the tobacco market. The firm rendered comprehensive legal support to three players of the tobacco market of Ukraine with the AMCU in protecting their rights from abuse of dominance and anticompetitive concerted actions. Furthermore, the firm prepared legal analysis of the pilot project National operation on the tobacco market, adopted by the Cabinet of Ministers of Ukraine. Veronika Zarubytska runs the practice. Ante Law Firm has a distinctive industry focus, advising aviation and pharmaceutical markets. The firm offers unique antitrust expertise in aviation as it represents the vast majority of international airlines, which operate in Ukraine. The team currently represents Qatar Airways, British Airways, Lufthansa, Austrian Airlines with regard to an AMCU investigation into airport fees and discounts at Boryspil Airport. The firm is also active in unfair competition cases and in filing claims to the AMCU. In 2020 the firm advised Sanofi regarding unfair competition practice when another Ukrainian company used the brand “Sanofi” as a part of its registered name (Sanofi Pharm); supported Zdravo with legal issues, arising in connection with its participation in public procurement, including claims proceedings at the AMCU. Managing partner Andriy Guck is the main contact. With a booming M&A track record in the renewable energy sector, EVERLEGAL obtains merger clearances for supported transactions. Another area of recent focus is transactions for the sale of real estate projects. Other expertise of the firm encompasses unfair competition practices and public tenders. The practice is co-led by Yevheniy Deyneko and Andriy Olenyuk. Gramatskiy & Partners handles merger control filings in the course of M&A transactions, investments and joint ventures, advises on the compliance and competition aspects of agency and distribution. Among recent highlights is advising City Capital Group in connection with obtaining merger clearances for acquisitions of Selin Trade LLC and Stroymetalengineering LLC; advising LLC Ditrans with regards to acquisition of 100% of PE Agricom-Invest. Competition aspects of procurement are another area of advisory. Ernest Gramatskiy is the main point of contact. Being dedicated to the pharmaceuticals and healthcare sector, Legal Alliance Company is particularly sought after for its advice on vertical agreements on the supply of pharmaceutical products and legal support of pharmaceutical companies within investigations undertaken by the AMCU. Other notable expertise includes unfair competition, public procurement and competition compliance. The firm rendered legal support to the agreement on the provision of services related to the promotion of products in 55 leading pharmacy chains of Ukraine; supported with distribution agreements and promotion of products in retail chains; advised on pricing policy and advertising that could mislead consumers. The practice is led by Andrii Gorbatenko, endorsed for his experience in the sector.

Being focused on maritime and shipping, port infrastructure and dispute resolution, Odesa-based law firm Legrant stands out for disputes with the Ukrainian Sea Ports Authority. The firm has an established track record of protecting clients in the territorial branches of the AMCU against the actions of the USPA, as well as in administrative courts. In particular, the firm protected the interests of the largest stevedores of Mykolaiv in a case of abuse of monopoly position by the USPA. Liudmila Sizonenko is visible on the market. Tatyana Titarenko, managing partner, is the main contact. Lexwell & Partners acts as a legal advisor to the CRH group on issues related to a conflict that arose with one of the CRH group’s cement dealers in Ukraine, and assisted with minimization of risks of ungrounded complaints on abuse of a monopoly position on the Ukrainian cement market. Merger control work is another area of focus. Andriy Kolupaev is the main contact. L.I. Group launched its antitrust practice with the arrival of Yurii Moiseiev as a counsel. The recent expertise includes merger control and litigation with the regulator. This past year the team won a case for mobile operator Lifecell which was accused of mistaken information on tariffication of outgoing calls. In 2020 Pavlenko Legal Group extended its merger control workload, and also represented clients in investigations, advised on unfair competition and drafted agreements in compliance with competition law, as well as appealed decisions of the regulator in courts. The firm obtained merger clearance recently, having represented PAEK Group in connection with the purchase of a land plot owned by LLC Activebud; advised TAS Group on acquisition of a share in the authorized capital of LLC Fortify; assisted Kernel Group on merger control issues by acquiring shares in JV Agrodim. Anna Hryshchenko and Veronica Shyrman are the core practitioners. Peterka & Partners advises on obtaining merger control clearances, including elaboration of merger control strategy in cases involving multijurisdictional filings. Furthermore, the Kyiv office advises on vertical and horizontal agreements. In 2020 the firm advised Euralis Semences Holding in connection with acquisition of shares in Caussade Semences Group; represented Theeuwes Holding in obtaining permission for concentration for acquisition of assets in the integral property complex belonging to the Ukrainian Elevator Company LLC. Taras Utiralov is the main contact. As part of an international law firm, the Kyiv office of Wolf Theiss is a point of choice for clients seeking assistance in obtaining merger clearances and concerted actions approvals in Ukraine. Among the clients of the office are market players in the retail, oil and gas, chemicals, business and financial services, agriculture and IT industries. Selected highlights include advising Gebr. Heinemann, the world’s leading travel retailer, on Ukrainian antitrust law issues related to establishment of a joint venture together with Casualfood, a subsidiary of Orior Group, to operate duty free shops, catering facilities and convenience stores at small and medium-sized airports in the EU and the EEA as well as in Switzerland and the UK; conducting due diligence, including competition matters, of Ukrainian companies which DSM Nutritional Products Ltd was aiming to acquire in the course of a global M&A transaction. Another area of expertise includes vertical restraints and abuse of dominance. The team advised a global operating automotive supplier from Japan on competition law framework regarding distribution arrangements in Ukraine. Olga Ivlyeva is in charge of the practice. Arzinger has a prominent antitrust and competition practice especially endorsed for its work on regulatory investigations and litigation. The firm’s counsel, Oleksander Dyakulych, was noted for prominence in litigation arising in the competition field, especially representation of clients from the tobacco industry.2 2

The firm has not submitted information for the current research.

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Who is Who

Banking & Finance, Capital Markets, Fintech Ukrainian full-service law firm Sayenko Kharenko traditionally retains a big share of cross-border banking and finance projects, restructuring and capital markets work, and also possesses a well- established GR practice. The firm’s sizeable team stands out especially in representing various types of creditors and is constantly called upon by major investment, domestic and international banks, as well as international financial institutions (IFIs). Traditionally finding itself on the top of capital markets work, the firm acted as Ukrainian legal counsel to the joint lead managers of all sovereign Eurobond issues in 2020; a new USD 333 million Eurobond issue by Metinvest; USD 300 million Eurobond issue by Kernel; advised on the successful consent solicitation by Ukrainian Railways acting for J.P. Morgan and Dragon Capital, the solicitation agents. The year of 2020 was notable for financing of the retail and infrastructure sectors, inter alia, the team advised the EBRD on providing secured loans to Novus Group and Fozzy Group; advised Orexim Group on secured USD 36 million financing provided by the Export-Import Bank of Korea (KEXIM) to Grain Terminal Holdings. The firm has for many years acted as a legal counsel of NEFCO, most recently representing state-owned Ukreximbank in project financing in the launch of a new facility to finance green projects, and project financing to 25 Ukrainian enterprises and municipalities aimed at the introduction of energy-saving technologies. Finding itself at the forefront of drafting legislation, the firm advised the EBRD on reforms of derivatives and corporate bonds. The firm fields a cross-functional team active in the fintech space, working on matters related to the regulatory regime, data protection, digital payment methods and other innovative solutions. Nazar Chernyavsky is the central figure with the focus on sovereign financing and capital markets work, municipal financing and fintech projects. Igor Lozenko acts as a lead partner for corporate lending and subsequent restructuring. Anton Korobeynikov took over instructions involving non-performing loans. Iryna Bakina is another important member of the executive team focused on financial services regulation and payment systems. Oleksandr Olshansky rejoined the team as a counsel to develop capital markets infrastructure. Michael Kharenko remains the core GR statesman, and also fronts projects in the field of banking M&A. Ukrainian law firm AVELLUM commands long-lasting expertise across the gamut of debt capital markets issues, high value and cutting-edge finance mandates, both cross-border and domestic. The firm has consistent engagements from major international lenders in financing the Ukrainian corporate sector, as well as major corporate and sovereign borrowers. For example, the firm advised BSTDB in respect of provision of a loan to Ukrgasbank; acted for the EBRD in the course of providing a loan to one of the largest shopping malls in Odesa. The series of recent loans to the State of Ukraine, provided, inter alia, by Deutsche Bank AG, Cargill Financial Services International, the French government, as well as the fifth macro-financial assistance

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program from the EU, were supported by the team, which acted as the Ukrainian counsel of the Ministry of Finance. The firm is the leader for capital markets work, historically representing sovereign borrowers, corporate issuers, and major lenders — investment and commercial banks and financial institutions. In 2020 the team continued to act as Ukrainian legal counsel to the Ministry of Finance on its Eurobonds issues. Furthermore, the firm advised joint lead managers on a USD 500 million Eurobond issue by Vodafone Ukraine; acted as the Ukrainian transaction counsel to The State Export-Import Bank of Ukraine as borrower, and Goldman Sachs International as dealer manager on a USD 316 million cash tender offer. On the top of that, its current portfolio contains restructuring mandates and NPLs transactions, as well financial services regulatory assignments. Glib Bondar, senior partner, is a recognized market leader who enjoys an exceptional professional reputation for handling sophisticated elite work. Anastasiya Voronova and Oleg Krainskyi are key members of the team. The formidable practice of national heavyweight Asters is called upon to handle a broad range of financing transactions, debt restructuring and insolvency, financial services regulation, and capital markets work. The firm enjoys long-lasting relations with major international financial institutions, and has for many years supported their financing transactions across key economic sectors. In 2020 the team acted as a legal counsel to the EBRD on its EUR 25 million financing to Yuria-Pharm, Ukraine’s leading manufacturer of intensive care medicines, medical devices and antiseptics; advised the EBRD and IFC on their loans to JSC Concern Galnaftogaz, Ukraine’s largest company in retail distribution of transportation fuels. Most recently the team acted on a landmark deal involving a state-owned bank, having advised the IFC in connection with a EUR 30 million loan to Ukrgasbank convertible into borrower’s shares. The team also stands out for its expertise in banking M&A. For example, Asters acted for Smart Holding, one of the largest industrial and investment groups in Ukraine, on the sale of JSC Unex Bank to Dragon Capital and Ivan Svitek. In the pipeline of the practice team are significant restructuring mandates, including multijurisdictional debt repackaging, where the team represents creditors, and anticipated CLN and LPN issues. Armen Khachaturyan is a heavyweight of the firm as such and the banking and finance practice in particular, and plays the leading role in capital markets and restructuring work. Iryna Pokanay and Gabriel Aslanian obtain market praise as knowledgeable and technical professionals, with a significant track record for IFIs. Roman Stepanenko and Kateryna Oliynyk advise on export financing, securities transactions and regulatory work. The prestigious practice of Baker McKenzie has a recognized strength in a broad range of financing and all types of financial restructuring work. The team is regularly instructed to handle financings to significant Ukrainian borrowers, and is equally well-versed to repre-

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Banking & Finance, Capital Markets, Fintech sent both sides — banks and borrowers. In a recent highlight the firm represented a consortium of German banks led by Bayerische Landesbank in connection with a EUR 180 million loan facility purporting to finance the construction of the second stage of the Primorsk Wind Power Plant in Zaporizhzhya Region. The office further added large-scale cross-border restructuring projects to its recent pipeline. Public representations included acting as counsel to PJSC Obolon, one of the largest breweries in Ukraine and in Europe, in connection with the restructuring in excess of USD 80 million worth of debt to international and domestic lenders under bilateral secured loan agreements. The office is engaged in capital markets reforms, and implemented an assignment of the IFC for drafting regulations of the National Securities and Stock Market Commission of Ukraine for the issue of UAHdenominated bonds by international financial institutions in Ukraine, which came into effect in early April 2020; developed a concept of reform of the warehouse receipts system in Ukraine. In addition, the office has unique expertise in payment services regulations and fintech. The dedicated team advised a number of operators of international payment systems, BigTech providers and acquirers on the potential regulatory impact on their business models of draft laws on payment services (implementing PSD2 in Ukraine), virtual assets and online gaming, launch of the “direct carrier billing” payment method in Ukraine. A notable highlight of traditional transactional work is advising a local subsidiary of a European banking group on its partnership with the European fintech group. Recognized for his strong expertise in financial services regulation, Maksym Hlotov heads the payments practice in Kyiv, and is at the front of fintech and digitalization projects. Co-managing partner Serhiy Chorny is named as outstanding legal professional with long-lasting practice commitment. Hanna Shtepa and Victoria Ischenko are practice team members. Working alongside big international counsel, Redcliffe Partners has a legacy of well-established relations with leading international financial institutions, corporate and investment banks, sponsors and other lenders, on cross-border financing. The EBRD instructed the firm to support a short-term secured loan to Nibulon of up to USD 27 million, which is one of the largest Ukrainian agricultural companies, and a EUR 25 million term loan to the Ukrainian State Air Traffic Services Enterprise towards working capital needs. The firm maintains its extensive portfolio of large-scale renewable project financing, traditionally acting on the creditors’ side. Redcliffe’s practice is known for a significant track record in sophisticated cross-border debt restructurings in the past few years. In a recent highlight the firm acted as Ukrainian legal adviser to ED & F Man Treasury Management Plc, a treasury management arm of ED & Man, one of the largest international commodities traders, on the refinancing and restructuring of nearly USD 1.5 billion worth of debt and raising an extra USD 320 million in working capital from scheme creditors via the scheme of arrangement. The firm further extends its offering of risk-sharing contracts and, in particular, acted as a legal counsel to the EBRD in relation to the risk participation agreement with Piraeus Bank Ukraine. The practice has been led for many years by Olexiy Soshenko, one of the most experienced professionals in

Who is Who BANKING & FINANCE

LEADING FIRMS 1. Sayenko Kharenko 2. AVELLUM 3. Asters 4. Baker McKenzie 5. Redcliffe Partners 6. CMS Cameron McKenna Nabarro Olswang 7. AEQUO 8. Dentons 9. DLA Piper Ukraine* 10. INTEGRITES

AUTHORITIES Serhiy Chorny (Baker McKenzie) Armen Khachaturyan (Asters) Michael Kharenko (Sayenko Kharenko)

Other established PRACTICES

Listed in alphabetical order

EVERLEGAL Kinstellar KPD Consulting Marchenko Partners

Other notable PRACTITIONERS

Listed in alphabetical order

Gabriel Aslanian (Asters) Kateryna Chechulina (CMS Cameron McKenna Nabarro Olswang) Bohdan Dmukhovskyy (AEQUO) Anton Korobeynikov (Sayenko Kharenko) Igor Krasovskiy (INTEGRITES) Oleksandr Kurdydyk (DLA Piper Ukraine*) Igor Lozenko (Sayenko Kharenko) Andriy Nikiforov (Kinstellar)

LEADING INDIVIDUALS 1. Glib Bondar (AVELLUM) 2. Nazar Chernyavsky (Sayenko Kharenko) 3. Olexiy Soshenko (Redcliffe Partners) 4. Iryna Pokanay (Asters) 5. Yulia Kyrpa (AEQUO)

* Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Ihor Olekhov (CMS Cameron McKenna Nabarro Olswang) Dmytro Pshenychniuk (DLA Piper Ukraine*) Natalia Selyakova (Dentons) Roman Shulyar (Marchenko Partners) Nadiya Shylienkova (Dentons) Roman Stepanenko (Asters) Evgeniy Vazhynskiy (Redcliffe Partners) Vsevolod Volkov (EVERLEGAL)

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Who is Who secured financing. Evgeniy Vazhynskiy received appraisal as a seasoned practitioner with mature experience in project finance. The key executive team includes Olena Polyakova and Olesia Mykhailenko. СMS is represented through two offices in Ukraine. CMS Cameron McKenna Nabarro Olswang is a solid port of choice for international banks and financial institutions requiring support in cross-border financing, in particular, export finance and project finance. The team is also well-versed in debt restructuring and transactions involving non-performing loans. Most recently the firm advised the European Investment Bank on the EUR 50 million loan granted to Unit Holdings for design and construction of selected components of an innovation campus. A multi-office team advised the Export-Import Bank of Korea on a secured USD 36 million financing to Grain Terminal Holdings, a Singapore-based joint venture between Posco International and Orexim Group. Another representative experience includes advising Bank Gospodarstwa Krajowego and KUKE S.A. on export credit financing for the development of the Nikolsky shopping mall in Kharkiv. With its strong positions in the energy and infrastructure sectors, the firm constantly advises on financing renewable and municipal and infrastructure projects. In particular, the team advised the EBRD on a loan of approximately USD 13.9 million to Irshanska SES and acted on all aspects of the project development and financing across five jurisdictions. The team is experienced in advising on financial services regulations, and acted as lead Ukrainian advisor to one of the largest private banking institutions in Switzerland, Bank Julius Baer & Co, on preparation of the country manual for its employees regarding regulatory issues relating to cross-border provision of intermediary financial services to its customers in Ukraine. Partner Ihor Olekhov strengthened the practice and added value with his recognized regulatory expertise. In terms of strengthening the agricultural practice, English-qualified Orest Matviychuk joined the banking team. Counsel Kateryna Chechulina is the key figure in the practice. Many projects of the Kyiv practice were headed by Warsaw-based partner Mark Segall1. CMS Reich-Rohrwig Hainz is traditionally retained by Germanspeaking clients. The team is experienced in supporting provision of export credit facilities, debt assignment and debt recovery proceedings, non-performing loans and anti-money laundering regulations. Anna Pogrebna is a lead partner. Ukrainian law firm AEQUO is adept at handling lending and borrowing on international capital markets, acquisition finance, debt restructuring, fintech projects, and banking M&A. The firm advised Posco International Corporation on a secured USD 36 million financing from Export-Import Bank of Korea to Grain Terminal Holdings; acts for the EBRD on four ongoing financing projects in a reputable mandate from Kyiv City Council. The firm is highly active in handling NPL projects, 1

in particular, it advised DebtX on auction procedures for the sale of multi-billion pools of NPLs of Ukrainian banks under bank resolutions procedures, which DebtX organized for the state-run Deposit Guarantee Fund of Ukraine (DGFU). The firm regularly advises Dragon Capital on the financings involved in supporting its acquisition strategy, and on a number of mergers and acquisitions involving banking assets. Most recently the firm advised it on the acquisition of Unex Bank, focused on serving corporations in the central and industrial regions of Ukraine. Among debt restructuring highlights is advising the DGFU on matters of restructuring its USD 4.3 billion indebtedness to the Ministry of Finance of Ukraine under the relevant promissory notes and on matters of implementation of EU Directives. Fintech is another fastgrowing area of the firm’s practice. For example, the firm advised Raiffeisen Bank and its fintech partner CreativeDock on the development of Fairo, a mobile platform designed to help freelancers and small and medium-sized business owners control their business operations on the go, while Ukraine was chosen to be the launch country for the groundbreaking new service in the region. Another notable example is advising SupplierPlus Group, a leading European fintech services company, on the launch of SupplierPlus, a supply chain finance solution designed to simplify the factoring process by using blockchain technology. Dedicated partner Yulia Kyrpa is active in practice development and the fronting of projects, and d emonstrated groundbreaking achievements in fintech. Another key figure is Bohdan Dmukhovskyy, a knowledgeable expert equally present in finance mandates and M&A transactions in the financial sector. The market constantly confirms the strong performance of Mykyta Polatayko, the firm’s IT head, in financial technology projects. With its global footprint and established following of international banks and financial institutions, the Kyiv office of Dentons commands instructions on cross-border lending, trade and export financing, distressed debts, transactions with non-performing loans, restructuring and complex regulatory matters. The practice currently represents the biggest creditor of a group of Ukrainian companies that operates on the world steel market, with regard to insolvency proceedings and debt restructuring. Given the firm’s strong presence in the renewable energy sector, the banking team customarily advises on project finance matters. In addition, Dentons provided legal advice to a leading Canadian developer in connection with the financing and development of real estate projects in Ukraine. Notably, the office advises the EBRD on legal and regulatory reform on the trading infrastructure, including capital market development. The team further demonstrates involvement in domestic European-wide projects in the fintech industry, being involved in wide-ranging advice on e-money matters, payment services, blockchain, fintech incubators and start-ups. Lead partner Natalia Selyakova oversees transaction work and actively boosts the fintech area. Nadiya Shylienkova, counsel, fronted work in international finance, including PXF and project finance, restructuring and de-

In March 2021 Mark Segall joined Dentons.

INTERNATIONAL LAW FIRMS Allen & Overy is a highly-preferred international counsel for debt capital markets and cross-border financing transactions, as well as restructuring mandates. The London team, as guided by partners Jeanette Cruz and Jamie Durham, acted as English law counsel to Metinvest on its new USD 333 million Eurobond issue. Catherine Lang-Anderson acted as a partner in acting for Metinvest Group on a EUR 62 million loan from the Black Sea Trade and Development Bank. Joe Clinton led the team acting for Natixis, the EBRD and Deutsche Bank in connection with borrowing base financing for Kernel. Latham & Watkins represents international lenders in debt capital markets transactions. This past year the firm advised the joint lead managers and joint dealer-managers on Ukraine’s successful completion of the settlement of its new USD 2 billion Eurobond due in 2033 as well as its first ever intra-day switch tender offer in relation to its outstanding US dollar-denominated senior notes due 2021 and US dollardenominated senior notes due 2022. Latham’s deal team was led by corporate partners David Stewart and Lene Malthasen. In terms of corporate issues, the firm advised joint lead managers Credit Agricole, J.P. Morgan, and Natixis on a USD 300 Eurobond million issue by Kernel. Linklaters regularly acts in the transactions in the CEE region, and is known for representation of lenders. The London team guided

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by partners Yaroslav Alekseyev and Richard O’Callaghan advised joint bookrunners Deutsche Bank, Natixis, IMI Intesa Sanpaolo, and Raiffeisen Bank International on Metinvest’s new USD 333 million Eurobond issue. Another notable representation was handled for joint lead managers of the Eurobond offering by Vodafone Ukraine, intended for the bridge loan prepayment attracted for Bakcell’s acquisition of Vodafone Ukraine. White & Case demonstrates its traditional strong presence in international capital markets transactions and financing mandates. The firm has consistently over many years acted for the Ministry of Finance of Ukraine. In 2020 the dedicated practice advised Ukraine on the issue of its new USD 2 billion senior notes due 2033, and its first ever switch tender offer in relation to its outstanding US dollar-denominated senior notes due 2021 and US dollar-denominated senior notes due 2022; on a USD 344.4 million term loan facility to the State of Ukraine from Deutsche Bank AG. The team was guided by London-based partners Ian Clark and James Hardy. Please see Tables 1, 2 and 3 for more information about international law firms involved in capital markets transactions, banking and finance and debt restructuring projects.

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Who is Who

Banking & Finance, Capital Markets, Fintech rivative transactions. Artur Savin and P olina Reshetniak are involved in regulatory and fintech assignments. DLA Piper Ukraine2 has a well-versed finance, projects and restructuring practice rendering legal support in bank lending, project and acquisition finance, restructuring and insolvency, debt capital markets and financial services. The team acts for commercial banks, payment systems, private equity firms, key export credit agencies, project sponsors and investors, and major international financial institutions, state aid and international development agencies. With its international presence the firm regularly advises on projects involving international payment systems, relating to fintech, as well as insurance. In the research period the team advised a US-headquartered bank in connection with a hedging product to be implemented in Ukraine; acted for an international investor on the termination and restructuring of a public-private partnership arrangement between a private company and the State of Ukraine. The restructuring of indebtedness and Eurobonds is another area of the team’s focus. As for the operation of the capital markets, the practice team advised VFU Funding PLC on its debut USD 500 million loan participation notes on Euronext Dublin intended for, among others, the bridge loan prepayment attracted for Bakcell’s acquisition of Vodafone Ukraine. Dmytro Pshenychniuk acts for IFIs and development institutions, supporting lending, aviation finance, capital markets, derivatives, asset-backed securities and financial services regulatory matters. Illya Muchnyk focuses on project finance in the energy renewables projects. The practice lead partner is Oleksandr Kurdydyk. Over the last couple of years the banking and finance practice of INTEGRITES has been centered on supporting high-profile renewable energy projects with respect to financing. As lead counsel to major wind farm developers and solar power producers, the firm has continued to demonstrate involvement in large-scale transactions in the sector. INTEGRITES advised Scatec Solar in relation to the review, execution and perfection of security over immovable property of the Chigirin, Progressovka, Kamianka Rengy Projects in favor of the lenders. The dedicated team renders ongoing support to Wärtsilä, a Finnish-headquartered global leader in smart technologies and complete lifecycle solutions for the marine and energy markets, on finance and security documentation of an ultra-large scale project related to construction of several generation and cogeneration power plants and implementation of electricity supply security. The firm advises the Ministry of Energy on an independent power project framework, including project financing. The latest landmark representation was advising Ukrgasbank, a state-owned bank, and the Ministry of Finance of Ukraine on a EUR 30 million loan extended by the International Finance Corporation. Further expertise includes financial restructuring, banking acquisitions, payment systems and fintech regulations. Igor Krasovskiy, lead partner and practice head, is highly visible on the market and praised for his strong performance in project finance in the renewable sector. 2

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar..

CAPITAL MARKETS

LEADING FIRMS

FINTECH

Established PRACTICES

1. AVELLUM

Listed in alphabetical order

AEQUO

2. Sayenko Kharenko

Baker McKenzie

3. Asters

Dentons

Other established PRACTICES

DLA Piper Ukraine* Listed in alphabetical order

INTEGRITES

AEQUO

Juscutum Law Firm

Baker McKenzie

Sayenko Kharenko

DLA Piper Ukraine*

Stron Legal Services

* Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

Dr. Oleh Zahnitko acts on regulatory projects. Olena Savchuk is a promising senior executive involved in the firm’s key projects. EVERLEGAL enhances its banking and finance practice, advising both lenders, including banks and IFIs, and borrowers, like local and international businesses. The firm’s recent profile spans project finance, acquisition finance, real estate finance, securitisation and regulatory work. Attracting financing for the construction and development of innovation parks in Ukraine is a landmark experience from this past year. The firm rendered comprehensive legal support to UNIT.City with regard to attracting financing from the European Investment Bank, and advised Novopecherska School in relation to a loan agreement with the Black Sea Trade and Development Bank. The firm’s focus on renewables, among other matters, includes project finance of respective projects in Ukraine. For example, the firm represented UDP Renewables in a process of receipt by its project company LLC Terslav financing from Oschadbank for the construction and development of a solar power plant in Dnipropetrovsk Region. The agrarian sector is another key area of the team’s presence, where it acts for banks in terms of providing trade finance and export lending. The practice has two partners on board, Vsevolod Volkov and Andriy Olenyuk. Over the research period Kinstellar was equally active in representing lenders, sponsors and borrowers. The Kyiv office was mandated by the EBRD to act as Ukrainian law counsel on its new financing deals. This past year was notable for infrastructure projects, in particular project financed concessions and PPPs. The team acted for QTerminals on all aspects of the Olvia sea port concession, including the project finance element; prepared for the WB/IFC an extensive feasibility study on the financing options for the Kyiv passenger transportation project known as Troeschina Rapid Transit. Kinstellar advised SESS Solar, a Ukrainian renewable energy business, in connection with financing of its two project companies West Solar LLC and Snyatinenergoinvest LLC by the EBRD. The office also advises the Supervisory Board of Naftogaz, in particular, on finance matters, including on debt arrangements (loans and bonds) for an aggregate amount in excess of USD 4 billion. On the restructuring front, the practice team handles a number of multimillion debt restructurings procedures representing debtors. Financial services regulation is another area of the team’s focus. Andriy Nikiforov heads the practice with the key input from Anna Kalinichenko. Being highly visible in the real estate space, KPD Consulting is called upon by banks for assisting with sophisticated collateral, pledge and restructuring matters, as well as lending transactions. The firm advised UniCredit Bank AG on extending a USD 60 million loan facility to commodities traders; assisted Sberbank in review and roll-over of the USD 40 million investment loan facility to Kyiv International Airport operator — Master Avia LLC, which is aimed at financing the new terminal construction; advised Viceroy Trade and Invest Limited on extending a USD 6 million loan to Poltava Rail Road Overhaul Plant. The firm also demonstrates the established practice of supporting intra-group loans, cash management and collateral issues. Vladyslav Kysil splits his time with real estate practice and is mostly known for substantial collateral law experience. The new banking and finance practice of Marchenko Partners rapidly added strength throughout the past year, demonstrating a strong focus on transaction work. The team continued representation of its long-standing Client WNISEF in connection with granting three social loans in 2020, namely to Walnut House, a Lviv-based bakery and a social enterprise, to CLRDP Printing House, a social enterprise in Kramatorsk, Donetsk Region, specializing in the production of various types of printing products, and to Veterano Pizza, a restaurant chain in Kyiv, which supports veterans of the ongoing military conflict in Eastern Ukraine. One more area of recent focus is pre-export financing. The team stands out for its performance in multimillion complex debt restructuring mandates. This past year the firm acted for EnergoGroup in

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Who is Who the USD 1 billion debt restructuring under the PXF facility granted by a syndicate of international banks (ING Bank N.V., UniCredit Bank AG, VTB Bank (France) SA, Raiffeisen Bank International AG and others) back in 2013. Roman Shulyar is lead partner, who splits his time with the corporate and M&A practice. AMBER Law Company has focused its legal advisory on advising top managers of Ukrainian commercial banks on the proper implementation of compliance procedures and on financial monitoring. Selected publishable clients include Bank Julius Baer (Switzerland), Bank Pictet & Cie (Switzerland), PJSC Tascombank, PJSC Ukreximbank. Andriy Segal and Semen Khanin are the main contacts. The banking and finance team at Arzinger is known as a lenderside practice. The firm is noted for representing international banks in crediting Ukrainian corporate borrowers, financial restructuring, including large-scale indebtedness. Lead partner Oleksandr Plotnikov is visible on the market.3 Avidbiz is mostly positioned as an international tax boutique, which has offices in Kyiv, Tallinn, Warsaw, Vienna and Munich, drawn on engagements in debt restructuring and anti-money laundering procedures. The firm assisted European Financial Solutions Ltd, a Maltese company specializing in finance, with debt restructuring, which involved EUR 11 million in loans from companies in Malta, Estonia, UK, Germany. The team helped SH Trade House Ltd to unfreeze USD 1.66 million from a UK bank which had frozen this amount for AML risk and involved the tax authorities in the dispute. Olga Solovyova and Pavlo Khodakovsky are the main contacts. EQUITY, a domestic dispute resolution heavyweight renowned for its solid portfolio of insolvency disputes, is also actively growing its advisory offering on the non-performing loans market. The team advised LLC Finance Company on its portfolio of NPLs of large-scale developers in Ukraine, and LLC Finance Company Helios on its NPL portfolio of Ukrspyrt, the leading state-owned enterprise in the alcoholic spirits market, and large financial and industrial group Primorye, in particular, on the available instruments for out-of-court enforcement of pledges and mortgages. In 2020 it added restructuring projects to its practice profile, and banking compliance with the standards of liquidity and solvency. Another notable advisory was rendered to the Corporate Non-Governmental Pension Fund of the National Bank of Ukraine — the largest private fund in Ukraine, on the compliance of certain transactions entered into by the former management. Oleg Malinevskiy is noted for his vivid activity on NPL-related workflow. Eterna Law re-launched its banking and finance practice with the arrival of new partner Nikolas Likhachov. The scope of its recent profile included asset tracing and recovery, factoring, banking regulation abroad, non-banking institutions regulation. Further expertise covers regulation of currency emission and cryptocurrency trading issues. Among the public highlights of the firm is advising the Factoring Finance International Finance Company on conducting cross-border factoring transactions involving three jurisdictions; legal support to J.P. Morgan’s branch in Luxembourg on art financing. In 2020 EY Ukraine started performing reviews and providing advice on various aspects of functioning of the non-performing loans and supply chain finance (SCF) markets in Ukraine, including on the relevant regulatory framework and possible investment structures, and regulation of certain non-bank financial markets. Another area of unique expertise is regulation of the Ukrainian insurance market. The team continued to expand its profile of supporting financial/debt restructuring, particularly under the Financial Restructuring Law. In 2020 the dedicated team acted as an advisor to TriO LLC, the owner of the Gulliver Shopping and Office Complex in Kyiv, in the course of financial restructuring of its debts to Oschadbank and Ukreximbank; assisted Ekobiotek-Ukraina LLC, a major Ukrainian producer of sunflower oil, in the course of financial restructuring of its debt to Oschadbank. The clients of the restructuring practice belong to agriculture and sunflower oil production, alcoholic beverages production (including beer, cognacs and spirits), metalworking and recycling, real estate and construction, retail. The team includes Bogdan Malniev and Andrii Pryimak. Borys Lobovyk is lead partner. Given the focus on the renewable energy sector, GOLAW’s team renders advice on financing subsequent projects in the sector. In 2020 Max Lebedev and Taras Lytovchenko advised KBPP Management 3

The firm has not submitted information for the current research.

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on financing of a Ukrainian subsidiary and extending a loan agreement for the Khmelnytsky Biofuel Power Plant; advised the German company Wealth Diplomats on financing renewable energy projects in Ukraine. The firm is also known for its good standing among export agencies and foreign banks. Most recently the team, as guided by Iryna Kalnytska, advised creditors — Export Guarantee and Insurance Corporation and Erste Abwicklungsanstalt on a USD 60 million debt restructuring of PJSC Eurocar and LLC RIC. Sergiy Oberkovych acts as lead partner in banking projects. Gramatskiy & Partners is regularly enlisted by its established clientele from industrial companies, the real estate and construction sector, on finance and re-finance matters, trade financing and intra-group transactions, financial monitoring and anti-laundering procedures. The firm represented PJSC Voronin clothing factory in a debt finance transaction for City Capital Group for the reconstruction of the Voronin Business Center; advised VPG Agro Plus LLC, agriholding conducting grain trading and owning a land bank in Kyiv and Chernihiv Regions, on a project finance provided by Financial Company Status Capital Plus. The firm also continues to advise on restructuring of indebtedness and bad debt management, and handles dispute resolution with the deposit insurance fund. The practice is led by Igor Reutov. Ilyashev & Partners is retained for legal support within sophisticated cross-border disputes involving banks, and challenging domestic proceedings. The firm also advises on matters related to banking resolution. The firm has recently represented BTA Bank in the reorganization of its banking business throughout spin-off. Insolvency and related restructuring is another busy side of the practice. Managing partner Mikhail Ilyashev is the key contact. The Kyiv office of Jeantet has a consistent following from international financial institutions, supporting their lending transactions with Ukrainian corporate borrowers. The firm acts as a legal counsel to the European Investment Bank on secured loans for Kernel Group, Astarta Group, Nibulon, state postal operator JSC Ukrposhta and PJSC Ukrainian Railways. Project finance in the renewable energy sector is another area of focus. The firm has also advised the European Investment Fund on guarantee agreements with various Ukrainian banks on DCFTA guarantees to cover a portion of risk related to the portfolio of domestic loans to small and medium-sized enterprises in Ukraine in the amount of EUR 70 million. The team includes Victoria de Robien and Andriy Koshman, and is headed by Olga Babiy. The Odesa-based law firm Jurline is sought for supporting lending transactions with the largest banks in Odesa Region, debt financing projects with the EBRD, debt restructuring in a foreign legal field and extensive court practice regarding conclusion and execution of financing agreements, including the sale of pledged property and corporate rights. The firm’s recent practice included support in obtaining credits, pledging, mortgage and surety agreements. The team includes partners Vitaliy Cherkes, Maxim Kapelist, as led by Volodymyr Zubar. As an active player in the IT sector, Juscutum Law Firm demonstrates rapid development in the fintech space. For example, the firm advised on the digital tokenization project for FC Dynamo Kyiv aimed at creating a convenient loyalty program for the club’s supporters and to give them opportunity to benefit from special offers and participate in different PR events. Another noteworthy representation was rendered to the online investment platform Wotan for investing without human intervention. Artem Afian, managing partner, is known for being one of the co-authors of the draft law On Virtual Assets. KPMG Law Ukraine advises on financial restructuring and offers its service of independent business review and transactions with NPLs. The team acted for TriO LLC Ukraine as an independent consultant to provide a financial and legal overview of the business, which is a precondition to restructuring. The notable highlight of 2020 was support to the Deposit Guarantee Fund in the sale of its NPL portfolio. Another area of presence is financial services, including development and implementation of anti-money laundering procedures. The firm recently supported JCB International Co on its proper registration as an international payment system in Ukraine. Yuriy Katser is in charge of legal services. In 2020 LCF Law Group added transactional and regulatory expertise in the banking sector, especially after its integration with Evris Law Firm. The firm advised Fozzy Group on obtaining a loan from the EBRD for the opening or renovation of various supermarkets and convenience stores. In addition to traditional dispute work, such as debt

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Who is Who

Banking & Finance, Corporate and M&ACapital Markets, Fintech collection and foreclosure of collateral, the firm expanded its offering with financial restructuring in accordance with the Financial Restructuring Law, acquisition of the rights of claim, banking regulations and operations. The group advised VR Global Partners, one of the largest privately-owned hedge funds, on the restructuring of loans issued for PJSC Ukrainian Railways and the settlement of the 26 disputes related thereto. Artem Stoyanov and Olena Volianska are lead partners. The young and ambitious domestic firm of Stron Legal Services has a distinctive focus on e-commerce and sophisticated fintech projects, project finance, financial services regulations. The team’s members came from payment systems legal units and scale their in-house experience in projects often involving multiple jurisdictions, inter alia, establishing operations abroad and implementing regulatory regimes. In particular, the firm handled the corporate and tax structuring of the payment system in Estonia and obtaining a license for electronic money. The landmark instruction included structuring the entry of a Ukrainian group focused on micro-crediting onto the South East Asian market, structuring of lombard licenses, followed by securitization of a microcredits portfolio with subsequent placement among accredited investors. Another highlight is legal support to a crypto exchange project based on blockchain technology. Oleg Derlyuk is the main point of contact. TCM Group Ukraine is part of the international network of law firms and debt collection agencies, focused on debt restructur-

ing. The team is called upon to act in cross-border assignments for Ukrainian debtors and a group of CIS debtors. In 2020 the firm handled the financial restructuring of the world’s largest provider of flexible workspace solutions worldwide. Denys Kopii is the managing partner. Wolf Theiss advises on banking and finance law issues in the course of M&A transactions, joint venture projects and general business on applicable Ukrainian currency control issues. Most recently the Kyiv office advised Optimum Solar Kft, a major Hungarian solar power equipment producer and developer of solar power projects, on the financing of a project in connection with its entry onto the Ukrainian solar generation market. Other instructions contained payment and financial services regulatory law, in particular, e-money issuance and circulation, money remittance services and other payment services. The practice head is Oksana Volynets. Yuliya Barabash, managing partner of SBSB, is referred for her visibility in obtaining payment/e-money licenses and setting up “neobanks” beyond the shores of Ukraine. Quantum Attorneys is known as a fintech-focused firm. According to public sources, Nazar Polyvka, Axon Partners, is observed in projects related to the implementation of virtual assets structures. Iryna Marushko, Marushko Law Office, was mentioned for advising on complex banking matters.

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Who is Who

Bankruptcy Ilyashev & Partners has a three-pronged approach, whose focus is on large complex bankruptcy cases involving litigation, as well as large scale cross-border insolvency disputes and sanation (financial rehabilitation). The experienced practice team has great expertise in handling the bankruptcies of distressed industrial debtors and state enterprises. It represented creditors in Ukrainian courts in the multibillion dollar bankruptcy of the Alchevsk Iron and Steel Works, which involved a large number of stakeholders in a number of jurisdictions. It has been involved in the ongoing bankruptcy procedure of Promoboronexport across several jurisdictions. The firm also represents interest of creditors — Indumet Limited, Indumet SA in the course of the bankruptcy and financial rehabilitation of Dneprovsky Integrated Iron & Steel Works, with a huge monetary value of USD 5.7 billion in the case. The firm’s banking clients Alfa-Bank and BTA Bank ensure a consistent workflow for its lender-side practice. The firm has a multicountry network of offices to continue providing support in insolvency disputes involving several jurisdictions. Its team works continually on complex cases for banking field representatives. The firm added new projects of cross-border bankruptcies. The Moscow office showed rapid expansion and success in precedent-setting cases by handling significant bankruptcies of developers and infrastructure companies. Vadym Kizlenko is highly active across project work and in the community of insolvency practitioners. Andriy Konoplya has a long-lasting presence in this practice. Lead partner Roman Marchenko plays a key role in long-lasting bankruptcy cases. The EQUITY law firm has one of the largest portfolios of insolvency litigation, being known for representing major industrial financial groups and fast growing practice of banking resolution. The firm reduced the liabilities of the Azovmash group of companies throughout insolvency litigation with ten banks, which now is valued at USD 850 million. This past year the team acted for the group in litigation against Alfa-Bank. The firm has made inroads into NPLs, foreclosure of mortgaged property and initiating insolvency proceedings. It advised some of the largest finance companies in Ukraine, including LLC Finance Company, LLC Expert Invest, LLC Finance Company Helios. It also successfully protected the interests of Ukrincom PJSC (formerly Ukrinbank) in its dispute with the National Bank of Ukraine and state-run Deposit Guarantee Fund over recognition of the decisions of regulators to declare Ukrincom insolvent as unlawful and to cancel them. It involved the firm receiving instructions in proceedings with debtors. Oleg Malinevskiy plays a strategic role in practice development, repeatedly recognized for his proficient solutions in insolvency disputes. Dmytro Tylipskyi is the key counsel in large-scale representation of Azovmash group. Olexiy Stepanenko is an important practitioner working on banking insolvency projects.

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Alekseev, Boyarchukov and Partners is among the key bankruptcy-focused teams in Ukraine, retained to act across the whole procedure. The firm has a long-standing track record in representation of creditors in the bankruptcies of corporate debtors. The firm represents Investohills Vesta as a creditor in the bankruptcy cases of Rosava, a vehicle tire manufacturer, and Bila Tserkva Heat Power Plant. Another notable case is acting for Alfa-Bank as a creditor in the bankruptcy of Gadyachsyr LLC. The practice portfolio is rich in numerous insolvency disputes, involving debt recovery litigation against distressed companies, appealing against auction results, etc. Its client roster includes Sberbank, Ukrgasbank, Geneva Financial Company, Hotel Property LLC. Endorsed for his creative approach Sergey Boyarchukov garners praise for his exceptional dedication to bankruptcy and regulation of the profession. Maksym Boyarchukov is another important figure in this practice. The domestic firm L.I. Group rapidly extends its bankruptcy practice portfolio with a range of bankruptcy proceedings initiated by big Ukrainian industrial companies, and is even more present in powerful cases. The firm is known for its strong performance on the creditors side, being hired by banks and financial companies. In 2020 the firm was enlisted in the large-scale bankruptcy of the Corporation Industrial Union of Donbas. It also represented Investohills Vesta in the bankruptcy of several companies, and is involved in the bankruptcy proceedings of PJSC Tomatsky Forging and Stamping Plant and turbine maker PJSC Uzhhorod Turbogaz. The team also advises on developing the financial rehabilitation plans of debtor companies. The practice has two partners on board. Artur Megeria is active in recent representations and highly visible on the market. Mykola Kovalchuk is an active litigator in insolvency cases. The team was strengthened by the arrival of Yurii Moiseiev, who joined the firm in 2020 from the Ministry of Justice. Peers strongly endorsed him as a skilled professional. The large bankruptcy practice at Ario Law Firm acts on both sides of proceedings, handling liquidation procedures and resolving criminal aspects that arise within debt recovery matters and corporate conflicts. The firm is particularly known for participating in resonant cases, development of restructuring plans and insolvency disputes, assets sales and working on financial rehabilitation. The bankruptcy team works closely with the criminal defense team, handling sophisticated cases involving criminal violations at different stages of a procedure. The resonant bankruptcy of the Ocean Shipyard in Mykolaiv, coupled with criminal proceedings, continued in 2020, when the Supreme Court of Ukraine upheld the legality of the auction held in 2018. It also represented the Kyiv-based Lybid Hotel as a debtor. Julian Khorunzhyi constantly enjoys the praise of the market and acts on the pro-bono project regarding the bankruptcy of physical persons. Iryna Serbin is

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Who is Who

Bankruptcy known for her major case as an insolvency administrator of the Ocean Shipyard. Other partners of the sizeable team are partners Oleksii Voronko, Andriy Fylyk and Ruslan Sydorovych. LCF Law Group possesses a well-regarded bankruptcy practice, acting for both sides. The team has a solid clientele of banks and financial companies, advising them in their capacities of creditors, and significant domestic borrowers. The firm represented the administrator of the Ocean Shipyard in Mykolaiv in a bankruptcy case, inter alia, established the legality of actions throughout the full procedure of bankruptcy. The firm acted for Premiori LLC as a creditor in a bankruptcy case involving tire maker Rosava. Another area of focus includes insolvency litigation in terms of corporate conflicts. Selected clients include Alfa-Bank, Prominvestbank, First Ukrainian International Bank (FUIB), VR Global Partners, Allianz Ukraine, Grawe Ukraine, Kontraktovyi Dom (Easy Pay), Bunge Ukraine, Ovostar, Ristone Holding, Lauffer Group, Cargill, Fozzy Group, TNT Express Worldwide, Scatec Solar Solutions, Holleman. Partner and practice head Olena Volianska kept her active role in the community of insolvency practitioners and across project work. Sokolovskyi & Partners has a wellrecognized practice supporting bankruptcy proceedings and handling liability crisis management. It acts regularly for both debtors and creditors, and is often retained by local clients. The workload of the firm includes asset disposition and sale within bankruptcy procedure, administration of insolvency and liquidation procedures. Insolvency disputes are another area of focus. The firm’s criminal practice contributes to avoiding violations at various stages of bankruptcy procedures. The practice is headed by Ivan Balytskyi. Domestic bankruptcy boutique homenko, Pita & Partners provides a comK plete offering, being especially preferred by the corporate sector — namely the agrarian, energy, manufacturing, hospitality, technology companies. Earlier, the team gained notable experience in supporting bankruptcies of state-owned companies. The firm continues to act in complex bankruptcies of groups of companies and often handles representation in different Ukrainian regions. For example, the firm works on a bankruptcy of the network of hotels in Odesa and Odesa Region. With his long-standing commitment to this practice Oleksandr Khomenko is a respected practitioner endorsed for providing tailored advice. Ivan Zakharko is named a key practitioner. Gramatskiy & Partners covers all aspects of litigation work in bankruptcy procedures, being retained by creditors, shareholders, insolvency officers. The scope of work includes creditors’ committees, appeal against stakeholder’s actions, support for liquidation procedures and amicable settlements, exits from bankruptcy procedures and post-procedure disputes. Clients emanate from construction, engineering, industrial manufacturing, technology. The firm provides support to the PJSC Plant Keramic on restoring commercial activities and an out-of-court settlement. Other public clients in bankruptcy last year included Plant Quant, Zolotoy Mandarin Group, Vinotex, Plant of Rubber And Latex Products, Saphir-Invest LLC, Global Space

LEADING FIRMS

Other notable PRACTITIONERS

1. Ilyashev & Partners

Oleksandr Bondarchuk (Absolute Law Agency)

2. EQUITY 3. Alekseev, Boyarchukov and Partners 4. L.I. Group 5. Ario Law Firm

Maksym Boyarchukov (Alekseev, Boyarchukov and Partners) Oleksandr Khomenko (Khomenko Pita & Partners)

6. LCF Law Group 7. Sokolovskyi & Partners 8. Khomenko, Pita & Partners 9. Gramatskiy & Partners

Andriy Konoplya (Ilyashev & Partners) Mykola Kovalchuk (L.I. Group)

10. ADER HABER

Other established PRACTICES

Listed in alphabetical order

Roman Marchenko (Ilyashev & Partners) Listed in alphabetical order

Absolute Law Agency Nobili

Yurii Moiseiev (L.I. Group) Iryna Serbin (Ario Law Firm) Andrii Trembich (Gramatskiy & Partners)

LEADING INDIVIDUALS 1. Sergey Boyarchukov (Alekseev, Boyarchukov and Partners) 2. Oleg Malinevskiy (EQUITY)

Dmytro Tylipskyi (EQUITY) Natalia Tyschenko (Nobili) Oleksandr Udovychenko (ADER HABER)

3. Julian Khorunzhyi (Ario Law Firm)

Olena Volianska (LCF Law Group)

4. Artur Megeria (L.I. Group)

Oleksii Voronko (Ario Law Firm)

5. Vadym Kizlenko (Ilyashev & Partners)

Ivan Zakharko (Khomenko, Pita & Partners)

Management Limited. Andrii Trembich is the practice head. Domestic law firm ADER HABER expands its bankruptcy practice with instruction of commercial banks, seeking representation in insolvency procedures of their debtors, as well as debt recovery procedures from debtors, including execution of court rulings. Other areas of focus include bankruptcy of individuals. The practice is headed by revered figure and former judge Oleksandr Udovychenko. Absolute Law Agency enjoys an established following among commercial banks

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COUNSELINK ID LEGAL GROUP

5A, H. Skovorody Street, Kyiv, 04070, Ukraine Tel.: +380 44 482 5780 +380 44 482 5785 +380 67 719 1177 +380 66 719 1177 E-mail: info@id-legalgroup.com Web-site: id-legalgroup.com

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Who is Who and financial companies. For example, VTB Bank enlisted it for representation in the course of bankruptcies of joint venture Iboya (currently under liquidation procedure) and Dnipro Plant Mineral Fertilizers (asset disposal stage). The Mustang Finance financial company enlisted the practice as a creditor in several bankruptcy cases and the First Ukrainian International Bank in the bankruptcy of Lendest Ltd. It continues to act for the Plant of Gas Discharge Lamps in its ongoing liquidation. Oleksandr Bondarchuk is a vivid practitioner particularly known for representing banks. Oleksandr Hladii is another key figure. Domestic bankruptcy boutique Nobili is adept at supporting bankruptcy proceedings of local borrowers. It gives legal advice to oil trader Rompetrol Ukraine regarding its ongoing bankruptcy. Other clients include PJSC Uzhhorod Turbogaz, the state-owned Diproverf State Design Institute, LLC Bigben, PJSC Dneprovsky Integrated Iron & Steel Works. The firm also represents creditors, inter alia, acts for MAS SIDS Ukraine LLC and Syngent LLC in the bankruptcy procedure of Trading House Seeds. Natalia Tyschenko, managing partner, who’s highly visible on the market, is the main figure. The litigation practice of AVELLUM, reinforced in 2020, includes a bankruptcy workload, with the team working mainly for creditors supporting their claims against Ukrainian companies undergoing bankruptcy proceedings. The firm is also hired to advise on the Ukrainian law aspects of cross-border insolvencies, and also acts in cases when a creditor’s claims are based on English law regulated agreements. The firm continued to represent the world’s leading investment funds as owners of the majority of notes issued by Mriya Agro Holding in the insolvency proceedings of the Mriya Group, where the team handles 11 simultaneous bankruptcy proceedings. Andriy Fortunenko is the key bankruptcy practitioner. Vadim Medvedev is lead partner in litigation.

The bankruptcy practice of full-service firm Eterna Law acts for creditors in initiating bankruptcy proceedings, investment companies in court proceedings for financial recovery, advising on settlement agreement and financial rehabilitation. Denys Kytsenko acted as lead partner1. The focus of the corporate recovery and insolvency practice at GOLAW is representing creditors. Among ongoing cases is representation of UniCredit Bank Czech Republic and Slovakia a.s. in the bankruptcy proceedings of PJSC Creative as a borrower and PJSC Creative Group as a guarantor under a loan agreement. The team has particular experience in preventing fictitious bankruptcies and preventing unfair actions by distressed debtors, assignment of receivables. Iryna Kalnytska works on the majority of cases. The full-service firm Arzinger has a strong standalone bankruptcy practice focused on representation of banks, financial institutions and international hedge funds in insolvency proceedings of Ukrainian corporates. Anton Molchanov, counsel, has been endorsed by peers for his extensive work on cross-border insolvency projects and high level of expertise.2 The poll revealed a number of law firms and bankruptcy commissioners in the regions: Matviiv & Partners and Andriy Nadlonok in Lviv; Serhii Udovychenko and Vitaliy Sokotun in Rivne; Pravova Constanta and Mykola Lukashuk in Dnipro; Kapustin & Partners, Volodymyr Kapustin and Globus Law Firm in Kharkiv. 1

In March 2021 he joined State Enterprise Ukroboronprom.

The firm has not provided submission for the current research.

Oleksandr Bondarchuk

Acting Chairman of the Ukrainian National Insolvency Trustee Association (UNITA), Insolvency Trustee, Managing Partner of Law Agency Absolute, Lawyer MEMBERSHIP

• Ukrainian Bar Association (UBA), • International Bar Association (IBA), • International Advisory Experts (IAE), • Coordination Council of European Business Association in Dnipro, • Member of Bankruptcy Committee of the Ukrainian National Bar Association. ADDRESS: Tel.: +38 067 732 3882 E-mail: absolute@absolute.com.ua Web-site: www.absolute.com.ua

EDUCATION

Dnipropetrovsk State Agrarian University with a degree in agrarian management; Dnipropetrovsk University of Humanities with a degree in law; Doctor of Philosophy in Economic

PRACTICE AREAS

Bankruptcy Dispute Resolution Recovery of bad debts

LANGUAGES

Russian, Ukrainian, English

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AWARDS

• Best lawyer in the field of criminal law (according to the publication Best Lawyers, 2021); • One of the most famous lawyers in the field of bankruptcy (according to Yuridicheskaya Practika Publishing, 2020) • Customer choice. Top 100 Best Lawyers in Ukraine — 2020, Expert in bankruptcy (2020); • Honorary award from the Ukrainian National Bar Association (2019); • Customer choice. Top 100 Best Lawyers in Ukraine — 2019, Expert in antitrust (competition) law (2019); • Legal500: EMEA Rankings (Ukraine): Dispute resolution, Tax (2019); • Certificate of Honor issued by the Main Territorial Administration of Justice in Zaporizhzhya Region (2018); • Certificate of Honour issued by the Cabinet of Ministers of Ukraine (2012); • Acknowledgment of the City Mayor of Dnipropetrovsk City Council (2013).

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PROFESSIONAL EXPERIENCE

Oleksandr Bondarchuk’s practical experience is in excess of 16 years. He represents the interests of financial institutions, international companies and large Ukrainian enterprises, agricultural and alcohol holdings, construction and IT companies (JSC FUIB, JSC OTP Bank, OLYMP Alcohol Company, Nemiroff, SE Production Association Yuzhny Machine-Building Plant named after A.M. Makarov, LLC OSCAR Production Group, Ukrainian eSport Federation, ROSTOKHOLDING, etc.).

PROFESSIONAL ACHIEVEMENTS

Oleksandr Bondarchuk is a professional insolvency trustee, acting chairman of the Ukrainian National Insolvency Trustee Association and a member of Bankruptcy Committee of the Ukrainian National Bar Association. Mr. Bondarchuk actively participates in drafting legislation in the field of bankruptcy, and stands for the protection of the rights and freedoms of bankruptcy trustees in Ukraine. One of the key practices of Absolute Law Agency works with distressed assets, including bankruptcy and restructuring practices. Since 2008 the firm has provided support to bankruptcy procedures for more than 120 enterprises (JSC VTB Bank, JSC PUMB, UVC Nemiroff, etc.) The team of experienced insolvency trustees, lawyers and attorneys provides full protection of the interests of clients at all stages of bankruptcy proceedings.

Who is Who

Corporate and M&A AVELLUM has for many years commanded a cutting edge corporate and M&A practice mandated for elite work, often alongside big international law firms. Thus, the team is hired on a regular basis for landmark deals reshaping certain industries in Ukraine, outbound investment, strategic joint ventures, and Ukrainian corporate matters related to global transactions. The firm consistently expands its practice, acquiring new clients and growing its presence in various industries, namely technology, media and telecoms (TMT), FMCG and retail, agriculture, real estate, energy, healthcare, banking. Most recently the firm advised Epicentr K in connection with the acquisition of Svarog Group, a high-tech agricultural company; advised UDP, a leading Ukrainian development company, on the acquisition of a 33.35% stake in Ocean Plaza, one of the largest shopping and entertainment centers in Ukraine and Europe; advised Prostor, a Ukrainian retailer of cosmetics, in connection with the acquisition of KOSMO, one of the largest cosmetics and house care retail chains. The team is among the busiest in handling deals involving alternative energy projects. In 2020 the team boasted a breadth of practice in structuring private equity investments, joint ventures and shareholding, corporate governance matters and advising on distressed M&A. Prominent Mykola Stetsenko is the premier M&A lawyer, shifting his major focus on foreign clients working with international counsel. Yuriy Nechayev is one of the busiest hands-on professionals endorsed for his combination of knowledge and impressive practical experience. Another key figure is Andriy Romanchuk, who fronted a series of challenging projects over the past year. The Kyiv office of prestigious Baker McKenzie is retained by multinational companies and Ukrainian industry leaders for high-profile corporate and M&A assignments, large-scale joint ventures and private equity deals. Sector-wise transactional experience spans agribusiness, life science, energy, infrastructure, TMT (technology, media and telecoms). The firm advised Glencore Agriculture Limited, an agricultural commodities giant, on its acquisition of LLC Everi port terminal from the Orexim Group of companies; acted as lead legal counsel to Remington Seeds with respect to a strategic agreement with MAIS to purchase its seed plant and farming operations in Ukraine. The team regularly acts as Ukrainian law counsel in global deals. For example, it advised Flügger group A/S on the acquisition of a 70% shareholding in Eskaro Group AB, an international paint group with operations in Ukraine, Russia, Belarus, Estonia, Latvia and Finland; advised Nielsen, the media research firm, split into two independent publicly-traded companies by the spin off its Global Connect business. Another example is advising Polenergia International on the structuring of a joint venture to participate in a PPP project in the power sector. The team is led by two partners — strong transaction professional Olha Demianiuk, who heads the healthcare industry group, and Viacheslav Yakymchuk, who leads the agriculture industry group, and is praised for his unparalleled experience, quality of work and personal involve-

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ment in negotiations. Counsel Andrii Moskalyk is highly experienced in the oil and gas sector. The formidable corporate and M&A practice of Sayenko harenko is one of the busiest in the country, performing domestic and K international M&A, joint ventures and strategic alliances that are the most landmark in scope and complexity. Given substantial transactional activity in the infrastructure sector in 2020 the team acted as legal counsel to the Orexim Group of companies on the sale of a port terminal Everi to Renaisco B.V., a subsidiary of Glencore Agriculture Limited; acted as legal counsel to a successful international consortium in relation to participation in both pilot tenders for the concession of Kherson and Olvia sea ports; advised Myrwayton Holding Limited in relation to the sale of a railway operator to Renaisco B.V. Another landmark representation was rendered to OH Holding Limited in relation to the sale of a 51% stake in the Luxottica Group of companies and the creation of a joint venture with Essilor Nederland Holding B.V., a subsidiary of EssilorLuxottica, the world’s largest manufacturer of eyewear products. The team’s sectoral expertise extends to financial services, transport, infrastructure, IT and technology, FMCG, and energy industries. In the banking and finance sector, the firm advised DCH on the acquisition of Bank Credit Dnipro; and advised the Treeum group, the leading online financial supermarket in Ukraine, on the sale of the group’s controlling stake to Dragon Capital. Further expertise extends to corporate governance matters in the public sector and squeeze-out. Three partners of the firm lead practice projects. Oleksandr Nikolaichyk is in front of the majority of M&A assignments, and is observed as a well-trained leader of this practice. Alina Plyushch fronts multijurisdictional deals and deals governed by English law. Vladimir Sayenko splits his time between M&A and competition matters, and plays strategic role for the firm. June 2020, US-qualified partner Peter Teluk joined the firm. The senior executive team includes Sergiy Kazmirchuk and Dmytro Korbut. Associate Ilhar Hakhramanov received positive comments in feedback from peers in the market. AEQUO consistently earns top M&A and JV mandates in a range of key economic sectors — agribusiness, pharmaceuticals, TMT, oil and gas, retail, real estate. Among the big-ticket deals was advising a large Ukrainian food retail chain, Novus Ukraine, on the acquisition of its competitor Billa Ukraine from REWE Group. The team also acts for significant retail actors, inter alia, Inditex Group on a corporate restructuring and in setting up an online shop. The team spent a ground-breaking year in terms of transactions in the TMT sector. The firm acted as a Ukrainian law counsel to NetApp, an American hybrid cloud data services and data management company, on the USD 450 million acquisition of Spot, a leader in compute management and cost optimization on public clouds; acted for a group of investors led by Kayne Anderson Capital Advisors in investing in CreatorIQ, an influencer marketing company

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Who is Who

Corporate and M&A

LEADING INDIVIDUALS

LEADING FIRMS

1. Mykola Stetsenko (AVELLUM)

1. AVELLUM

2. Viacheslav Yakymchuk (Baker McKenzie) 3. Anna Babych (AEQUO) 4. Yuriy Nechayev (AVELLUM) 5. Tetyana Dovgan (CMS Cameron McKenna Nabarro Olswang) 6. Graham Conlon (CMS Cameron McKenna Nabarro Olswang) 7. Oleksandr Nikolaichyk (Sayenko Kharenko) 8. Olha Demianiuk (Baker McKenzie) 9. Adam Mycyk (Dentons) 10. Illya Tkachuk (INTEGRITES)

Other notable PRACTITIONERS Oleg Boichuk (Asters)

2. Baker McKenzie 3. Sayenko Kharenko

Yevheniy Deyneko (EVERLEGAL)

4. AEQUO

Taras Dumych (Wolf Theiss)

5. CMS Cameron McKenna Nabarro Olswang

Ernest Gramatskiy (Gramatskiy & Partners)

6. DLA Piper Ukraine* 7. Asters

Yuriy Katser (KPMG Law)

8. Dentons

Alla Kozachenko (DLA Piper Ukraine*)

9. INTEGRITES 10. EY Ukraine

Other established PRACTICES

Oksana Krasnokutska (AEQUO) Listed in alphabetical order

CMS Reich-Rohrwig Hainz Eterna Law

Gramatskiy & Partners

Oleh Malskyy (Eterna Law)

GOLAW

Andrii Moskalyk (Baker McKenzie)

Ilyashev & Partners

JURLINE

KPMG Law

Royal Gardens Business Center, 66/1 Frantsuzky Boulevard, Odesa, 65062, Ukraine Tel.: +380 48 235 6517 +380 48 738 0893 E-mail: office@jurline.ua Web-site: www.jurline.ua

ID LEGAL GROUP

Andriy Olenyuk (EVERLEGAL) Maria Orlyk (CMS Reich-Rohrwig Hainz)

Marchenko Partners MORIS GROUP

Alina Plushch (Sayenko Kharenko)

Nobles

Andriy Romanchuk (AVELLUM)

Pavlenko Legal Group Redcliffe Partners

Celebrated PRACTITIONERS

VIGOLEX

Oleg Batyuk (Dentons)

RELE Business Center, 8th Floor, 132 Holosiivskyi Avenue, Kyiv, 03127, Ukraine Tel.: +380 68 520 8888 +380 50 520 8888 15 Zhukovsky Street, Odesa, 65026, Ukraine E-mail: info@vigolex.net Web-site: www.vigolex.net

Iryna Nikolayevska (Kinstellar)

Kinstellar

5A, H. Skovorody Street, Kyiv, 04070, Ukraine Tel.: +380 44 482 5780 +380 44 482 5785 +380 67 719 1177 +380 66 719 1177 E-mail: info@id-legalgroup.com Web-site: id-legalgroup.com

Michael Lukashenko (AEQUO)

Bogdan Malniev (EY Ukraine)

EVERLEGAL

Jurline

Olena Kuchynska (Kinstellar)

Denys Maistrenko (Pavlenko Legal Group)

EUCON Legal Group

COUNSELINK

Listed in alphabetical order

Vadym Samoilenko (Asters)

Wolf Theiss

Roman Shulyar (Marchenko Partners) Listed in alphabetical order

Armen Khachaturyan (Asters) Denis Lysenko (AEQUO) Vladimir Sayenko (Sayenko Kharenko)

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Zoryana Sozanska-Matviychuk (Redcliffe Partners) Anna Tkachenko (Dentons) Volodymyr Yakubovskyy (Nobles) Galyna Zagorodniuk (DLA Piper Ukraine*) * Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Who is Who with R&D in Ukraine. Another benchmark deal concerned the Ukrainian legal tech sector, included representation of Onit, a leading provider of enterprise legal management in its acquisition of AXDRAFT, a document automation company. The team stands out for its extensive track record in private equity deals, and consistently receives instructions from a range of local and foreign funds. Dragon Capital instructed the firm to represent its interests during acquisition of Treeum group, the leading online financial supermarket in Ukraine, the Industrial Park Ryasne-2, the business center for the Kyiv School of Economics and other investments. With the two partners on board, the firm cemented its positions on the market. Anna Babych is endorsed for handling the most challenging projects and her involvement in policy-making. Splitting his time between competition and tax practices, Denis Lysenko guides the team in such sectors as oil and gas, mineral resources and retail. The firm has a recognized senior executive team. Michael Lukashenko is referred as the most recognized executive within M&A deals. Oksana Krasnokutska received the appreciation of the corporate sector for her strong performance in retail. Mykyta Polatayko demonstrated notable activity advising the IT sector. СMS is represented through two offices in Ukraine. CMS Cameron McKenna Nabarro Olswang reaffirms its position as a go-to international counsel for big-ticket transactions with English-law capability in Kyiv. The firm is highly active in the infrastructure sector, being a legal counsel for large-scale deals and major joint ventures transactions. In 2020 the firm advised TIS Group on the English and Ukrainian law aspects of a landmark joint venture transaction, when DP World acquired control of TIS Container Terminal Ukraine, the deepest and most technologically advanced container terminal in Ukraine’s Black Sea port of Yuzhniy. The firm continued advising MV Cargo on all aspects on the ongoing establishment of a joint venture with Cargill, a leading international agricultural company, and its construction of a new grain terminal in the port of Yuzhniy. The firm is exceptionally well-presented in the energy sector, advising Scatec Solar ASA, a large Norway-based solar power developer, on its continuous expansion of the solar portfolio in Ukraine; and represented Acciona Energia on all aspects of its joint venture projects. The firm advised the EBRD on the acquisition of a minority stake in a leading food retailer Korzinka. Private equity deals are also in the pipeline of the M&A team. In the past year the Kyiv team was strengthened by the arrival of English-qualified lawyer Louise Cakar. Graham Conlon, an Englishqualified corporate and private equity partner, was noted as a numerical lawyer possessing broad experience in CEE and knowledge of various market practices, who adds value to the team. T etyana Dovgan is highly esteemed for being an exceptionally strong negotiator and handing complex M&A in infrastructure. CMS Reich-Rohrwig Hainz is called upon for corporate governance, reorganizations, M&A. In conjunction with its international network, the team is also mandated for global restructuring. Industry-wise the office is present in energy, IT, healthcare and pharmaceuticals. The Kyiv team continued to handle complex and comprehensive corporate governance matters for the Gas Transmission System Operator. The landmark M&A project was advising Quadient on the acquisition of YayPay Inc., an IP start-up. Following completion of a complex multijurisdictional transaction on acquisition by MANE Group of the distributor chain, the team continues to provide regular support and legal advice to the client and its subsidiary in Ukraine in connection with their day-to-day business activities. Maria Orlyk is a visible and well-regarded corporate partner. Johannes Trenkwalder is another key contact. With its strong global footprint, DLA Piper1 earns elite corporate and M&A work from sound multinational corporations, including support on cross-border M&A and complex joint ventures, corporate restructurings and an extensive roster of commercial matters. The practice’s recent pipeline took in large-scale M&A mandates covering such sectors as telecommunications, IT, media, aerospace and defense, manufacturing. Over the past year, the Kyiv office advised Brockwell Capital Limited on provision of a warranty and indemnity insurance to a buyer in a transaction on acquisition of a major Ukrainian telecom provider. Another example of the firm’s work was advising Ecolab Inc. on the global separation of its upstream energy business. Clients include AON, Mondelez, Perion, Pfizer, NEQSOL. Anastasiya Bolkhovitinova is in charge of unique representations in the aerospace and defense sector. Alla Kozachenko is focused on M&A transactions, acting as lead partner. Galyna Zagorodniuk works on complex corporate mandates 1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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and splits her time with the competition practice. She gained praise for her detailed work approach and solid regulatory knowledge. The sizeable corporate and M&A team of Asters is historically preferred by prominent multinational companies. The wide-ranging engagements span establishment of local subsidiaries and termination, corporate structuring and governance, JVs and M&A, including Ukrainian parts of global mandates, and shareholder issues. Given the firm’s extensive presence in oil and gas, as well as the renewable energy market, this past year the practice portfolio maintained a chunk of subsequent transactions. For example, the firm advised Enwell Energy plc, a British oil and gas company, on its acquisition of Arkona GasEnergy, valued at up to USD 8.63 million, a Ukrainian company holding the license to explore, develop and produce hydrocarbons; acted for Volterra Energy Group on the sale of a minority stake to VR Capital in 10 solar power plant projects in Ukraine. Another strong industrial focus of Asters is IT and telecommunications. The recent transactional highlight was advising Intersections Inc. d/b/a Aura, a technology company dedicated to simplifying digital security for consumers, on the purchase of a software business. The scope of its industrial presence is divided between four partners. Armen Khachaturyan guides the team in energy and projects involving public companies, and is recognized for its important role in the strategic development of the firm. Oleg Boichuk is historically active in transactions in the real estate sector. Oleksiy Demyanenko demonstrates notable activity in transportation and gambling. Vadym Samoilenko is active in advising healthcare, FMCG and technology clients and guiding general corporate work. Olena Radko and Oles Kvyat are seen as key executives across project work. Dentons uses its exceptional network across the CEE and CIS regions, and is a go-to firm for big multinationals seeking support in cross-border M&A, joint ventures, corporate governance, and general corporate and regulatory matters pertaining to market entry and operating in Ukraine. The firm acted on a landmark transaction on the Ukrainian retail market, and represented REWE Group, a German diversified retail and tourism cooperative group, on the sale of the Billa supermarket chain in Ukraine. Renewable energy continued to be at the center of transactional activity, where the Kyiv office is particularly active on the side of buyers. Other areas of the firm’s presence include agriculture, life sciences, financial services, technology, hardware and electronics, and chemicals. Adam Mycyk, a US-qualified partner, enjoys a legacy as a prominent transactional lawyer. Counsel Anna Tkachenko was noted for her hard-working M&A performance. Oleg Batyuk plays a strategic role for complex corporate mandates and has been for many years the inevitable point of contact for many international clients of this global firm. INTEGRITES demonstrates a growing client portfolio, volume and complexity of transactions. The practice team is retained by sound multinational companies for cross-border M&A and multijurisdictional joint venture projects, corporate governance issues, corporate restructurings and reorganizations. In a recent highlight the team advised Sibelco, a global material solutions company, on the acquisition of a group of companies specializing in the extraction of mineral resources in Ukraine. Another ongoing project is advising BGS Rail, a Ukraine-based company established by Baltic Ground Services providing long-term renting of railcars, on the acquisition of a Ukrainian company specializing in the lease of different types of wagons. Most recently the team assisted the Ministry of Finance of Ukraine and state-owned Ukrgasbank on the inclusion of the International Finance Corporation into the bank’s share capital; advised Savencia Group on corporate restructuring aimed at simplifying corporate governance. In the team’s pipeline are a series of high-profile M&A transactions in the renewable energy, heavy industry and mineral resources, agribusiness, healthcare and pharmaceuticals, banking and finance sectors. The practice head, Kyivbased partner Illya Tkachuk, had a busy year and received extremely positive appraisal from peers for his exceptional legal and commercial knowledge. The senior team includes Anton Babak, transactional practitioner, and Inna Kostrytska, who focuses on corporate restructuring. Vasyl Yurmanovych and Yuliya Bleshmudt focused on the projects of German-speaking clients. Munich-based partner Dr. Julian Ries focuses on developing international offices. Renowned for its multidisciplinary capabilities, the legal team at EY continues to grow its volume on the Ukrainian M&A landscape, expanding its track record of private equity and venture capital transactions. The legal team lately advised Horizon Capital on its investment in MAKEUP and Liki24; acted for Project Partners on acquisition of a Ukrainian company holding, Azor Business Center, in Kyiv from Basenj LLC. The firm’s M&A profile also features representation of sellers, and

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Who is Who

Corporate and M&A mandates from large Ukrainian business groups and local businesses seeking equity investments. Landmark projects of 2020 included EY’s involvement in a pilot concession transaction in Olvia and Kherson sea ports, and completion of the long-lasting Naftogaz of Ukraine unbundling project. Furthermore, EY handled ongoing corporate support to a roster of local players and subsidiaries of multinationals, and is called upon in projects with state-owned and municipally-owned companies on reforming their corporate structures, system of corporate governance and control. In 2020, the team provided assistance to Ukroboronprom in defining its governance strategy. Bogdan Malniev maintains high involvement in M&A work endorsed by market participants. The practice was further reinforced by the return of Borys Lobovyk, partner, who became head of the EY law practice in Ukraine. Albert Sych is continually present in complex corporate mandates. Eterna Law boasts lengthy experience for corporate engagements mandated by renowned businessmen and corporates, encompassing ownership structuring, multijurisdictional reorganizations, cross-border dividends distribution, corporate rights purchase and sale. In addition to Ukraine, and given its presence in Russia and Kazakhstan, the firm is hired as a counsel on subsequent national laws. For example, the firm acted as legal advisor to Global Spirits on issues related to acquisition of an alcoholic beverage plant in Kazakhstan. This past year the firm was active in M&A deals involving alternative energy projects, and advising investment structuring and entry into the Ukrainian gambling market. The practice has two partners on board. Oleh Malskyy is focused on pure M&A. Artem Kuzmenko leads corporate work for clients from the gambling, IT, infrastructure and construction sectors. Konstantin Derbyshev and Margarita Tatarova are present across many of the firm’s projects. Given offices in Kyiv and Warsaw, EUCON Legal Group cemented its position as a go-to counsel for Polish and CEE companies doing market entries and investment activities in Ukraine, as well as for Ukrainian companies seeking corporate structuring in Poland. The expertise of the group encompassed international corporate structuring, corporate governance, acquisition of corporate rights and intra-group deals. In a recent highlight the firm advised Lagako LLC, a company involved in the cultivation and processing of flax plant, in acquisition of the corporate rights of Linen of Desna from Ukren Agri. This past year the group was extensively instructed on relocation of Belarusian IT companies to Ukraine and Poland. The Warsaw office increased the number of assignments on corporate governance and structure, including clients like Nord Farm Sp. z o.o., Farmak International Sp. z o.o., Roshen EUROPE Sp. z o.o.; and maintained its well-established service — corporate business structuring throughout Poland for Ukrainian and CIS investors (e.g., TGL Polska, TranSoftGroup, Restauracja Baczewski, Agrocenter Poland, Online Radio Box, G3C Engineering). Yaroslav Romanchuk and Andrii Romanchuk lead the projects in Ukraine and Poland, respectively. Counsel Mariia Lipina is another important executive. EVERLEGAL is a preferred Ukrainian counsel for renewable energy developers and investors, large and mid-size energy companies, investment funds, IT companies, agrarian businesses. In light of the firm’s robust renewable energy practice, its team represents anchor clients — UDP Renewables and Main Group Ukraine on a wide range of transactions. For example, the team supports UDP Renewables with regard to the sale of a 50% stake in a number of wind solar power plants under development, and sale of a 75% stake in a number of operating solar power plants. In addition, the firm assisted an oil and gas technology company with negotiating and structuring JVs with public and private oil and gas companies in Ukraine. The firm continued to enhance its presence in the IT and innovations sector, being retained for M&A and JVs, as well as supporting operational matters. In a recent highlight the team advised a German private equity fund on the acquisition of a group of companies in IT business with significant R&D presence in Ukraine. In addition, the team was retained to support projects connected with construction and development of industrial parks, and was active in representation of agrarian companies in expanding land banks and their asset deals. The sizeable team is led by two partners — Yevheniy Deyneko, endorsed for extensive transactional path in 2020, and Andriy Olenyuk acclaimed for his accurate performance in renewable energy. Gramatskiy & Partners is a highly-recognized domestic counsel with an established client following from real estate and construction, commercial property, IT, investment, transportation, engineering, logistics HoReCa sectors. The firm has exceptional standing in real estate, and recently supported the sale of the Arsenal Plaza Business Center to Tarantino Family group; advised Global Space Management on the

sale of a controlling stake in Zhytlobudinvest LLC, one of the largest development companies in Kyiv. Noteworthy, throughout 2020 the firm supported a series of share deals aimed at the acquisition of land plots and acted on privatization projects. For example, the firm represented Bastion Group LLC on the acquisition of PJSC Kyivpasservice during privatization. Another significant focus of the practice team is support of investment in start-ups, including angel investments. A consistent flow of instructions of mid-market deals, restructuring of ownership and corporate control, intra-group restructuring. Ernest Gramatskiy leads M&A work, and performs both strategic guidance and personal leadership in the negotiation process. Yegor Ignatichev leads the corporate practice. In 2020 Ukrainian law firm GOLAW was called on to advise on the purchase and sale of corporate rights, shareholder agreements, distribution of dividends, conversion of debt into share capital, corporate governance. The firm is consistently preferred by significant actors from energy, retail, FMCG, IT and agribusiness. The firm advised Skyline on the exclusion of a participant from the company by a decision of the majority of participants, which became the first precedent in Kyiv for the exclusion procedure provided for by new legislation. PPP is another area of the firm’s expertise. Most recently the team rendered support to Software Solutions & Technologies AG on structuring foreign investments and corporate governance. The firm’s client roster takes in TIU Canada, Ubisoft Ukraine, GAP Ukraine, Marka Ukraine, Oriflame. Max Lebedev acts as lead partner, supported by Taras Lytovchenko and Oleksandr Melnyk. Ilyashev & Partners maintains its reputation as a go-to firm for high-stake shareholder disputes and resolution of multijurisdictional corporate conflicts, in parallel enhancing its portfolio of corporate structuring, M&A and shareholding agreements instructions. The team is consistently retained by Ukrainian business groups, owners and private investors, as well as foreign companies entering the market. Most recently the corporate practice advised a US investment company on the sale of its Ukrainian IT branch company and conducted due diligence in SLR Ukraine, a subsidiary of Selerant, in terms of potential acquisition of Selerant by the private equity fund Symphony AI. The track record of recent conflicts encompasses protection of the interests of LU Invest (Latvia) in a corporate conflict regarding the management of the agricultural holding Golden Sunrise, and acting for Vnesheconombank in connection with the actions of raiders against eight leasing companies, namely the bank’s Ukrainian subsidiaries. Yevgen Solovyov is lead partner, supported by the firm’s counsel Leonid Gilevich. Jurline, a domestic law firm based in Odesa, is preferred by major industrial leaders in Southern Ukraine for handling corporate rights transactions, corporate structuring, privatization and other forms of public-private partnership. The firm has especially well-established positions in infrastructure, transshipment and transportation services, wineries, real estate and commercial property. Jurline represented Fedcominvest Monaco SAM and Alekszej Fedoricsev (together holding 37.5% shares in TIS-Container Terminal) in the course of changes in the corporate structure in connection with the entry of a new participant — DP World (UAE) into TIS-Container Terminal. Further expertise includes development of investment schemes and alienation of corporate rights. The firm’s representative clients include TIS-Grain, TISMindobryva, PJSC Odesawinprom, PTK Shabo, Kadorr Group, PJSC Severtrans, PJSC Odesavtotrans, SK Petroleum, Teka (Sarmont group holding). The practice has two partners on board, namely Volodymyr Zubar and Maxim Kapelist. Kinstellar provides a solid offering on the Ukrainian corporate arena, and was noted for the office’s expertise handling M&A and JVs deals, privatization, corporate governance, regulatory and compliance issues. The office is consistently mandated for advising on corporate governance reform related to state-owned enterprises in Ukraine — Naftogaz of Ukraine, the national oil and gas company, Ukrposhta, the national postal operator, Ukroboronprom, the national state-owned defence company, Ukrenergo, the national transmission system operator for energy. Kinstellar Kyiv advised Vesco Limited, one of the leading clay manufacturers and exporters in the world, on the acquisition of a majority stake in Public Joint Stock Company Chasov-Yar Refractory Plant, a Ukrainian clay manufacturer; represented QTerminals WLL in the largest port concession project in Ukraine — concession of the Black Sea Port of Olvia. The M&A team’s deals were seen in the automotive, pharmaceuticals, energy, TMT and real estate sectors, as well as instructions of multijurisdictional corporate restructurings and reorganizations. For example, the firm advised GTT Communications, Inc., a global leader in cloud networking services, on the sale of its infrastructure business

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Who is Who to I Squared Capital, an independent global infrastructure investment management firm, for USD 2.15 billion, and assists with divestment of the infrastructure business in Ukraine. The practice has two partners on board. Iryna Nikolayevska heads the corporate/M&A and compliance practices. With her focus on energy, oil and gas and environmental sectors, Olena Kuchynska handles complex corporate and corporate governance matters, privatization projects and investment activities. She received references as a well-rounded lawyer with sharp judgment. KPMG Law regularly handles due diligence of investment targets for international clients and corporate restructuring affecting multiple jurisdictions. The extensive client base spans IT, real estate and construction, equipment manufacturing, food and beverages, investment industries. The team provided CTP Invest with the sell-side legal support during the acquisition of an Industrial Park in Ukraine by Dragon Capital. KPMG stands out for its vivid privatization experience. For example, it leads a consortium of advisers to the State Property Fund of Ukraine in the course of privatization of First Kyiv Machine-Building Plant (formerly known as Bilshovyk) and supports the Fund in privatization of the State Enterprise Plant Eleсtrotyazhmash. Among landmark projects is advising on the unbundling of gas transmission system activities in Ukraine from Naftogaz, as part of the country’s energy market reform towards implementing the provisions of the EU Third Energy Package. Yuriy Katser, director, heads the work of projects with key involvement from Maksym Zavalnyy, Ivan Demtso, Bogdan Shyshkovskyi. Ukrainian firm Marchenko Partners rapidly reaffirmed its market position with the team that came from Nobles in 2019 and with the growing track record of corporate and M&A work. The team is experienced in complex cross-border deals, including those in highlyregulated industries, post-completion matters regarding multi-million M&A, corporate reorganizations, including Ukrainian parts of global projects, and general corporate support. The team closed one of the biggest transactions in 2020, having represented DP World, a Dubaibased provider of worldwide smart end-to-end supply chain logistics, in a multi-million dollar acquisition of a controlling stake in the major Ukrainian stevedoring operator TIS Container Terminal. The firm also advised EnergoGroup on post-completion matters regarding the sale in 2018 of EnergoGroup’s Ukrainian coal business to a group of buyers, including Metinvest B.V. Other clients serviced by the team include Ecosoft, LafargeHolcim, Subway. Roman Shulyar is a hands-on team leader with solid market praise and recognition from peers. Ukrainian law firm MORIS GROUP is getting more visible for its corporate work, and its recent scope spans corporate restructuring, including across multiple jurisdictions, corporate governance, acquisition of corporate rights, shareholder agreements. The practice team grants Ivano-Frankivskcement PJSC complex legal support regarding the restructuring of its group of companies in Ukraine; supported the Ukrainian Association of Football in concluding a share management agreement. Another highlight is representing the Teple Misto Charitable Organization in the process of preparing the corporate structure of Promprylad, a renovation project with the involvement of a plethora of companies, and prepared legal algorithm for investing in the project. Among the firm’s landmark ongoing representations is the creation and due operation of the Orthodox Church of Ukraine, which includes more than 7,000 legal entities. Maryan Martynyuk is lead partner. Ukrainian law firm Nobles possesses an extensive international client base seeking both general advice and corporate housekeeping in the country and representation in M&A. The portfolio also contains significant JVs projects in a range of industries, and support of investments of private equity and venture funds. The firm advised the Swiss private equity investor Evoco AG buyer on Ukrainian law issues on the acquisition of subsidiaries of Gesco AG (Germany); advised an Eastern European hostel operator Dreamgroup Management on the sale of its hostels in Warsaw, Prague and Bratislava to Safestay plc, operator of an international brand of contemporary hostels. The team is active in IT, e-commerce, media, retail, real estate, healthcare sectors. Clients include H&M Hennes and Mauritz, Auto1 Group GmbH, KIA Motors, Advanced Micro Devices, Inc., Spacebit Global Ltd, Viatrans and others. The practice is jointly led by a Ukrainian corporate partner, Volodymyr Yakubovskyy, and a German-qualified partner, Alexander Weigelt. Pavlenko Legal Group is enlisted for incorporation and corporate structuring, M&A, JVs, shareholders agreements, and handled general support in corporate matters. The M&A practice focuses on representing domestic clients. Recent public highlights include representation of the Odesa Film Studio JSC in the course of sale by former head of 1+1 Media, Oleksandr Tkachenko, of a 25% stake to Oleksandr

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orozov, a Ukrainian banker. The team also acted for PJSC HalychM pharm and PJSC Kievmedpreparat in procedures of mandatory acquisition of minority stakes on the stock exchange. Since 2020 the firm has worked on share deals involving land and real estate purchases, as well as transactions in such sectors as wholesale trade, construction, agrarian equipment, IT, financial services. Denys Maistrenko heads the practice. Redcliffe Partners was called upon for M&A support in agribusiness, financial services, pharmaceuticals, energy, IT, transport. The firm often acts as a Ukrainian law counsel in global transactions alongside international law firms. In 2020 the firm was traditionally active in the renewable energy sector, and currently advises Aragon Capital/ Clear Energy, acting as a seller of a several renewable energy projects located in Ukraine. Another transactional highlight is representation of a FinTech company called YayPay, specialized in accounts receivable management software during the EUR 17 million acquisition by Quadient, a leading manufacturer of mailing equipment and provider of mailing-related services. The firm advises the founder of a Ukrainebased tech start-up called Hurma System in connection with round A financing, including advising on the establishment of a joint venture company and negotiating a shareholders’ agreement. SALIC has been advised on regulatory, corporate and contractual matters, such as potential investment in infrastructure and land reform. Zoryana Sozanska-Matviychuk, partner and head of M&A practice, is qualified to give advice on matters of English law. Corporate and compliance practices are led by US-qualified partner Rob Shantz. Dmytro Fedoruk is known for representing oil and gas companies. The Kyiv office of Wolf Theiss acts regularly in unison with its CEE network of offices on multijurisdictional transactions, and is a traditional point of choice for European companies seeking entry to the Ukrainian market. In particular, the team advised Royal DSM, a global science-based company in nutrition, health and sustainable living, as part of a global M&A project, on the acquisition of Biomin and ROMER LABS divisions of Erber Group; handled the Ukrainian part of the disposal by the global, privately-owned pharmaceutical company Alvogen of its CEE business to Zentiva. This past year was notable for the office’s advice on privatization, inter alia, counseling a joint venture between Ukrainian and Israeli investors on the privatization tender of the Dnipro Hotel. Other areas of established expertise include corporate governance, corporate reorganization and internal processes re-structuring. Taras Dumych, managing partner, possesses further experience in corporate governance matters and private equity deals. Alstellar Law Firm develops its core focus on international corporate structuring and is mandated for concurrent regulatory and tax matters. The team extended its projects portfolio with corporate structure clearances, business relocation, share sales, restructuring and dividend payments. The team added further experience of resolution of corporate conflicts. 1+1 Media, Evo Play, Fishing Company S.A., GP GLOBAL SUISSE S.A are on the firm’s client list. The practice is led by the firm’s managing partner Olga Vinglovska. Ukrainian firm Andriy Kravets & Partners advised Aitheon Ukraine, Astarta Group, Konecranes, Bio Hlib, Dilkorn Trade, Muztorg, Lybid, Sophia, Optical Design, Ukrainian Agro-Insurance Company on a range of corporate and corporate governance matters, preparing documents for general shareholders/participants meetings of companies. Ante Law Firm has a remarkable following of clients from the aviation and pharmaceutical sectors. The corporate practice spans day-today support for representative offices, including their registration and liquidation, opening branches, changes in management and corporate structuring. Clients include the Lufthansa group (Lufthansa, Swiss, Austrian, Brussels Airlines), Ernest S.p.A., British Airways, Air France — KLM, Alitalia, Qatar Airways and other international airlines, operating flights to/from Ukraine; Aviaholidays LLC, the representative office of the Turkish construction company DOĞUSAN İNŞAAT, Sanofi-Aventis. Andriy Guck is the main contact. ANTIKA Law Firm is experienced in the field of commercial, corporate law and M&A. This past year the firm assisted Magnusson International Verein on a debt-to-swap transaction that was carried out by the Ukrainian subsidiary; handed restructuring of the existing system of corporate management of a group of Ukrainian companies managed by AWT Bavaria and introduced the unified and vertically-integrated system of corporate management. The team renders support for the commercial activities of Zoo 12 Months LLC. Alexander Burtovoy, Dr. Alexey Kot and Andrey Kuznetsov are lead partners.

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Who is Who

Corporate and M&A Ario Law Firm advises on the protection of property rights, acquisition of corporate rights, resolution of corporate disputes, corporate matters related to business expansion. Among the landmark projects of the firm in 2020 was development of customs reform in terms of the corporate structure of the State Customs Service, that was conducted in cooperation with the IMF. The firm also continued long-lasting representation of Hotel Lybid in a corporate dispute due to a raider attack on the hotel’s corporate rights. The practice has three partners on board — Julian Khorunzhyi, Ruslan Sydorovich and Andriy Fylyk. ECOVIS Bondar & Bondar renders corporate advice in the aviation sector. The firm is experienced in corporate structuring and PPP. Ukraine International Airlines, Interavia, Aerohandling are on its client list. Oleg Bondar and Oleksandra Nikitina are the main contacts. Ukrainian law firm ESQUIRES is enlisted to handle general corporate work, including business establishment, day-to-day support of business activities, restructuring and liquidation. Notable expertise consists of multinational corporate structuring and outbound investment. Viktoria Kovalchuk and Bogdan Prysyazhnyuk are lead partners. Ukrainian law firm Hillmont Partners, with a representative office in London, has experience which takes in establishment of JV and acquisitions, PPP and concession, corporate law disputes with respect to hostile takeovers. The firm is particularly focused in the areas of mining and natural resources, infrastructure and retail. The client portfolio, among others, include the US consultancy group AlixPartners, Black Iron Inc., and the leading Spanish start-up Glovo. The practice is supported by a well-established regulatory affairs practice and strong positions in GR. James Hart, founding partner, heads the practice and is the key client relationship figure. The Kyiv office of the French law firm Jeantet is customarily preferred by foreign names, especially francophone clients on their corporate and commercial issues from doing business in Ukraine. This past year the office rendered legal assistance to a French multinational technology consulting and engineering company with respect to acquisition of assets of a Ukrainian engineering company. The firm advised AmSpec, a professional group working in inspection and testing services in energy, on transfer of a minority shareholding, share capital increases, corporate management. Bertrand Barrier is lead partner. KM Partners acts on general corporate and commercial matters, providing seamless tax advisory, that is a renowned strength of the firm. Among other assignments, the firm advised on payment of dividends, entrance of new participants, disclosure about beneficiaries, joint stock companies’ spin-off. Alexander Minin and Maxim Oleksiuk are lead partners. Krolevetskyi & Partners, a Kharkiv-based law firm, is a vivid regional counsel, being enlisted for business structuring, reorganizations and share deals. In 2020 the firm acted in a series of corporate rights sales representing local domestic clients, Khelso LLC, Metalobaza Metalan, Cuprum Capital Group. The practice is headed by Olexii Zaitsev. LCF Law Group added corporate practice to its offering with its merger with Evris Law Firm in the past year. The firm advises on corporate structuring, ownership control from the perspective of corporate conflicts, capital increases, investment support and structuring. Amongst publishable clients are Ostchem Holding Limited, Alros Holding Limited, Finance Real, Fozzy Group, Grawe Ukraine, SCATEC Solar Solutions Ukraine, Greenteco SES, Chysta Enerhiia 2011. Sergiy Benedysiuk is lead partner. Legal House Group was established by a group of lawyers from Juscutum Law Firm in 2019. The dynamic team rapidly grows its client base, and offers corporate structuring and transactional support. In 2020 the firm advised a production service company called Radioaktivefilm LTD in the course of its merger with TF7-TV S.L., specializing in producing creatively-driven content for brands, advertising agencies, studios and production companies worldwide; supported structuring the Miratech holding; advised on choosing a model for structuring and scaling the business of Uma And Umi Group to EU markets. Another highlight was structuring corporate relationships for Budynok Ihrashok. Among publishable clients are Kryla, Biznes-Konstruktor, Glovo (Hlovoapp Ukraine LLC), Harten-KONSALTYNH LLC, Polar HPC, B-pro, GMS, Wirex, Studio 53, Onyx, Pragmatic Play, Cronwest, Salvi. The projects are led by two partners, namely Ruslan Redka and Lana Golian.

MK Legal Service handles general corporate support to domestic clients with a distinctive focus on HoReCa and telecommunication industries. The firm arranges comprehensive legal support to Ukrainian restaurant chains, and supports transactions in the TMT sector. In particular, the firm advised on investment business models of the Ukrainian restaurant chain Chernomorka and burger network Yudgin Burger; supported IFPharm in attracting investment from Azerbaijan to open an online pharmacy. Another notable project was support of GigaGroup, a player on the Ukrainian telecommunications and technology market, on establishment of IAAS, an operator of cloud services. Selected clients of the firm are Gastrofamily — Dmitry Borisov’s family of restaurants, a start-up called Trustee Wallet, Medical Data Management. Maksym Kurochko, managing partner, is the key contact. The Kyiv office of the Czech law firm Peterka & Partners is a port of call for many CEE clients doing business in Ukraine. In particular, the firm provided full-range legal support to PEKM Kabeltechnik, a renowned Czech manufacturer of electrical equipment and electronics, on the corporate issues of transfer of participatory interest and debt to equity swap; Mammoet Ukraine, a global market leader in engineered heavy lifting and transport services, on development of a multilevel structure of corporate governance; KPB INTRA, a Czechbased company specializing in the development, production and sale of electrical appliances, with regard to corporate issues related to its joint venture in Ukraine. The team is approached for corporate advice on market entries and exits, internal corporate procedures. Other clients include World Courier, Polpharma, Nutreco, Czech Center, Algol, HSH Chemie, Steelcase. Kyiv-based partner Taras Utiralov is the main contact. The Kyiv branch of SBH Law Offices, a Belarusian firm, became visible in supporting clients in the organization of their business in Ukraine, including various corporate issues. Among notable projects in 2020 was advising Santa Impex Brest, the largest Belarusian food holding and the third largest distributor in the CIS, on its purchase of a power station. The team has vivid focus on the IT sector that conducted relocation to Ukraine, and experience in advising venture capital actors. For example, the firm advised the venture capital funds Adventure Lab and Kolos Ventures on issues of investment in Ukrainian IT start-ups; advised Belarusian IT start-ups Simplerity and Fanaticka on corporate structure issues before the seed round of investments. SBH acted as a legal counsel for Mogotel Hotel Group on its entry into the Ukrainian market. Semyon Astapov, senior associate, handled the respective work. Stron Legal Services has a narrow industry niche centered on -commerce, fintech and the wider IT sector. The team offers seamless e international tax and corporate structuring. The recent representative experience includes legal support of acquisition of a 100% shareholding in R&D company and incorporation of R&D office in Ukraine; corporate structuring of an online music platform in Europe for the purpose of attracting crowd investors. Gambling is an area of recent growth, inter alia, Stron handled legal support in the acquisition of an international gambling business with Maltese licenses and total client base of more than 100,000 users. Oleg Derlyuk, managing partner, is the practice head. Sytnyk & Partners is constantly present in cross-border transactions and supports the market entries of international names to the Ukrainian market, especially in IT and gaming industries. In a recent highlight the firm represented 4A Games in the sale of its gaming business to Embracer Group; acted for Schneider Electric, a global leader in digital transformation of automation and energy management, in the Ukrainian aspects of the global acquisition of ProLeiT, a developer of technological solutions. The practice is headed by Artem Sokurov. The full-service Ukrainian law firm Arzinger* is a notable market player with a very well-organized corporate and M&A team. The market recognizes the active role of its managing partner, Timur Bondaryev, as a rainmaker. Anna Zorya has strong market feedback, especially for her transactional work in the IT sector2. Volodymyr Igonin, partner of Vasil Kisil & Partners*, received praise from peers for his scrupulous approach and good knowledge of commercial issues, especially profound analysis of the potential risks and opportunities from a client’s perspective. 2

The firms marked with * have not submitted information for the current research.

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Who is Who

Criminal Law/ White-Collar Crime The standout team of AVER LEX commands a consistent leading position in white-collar crime (WCC), utilizing representation in high-profile economic crimes and politically-motivated prosecutions. The firm acts in the most serious cases involving leading politicians and wealthy individuals, public officials and judges, also advising prominent corporate clients and institutions. Being involved in comprehensive criminal cases, the firm is also adept at cross-border matters. The team is known for its long-lasting representation of ex-president of Ukraine, Viktor Yanukovych, in an unprecedented large-scale case with numerous proceedings and episodes; continued representation of high-level public officials, such as Yaroslav Dubnevych, a former MP of Ukraine and businessman; Igor Nasalyk, a Ukrainian politician, and former MP and ex-Minister of Energy and Coal Industry of Ukraine; a group of seven judges of the District Administrative Court in Kyiv. In addition, the firm extended its portfolio of projects addressing fraud and forgery, misappropriation of funds, fictitious bankruptcy, and handles corporate investigations. The largest market team has five partners on board. Vitaliy Serdyuk, one of the most recognized attorneys in Ukraine, heads the defense counsel group in resonant landmark proceedings. Olga Prosyanyuk, managing partner, acts in a multitude of challenging cases, including corruption proceedings. Igor Fedorenko handles high-stake WCC matters. Artem Drozdov took over leadership in a number of economic and corporate crime matters. Volodymyr Enich, who works alongside litigation cases, was promoted to partner. A ndriana Fozekosh and Bogdan Bilenko are the other key members of the executive team. Ukrainian legal heavyweight Asters commands one of the largest criminal law practices in the country, representing high-profile individuals and major corporates in domestic and international criminal investigations. The well-versed team is increasingly active in handling politically-motivated prosecutions and corporate crimes, financial fraud, tax evasion, money laundering, misappropriation of property, business security, and is also enlisted to handle comprehensive international criminal proceedings. The team represents TAS group in politically-motivated criminal proceedings on allegations related to the purchase of Kuznya na Rybalskomu shipyard in Kyiv; represents the former deputy CEO of a major state-owned company in criminal proceedings related to the operations of the company; defends Pelagia AS (Egersund brand), one of the largest fish suppliers, with respect to criminal proceedings connected with fraudulent actions of its counterpart to avoid payment for supplied goods. The firm has further strong capacities in handling compliance inquiries by its special anti-corruption compliance group, being retained by multinational corporates for global risk assessment on criminal liability risks for officers and employees in Ukraine. Referred for assembling and managing the strong WCC team, lead partner Sergiy Grebenyuk

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acts on the most complicated and sensitive cases. Orest Stasiuk, counsel, is another core team member. The most visible members of the executive team are Viktor Duma and T atiana Popovska. Igor Voronov (previously — Sayenko Kharenko) joined the practice. Acting as a one-stop shop in dispute resolution in Ukraine, QUITY has an extensive portfolio of landmark representations of E officials from the government sector and business leaders, as well as business owners, corporates and banks. The firm added its caseload with sensitive cases of political figures investigated by the National Anti-Corruption Bureau of Ukraine. Among the most resonant public cases was the defense the Mayor of Odesa — Hennadiy Trukhanov, suspected of embezzlement of property through abuse of office. The firm also defends the interests of Ukrainian top officials and high net worth individuals, including Volodymyr Omelyan (former Minister of Infrastructure), Roman Nasirov (former head of the State Fiscal Service), Dmytro Kryuchkov (former MP, chairman of the management board of Energomerezha Holding), Maksym Mykytas (ex-President of Ukrainian State Construction Corporation Ukrbud). The team successfully defended the interests of the owners of Agricultural Holding Gavrylivski Kurchata as its top management was charged with criminal proceedings on facts of violation of environmental safety rules and creation of a criminal organization. The sizeable team working on white-collar crime projects is guided by a number of partners — wellregarded Oleksandr Lysak, experienced Vyacheslav Krahlevych and Taras Poshyvanuyk. Luminary Yaroslav Zeikan has over 40 years of practical experience. Senior partner Viktor Barsuk plays the role of the firm’s key strategist. Highly-specialized in white-collar crime and a dispute resolution boutique, VB PARTNERS is customarily involved in resonant representations in the investigation of fraud, money laundering, misappropriation of funds and assets, tax evasion and fictitious bankruptcy, abuse of office, negligence and illegal enrichment. The team has experience in Interpol proceedings, and rapidly develops an investigations area. In a recent highlight the team renders defense of a former board member of the National Bank of Ukraine in criminal proceedings regarding the issue of a refinancing loan to one of Ukraine’s commercial banks; protects the interests of shareholders and top managers of banks (Delta Bank Ukraine, Delta Bank Belarus, Khreschatyk Commercial Bank, Сommercial Bank Premium, Omega Bank, etc.) in a number of criminal proceedings, including those on the facts of asset misappropriation, abuse of office and money laundering. The team represents the interests of the former First Deputy Minister of Justice of Ukraine (2015-2018) in a criminal case on suspicion of theft, to ensure a peaceful settlement of a dispute between Golden Mandarin Oil and Ukraine in the European Court of Human Rights and subsequently enforce this decision in Ukraine. The team is also

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Who is Who

Criminal Law/White-Collar Crime

LEADING FIRMS 1. AVER LEX 2. Asters 3. EQUITY

Other established PRACTICES ADER HABER

Alekseev, Boyarchukov and Partners CREDENCE

4. VB PARTNERS

ESQUIRES

5. Sayenko Kharenko

EUCON Legal Group

6. Barristers

Gramatskiy & Partners

7. Ilyashev & Partners 8. GOLAW 9. Ario Law Firm 10. GRACERS

retained by industrial and mining companies. For example, Glukhov Quartzite Quarry was successfully represented in criminal proceedings on illegal mining in 2019-2020. The practice has three partners on board. Renowned Ukrainian criminal defense attorney Denys Bugay is a go-to professional for banking clients. Oleksandr Lukianenko is another key partner, being especially active in cases involving fraud and corruption. Denys Shkarovsky, promoted to partner, develops the practice of investigations and corporate security. Sayenko Kharenko’s white-collar criminal defense team is known for its core focus on corporate crime matters, tax evasion, embezzlement, unlawful appropriation of funds, fraud, cyber and data protection crimes. As a full-service firm with a stellar bench of clients, the firm regularly advises major corporations on preventive measures, criminal law risks and compliance, potential consequences of criminal prosecution. The WCC team represents the interests of Oshadbank in criminal proceedings in connection with possible misappropriation, embezzlement and tax evasion at the pre-trial investigation stage; defends the rights of Power Construction Corporation of China Limited in a criminal investigation. The firm further continues defending the interests of the Auchan group of companies within a high-profile case on the illegal alienation of land plots in Odesa Region, and advising Porsche Finance Group companies on criminal law matters. The firm is enlisted to represent officials, and continued acting for ex-first deputy Minister of Justice Nataliya Bernatskaya in criminal proceedings on facts of malpractice. The sizeable white-collar criminal defense team is led by partners Sergiy Smirnov, who is mostly known for representing international corporate clients, and long-standing market insider Yevgeniy Solodko, who conducts criminal defense of officials. The team includes Zlata Simonenko, Volodymyr Adonin and Yevhen Myroshnykov. Ario Dehghani leads the firm’s compliance practice. In December 2020 the firm opened an office in Strasbourg for the protection of its clients at the European Court of Human Rights.

Listed in alphabetical order

Yaroslav Zeikan (EQUITY)

LEADING INDIVIDUALS 1. Vitaliy Serdyuk (AVER LEX) 2. Sergiy Grebenyuk (Asters) 3. Oleksandr Lysak (EQUITY)

Juscutum Law Firm LCF Law Group

4. Evgeniy Solodko (Sayenko Kharenko)

Shkrebets & Partners

5. Olga Prosyanyuk (AVER LEX)

Sokolovskyi & Partners Vdovychen & Partners

Other notable PRACTITIONERS

AUTHORITIES

6. Denys Bugay (VB PARTNERS)

Listed in alphabetical order

Artem Drozdov (AVER LEX) Igor Fedorenko (AVER LEX) Igor Glushko (GOLAW) Vyacheslav Krahlevych (EQUITY) Galyna Lefor (Ilyashev & Partners) Andrii Levkovets (Barristers) Oleksandr Lukianenko (VB PARTNERS) Serhii Lysenko (GRACERS) Tetiana Lysovets (Sokolovskyi & Partners) Angelika Moisieieva (GOLAW) Denys Nienov (Ilyashev & Partners) Illia Novikov (Barristers) Denis Ovcharov (Legal House Group) Taras Poshyvanyuk (EQUITY) Kostyantyn Rybachkovskiy (Alekseev, Boyarchukov and Partners) Oleksii Shevchuk (Barristers) Maksym Sheverdin (LCF Law Group) Zlata Simonenko (Sayenko Kharenko) Sergiy Smirnov (Sayenko Kharenko) Orest Stasiuk (Asters) Oleg Vdovychen (Vdovychen & Partners)

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7. Kostiantyn Globa (Barristers) 8. Yevhen Hrushovets (Ario Law Firm) 9. Denys Ponomarenko (Barristers) 10. Oleksii Meniv (Shkrebets & Partners)

COUNSELINK VDOVYCHEN & PARTNERS

Lagoda Business Center, 21 Poliova Street, Kyiv, 03056, Ukraine Tel.: +380 44 586 7777 +380 98 586 7777 E-mail: office@ov-partners-com Web-site: www.ov-partners.com

ID LEGAL GROUP

5A, H. Skovorody Street, Kyiv, 04070, Ukraine Tel.: +380 44 482 5780 +380 44 482 5785 +380 67 719 1177 +380 66 719 1177 E-mail: info@id-legalgroup.com Web-site: id-legalgroup.com

VIGOLEX

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Who is Who With a network of branches across Ukraine Barristers attorneys at law enjoys its deep focus on protecting politicians, businessmen, government officials, top managers of private corporations and banks in criminal prosecutions. During 2020 this sizeable team handled dozens of resonant politically-motivated cases. The landmark projects portfolio include representing Petro Poroshenko, Ukrainian politician and businessman, fifth President of Ukraine, currently MP and chairman of the European Solidarity political party in a series of criminal proceedings; representation of Hennadii Korban, Ukrainian statesman and politician, businessman, member of the Supervisory Board of Ukrnafta; representation of Mykhailo Bekker, founder of the bridge building enterprise Moststroy LLC in criminal proceedings in a resonant case regarding a bridge in Dnipro. The firm also continues to represent Oleh Bakhmatiuk, Ukrainian businessman and politician, owner of UkrLandFarming PLC, former head of VAB Bank, who is suspected of carrying out embezzlement of funds. Partners Kostiantyn Globa, Oleksii Shevchuk, Andrii Levkovets, Denys Ponomarenko, Elvira Lazarenko, Illia Novikov lead the sizeable criminal defense team. The dispute resolution powerhouse of Ilyashev & Partners maintains a well-versed criminal law practice, acting for corporate clients, businessmen, top managers and public officials. The firm provides representation in regulatory offenses, fraud and money laundering cases, including advising on execution of international investigative commissions, takeover of criminal proceedings from abroad, extradition support, legal support of cyber-crime cases, appeals against the decisions of law-enforcement agencies. Recent significant projects of note include representing the interests of the State Enterprise Antonov as the victim party in criminal proceedings against the Federal Agency of Air Transport of the Russian Federation (Rosaviation) and the German company AMTES GmbH, accused of forging documents on the An-124-100 aircraft’s modification; protecting the interests of nine top managers of a Ukrainian bank in criminal proceedings over the embezzlement of a bank’s property through abuse of official position; and comprehensive protection of the interests of a Ukrainian businessman in criminal proceedings on suspicion of obtaining unlawful benefits for influencing officials and deputies of Kyiv City Council regarding the approval of documents and the adoption of appropriate

decisions on the renewal of a land lease agreement. Denys Nienov is highly visible across criminal defense cases. The dedicated team includes Yevgen Solovyov, Galyna Lefor, Mykola Burtovyi, Kostiantyn Kryvenko, Lesya Moroz (Samarina). The team is supervised by two partners, Mikhail Ilyashev and Roman Marchenko. Year over year GOLAW has been actively protecting business from criminal prosecution and interference with legitimate commercial activity. The firm’s practice, in particular, covers support for clients at all stages of criminal proceedings; provides legal support to the negotiation process on the return of illegally-retained assets and documentation; represents the interests of the client before law-enforcement agencies; organizes the process of determining the amount of material damages caused by punishable criminal actions, etc. The team acted on cases involving the seizure and legalization of state funds, abuse of official position, fraud, fraudulent takeover of property, misappropriation, tax evasion, suspicions of financing of terrorism, illegal collection of personal data and forgery, hacker actions. Igor Glushko heads the criminal and white-collar defense practice. Angelika Moisieieva, partner, has considerable practical experience as a forensic attorney in criminal cases with an economic component, and proceedings related to the investigation of crimes allegedly committed by public officials. The criminal practice of Ario Law Firm is known for its experience in resonant and difficult cases. The team handles dozens of projects related to representing the interests of victims of legal entities, the interests of suspects and other victims of illegal actions by law-enforcement agencies. The team possesses expertise in investigating business activities, official crimes, crimes related to private property. Most recently the team has been representing farmers as victims of harvest theft; represents the interests of the families of victims of flight PS752 of Ukraine International Airlines downed in Iran; defends the interests of victims of financial pyramid B2B Jewelry, fighting to impose arrest on the property of the organizers and its transfer to ARMA. Its client portfolio includes Pishchansky Quarry, Lviv mayor Andriy Sadovy, members of local councils, officials, wellknown human rights activists, and others. Yevhen Hrushovets is lead Advertisement

Oleksandr Lukianenko

Partner, Attorney-at-Law, VB PARTNERS EDUCATION

Taras Shevchenko National University of Kyiv, 2008.

PRACTICE AREAS

ADDRESS: Tel.: +380 44 581 16 33 E-mail: a.lukianenko@vbpartners.ua Web-site: www.vbpartners.ua

Oleksandr Lukianenko is a lawyer with extensive experience in business protection, representing interests in criminal proceedings and complex legal disputes in all court instances. Oleksandr takes part in asset tracing in foreign jurisdictions, as well as in investigations related to fraud, corruption, and insider trading. Mr. Lukianenko is experienced in crossborder investigations as a local adviser. His practice also covers representation of clients before international law-enforcement agencies, including Interpol.

PROFESSIONAL EXPERIENCE

Oleksandr is one of the top lawyers in representing and advising Ukrainian and international clients in white-collar crime, corporate criminal liability, bribery and corruption, compliance, governance and complex commercial disputes. He is experienced in representing the interests of senior officials in anti-corruption bodies (National Anti-Сorruption Bureau

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of Ukraine, High Anticorruption Court of Ukraine, etc.). Mr. Lukianenko is well known for his expertise in protecting the interests of shareholders and top managers of banks in criminal proceedings on facts of alleged misappropriation of assets, abuse of office and money laundering, etc. Oleksandr has acted in a number of highprofile, complex and multijurisdictional cases in supporting major transactions and large-scale projects in the field of real estate and construction as well as supporting M&A transactions, business restructuring. Shareholders and top managers of large Ukrainian business, banks, foreign investors and key government officials are among his clients.

RECOGNITION

• Best Lawyers: one of the best specialists of Ukraine in the field of Real Estate, M&A and Criminal Defense. • Chambers Europe: noted as Up & Coming in White-Collar Crime. • Legal 500 EMEA: recommended as Next Generation Partners in White-Collar Crime. • Ukrainian Law Firms. A Handbook for Foreign Clients: recommended in Criminal Law/White-Collar Crime.

Who is Who

Criminal Law/White-Collar Crime partner with strong visibility across the criminal practice. The key executive team includes Vladyslav Hryshchenko, Yaroslav Serbin and Michael Golovaniov.

co-headed by two partners. Yevhen Petrenko is traditionally present in tax evasion cases and anti-raiding. The focus of Hanna Shyshko is on criminal defense of officials accused of economic and financial crime.

The criminal law boutique GRACERS rapidly grew its practice throughout 2020. The dedicated team gained a remarkable following among owners, top managers, private and corporate clients in cases involving fraud, embezzlement, misappropriation, etc. Among the recent public cases is representation of Evgeniy Dykhne, president of Ukraine International Airlines, former general director of State Enterprise Boryspil International Airport, in accusations of abuse of authority with regard to concluding agreements on leases for premises at the airport with commercial entities. The head of the supervisory board of Vernum Bank PJSC is defended on suspicion of complicity in taking the funds of a criminal group in the course of purchase of portable drilling devices and withdrawal of property that was under arrest. The team, as lead by Serhii Lysenko, managing partner, is involved in many resonant criminal proceedings. Liudmila Kusa is another important practitioner.

The criminal practice of Gramatskiy & Partners is divided into business protection led by Oleksandr Koval, and criminal defense headed by Mykola Voitovich. The firm represents corporate entities during searches and investigative actions, interrogations, answering inquiries from investigative authorities. The firm handled dozens of criminal proceedings over the course of 2020. Protecting a group of IT companies against the Security Service of Ukraine and Department of Cyberpolice was a significant case. The firm is often enlisted for representation in the course of financial investigations carried out by the tax authorities.

The white-collar crime practice of ADER HABER, as lead by leonora Salova, senior associate, encompasses fraud investigations, E money laundering, misappropriation and embezzlement, tax evasion and fictitious bankruptcy, abuse of authority, negligence and illicit enrichment, and defense of public figures from political persecutions. The team represents the interests of legal entities in criminal proceedings in order to minimize possible risks and related negative consequences, also possessing significant experience of Interpol-related matters. The firm represents private clients in a pre-trial investigation of the legalization of funds obtained illegally. It is also hired to conduct analysis of criminal risks in clients’ activity, especially in IT. The white-collar crime and business defense practice at Alekseev, Boyarchukov and Partners encompasses legalization of property obtained by criminal means, forgery, inaccurate information declaration, abuse of office. Clients include well-known political figures, members of the Ukrainian Parliament, officials of banks and private companies. Among the representative cases is representing the MP Volodymyr Makeyenko in a pre-trial investigation of the Pryamyi TV Channel case; Altera Vest (Carlo Pazolini) in criminal proceedings under legalization of illegally obtained property, tax evasion in especially large amounts, forgery. Kostyantyn Rybachkovskiy is lead partner. Criminal defense law firm CREDENCE is experienced in anti-corruption cases, international legal defense, including escalations, sanctions, legal tracing. One of the most resonant and high-profile cases is representing Mr. Ivan Gelyukh, CEO of DTEK, the largest private energy company in Ukraine, Borys Lisovyi, general director of DTEK Vostokenegro, on the Rotterdam+ formula, in the investigation by the AntiCorruption Committee and criminal proceedings arisen from the investigation. The firm handles representation of Mr. Volodymyr Kaskiv, ex-chief of the State Agency for Investment and National Project Management, in a dispute with the National Anti-Corruption Bureau of Ukraine (NABU) in connection with its internal investigations on malpractice and abuse of official position. Vadym Novinskiy, oligarch, businessman, ex-MP of the Ukrainian Parliament, is represented in a criminal procedure in connection with his political and business activities on the territory of Ukraine. The firm has experience of representing clients before European Courts on nullification of sanctions and restrictions as well as in negotiations with representatives of other countries on extradition of Ukrainian citizens. Senior partner Artyom Trekke and Vasil Farinnik are the key points of contact. In 2020 the domestic law firm ESQUIRES demonstrated a solid portfolio of criminal assignments, involving cases of abuse of official position, illegal takeover, fraud, misappropriation and embezzlement. The team’s recent experience includes defense in criminal proceedings of a large Ukrainian logistics center; preventing the raider seizure of an enterprise, the owner of a unique property in Ukraine for cooling, sorting, transportation and processing of frozen products, preventing the withdrawal and misappropriation of company assets; initiation and support of a pre-trial investigation of criminal proceedings aimed at protecting the interests of a society from unlawful disposal of real estate belonging to it in Kyiv. Opanas Karlin is lead partner. In 2020 EUCON Legal Group boosted its criminal law practice with cases of misappropriation of state funds, forgery and abuse of authority around Kyiv city development matters. The firm maintains representation of clients in tax evasion and customs-related matters, as well as abuse of authority around insolvent banks. The practice is

Juscutum Law Firm acts for corporate clients in terms of business crime matters. It also represents state officials and PEPs. The firm is primarily known for its business protection practice, and represented Ukrayinska Prodovolcha Hrupa LLC, large producer of turkey meat in Ukraine, in preventing a hostile takeover of its business. In addition, the firm has a traditional strong following among IT clients. For example, the team represented ELKO Ukraine, involved in the implementation of the project of the Unified Electronic Ticket in Kyiv, in the course of an investigation and during a search and lifted seizures on property. Juscutum represented Ruslan Makogonchuk, a high-ranking State Police officer, in two criminal cases: on charges of bribery and in the prosecution of the main police for illegal actions against him and his reinstatement in the State Police. Stanislav Borys, counsel, is the key contact. LCF Law Group has boosted its criminal law practice through its merger with Sheverdin & Partners in April 2020. Selected highlights include representations in the course of suspected money laundering, forgery and misappropriation, abuse of authority, fraud, and also representing the interests of victims. Maksym Sheverdin leads the practice. Kharkiv-based Shkrebets & Partners has a formidable criminal defense practice handling representation of officials of regional state authorities, former members of Parliament, as well as corporate clients and their officials in a wide range of criminal proceedings. Their clients include Ukrainian politician and businessman Petro Dyminsky and a number of former MPs, in particular, Nadia Savchenko. The 10-attorney strong team is lead by the firm’s partner, Oleksii Meniv. A significant part of the criminal practice of Sokolovskyi & Partners is protection in criminal proceedings under tax evasion. During the period under research the team provided clients with legal assistance in tax evasion cases and proceedings related to crimes in the field of economic activity and violation of safety rules during the performance of work with increased danger. Another area of the firm’s expertise is forensic work and conducting corporate investigations to reveal fraud. Tetiana Lysovets, senior partner, leads the practice. Ukrainian law firm Vdovychen & Partners is traditionally active in various criminal issues. The spectrum of representations encompasses fraud, theft, tax evasion, appeals against property arrests and property seizure. Selected significant cases include protecting the interests of bank officials in criminal proceedings on the fact of embezzlement; protection of client interests within the framework of criminal proceedings on the fact of tax evasion; defense of a client and a client’s officials from criminal prosecution in several criminal proceedings on alleged theft of state property. Oleg Vdovychen, managing partner, is the key figure. AMBER Law Company has a group of criminal defense practitioners rendering legal assistance on white-collar and business-related crimes. The firm is active in tax litigation and also represents its clients in tax evasion matters and removing arrests from the property of clients. The key individuals are Serhii Peresunko, Liudmyla Koziatnyk, who are guided by Semen Khanin. Ante Law Firm handles representation in the criminal proceedings of its clients from aviation, life sciences, agrarian, media and private clients. Andriy Guck, managing partner, represented Mr. Zurab Alasania, the head of the National Public Broadcasting Company of Ukraine, top officials of the State Aviation Service of Ukraine and top managers in various economic crimes proceedings. The firm renders legal support to its long-standing client, Zdravo LLC, in the course of state procurement procedures under investigation of local police and State Security Service offices in a few regions of Ukraine. DFU Agro,

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Who is Who Sanofi-Aventis Ukraine, Lutsk Foods were among the clients that generated most white-collar defense work in 2020. Andriy Guck, managing partner, is the team leader. AS Legal, an Odesa-based law firm, is focused on litigation and criminal defense. The firm represented Mr. Yehiazaryan Bahrat, the founder of the road construction company Basalt in criminal proceedings based on an economic dispute in the form of accusations by a counterparty of the quality of services provided and payment for services performed; defends Trans-Ocean Ekspress LLC, which is accused of misappropriating funds. The firm’s recent portfolio contains sound representations of an individual who received body injuries in connection with his active citizenship role and professional activities. The practice is headed by Diana Yakovleva. AVELLUM defends its corporate and private clients against criminal persecution in Ukraine and in foreign jurisdictions, dealing throughout cross-border criminal investigations, money laundering, fraud and embezzlement cases. In addition, the team assists with assessing corruption risks in the course of M&A transactions. Kostiantyn Likarchuk rejoined the firm as a senior partner in January 2021 and is particularly keen on the international aspects of WCC. Andriy Fortunenko is a certified fraud examiner whose focus is global investigations and WCC. The Kyiv office of Baker McKenzie handles representation before law-enforcement authorities with respect to various issues related to criminal proceedings, including support during investigation actions, representation in courts, and cancellation of arrest over assets. The practice group is headed by dispute resolution partner Ihor Siusel. The Kyiv dispute resolution team at CMS Cameron McKenna Nabarro Olswang, as led by the firm’s counsel Olga Shenk, provides assistance on white-collar crime, including: embezzlement, forgery, bribery, identity theft, money laundering, misappropriation cases. The firm also conducts training on the FCPA and the UK Bribery Act. With the arrival of the life sciences and healthcare team headed by Borys Danevych, the firm expanded its practice in complex regulatory related criminal investigations regarding the pharmaceutical industry, specifically in the counterfeiting of medicines and medical devices area. The team represents most top global pharmaceutical companies as criminal complainants in the most significant criminal investigation on counterfeiting and illicit trade in medicines in Ukraine, also advising several other industry leaders in this investigation. The Kyiv office of DLA Piper1 handled complex, high-stake multijurisdictional compliance and investigation matters, acting for both Ukrainian and international corporate clients. The team is also attracted to conduct criminal and compliance risk assessment within the framework of corporate deals. Partner Olga Vorozhbyt heads the litigation and regulatory practice. Artem Krykun-Trush is an important member of the team. EVERLEGAL actively extended the scope of projects in criminal law practice, broadening representation in criminal proceedings and investigations of white-collar crimes, abuse of power by government authorities against business and economic crimes. The team maintains representation of the interests of Resilient a.s., Agromino in criminal proceedings in cases connected with resonant raiding attacks carried out against farm fields. The firm’s recent portfolio contains cases of administrative offenses, proceedings deriving from construction projects, property seizure. The head of practice is Tetiana Pavliukovets. Oleksandr Ruzhytskyi is lead partner. Lviv-based First Chair Legal represents foreign companies and officials in matters relating to white-collar prosecution. The recent scope of work includes criminal proceedings involving tax evasion, corruption, public procurement. Oleg Kyryievskyi, managing partner, heads the practice. Domestic tax boutique ID Legal Group provides tax advisory and criminal defense services for tax offenses and evasion cases. Oleg Dobrovolskyi is named the responsible partner. Odesa-based Interlegal handles criminal proceedings centered on business protection. In 2020 the team acted in protecting the interests of the owner of cargo in a case of theft of cargo from a terminal; protected a bank in criminal proceedings on recovery of credit funds. 1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Karyna Gorovaya and Ellina Romanova, senior associates, lead the practice. Odesa-based law firm Jurline represents the interests of clients in criminal proceedings for tax evasion, legalization of proceeds from crime, fraud, misappropriation and embezzlement of property, illegal enrichment, abuse of office; other offenses in the field of official and professional activities related to the provision of public services. Partner Maxim Kapelist heads the practice. Known as a top tax firm, KM Partners possesses profound experience in the defense of clients in criminal proceedings on tax evasion. Over the last few years the team represented clients’ officials in dozens of proceedings qualified as tax evasion and achieved court acquittals or closure of criminal proceedings against clients at the pre-trial stage. Alexander Shemiatkin and Alexander Minin act as practice leads. Ukrainian law firm KPD Consulting is called upon to give legal assistance in criminal proceedings acting for top management and owners of large companies. The team is present in matters of tax crime, fraud, illegal takeover, and is often hired by Ukrainian and international banks, financial companies, lessors, automobile dealers, industrial, transport, manufacturing companies. The team renders comprehensive support of criminal proceedings in fraud and illegal operations with collateral in the interests of the Porsche Group of Companies with the actual involvement of the guilty to criminal responsibility and received a conviction by the court which came into force. Another current representation is protecting the management of Complex Libidskiy JSC in criminal proceedings on white-collar crimes with acquittal of the client based on the results of the investigation. Kyrylo Kazak is lead partner. Kharkiv-based Krolevetskyi & Partners provides legal assistance to officials of large state-owned enterprises and state authorities in criminal proceedings on alleged misappropriation, tax evasion, abuse of power at the stage of pre-trial investigation and court proceedings. The firm represented the interests of the top managers of State Enterprise Plant Electrotyazhmash, who are accused of machinations involving the firm’s funds. Illia Tkachenko heads the practice. Legal Alliance Company, which is focused on the pharmaceuticals and healthcare sector, demonstrates an established workflow of criminal matters, including fictitious business, misappropriation, abuse of power, forgery of documents, declaring false information. In particular, the team represents a group of pharmaceutical companies as victims in a transnational criminal case related to the falsification of medicinal products. The team also defends a client who is suspected of the high-profile murder of journalist Pavlo Sheremet. Partners Taras Bezpalyy and Ilya Kostin are engaged in high-profile cases. White-collar crime practice is one of the main staples of the new ambitious market brand name called Legal House Group. The team represents corporate clients across a wider range of criminal proceedings involving larceny with abuse of authority and disclosure of state secrets, misappropriating property, fraudulent conversion of funds, money laundering, violation of the procedure for international transfers of goods, etc. The team secures protection of the general director advisor’s interests under a case on preventing and combating corruption at the NNEGC Energoatom. Denis Ovcharov is lead partner. The criminal practice of Legal & Economic Security (LES) emonstrates a rise in incoming requests. According to the results of d its work in 2020, the rights and interests of 60 victims in criminal proceedings were protected, and decisions on the closure of 85 criminal proceedings in the sphere of economic and official activity were provided. Partners Serhiy Kolisnyk and Dmytro Bezmal are key contacts. The dispute resolution team of Redcliffe Partners has certified criminal defense attorneys focused on assisting with legal, commercial and reputational risks associated with regulatory and white-collar crime issues, including tax and anti-corruption legislation. Furthermore, the team, as led by Sergiy Gryshko, represented Vlad Tsilytsky in criminal proceedings against police officers on charges of torturing him due to his participation in the Euromaidan revolution. The Kyiv branch of Belarusian firm SBH Law Offices has a white-collar crime practice focused on various asset protection matters. Clients include business owners and public officials. Kseniya Prokonova, partner in Ukraine, left the firm in April 2021.

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Who is Who

Energy & Natural Resources СMS is represented through two offices in Ukraine. CMS Cameron McKenna Nabarro Olswang possesses a fullservice energy practice and is mandated by major players across the energy sector, as well as related utilities and infrastructure issues. The team advises Vermilion, the North American based international energy producer, on preparation of the final draft of a product sharing agreement (PSA) with the government. The highlight of 2020 was supporting the first ever full-scale Production Enhancement Contract (PEC), where the team assisted Expert Petroleum, an international company specializing in mature oil and gas field operations optimization, in negotiating and executing the PEC with Ukrgasvydobuvannya. With the strong portfolio of renewable energy projects, the practice continued advising high calibre investors, including Scatec Solar ASA and Acciona Energia among others. The firm maintains its active involvement in legislative shaping, and renders legal advice to the EBRD on introduction of the procedure and implementation of competitive procurement process and developing secondary legislation for auctions for renewable energy projects in Ukraine. Lead partner Vitaliy Radchenko continued to demonstrate high visibility. Maryna Ilchuk is observed as an active team member. Volodymyr Kolvakh was referred during the poll for his work in the oil and gas sector and PSA regulations. In October 2020 Olexander Martinenko, senior partner, who is considered one of the most experienced legal practitioners in the energy sector, left and joined the Kyiv office of Kinstellar. Renowned for being a legal counsel within the Ukrainian Gas Transmission System Operator unbundling, CMS Reich-Rohrwig Hainz continued advising on the Third Energy Package, as well as complex corporate governance issues; compliance and anti-corruption laws, and other matters. Other areas of the office’s presence take in development of renewable projects and structuring of energy companies. Maria Orlyk is lead partner. Asters, the largest Ukrainian law firm, maintains wide-ranging expertise across the entire energy spectrum. The team is retained by prominent international and national energy majors on production sharing agreements, licensing issues and regulation across different energy sectors, market entry, operational activity, construction, M&A and financing. In addition to exploration and mining, this domestic practice advises on natural gas and electricity markets, power trading, transmission, transportation and processing. The firm possesses a significant portfolio of renewable energy projects. For example, the firm acted as a legal counsel to Naftogaz Energoservice in connection with the construction of a 33 MW solar power plant in the town of Chudniv, Zhytomyr Region. The firm demonstrates its growing role throughout GR activity. Its client roster includes China

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achinery Engineering Corporation (CMEC), Enwell Energy plc (forM mer Regal Petroleum Plc), Modus Energy/GreenGenius, Naftogaz Group, VR Capital Group. Armen Khachaturyan is known for his strategic role in PSA projects. Yaroslav Petrov is confirmed as being among market leading energy practitioners, advising on renewable projects and electricity matters. Tamara Lukanina is a longtime expert in exploration and subsoil use. Anzhelika Livitska focused on land and construction law expertise, as well as environmental issues. Another key executive is Marta Halabala. Baker McKenzie is constantly preferred by international and local groups of energy companies on sophisticated midstream and upstream market instructions, structuring of their participation in the latest PSA oil and gas projects, supporting subsoil use, trade and storage matters, transmission and distribution networks, construction and project finance transactions. Public examples encompass advising Geo Alliance Partnership on a production sharing agreement for the exploration and development of oil, natural gas and gas condensate for 50 years with the government of Ukraine. The firm’s expert team has for many years been actively involved in carrying out energy reform in Ukraine, and stands out for its exceptional portfolio of privatization projects. Its recent workload includes advising the State Property Fund on the privatization of Electrotyazhmash, one of the largest producers of turbines in Ukraine, and on the privatization of a 78.289% shareholding in Centrenergo, one of the largest Ukrainian power-generation companies. The energy practice is active in renewable energy projects, handing ongoing advice on various corporate, construction, regulatory, tax and finance aspects. Clients include Polenergia International S.àr.l., a subsidiary of Kulczyk Investments SA, NAFTA a.s., ArcelorMittal Kryvyi Rih, DTEK, SE NPC Ukrenergo, MGU (sole shareholder of Gas Transmission System Operator of Ukraine), Energoatom. Renowned for his long-standing experience in landmark privatization, managing partner Serhiy Piontkovsky, remains the key face for energy clients and handles strategic advisory. Andrii Moskalyk is a standout professional in PPP, PSA and energy infrastructure. Victoria Ischenko is the key practitioner involved in regulatory work in the renewable sector, which is supervised by Hanna Shtepa. Dentons excels with its highly-diversified energy practice that extends to upstream oil and gas, mining and natural resources, nuclear energy, renewables. The office is a point of choice for many global and European energy majors, working on cross-border mandates, especially regulatory, transactional and tax advice. The practice team has a substantial market share of renewable energy projects, delivering advice on their construction, acquisitions and development, project finance and investments. This past year Dentons advised VLC Renewables on its investment in the first phase of a

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Who is Who

Energy & Natural Resources 500 MW onshore wind farm in Zaporizhzhya; rendered advice to Grasshopper Solar Corporation on the regulatory framework in the renewable energy sector of Ukraine. Other areas of recent advice cover infrastructure and transportation, as well energy disputes. Maksym Sysoiev, promoted to partner, was referred as very technical and knowledgeable and well-connected among industry players. Redcliffe Partners has a fully-fledged projects portfolio comprising mining and hydrocarbons exploration, renewables and finance. The firm is recognized for its consistent flow of PSA projects, having advised Ukrgasvydobuvannya (UGV) and Ukrnaftoburinnya (UNB) on onshore production sharing agreements with the Ukrainian government. Another highlight is advising UGV on conclusion of the first-ever production enhancement contract in Ukraine, with Expert Petroleum aiming at rehabilitation of UGV’s mature fields in western Ukraine. The firm also advised a long-standing client, Trident Acquisition, on anticipated entry into the Yuzivska tight gas exploration and production project. The oil and gas and mining team is led by Dmytro Fedoruk, referred to as a skilled and proactive negotiator. The firm is visible in supporting renewable energy projects, including multilateral M&A and high value project finance. Svitlana Teush heads the renewables and electricity team. Peers admired Evgeniy Vazhynskiy for his expertise in energy project financing. The firm has a presence on the legislative arena, advising the Ukrainian Oil and Gas Association on development of amendments to tax legislation aimed at reducing taxes for extraction of hard-to-get reserves and participated in the development of amendments to the PSA legislation and the new Subsoil Code. INTEGRITES continued advising key energy-focused actors, rapidly expanding practice scope, in particular enhancing its workflow in mining and subsoil use. In 2020 the firm was focused on supporting the implementation of renewable energy projects that followed after a series of project finance deals in 2019. For example, the team supports NBT (Norway) and Total Eren (France) wind farm developers on the construction of a 250 MW Syvash Wind Farm; advises NBT on all aspects of financing and development of onshore wind project Zophia; Eurocape/ LongWing on construction of 402 MW and 98 MW wind farms in Zaporizhzhya Region. The energy practice team also advises on the conventional sector, most recently advising AKW Ukrainian Kaolin, a member of Quarzwerke Group, on production licenses and mining allotment for several kaolin deposits in Ukraine. The firm is known for its profound experience in arbitration disputes and acts as a Ukrainian law counsel for State Enterprise NPC Ukrenergo in the investment arbitration against Russia regarding the expropriation of the power grid, related infrastructure and other property by the Russian authorities following Russia’s annexation of Crimea in 2014. The firm pursued its GR and legislation shaping in renewable energy sector. Praised by his expertise in development, as well as in M&A and negotiations, Dr. Oleksiy Feliv has been involved in negotiations between the Ukrainian government and energy industry associations regarding reduction of the feed-in tariff, being among

AUTHORITIES

Listed in alphabetical order

Armen Khachaturyan (Asters)

LEADING INDIVIDUALS 1. Vitaliy Radchenko (CMS Cameron McKenna Nabarro Olswang)

Olexander Martinenko (Kinstellar)

2. Yaroslav Petrov (Asters)

Serhiy Piontkovsky (Baker McKenzie)

3. Maksym Sysoiev (Dentons) 4. Dr. Oleksiy Feliv (INTEGRITES)

LEADING FIRMS

5. Andriy Olenyuk (EVERLEGAL)

1. CMS Cameron McKenna Nabarro Olswang 2. Asters

Other notable PRACTITIONERS

3. Baker McKenzie 4. Dentons

Ivan Bondarchuk (LCF Law Group)

5. Redcliffe Partners 6. INTEGRITES

Yevheniy Deyneko (EVERLEGAL)

7. Sayenko Kharenko

Taras Dumych (Wolf Theiss)

8. EVERLEGAL

Dmytro Fedoruk (Redcliffe Partners)

9. AEQUO

Maryna Hritsyshyna (Sayenko Kharenko)

10. EY Ukraine

Other established PRACTICES

Listed in alphabetical order

Maryna Ilchuk (CMS Cameron McKenna Nabarro Olswang) Listed in alphabetical order

ANTIKA Law Firm

Volodymyr Kolvakh (CMS Cameron McKenna Nabarro Olswang)

AVELLUM

Dr. Alexey Kot (ANTIKA Law Firm)

DLA Piper Ukraine* Eterna Law GOLAW Hillmont Partners Ilyashev & Partners Kinstellar KPMG Law Shkrebets & Partners Sokolovskyi & Partners Wolf Theiss

* Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Olena Kuchynska (Kinstellar) Oleksandr Kurdydyk (DLA Piper Ukraine*) Max Lebedev (GOLAW) Anzhelika Livitska (Asters) Denis Lysenko (AEQUO) Andrii Moskalyk (Baker McKenzie) Albert Sych (EY Ukraine) Svitlana Teush (Redcliffe Partners)

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Who is Who the elaborators of the Memorandum between the state and investors. Dr. Oleh Zahnitko handled regulatory advisory on maneuverable capacities and traditional electricity. Igor Krasovskiy continued his project finance work in the renewable sector. Serhii Uvarov, counsel, leads a number of significant energy disputes. Sayenko Kharenko houses a multidisciplinary energy team especially known for M&A, joint ventures, high-profile securities offerings and sophisticated financing transactions. The oil and gas portfolio contains projects on involving investments and establishing JVs. The firm expanded its renewable projects profile, and advised WIND FARM in relation to the conclusion of an EPC contract with POWERCHINA aimed at implementation of a wind farm project with capacity of 800 MW on the territory of the Nikolsky and Mangush Districts of Donetsk Region; advised the representative office of POWERCHINA regarding construction of Syvash Wind Farm with a capacity of 245.7 MW. The transactional highlight of the past year was advising Elementum Energy Limited, a subsidiary of VR Capital, on a buy-out of the minority stake of its partner Volterra Energy Group in a joint venture company that had successfully developed ten solar power plant projects. The firm is traditionally well connected with international financial institutions. Its dedicated team advised NEFCO on the launch of a new facility to finance green projects, and on project financing to over ten Ukrainian enterprises and municipalities aimed at the implementation of energy-saving technologies. Praised for her active role on the market, counsel Maryna Hritsyshyna is known for her particle experience in the implementation of wind power projects. Partners Igor Lozenko and Nazar Chernyavsky lead finance work in the sector. Finding itself among top legal counsel in renewable energy, VERLEGAL works on several landmark solar projects, including deE velopment and construction, M&A, and providing financing solutions to developers and EPC contractors. In a recent highlight the firm acted as legal counsel to UDP Renewables in connection with the development and construction of 24.4 MW Hudzovka SES project in Odesa Region, and advised Main Group on the sale of a project company for further construction and development of a solar power plant in Zakarpattya Region. To exemplify projects in wind energy, the firm advises foreign developer on construction and further development of the largest onshore wind farm in Europe with a total capacity of 750 MW in Zaporizhzhya Region. The firm is retained by oil and gas companies on structuring their JVs in Ukraine, M&A deals and implementation of technologies. PPP projects is another area of recent advice. A noteworthy highlight is advising Go To-U Network on the installation of chargers for electric cars on Ukrainian roads in order to create a nationwide network of chargers. The energy practice has two partners on board. Yevheniy Deyneko is focused on instructions from foreign investors in renewables, and his traditional mainstay is oil and gas. Being highly visible across renewable energy projects for the last couple of years, Andriy Olenyuk is seen in transactional work and received praise for being strong in M&A and negotiations. The arbitration team headed by Vsevolod Volkov advises foreign developers on arbitration matters. The cross-practice energy team of AEQUO is known for its successful performance in large-scale disputes with a political dimension, and demonstrated significant unstick in structuring investments and supporting the transactions of energy companies. The firm acts for a variety of prominent domestic clients and increases its popularity among foreign private investors. The team’s wide-ranging engagements included corporate and antitrust work in the natural resources sector, establishment of joint ventures, sophisticated corporate and corporate governance advisory mandates, regulatory, tax, land disputes. The team is known for its historical win against Russia’s Gazprom, and continues to act as the Ukrainian counsel for NJSC Naftogaz of Ukraine and its subsidiaries in international investment arbitration administered by the Permanent Court of Arbitration in The Hague in a dispute against the Russian Federation over breach of the Ukraine-Russia bilateral investment treaty due to expropriation of assets of the Naftogaz group in Crimea. The firm maintains a stable and renewable workload. The firm’s client list takes in ArcelorMittal, MET Ukraine, the Ukrainian subsidiary of a major European gas trader, U krgasvydobuvannya and investors in the renewable energy field. Denis Lysenko plays a strategic role in sophisticated disputes, including tax litigation. Anna Babych guides corporate work for energy clients. Energy-related disputes, including arbitrations, are led by Pavlo Byelousov and Myroslava Savchuk. Olena Pertsova led the team on a number of precedent setting disputes in Ukrainian courts.

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EY is primarily known for its unmatched experience in tax and legal support of production sharing agreements projects and vast unbundling experience around Europe. In 2020, the firm rendered tax and regulatory support of PSAs for Vermilion Energy, Aspect Energy, DTEK Oil & Gas, GeoAlliance Partnership, and also advised one of its clients on a joint operating agreement to be concluded between investors in a multiparty PSA. The firm’s ongoing landmark project is restructuring Naftogaz in order to fulfill the requirements of unbundling and independence of the operator of the gas transportation system of Ukraine in accordance with Ukrainian and EU legislation. The team is also engaged in advising the natural gas midstream market and developing certain regulatory recommendations, and in renewable energy projects. Albert Sych, practice head, possesses expertise in oil and gas. Iryna Kalyta is among other key individuals. ANTIKA Law Firm is a long-standing name in the area of mining and subsoil use, advising on joint exploration, development and operation, and proves its recognized expertise in the oil and gas sector. The firm is a constant legal counsel to Ukrainian subsidiaries of Cadogan Petroleum Plc on various legal matters related to receiving, prolonging and amending special permits for subsoil use as well as other legal matters which are connected to the production of hydrocarbons within the territory of Ukraine. In a recent highlight the team acts for USENCO NADRA, LLC, Ukrainian subsidiary of Cadogan Group, on challenging the inactivity on the part of the State Service of Geology and Mineral Resources of Ukraine in the form of nonissuance of the requested special permit for subsoil use and obliging the latter to grant the said special permit. The team, as guided by A lexander Burtovoy, has fixed its niche in supporting projects financed by NEFCO, and most recently advised two of them — energy efficiency improvements in public buildings in the cities of IvanoFrankivsk and Chernivtsi. Given his historical presence in this field, Dr. Alexey Kot is a highly-recognized expert in oil and gas matters. Another noted strength of the team, as led by Andrey Kuznetsov, is involvement in high-profile litigation and arbitration cases. As a top corporate finance domestic firm, AVELLUM maintains a strong profile in the development, acquisition, disposal involving energy assets, and is customarily hired and preferred by international financial institutions in financing in the energy sector. In 2020 the team continued to be a legal counsel to the EBRD (acting independently or with other lenders) on financing of its renewable energy projects. The team’s area of recent growth is oil and gas, especially subsoil use and PSA. Maksym Maksymenko, involved in advising on development and construction in terms of energy projects, was promoted to partner. Glib Bondar, the firm’s senior partner and practice head, is known for his solid experience in financings, capital markets and debt restructurings, and growing involvement in energy and infrastructure projects. DLA Piper1 fields specific energy industry expertise extending to mining, extraction and development, all facets of renewable energy projects, political and regulatory issues. The firm is a port of choice for cross-border mandates, including corporate, M&A and JV establishing, financing. The global practice team advised Ecolab Inc. on the global separation of its upstream energy business. The team is experienced in exploration of hydrocarbons, and also received mandates for large-scale projects in the renewable sector. The energy practice is led by two partners. Galyna Zagorodniuk acts as a lead partner in M&A and corporate projects in exploration and development sectors, oil and gas regulation environment and renewables. Oleksandr Kurdydyk heads renewable energy generation projects and financing mandates. Eterna Law is preferred by many energy companies to support their entering the Ukrainian market, advising on regulation and structuring of business in Ukraine. The areas of recent assignments include the electricity market, competition and disputes involving energy assets. The firm retains a portfolio of renewable energy projects, inter alia, M&A transactions with renewable power plants. This past year the firm completed the acquisition of a solar power project from a Ukrainian development company, having acted for Gamma Solar Holding on the buyer’s side, and advising Yuzhne Energy, the Ukrainian subsidiary of a Lithuanian company, on its investment in renewable energy systems and the development process of a 72 MW wind power plant project in Odesa Region. DTEK, Energoatom, MODUS Group, Axton Commodities are among its notable clients. The practice has two partners on board — Oleh Malskyy 1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Energy & Natural Resources guides the conventional energy workload, with Eugene Blinov heading disputes. Having exceptional dedication to renewable energy, GOLAW commands a solid client portfolio of foreign investors and market operators. The team advised TIU Canada, a subsidiary of the Canadian investment fund Refraction Asset Management, on the legality of the Nikopol Ferroalloy Plant shutting down the Nikopol solar power plant; advised the Georgian International Energy Corporation on the conclusion of an electricity purchase and sale agreement at a green tariff with the State Enterprise Guaranteed Buyer for a solar power plant. The firm is known for its unique experience in supporting construction of the largest biomass power plant in Ukraine — the Khmelnytsky Bio Power Plant (KBPP), and recently advised KBPP Management and a group of Irish investors regarding participation in auctions for state support for the plant. Other engagements include implementation of a hybrid power plant project and electricity supply contracts. Max Lebedev is lead partner. Taras Lytovchenko is another key executive. Hillmont Partners is primarily known for its litigation work for energy and mining clients. In particular, the firm represents NPC Ukrenergo, the national grid operator, in a USD 10 million dispute with the Ministry of Energy and Coal Industry regarding the latter’s inaction in approving individual documents for financing the construction of individual energy infrastructure facilities as part of the implemen-

tation of the Energy Strategy of Ukraine, which is financed through the EBRD; Nuclear Energy Systems of Ukraine as a license holder for uranium exploration in Ukraine in a number of court proceedings; the Zasyadko Coal Mine in complex tax and administrative disputes. Another landmark project is advising Black Iron Inc. on land law matters in its iron ore mining project in Ukraine. Other areas of focus included the establishment of joint ventures, advice on regulatory framework for land matters, subsoil use, renewable energy and investment protection. The practice is led by firm’s counsel Tetiana Mylenka. The international workflow is led by James Hart, managing partner, while Igor Pugailko, counsel, leads domestic administrative litigation for clients in the energy sector. Ukrainian dispute resolution heavyweight Ilyashev & Partners is noted for its strong experience in energy disputes, enforcement of international arbitration awards and the role of its practitioners as independent experts in landmark arbitration disputes. Additionally, the recent portfolio includes advising on potential investment arbitration due to retrospective feed-in tariff cuts, sophisticated disputes regarding the supply of low quality electricity, challenging high value tax charges on unpaid rent and shareholder conflicts. Another recognized strength of the team is regulatory disputes. Among the highlights of the past 12 months are representation of JV Poltava Petroleum Company in appealing a rise in tariffs for a gas pipeline network; representation of Belanovo Mining (Ferrexpo AG) in its dispute with JSC Poltava Regional Energy Supply Company regarding

THE NEW UK FACILITY TO SUPPORT BRITISH-UKRAINIAN TRADE AND RELATED INVESTMENT The UK has initiated a huge GBP 2.5 billion trade facility (“Trade Facility”) for trade and related investment with Ukraine, which is managed by UK Export Finance (“UKEF”) under the new Trade Treaty between Ukraine and the UK. This Trade Facility provides an excellent opportunity for Ukrainian companies to finance the growth of their businesses. BENEFITS OF THE FACILITY Through the Trade Facility, Ukrainian importers and British exporters can access funding for very long terms (up to 10 to 18 years, depending on the activity involved) at very reasonable interest rates. Up to 85% of the cost for a transaction can be so financed. The types of expenses that can be covered are very broad, including not just imports of goods and services, but also product development, working capital and other associated expenses. UKEF can flexibly finance a variety of transactions, including project financings. WHAT UKEF CAN DO UKEF is regularly rated as one of the world’s best export credit agencies (customer.service@ukexportfinance.gov.uk). UKEF can enhance the credit worthiness of transactions and projects by using the very high UK sovereign credit rating to borrow at low rates in the international markets in order to on-lend to, or give guarantees for, Ukrainian buyers or British sellers. The UK can thereby meet the needs for most Ukrainian trade transactions and investment projects, as Europe’s largest equipment manufacturer and a world leader in advanced aerospace, automotive, rail and marine design and engineering, among other areas. DESIRABLE SECTORS While UKEF can consider lending for most types of transactions and projects, UKEF is especially interested in financing the following areas in Ukraine: 1) Agriculture and Aquaculture; 2) Transport Infrastructure and Construction, including for hospitals, bridges, “green” buildings, clean transportation, sustainable water and wastewater management; 3) Renewable Energy; 4) Health Care, including for the supply of vaccines and other pharmaceuticals; 5) Civil Aerospace and Aircraft; 6) Mining (except for oil, gas and coal); 7) IT, including agritech, fintech, medical technology, educational technology, the Internet of Things, artificial intelligence, gaming, etc; and 8) Defence and Security, including to provide equipment for the Ukrainian Army, Navy and Air Force. ELIGIBILITY CRITERIA While past UKEF deals have financed transactions up to GBP 1.2 billion, many UKEF financings have been to support small and medium-sized enterprises (“SMEs”). The criteria to apply include: 1) Minimum 20% UK Content. Unlike most such credit agencies, UKEF requires only a minimum of 20% UK content in goods and services; and 2) Borrower Status. A borrower must have a creditworthy record, with three years of audited accounts, though exceptions can be made depending upon the situation, and this requirement for three years of accounts does not apply for project financings. For further information on structuring finance for transactions, including by involving UKEF finance, please contact Bate Toms at B. C. Toms & Co.

As the first foreign law firm to open an office in Kyiv in 1991, we are presently celebrating our 30th anniversary in Ukraine. During that time, we have successfully completed many of Ukraine’s milestone projects, including: • The First IPO in Ukraine (to raise approximately USD 500 million by a Ukrainian energy company’s listing on the London Stock Exchange); • The First True Project Financing in Ukraine (for oil and gas exploration and development, including processing facilities, pipelines, railroad construction, etc., funded by the EBRD); and • Eight Ukrainian Agricultural IPO’s. In recent years, we have successfully handled the legal work for many of the largest and most complex transactions and disputes in Ukraine, including: • The Largest Acquisition in the Ukrainian Energy and the Natural Resources Sectors; • The Largest Bilateral Investment Treaty Arbitration concerning Ukraine, at the Permanent Court of Arbitration in the Hague; • The Largest Acquisition in the Agricultural Sector (by a major foreign investor to purchase a Ukrainian farming business, for which we earlier handled its creation, IPO and other financings); and • A Highly Complex Corporate Raid Defense simultaneously involving over 50 related proceedings. Our legal practice is based on our commitment to provide client service of the highest quality. We organize our practice in teams around our clients to respond to and understand fully each client’s needs and efficiently deliver timely legal work. We were ranked in the independent KyivPost Survey of Law Firms among the top three law firms in Ukraine. We would be pleased to assist you for your proposed transactions or to defend you should your property or contract rights be challenged. We also provide legal research reports on significant problems in Ukrainian legislation that investors should be aware of, but that are not widely known. B.C. Toms & Co Attorneys and Counselors at Law 18/1 Prorizna Street, Suite 7, Kyiv 01001, Ukraine +380 44 490 6000 kyiv@bctoms.net www.bctoms.com

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Who is Who the moving of a power transmission line. The Moscow office demonstrates deep involvement in cross-border insolvency proceedings and litigation. The key individuals are Andrey Bychkov and Oleh Trokhymchuk. Iryna Demchenko joined the firm as a key expert last year. Mikhail Ilyashev is lead partner. The Kyiv office of Kinstellar retains significant mandates from top domestic and international energy companies. The team is known for its legal advisory service to the supervisory boards of Naftogaz of Ukraine and of PJSC National Power Company Ukrenergo. In 2020 the practice team acted on M&A deals across the energy sector, in particular, advising on a private international company engaged in wholesale power trading, on a contemplated purchase of a cross-border transmission line with a view to importing and exporting power between Ukraine and Romania. With its high visibility in the renewable energy sector, the firm advises on an international engineering corporation and EPC contractor, on acquisition of a 94.5 MW solar power plant, located in Kremenchuk, and advised Ukrainian developers with respect to the sale of a project to build a 500 MW wind power plant in Mykolaiv Region to DTEK Renewables. The Kyiv finance team acted as Ukrainian law counsel to SESS Solar, a Ukrainian renewable energy business, on financing of its two project companies West Solar LLC and Snyatinenergoinvest LLC by the EBRD. Other areas span energy trading contracts, competition and compliance, dispute resolution. The firm advised on a potential investment arbitration case against Ukraine due to restructuring of a feed-in tariff. In October 2020 the practice was strengthened with the arrival of renowned luminary O lexander Martinenko as partner and head of dispute resolution/commercial from CMS Cameron McKenna Nabarro Olswang. The new Kyiv managing partner, Olena Kuchynska, heads the practice. KPMG Law is a point of choice for many international energy producers, services providers, state enterprises and international organizations. The team is often retained to advise on regulations in mining and petroleum industries, heating reform. The highlights of 2020 included advising a Ukrainian electricity transmission system operator and providing support for Ukrenergo in re-engineering its system operation function and successful integration into ENTSO-E; consulting one of the largest private groups of energy companies in Latvia on issues related to the import of electricity into Ukraine and general description of the Ukrainian electricity market. The team also acted for a European energy producer and performed legal and tax due diligence of a Ukrainian company developing a solar power plant and considered for purchase. Yuriy Katser, director, is the key figure. Highly-visible regional firm Shkrebets & Partners, which is based in Kharkiv, is the permanent legal counsel to the key energy power generating and distribution companies in north-eastern Ukraine. Kharkiv Combined Heat and Power Plant No. 5 is represented in high-profile litigation proceedings regarding debt collection under a natural gas delivery agreement, payments for balancing natural gas, and set a precedent recognizing Naftogaz of Ukraine as a last resort supplier. The team supported the development of a power generation mechanism using customer raw fuel. Kharkiv Heating Network, a monopolist for the supply of heat energy in Kharkiv, is another key client of the firm. The practice is led by partner Andriy Syvak. Sokolovskyi & Partners is active in advising construction of renewable energy plants, EPC contracts, electricity networks connection, supporting commercial activities of energy companies, and handling wide-ranging regulatory assignments in this regulated sector. The firm rendered full legal support to Solar K, LLC on the construction of a solar power plant and obtaining the green tariff. Another recent project is supporting Energomisto as a contractor for wiring and electrical modification. Vladyslav Sokolovskyi, managing partner, heads the practice, and developed original debt recover procedure for green tariff from the State Enterprise Guaranteed Buyer. Wolf Theiss has a formidable workflow from European clients, who hire the office for Ukrainian law matters. Recent projects included advising Monstera, a lime mining company, on contractual and regulatory issues, with respect to contracts with one of its biggest consumers, Metinvest Group. The office continues to assist clients from the renewables sector in connection with investment projects and obtaining loans for the development of renewable projects. Most recently the firm advised Optimum Solar Kft, a leading Hungarian solar power equipment producer and developer of solar power projects, on its entry into the Ukrainian solar energy market; advising a foreign investor in connection with their planned investment into develop-

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ment of a photovoltaic power project in the town of Trostyanets, Sumy Region. The firm is also enlisted to handle corporate and regulatory advisory. Rubellius Capital, a Swiss-based private equity firm, is supported on regulatory and ongoing matters of their portfolio companies, including the Kharkiv Power and Heating Plant and Volyn Regional Energy Supply Company. Experienced Taras Dumych, managing partner, advises energy clients for the past decade. Sergii Zheka, a senior associate, is in charge of renewable energy projects. Arzinger continued to be named a significant market player in the Ukrainian energy sector. Practice head Iaroslav Cheker was endorsed for good knowledge in renewables, and was especially visible in sound representation of associations of renewable energy producers in relation to a case in the Constitutional Court of Ukraine with respect to cancellation of feed-in tariffs. Timur Bondaryev, managing partner, was also noted for his strategic role in the firm’s energy practice standing.2 Gramatskiy & Partners advises on mining, exploration and development, electricity production and distribution, as well as renewable energy matters. The firm is regularly retained for supporting municipal infrastructure and energy efficiency projects. This past year the firm acted for Eurotransgaz Corporation Kft, Hungarian oil and gas exploration, production and gas storage company, on building a distribution network of agents for the conclusion of contracts for the supply of gas in Europe and Ukraine. The firm has a wide practice of mining and subsoil use, supporting an established UkrainianChinese joint venture between TioMan Ukraine LLC, NewVela Group, Manganese China Corporation on construction and exploitation of upstream infrastructure, obtaining special permits for subsoil use. Ernest Gramatskiy heads the practice group and is very well connected with major real estate developers. The Kyiv office of Jeantet is engaged in energy development rojects covering traditional and renewable technologies. The firm is p experienced in preparing fully wrapped FIDIC-based EPC contracts signed directly by and between a Ukrainian project company and an international developer. The team most recently advised a large industrial plant, in a project relating to electro filter installation for flue gas treatment and exhaust in order to comply with the new limits of exhaust emission, including advice on all effective environmental regulations both in Ukraine and the EU. The practice consists of Olexiy Soloviov and Igor Martsyn, supervised by office head Bertrand Barrier. The energy practice at LCF Law Group was established after its merger with Evris Law Firm in spring 2020. The new team headed by Ivan Bondarchuk brought renewable energy expertise. In particular, the firm provided full legal support to Scatec Solar Solutions in regulatory procedures required for the commercial operation of a number of power plants. The firm is a legal counsel to the Ukrainian Association of Renewable Energy in mediation with the government on review of the feed-in tariff, and coordinated protection of its members during consideration by the Constitutional Court of Ukraine. Given the traditional dedication to litigation work, the firm also acts on regulatory disputes. Ivan Bondarchuk received praise for his expertise in electricity markets and increased visibility in the sector throughout 2020. Legal & Economic Security (LES) attorneys at law is focused on environmental matters related to energy projects, including disputes. The firm regularly supports energy market companies in impact assessment procedures within exploration and mining activities, renewable energy production. Ivan Prodanyk is the main contact. Lexwell & Partners is instructed by big industrial companies for regulatory assignments in their mining and extraction activities, as well as subsequent environmental issues. Podilsky Cement (CRH Group), one of the firm’s long-standing clients, is supported in extending the license surface of a special permit for subsoil use and obtaining environmental assessment documentation. The team includes Igor Nagai and Zhanna Goriacha, and is led by Andriy Kolupaev. Tetiana Revutska, senior associate at Vasil Kisil Partners, has been endorsed by market insiders for creative thinking and for deep knowledge of contractual law in PSA projects.

The firm has not submitted information for the current research.

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Information Technologies, Telecommunications & Media The tech law team at AEQUO demonstrates continuous practice growth, being enlisted for M&A transactions, market entering, tax structuring, regulatory issues, data protection, migration and policy-shaping. The firm enjoys a robust client base of IT-product and outsourcing companies, hardware and telecom, online services, and further assists its corporate clients with IT-related transactions. The increase in tech M&A boosted the team with significant deals. For example, assisting Dragon Capital with the acquisition of a controlling stake in Treeum, a leading Ukrainian online financial supermarket that manages business media resources (including minfin.com.ua and finance.ua); advising 4A Games in connection with attracting investment from Tencent, the largest video game publisher, and a series of other landmark projects. The team took part in a benchmark deal for Ukrainian legal tech, and represented Onit Inc., a leading provider of enterprise workflow automation and AI solutions on the acquisition of Axdraft, a Y Combinatorbacked document automation company. The team is sought for its legal support to maintain R&D offices in Ukraine, and also acts as a Ukrainian legal counsel on multijurisdictional projects empowered by global law firms. Among other notable areas of advice are gambling and advertising of online gambling providers, cyber sport. The firm advised Scientific Games, an American company that provides gambling products and services on the new legislation requirements for suppliers of software and equipment for gambling. This past year the team boosted its GR domain and contributed to plenty of IT and e-gov initiatives. The firm has affirmed its position in the telecom area, with particular focus on M&A and corporate matters, as well as sector specific competition advice. Clients include Google (incl. YouTube), GlobalLogic, Star (previously, Cogniance), SPD Ukraine, OLX, RIA.com, ABBYY, Naftogaz Digital Technologies, Skylum, Sisense, PandaDoc, Ukrtelecom JSC and many others. The head of the IT industry group, Mykyta Polatayko, is one of the most active sector-focused practitioners, with a broad-based technology practice — both regulatory and transactional. Corporate and M&A partner Anna Babych is lead partner of the IT practice, noted for her expertise of telecom regulation. Oksana Krasnokutska is visible for transactional advice regarding the telecommunications sector. The full-service law firm Sayenko Kharenko retains its commanding position on the Ukrainian IT and telecom landscape, being instructed for challenging deals and strategic comprehensive projects. The scope of the practice workload this past year included, among other things, M&A, raising investments, setting up R&D centers and development offices in Ukraine; transfer, outsourcing, licensing agreements; protection of IP rights in several jurisdictions. For example, the firm advised Creatio, a global software company that provides a low-code platform for process management and CRM, in connection with the raising of USD 68 million in investment by Volition Capital with participation from Horizon Capital; advised the Treeum group and its shareholders on the sale of a controlling stake in the group to Dragon Capital. The competition team advised ADM, Bunge, Cargill, COFCO, Louis Dreyfus Company and Glencore Agriculture on obtaining clearance from the Antimonopoly Committee for a joint venture to develop an independent and trusted digital platform to enable post-trade efficiency for the participants of

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the agri-industry. Given the firm’s involvement in the development of new gambling legislation in Ukraine, the team represents top world gambling providers and major Ukrainian betting and lottery operators, software and payment services companies, and many prospective buyers of Ukrainian sports betting operators. The firm had a groundbreaking year in terms of GR work, as the team acted as experts at key public forums for development of taxation for the IT industry, including involvement in the current Diia City taxation initiative, e-commerce laws and copyright protection on Internet regulations. The team is consistently retained to advise telecom players on transactional and regulatory matters, among others, licensing requirements applicable to telecom services and products; data protection and maintaining databases; introducing new technologies, regulatory compliance; rolling out a video-on-demand service in Ukraine. Oleg Klymchuk re-joined as IP practice counsel and technology, media and communications group coordinator. Alina Plyushch is at the forefront of projects in the gambling industry. Pavlo Kovalchuk took over the key executive role in telecommunications projects. With his international standing and versatile experience lead partner Nazar Chernyavsky guides the practice and is particularly active in the GR arena. With its commanding position globally, the robust IT/TMT legal practice of Baker McKenzie has a standing following of global tech heavyweights, such as international search engines, gaming companies, platforms, social networks, payment networks, and prominent producers of electronic devices. The Kyiv office is mandated to assist with the launch of innovative services and products in Ukraine, performing regulatory, data protection, consumer protection, GDPR, localization of distribution and service agreements, tax, customs, corporate and employment issues. International tech companies instruct the office on software outsourcing and joint production agreements, as well as the structuring of their operations in Ukraine. The firm acts regularly on sophisticated transactional matters, and most recently advised Embracer Group AB Holding, a Swedish video game holding company, on acquisition through its wholly-owned subsidiary Saber Interactive, of 100% in Kyiv/Malta-based 4A Games Limited. The firm has further wealth of experience in the area of media and broadcasting regulation, including distribution of international TV channels in Ukraine and broadcasting licenses. Other areas of client queries cover cybersecurity, encryption, gaming and gambling regulations, with notable expertise in fintech. The multidisciplinary seasoned team consists of dedicated practitioners from different practice groups Viacheslav Yakymchuk and Olha Demianiuk (corporate and M&A), Ruslan Drobyazko (IP), Hennadiy Voytsitskyi (tax), Lina Nemchenko and Mariana Marchuk (employment), Maksym Hlotov (fintech). The head of the practice group is Oleksiy Stolyarenko, a highly-esteemed professional acclaimed for his deep knowledge of the sector. Coupled with its global network, DLA Piper1 is the preferred firm for significant cross-border matters, and sophisticated regulatory 1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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IT, Telecommunications & Media mandates. The Kyiv office arranges legal support for large technology multinationals entering the Ukrainian market, and assists with software development, assignment, licensing and R&D agreements, and supports with sustainable termination strategies. The firm regularly assists with technology-based transactions. For example, it advised Stillfront Group AB, a leading free-to-play powerhouse of gaming studios, on the acquisition of a 100% shareholding in Game Labs Inc. The office is approached for contractual set-up with contracting companies, IP rights transfer, restructuring operations in Ukraine, engaging Ukrainian-based contractors for software development. The practice team possesses long-standing expertise in the telecom sector, advising sector majors on telecom services regulation, use of telecom equipment, mobile financial services regulation, satellite regulation, taxation, compliance and legislative affairs. In 2020 the Kyiv team acted on the Ukrainian part of a global deal, having advised Polhem Infra on its acquisition of Telia Carrier. The firm’s clients include NEQSOL, Kyivstar, VFU Funding PLC, Viber, Verizon. Legal director Natalia Kirichenko is particularly wellversed in complicated assignments in the telecom sector. Anastasiya Bolkhovitinova is another key team member, handling corporate work with experience in technology, telecommunications, aerospace and defense sectors. IP partner Natalia Pakhomovska left the firm. Asters acts for a wide range of technology companies, financial institutions and telecom majors, advising on sophisticated regulations, M&A transactions, disputes resolution, and is also increasingly active in the GR space. The firm particularly stands out for its expertise in telecommunications and cybersecurity, and is mandated to support information and communication infrastructure development for both the public and private sectors in Ukraine. The firm’s wide-ranging projects portfolio, among others, encompasses legal structuring of new IT products and IT-business in Ukraine, structuring of relations with local IT staff, provision of software development services, use of cloud services, transfer of intellectual property rights. On the transactions front, the firm advised Intersections Inc. d/b/a Aura, a technology company dedicated to simplifying digital security for consumers, in connection with the purchase of a software business, including acquiring IP assets to enhance its IT business. Yuriy Kotliarov has strong experience and endorsements in telecommunications, cybersecurity, and intersection of IT and telecom services. Sergiy Tsyba is present across the sector related assignment. IP partner Julia Semeniy runs media and advertising. Constantin Solyar leads tax advice, and Oleg Boichuk guides M&A work. Alcor is a highly-focused domestic firm with tech law as its main competence, having among its clients product and IT consulting companies, large game developers, upand-coming public companies and start-ups from Silicon Valley. Most recently the firm advised an American e-commerce company on the implementation of its stock incentive plan in Ukraine; assisted with the review and properly structured the global distribution system of a Ukraine-origin company developing a universal insider threat management

INFORMATION TECHNOLOGIES

TELECOMMUNICATIONS & MEDIA

LEADING FIRMS

1. AEQUO

1. DLA Piper Ukraine*

2. Sayenko Kharenko

3. Baker McKenzie

3. Asters

4. DLA Piper Ukraine*

4. AEQUO

5. Asters

5. CMS Cameron McKenna Nabarro Olswang

Other established PRACTICES

Listed in alphabetical order

Alcor

Other established PRACTICES

Listed in alphabetical order

Baker McKenzie

AVELLUM

Kinstellar

CMS Cameron McKenna Nabarro Olswang

MK Legal Service

Eterna Law

Notable PRACTITIONERS

EVERLEGAL EY Ukraine

Anna Babych (AEQUO)

Gramatskiy & Partners ILF

Olga Belyakova (СMS Cameron McKenna Nabarro Olswang)

Juscutum Law Firm Legal IT Group

Nazar Chernyavsky (Sayenko Kharenko)

Stron Legal Services

Notable PRACTITIONERS

Listed in alphabetical order

Natalia Kirichenko (DLA Piper Ukraine*) Listed in alphabetical order

Artem Afian (Juscutum Law Firm) Anna Babych (AEQUO) Arsen Buchkovskii (ILF)

Yuriy Kotliarov (Asters) Oksana Krasnokutska (AEQUO) * Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

Nazar Chernyavsky (Sayenko Kharenko) Oleg Derlyuk (Stron Legal Services) Oleg Klymchuk (Sayenko Kharenko) Yuriy Kotliarov (Asters) Dmytro Ovcharenko (Alcor) Mykyta Polatayko (AEQUO) Anton Polikarpov (AVELLUM) Oleksiy Stolyarenko (Baker McKenzie) Anton Tarasiuk (Legal IT Group)

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Who is Who latform. The firm has a sharp focus on supporting the operations of p R&D offices in Ukraine, including recruitment, real estate, HR payroll, accounting services, tax planning, IP protection and M&A deals support. In 2020 the firm assisted a leading US healthcare technology company in ensuring the legally safe operation of its R&D center in Ukraine, and conducted due diligence of a California fintech start-up, helping it raise more than USD 20 million in funding. The firm is headed by Dmytro Ovcharenko, a highly-active practitioner across the IT community. AVELLUM regularly supports transactions in the IT and telecom sector, also handling the transfer of IP rights, data protection matters, complex and cross-practice market-entry advice, regulatory and IP due diligence. The firm is traditionally enlisted to support the most challenging technology transactions, having a series of significant cross-border M&A in its recent portfolio, and Ukrainian parts of global deals. The firm was a legal counsel to major shareholders of Axdraft, a Ukrainian document automation company, on its sale to Onit. Among recent assignments are clearance of IP rights to an IT product, cybersecurity matters, procurement regulations. The tax team developed a full-scope tax advice service that covers all possible tax-related questions regarding the operation of innovative service Uber Shuttle in Ukraine. The practice is led by Anton Polikarpov. Mykola Stetsenko leads transactional work. The Kyiv office of CMS Cameron McKenna Nabarro Olswang delivers multijurisdictional legal support to its global clients and supports their queries on the Ukrainian market. The firm enjoys the loyalty of major technology leaders and IT giants, assisting with establishment of their operations and assessing expansion plans in Ukraine, structuring commercial relations with Ukrainian partners, inter alia, outsourcing of IT services and assignment of intellectual property, IT service contracts, privacy/data protection advice. The office is traditionally mandated for cross-border M&A. The team is also knowledgeable as to broadcasting regulation and data transmission, licencing and contract compliance. The TMT sector group is led by partner Olga Belyakova.

Eterna Law provides legal support with corporate and tax advisory, employment and disputes. The firm acted for CoreValue group during its sale to an investment funds group, and for international structuring and restructuring of businesses in several jurisdictions; assisted Wefuture Ltd with registration of an international trademark, and assignment of exclusive property copyrights on computer programs. The firm grabbed the instructions of gambling market players, including structuring their entrance, taxation, licensing, etc. Cross-border disputes regarding violation of software development contracts, hacking and unauthorized access to data became part of the firm’s portfolio recently. The practice has two partners on board. Artem Kuzmenko took in transactional and corporate instructions from gambling and IT companies. Aleksandr Lugovskyi works on IT-related disputes. The innovation and technology practice team at EVERLEGAL develops the scope of its offering for international industry players, significant domestic stakeholders and Ukrainian start-ups. The firm acts for international IT companies on corporate governance, contractual relations with services providers, operational matters. The firm continues to advise IT companies on sector specific employment matters, in particular, agreements with employees and independent contractors, protection of personal data, getting work and residency permits for their international employees and staff relocation. In 2020 the firm advised on the development of innovation parks. For example, it acted as a legal counsel to the first Ukrainian innovation park, UNIT.City, in connection with the receipt of EUR 50 million in financing from the European Investment Bank. Furthermore, the team provides legal support for start-ups, and assists with financing and subsequent financial restructuring, and also has notable expertise in crowdfunding and extending its involvement in technology-related litigation. The practice is guided by two partners — Yevheniy Deyneko, who advises large and mid-sized foreign corporates and Ukrainian outsourcers, while Oleksandr Ruzhytskyi took in the function of a dedicated IT business development partner. The legal team of EY Ukraine continued supporting investments in the IT business, setting up joint ventures, establishing operating models,

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IT, Telecommunications & Media corporate restructuring and tax advice. The team continued supporting Horizon Capital on its investment, most recently representing the private equity fund EEGF III in acquiring a significant minority stake in MAKEUP, a leading European e-commerce player in the beauty segment operating in 14 markets; and in the course of investment by Horizon Capital, TA Ventures, Genesis Investments, iClub and Mission Tech into Liki24, a Ukraine-based e-commerce platform for medicine delivery. The integrated team is enlisted for comprehensive state projects, and provides all round legal, commercial, financial and strategic advice on a unique project involving development of the foreign direct investment strategy for the Ukrainian government, including digital infrastructure issues. EY also renders ongoing assistance to Rozetka, a leading Ukrainian e-commerce company. Borys Lobovyk and Bogdan Malniev lead the projects. Gramatskiy & Partners possesses an extensive offering for IT clients, providing for structuring a business model, IP rights, contractual set-up with contractors, confidentiality issues. The firm has an established roster of foreign clients purchasing Ukrainian IT companies, supports cross-border technology transfer, development of new IT products, Ukrainian software rights purchase. The firm recently rendered support in the expansion of the American company DraftKings through the acquisition of SBTech Global Group (including SBTech Ukraine), a well-known Israeli software developer in the field of gaming, online casinos, sports betting. The firm has broad experience in supporting the development of software products. In particular, the firm acted for SmartTender LLC, on the creation and launch of tender software for organizing and conducting auctions (including in the ProZorro system). The firm represented Labs Technology Services in the course of organization of a software development center for the American company Starry, Inc. and its corporate restructuring. In addition, the team has standout expertise in supporting software development in the gaming and entertainment areas, and a very-well established workflow of projects on investing in technology start-ups. Igor Reutov heads the practice and forms multidisciplinary task forces. Transactions support is supervised by Ernest Gramatskiy, renowned for his versatile skills. ILF is sought after by product and outsourcing IT companies, investors and start-ups. The scope of the dedicated practice spans

corporate structuring of IT companies, partnership arrangements, licensing and service agreements, market entry, raising investment, international tax planning, contracts with customers and developers. The firm further develops partnership agreements for IT business development, and elaborated agreements on joint management of intellectual property rights. This past year the team gained unique experience on highly-regulated markets. For example, the branch office of the Swiss IT-company KASKO2GO enlisted the team to support it with a licensing and partnership agreement with a Ukrainian insurance company to launch its application for end-use customers. The firm represented Singaporean investment fund Intrinity in its investment in a domestic start-up throughout equity participation and a convertible loan. Arsen Buchkovskii heads the practice and visibly expands the geographic reach of the project portfolio. IT law forms a significant part of the legal offering provided by Juscutum Law Firm, with proactive participation in national digitalization projects and GR efforts. The firm is known for its vast knowledge of blockchain technology and cryptocurrency regulation. The team rendered regulatory advice to Binance, a large cryptocurrency exchange, and protection of IP rights attributed to cryptocurrencies; Andromeda Ukraine, a leading provider of blockchain solutions, on participation in a public procurement tender for introducing blockchain technology in the services of the Ministry of Infrastructure of Ukraine. Among notable highlights is the role of a legal counsel of the digital tokenization project for FC Dynamo Kyiv. Clients include Fex.Net, a cloud computing platform; Blackwood Games, a Kyivbased games developer; Swiss Venture LLC, a leading end-to-end custom software development company in Ukraine; Blocksport, a Swiss-based SportsTech; Solve.care, a US-Indian healthcare platform with a R&D function in Ukraine. Managing partner Artem Afian maintains a strong presence in the IT community and is one of the co-authors of the draft law On Virtual Assets. Domestic boutique Legal IT Group possesses significant expertise in GDPR, intellectual property, contract drafting, investments and disputes for IT business. The firm is also enlisted for business structuring and geographic expansion. For example, it advised Advertisement

Ganna Buiadzhy

Doctor of Law, Honored Lawyer of Ukraine, Attorney-at-Law, Managing Partner, LLC VigoLex

PRACTICE AREAS

Civil law, private international law, corporate law, trusts, gambling, public administration, procedural law.

MEMBERSHIP

Member of Board of Ukrainian Attorneys Association (UAA). ADDRESS: Tel.: +380 50 902 7777 E-mail: bgv@vigolex.net Web-site: www.vigolex.net

EDUCATION

• Doctor of Law (LL.D), dissertation topic: Trust and Trust-Like Constructions: Implementation of International Standards into the Civil Law of Ukraine. • Master of Law, T. Shevchenko National University of Kyiv • Master of Public Administration, National Academy of Public Administration under the President of Ukraine.

PROFESSIONAL EXPERIENCE

Ganna Buiadzhy has significant experience in contract work, representing clients in civil, administrative and commercial matters, as well as experience in the field of M&A. She held senior positions in the civil service in the past, including the posts of Minister of the Cabinet of Ministers of Ukraine, Deputy Minister of Justice-Chief of Staff, State Secretary of the Ministry of Justice and Head of the State Registration Service of Ukraine. Co-author of a number of bills and other legal acts, including: Draft Law of Ukraine On Civil Service, On the Cabinet of Ministers of Ukraine, On Amendments to the Civil Code of Ukraine and others. She is currently a member of the Working Group on Recodification of the Civil Legislation of Ukraine. Author of a number of articles on civil and international private law, as well as the

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monographs Trust relationships with a foreign element (2012) and Trust: history, present, prospects (2018) co-author of Bank guarantees (2014). She has been teaching law at the Institute of Law (formerly the Faculty of Law) of the Kyiv National University for over 5 years. Ganna is one of the best specialists in the field of trusts in Ukraine, so she is a regular participant in public events on this issue. In 2021, she was invited by the Council of Europe as a national expert on trusts and beneficial ownership. Ganna Buiadzhy also specializes in representing customers interests in the field of gambling, especially in the area of online casinos. She works closely with the Ukrainian Gambling and Lottery Commission (UGLC), particularly drafting regulations on gambling, and renders legal services to gambling businesses in Ukraine and abroad, including obtaining gambling licenses and certification of gambling equipment. Ganna has been the head of VigoLex law firm since 2019, which has specialized in representing interests in the field of IT law, gambling and other areas of high-risk activity, as well as in real estate.

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Who is Who imbaze, a software company, on its new business structure, incorpoS ration in new countries and compliance with local ad laws. The team assisted Buki, one of the biggest Ukrainian educational marketplaces, with creating a Public Offer that allows Buki to work on the EU market and engage highly-qualified tutors, and with compliance with the GDPR; advised Opinov8, a software company specializing in technology consulting, engineering, product and platform development, on software development agreements and enlargement of business activities on the market of Latin America. The group is consistently approached for drafting of software development agreements, license agreements for AI software, data processing agreements, SaaS (software as a service) agreements, master services agreement, etc. The firm has two partners on board — Anton Tarasiuk and Gennadiy Tamashev. The key members of the team are Oleksandra Belymenko (operational support of IT business), Aleksandr Holod (contract law, disputes resolution) and Kateryna Dubas (endorsed for advising on privacy law and GDPR). Stron Legal Services possesses niche expertise in supporting e-commerce and fintech projects for both large businesses and small start-ups. The team is particularly keen to handle international tax and corporate structuring projects, and incorporation of R&D offices in Ukraine, e-commerce business structuring, support for crypto exchange projects based on blockchain technology. The standout feature is niche advice on online gambling. This past year the firm handled the corporate and tax structuring of an online casino, advising on the use of blockchain technology for the purposes of accounting and storage of corporate rights, and assisted with the development of internal and cybersecurity policies. The firm assisted a Japanese dating project in corporate and tax structuring of the holding, obtaining a license, development of the scope of required documentation for the web site and internal documentation. The team also handles structuring of outsourcing IT companies in Ukraine, covering employment matters and contractual arrangements with foreign contractors. Oleg Derlyuk fronts the firm, commanding seasoned experience in international tax and corporate structuring. Being a part of firm-wide TMT practice in Emerging Europe and Central Asia, Kinstellar handles significant sector-related transactions across the region, and in Ukraine. The team is retained for acquisition finance, compliance and M&A, corporate reorganization, supporting business operations, data protection and transfer, e-commerce. Kinstellar Kyiv advised GTT Communications, Inc., a global leader in cloud networking services, on the sale of its infrastructure business to I Squared Capital, an independent global infrastructure investment

management firm, assisting with the divestment of the infrastructure business in Ukraine and advised on complex Ukrainian law matters related to the transfer of assets, debts, claims, contracts, IP rights, employees, data and business processes. Another notable representation was acting for the ERBD in relation to financing of up to USD 115 million in the acquisition by Datagroup, a major Ukrainian communication company, of Volia, a major Ukrainian cable and OTT TV broadcasting company. The office advises the EBRD on telecom and TV broadcasting regulatory matters. Another area of focus is employment advice and structuring relations with Ukrainian contractors and transfer of employees. Counsel of banking and finance practice Andriy Nikiforov is the TMT practice head. MK Legal Service, a domestic law firm, develops its market standing in IT, telecommunication and cybersecurity area, acting for household names. The team acted for YouTV, a national OTT provider, in the sale of its 30% stake. The firm supports its long-standing client GigaGroup, a prominent player on the Ukrainian telecommunications and technology market, on development of a cloud services business in Ukraine, and supported creation of infrastructure as a service (IAAS) operator of cloud services. Other clients include online pharmacy IPharm, Trustee Wallet, a start-up that provides services as a wallet for buying and selling cryptocurrencies from any bank card, IT support company Synchron. Maksym Kurochko, managing partner, is the key contact. Dentons is an entry point for international companies entering the Ukrainian market, as well as those seeking employment advice. The office assists with investment in Ukrainian technology companies, contracting private entrepreneurs and individuals, as well as data protection issues and IP protection. This past year the firm acted for telecommunication companies and advised on TV broadcasting regulations. Oleg Batyuk is the main point of contact. EXPATPRO law firm focuses on the specifics of employment and contracting in IT, tax and corporate structuring. In 2020 the firm was involved in IT business relocation to Ukraine, covering setting up the subsidiary contract, full team and staff relocation from overseas to Ukraine, amending contracts and their update to comply with the legislation of Ukraine. The firm has assigned 5 foreign IT companies that have opened or substantially developed their offices in Ukraine, such as IT REX, 2021.ai, GP Solutions, SayGames, PlayDay, Interstorm, Silvaco Inc. The firm also advises Ozon Technologies LLC on implementing the remote team’s work in compliance with local labor regulation and international group’s policies. Tetiana Yashchenko heads the team. Advertisement

Alexander BONDAR Partner, SBH Law Offices Ukraine

PRACTICE AREAS

IT, investments (venture capital & private equity), corporate and M&A, banking and finance, project development.

MEMBERSHIP

ADDRESS: Tel.: +380 67 371 3692 E-mail: alexandr.bondar@sbh-partners.com Web-site: www.sbh-partners.com.ua

• Member of the International Bar Association (IBA); • Expert of EAEU Court (from Republic of Belarus) when considering disputes on application of anti-dumping, compensatory and special protective measures; • Member of Non-Profit Partnership called Promotion of Competition in CIS Countries.

KEY FACTS

• Ranked among best lawyers in the category of Corporate/Commercial, Chambers and Partners Global 2021; • Ranked among best lawyers in the category of Corporate/Commercial, Chambers and Partners Europe 2021; • Ranked among leading individuals in the

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categories of Banking, finance and capital markets and Commercial, corporate and M&A, The Legal 500 2021; • Ranked as a market leader in the practice area M&A, IFLR 1000 2021; • Recommended lawyer in the categories of Corporate Governance 2021 and M&A 2021, Who’s Who Legal 2021.

PROFESSIONAL EXPERIENCE

Alexander Bondar possesses strong communication abilities and the ability to accurately identify the main tasks, whose solution will enable a client to achieve the best results. Alexander took an active part in M&A transactions, refinancing, financing, corporate restructuring and legal expertise (LDD) projects of companies working in the construction and development sector, retail, production and mining companies, IT companies, banks and insurance companies. He has extensive experience in forming and coordinating a team of lawyers in the course of complex projects for foreign, international and local clients.

Who is Who

IT, Telecommunications & Media Ilyashev & Partners customarily has an extensive litigation caseload, working for companies from landline, mobile and satellite services and Internet access markets. The firm represented IP Telecom Bulgaria in recognition of a trademark as being invalid and transfer of the domain name zadarma.ua. The firm acts in litigation on non-authorized access and related to information security issues. The team, as led by Leonid Gilevich advised SLR Ukraine, a subsidiary of Selerant, a software developer for managing product life circle, on employment matters in view of the potential acquisition of Selerant by the private equity fund Symphony AI; and rendered legal support for Suntech Innovation, a developer of software for supporting the sports betting industry, on gambling regulation and production of a subsequent software product, including IP rights protection, confidentiality and data protection, taxation, employment structuring. This past year the team of Oleskandr Padalka advised the TikTok social network on advertising regulation and remuneration of advertising videos; PromoVeritas on advertising campaigns in Ukraine. Dmytro Nikulesko is active in IP litigation. Vitali Galitskihh, head of the Estonian office, focuses on fintech and crypto exchange matters. Established in September 2020 as a full-scope IP boutique, Mamunya IP formed a dedicated team focused on IT. The firm has an essential client portfolio consisting of media and new technologies, consumer electronics, and software development sectors. The scope of services spans patent and trademark prosecution, enforcement, including litigation, data protection, GDPR, data privacy, protection from unfair competition, copyright advice and litigation. The firm currently represents Finik.Pro LLC, a Ukrainian software developer, in copyright infringement action against one of the largest banks in Ukraine and Russia. The firm’s founder, Oleksandr Mamunya, has long-standing expertise of representing large foreign and domestic tech companies. The Kyiv office of Belarusian SBH Law Offices established a separate IT practice in 2020. The firm has a strong position among ITcompanies in Belarus, which were actively relocating to Ukraine in the autumn of 2020. The firm advised Belarusian IT start-up Fanatika on entering the Ukrainian market and provided legal support on the seed round of investments; assisted Apalon Apps with full legal support on setting up businesses in Ukraine. The firm also assists with attract-

ing investments, and advised Belarusian venture capital fund Kolos Ventures on issues of venture capital investment in the Ukrainian IT company SOC Prime and IT start-up Be.Live. The practice was headed by Minsk-based partner Alexander Bondar. Sokolovskyi & Partners is approached for its specific knowledge of taxation in the IT sector, assisting IT companies and individuals involved in the production of IT projects, and dealing with taxation of intellectual property rights on software. The firm recently assisted with introduction of e-document management and e-signature. A nother vivid area of expertise is legal tech. Ihor Shevchenko and Serhii Tanchyn are the key contacts. Ukrainian law firm Arzinger* is named for its well-established client following of IT developers and electronics producers. The market strongly endorsed its IP partner Kateryna Oliinyk for her expertise in domain names disputes in Ukraine. Corporate and M&A partner Anna Zorya is endorsed for involvement in sector deals.2 Axon Partners* is a fully IT focused law firm known as a start-up supporter in IT as well as in cryptos. Another noted firm during the peers’ review is Vasil Kisil & Partners*. Ilarion Tomarov was endorsed for IP selling and IP litigation projects, and Oleksandr Melnyk for expertise in data privacy and telecom. Other firms and individuals mentioned in the poll are Nataliia Vasylechko from Lviv-based BK Partners (commercial), Maksym Nosarev, founder of Tretten Lawyers (cross-disciplinary experience). Avitar received praise for GDPR compliance on the US and EU markets. The market also highlighted the market standing of Legal Nodes and its co-founder Nestor Dubnevych, for GDPR experience and counseling famous Ukrainian start-ups. Yurii Krainiak, managing partner and head of media law at Jurimex Law Firm, was noted for his counseling of telecom-related matters. 2

The firms marked with * have not submitted information for the current research.

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Who is Who

Infrastructure In 2020 EY Ukraine demonstrated an unrivalled track record of advising on infrastructure, public-private partnership (PPP) and investment projects. The pipeline of PPP transactions in Ukrainian sea ports is highlighted by acting for public side and signing of concession agreements in relation to Kherson and Olvia sea ports in 2020, and is followed by advisory assistance with pre-feasibility analysis of transferring the assets of the First and Container Terminals of Chornomorsk Sea Port into concession, which is supported by the IFC and EBRD. Furthermore, EY is providing all around legal, commercial, financial and strategic advice on this unique project involving development of foreign direct investment strategy for the Ukrainian government. Another highlight is the IFC-led two-stage project for development of a legal framework and business model for water user organizations (WUOs) in Ukraine, advice on bankable options for investment in irrigation infrastructure, and support with launching the pilot WUOs project. On top of that, EY completed the IFC-led project involving a pre-feasibility assessment of the potential options for private investment in the infrastructure of four regional airports in Ukraine — Lviv, Kherson, Chernivtsi, Zaporizhzhya. Bogdan Malniev is known as an infrastructure focused professional on concession projects. The team also includes Borys Lobovyk and Andrii Moskaliuk. Sayenko Kharenko possesses well-versed expertise, with special focus on infrastructure and construction contentious matters, encompassing ports and terminals, municipal and industrial infrastructure. The firm provided full legal support to the Swiss-Cypriot consortium consisting of Risoil and Luraq in tenders for both pilot Kherson and Olvia sea port concession projects, and represented the interests of Risoil Kherson LLC, the winner in the Kherson sea port tender, on negotiating the concession agreement and submission of application for approval from the AMCU. The firm also advised an investor on the potential project related to concession of the ferry complex in Chornomorsk. It most recently advised one of the largest grain transshipment terminals in Ukraine on various legal matters related to land and operation development in Odesa Port. The firm handles sector specific disputes, and represents the interests of a Turkish contractor in arbitration proceedings with a municipal company in a dispute associated with delays in completing construction works under the FIDIC-based contract within the framework of the EUR 360 million Dnipro metro construction project financed by the EBRD and EIB. The infrastructure team is led by Volodymyr Yaremko supported by Vladlena Lavrushyna. Ukrainian boutique law firm AGRECA demonstrates a complete offering across the entire transport and infrastructure life-circle. It enjoys a strong following on the part of private business, sponsor-side companies, international financial institutions (IFIs), institutional investors, etc. The team has strong credentials in highways and rail networks. For example, the firm is called upon to assist in the preparation

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of a pre-feasibility study for attracting private investment and developing PPP within the framework of implementing the Ukraine National Roads Program; took part in preparing a pre-feasibility study on re alization of concession projects of passenger railway stations. The firm supported transport company Levada Cargo LLC in the construction of container railway terminal. On the top of that, AGRECA handles the first privatization project in the area of port infrastructure, and represents the Transship group of companies in the course of privatization of the State Enterprise Ust-Dunaisk Sea Trade Port. Another highlight is assisting Ukrelevatorprom LLC (ADM Group) in a tender to lease property of the State Enterprise Odesa Sea Trade Port. With its now 15-year long commitment to the sector, the firm’s partners Andrii Pidhainyi and Marina Sharapa are present across groundbreaking projects, and contribute to policy-making initiatives. Both are consistently referred for extensive regulatory expertise. Coupled with its well-established real estate practice, Kinstellar has rapidly developed its presence in the infrastructure sector, being involved in the benchmark projects in port, roads and municipal infrastructure. The Kyiv team successfully represented Qatari port operator QTerminals LLC in the first ever and largest port concession tender in Ukraine, followed by the signing of the agreement for the 35-year concession of Olvia port, valued at USD 122.9 million. The firm provides ongoing advice on the legal aspects of fulfillment of conditions precedent under the concession agreement, land lease and land rent negotiation, construction regulatory matters. Another recent mandate is advising one of Ukraine’s leading road construction companies, Automagistral-Pivden (AMP), on the preparation of the first unsolicited proposal for the construction of the 300-km long Krakovets — Lviv — Brody — Rivne motorway, to be undertaken on a PPP or concession basis. Moreover, the firm was appointed legal counsel to the World Bank Group for the project Policies, Financing and Private Sector Participation Study for Troyeschina Rapid Transit (TRT), which provides for arrangement of bus-train and tram-train routes on parts of existing automobile roads and railways within the city of Kyiv. Oleg Matiusha, head of practice, received exceptional market recognition for his unique concession experience from the investor’s side. Enhanced with its international standing CMS Cameron McKenna Nabarro Olswang is adept at handling joint venture agreements, advising infrastructure acquisitions, port terminals construction projects and financing transactions. The firm provides continuous support for one of Ukraine’s largest marine infrastructure market players. In 2020 the dedicated team advised DP World on acquiring control in TIS Container Terminal Ukraine, the deepest and most technologically advanced container terminal in Ukraine’s Black Sea port of Yuzhniy. A multi-office team advised the Export-Import Bank of Korea (KEXIM) on a secured USD 36 million financing to Grain Terminal Holdings, a Singapore-based joint

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Who is Who

Infrastructure venture between Posco International and the Orexim Group that controls a Ukrainian grain terminal based in Mykolaiv. The firm is a lead counsel on financing municipal infrastructure projects in Ukraine. The projects are led by office partners — Tetyana Dovgan, Graham Conlon, Natalia Kushniruk and Ihor Olekhov.

COUNTRYWIDE

PORT INFRASTRUCTURE

LEADING FIRMS

REGIONAL COUNSEL

1. EY Ukraine

1. ANK Law Office

Asters demonstrates multidisciplinary capacities in advising on the infrastructure sector, which encompasses development of railway and road infrastructure, FIDIC contracts and related disputes, public procurement tenders, structuring market access. The banking team of Iryna Pokanay is a legal counsel for IFIs on extending finance to various initiatives on development of the municipal infrastructure, and to improve urban transport and social infrastructure. The team, as guided by Oleg Boichuk, renders ongoing support to Webuild SpA (ex Salini Impregilo SpA.), a leading global player in the construction of major complex infrastructures, on a broad range of corporate matters and other local legal issues, including public construction contracts, restructuring, licensing; and advises the consortium of EMIT Group S.r.l. and Atzwanger in connection with a contract for the reconstruction of water treatment plant in a Ukrainian city. The firm has well-established positions in the aviation area, and possesses expertise in airport infrastructure.

2. Sayenko Kharenko

2. Jurline

3. AGRECA

3. Legrant

Given the strong following of foreign investors, local companies and state enterprises, AVELLUM expands its practice of infrastructure that utilizes transactions, investment structuring, land allocation and construction, including applicability of FIDIC-based contracts. The firm is present in the area of sea ports, terminals, industrial and social infrastructure. In a recent highlight the team advised an acquisition of an oil transshipment terminal by one of the largest Ukrainian oil and gas producers with a view to expand its presence on the Ukrainian market. Maksym Maksymenko, head of the real estate and infrastructure practice, plays an active role in practice development.

Eterna Law

Baker McKenzie’s infrastructure, power and project finance practice advises on significant deals and project development in the Ukrainian infrastructure sector. The firm commands sector-wide coverage, receiving mandates in ports and terminals, automobile roads, railways. This past year the firm advised Glencore Agriculture Limited, the agricultural commodities giant, on its acquisition of LLC Everi port terminal, a leading vegetable oil export terminal in the city of Mykolaiv, from the Orexim Group of companies. The team continues to advise the EBRD and the Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine on reforming the construction sector’s regulatory framework, and assist with the introduction of internationally recognized contract conditions into Ukrainian contractual practices. The practice group is traditionally supervised by comanaging partner Serhiy Piontkovsky. Andrii Moskalyk is a market-respected counsel with established expertise in transactions on energy infrastructure development. The Kyiv office of Dentons advises on infrastructure development of highways, ports and terminals, municipal utilities, energy infrastructure. The cross-practice team is sought after public-private partnership, privatization

4. Kinstellar 5. CMS Cameron McKenna Nabarro Olswang

Other established PRACTICES

Listed in alphabetical order

Maxim Kapelist (Jurline) Listed in alphabetical order

Asters

Dmytro Kolodiazhnyi (ANK Law Office) Oleg Kutateladze (Jurline)

AVELLUM Baker McKenzie

Oleksandr Kyfak (ANK Law Office)

Dentons DLA Piper Ukraine*

Maksym Maksymenko (AVELLUM) Bogdan Malniev (EY Ukraine)

Gramatskiy & Partners Ilyashev & Partners

Oleg Matiusha (Kinstellar)

* Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

and other types of structuring investments. Most recently the firm advised international investor on status of local auto roads in Ternopil Region and the State Agency of Auto Roads and its local branch to manage such roads and hold tenders for their reconstruction. Given the firm’s leading positions in the energy sector, its team is actively involved in energy infrastructure, transmission and transportation projects, advising on implementation of significant PPPs. Volodymyr Monastyrskyy and Adam Mycyk are the lead partners. The Kyiv office of DLA Piper obtains significant mandates in projects involving 1

Notable PRACTITIONERS

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

Andrii Moskalyk (Baker McKenzie) Andrii Pidhainyi (AGRECA) Marina Sharapa (AGRECA) Tatyana Titarenko (Legrant) Volodymyr Yaremko (Sayenko Kharenko) Volodymyr Zubar (Jurline)

COUNSELINK JURLINE

Royal Gardens Business Center, 66/1 Frantsuzky Boulevard, Odesa, 65062, Ukraine Tel.: +380 48 235 6517 +380 48 738 0893 E-mail: office@jurline.ua Web-site: www.jurline.ua

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VIGOLEX

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Who is Who rivate investment in Ukrainian port infrastructure. The office advises p on construction issues pertaining to marine terminals, state property lease and privatization, public-private partnership arrangements. The aerospace and defense sectors are an area of unique focus, where the office is retained for strategic mandates. The workflow is led by Natalia Kochergina and Galyna Zagorodniuk. Eterna Law advises foreign private investors on sector specific regulations, participation in public procurement and potential PPP. Areas of recent focus include road construction, construction and rent matters in ports, strategic cooperation, joint activities, finance attraction. The firm handles representation of foreign investor regarding a potential PPP project in energy sector and represented Ukrainian Railways in disputes. The practice is led by Oleh Malskyy and Andrey Astapov. Being historically well-versed for handling construction and development projects, domestic law firm Gramatskiy & Partners took in significant projects of logistics, municipal, social and recreational infrastructure. In addition to pure construction and infrastructure regulatory expertise the firm conducts structuring investments, respective corporate and commercial matters. This past year the firm advised on restructuring and restart of the project for the construction and reconstruction of European Square in downtown Kyiv. The firm most recently represented Bastion Group on the acquisition of PJSC Kyivpasservice, which owns bus stations and railway stations in Kyiv and Kyiv Region, during privatization. The long-lasting representation is acting for Seven Hills, an established client of the firm, on construction of the Aeroport City office and logistics complex with developed infrastructure near Boryspil Airport along Boryspil Highway. The firm’s leader, Ernest Gramatskiy, is one of the most recognized legal practitioners among developers, contractors and professional investors. Ukrainian law firm Ilyashev & Partners, which has its own network of offices, is growing its presence in river and port infrastructure, and preserves a strong footprint in regulatory disputes. The firm represents Danube Shipping-Stevedoring Company (COFCO Agri Ukraine) in a dispute with the State Enterprise Ukrainian Sea Ports Authority (USPA) regarding using the berth and berth infrastructure of Mykolaiv Sea Port. This past year the firm represented Busserk, a leading Turkish company in the administration of sea ports and stevedoring activity, on participation in the tender on transfer into concession of properties of the state enterprises Kherson Sea and Trade Port and the USPA. Ukrrichflot is represented in a range of infrastructure and competition matters in the state authorities. The multidisciplinary team is led by partners Mikhail Ilyashev and Oleksandr Fefelov. Giving advice on environmental issues and subsequent disputes with ecology inspections is another area of the firm’s practice work. Sergey Nedelko, head of the Odesa office, has port specific knowledge.

Backed by the strong positions of real estate and construction practice, Ukrainian law firm ADER HABER stepped rapidly into the infrastructure area. The team recently represented Sinohydro Corporation Limited in Ukraine, which is a contractor of a large infrastructure project for the reconstruction of roads in Ukraine, namely the project for the reconstruction of the M06 highway (bypassing Zhytomyr), and handled the issue of relocation of the transmission line, which is complicated by unresolved land issues. Real estate partner Alexandra Fedotova is the main point of contact. Ukrainian law firm AEQUO has multidisciplinary capacities to provide legal support in transactions and disputes involving infrastructure assets. In particular, the major transactional highlight in the sector was advising Posco International on the acquisition of a majority stake in a Ukrainian grain export terminal, and in setting up a related joint venture to oversee the operation of the terminal. In addition, the firm represented US-based company Cummins, Inc. and ETC in the process of formation a joint venture with NPROXX, a world leader in high pressure hydrogen storage a world leader in high pressure hydrogen storage. The team advises LTG Cargo, a division of Lithuanian Railways, on planning, structuring and establishing its business presence in the Ukrainian market of cargo transportation by rail. Disputes concerning infrastructure related property are also in the area of focus. The projects are led by firm’ partners — Denis Lysenko, Anna Babych, Yulia Kyrpa and Sergey Denisenko. The full-service law firm INTEGRITES supports foreign contractors operating in the infrastructure sector to launch their presence in Ukraine and develops legal strategies for their participation in tenders. The firm’s presence is seen in the construction of highways and public roads, urban transport infrastructure and social infrastructure, industrial utilities. Dispute resolution is another strong advantage on the market. The firm acts as a Ukrainian law counsel for SE NPC Ukrenergo in investment arbitration against Russia regarding the expropriation of the power grid, related infrastructure and other property by the Russian authorities following the annexation of Ukraine’s Crimea in 2014. Managing partner Dr. Oleksiy Feliv runs the practice. Marchenko Partners is focused on sophisticated transactions, and this past year it completed representation of the Dubai-based logistics group DP World in a multi-million dollar acquisition of a controlling 51% stake in major Ukrainian stevedoring operator TIS Container Terminal, which is one of the largest M&A infrastructure transactions in Ukraine to date. Roman Shulyar, corporate and M&A partner, led the project. The Kharkiv-based Shkrebets & Partners advises on municipal and waste infrastructure, assisting with construction matters and litigation.

REGIONAL COUNSEL: PORT INFRASTRUCTURE Being close to the main Ukrainian sea ports and enjoying established relationships with infrastructure industry leaders, Odesa-based ANK Law Office is the market leading legal counsel for supporting large-scale projects in ports and terminals. In 2020 the team conducted the instructions of clients operating port terminals and assisted in the restructuring of loans granted within project financing. The firm extends legal support to Delta Wilmar CIS in realization of the investment project in Yuzhniy Sea Port on constructing a plan for soya bean processing and maritime terminal for storage and transshipment of grain cargoes and meal pellets, and a new berth in the port’s water area. ANK’s long-standing client Container Terminal Odesa is represented within construction of third and fourth launch facility of the container terminal of Odesa port; and is advised on the rebuilding of railway lines at its territory for improving logistics and increasing throughput of the terminal. The firm recently represented SC YURAN, a member of the Brooklyn-Kyiv group, in the process of its participation in the concession competition for selection of the concessioner for Kherson Sea Port. The firm is also experienced in industrial infrastructure, having advised VG Trade within construction of a silo complex in the village of Maharyntsy in Vinnitsa Region and the procedure on putting the silos into operation. Dmytro Kolodiazhnyi is endorsed for his knowledge in port infrastructure regulatory issues. The key executive team also includes Vladyslav Brig, Iryna Nogina, and is guided by Oleksandr Kyfak.

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Jurline, the Odesa-based law firm, historically supports activities of sea terminals (easements and lease of port infrastructure facilities, joint activities in sea ports, construction and modernization of port infrastructure facilities, hydraulic structures, dredging, etc.). In its track record the firm supported multimillion investment projects for the construction of port infrastructure facilities, lease agreements for integral property complexes and privatization, and construction and launch of transshipment complexes and sea terminals in Odesa Region. The firm recently advised on the implementation of the contract for dredging services in the port of Constanta (Romania). Sound representation of TIS-Mindobryva Ltd on the claim of the Ukrainian Sea Ports Authority for the recovery of debt for the use of berth No.17 in the port of Yuzhniy resulted in favor of the client. Partners Volodymyr Zubar and Oleg Kutateladze are known for unique transaction experience that is ongoing and related to TIS Terminal. Maxim Kapelist and Vitaliy Kutateladze are other key practitioners. Legrant, the Odesa-based law firm, has a successful track record of regulatory disputes in port infrastructure and supports ports development projects and arising operational issues. This past year the team was enlisted to support new investment projects in sea ports, and demonstrates further expertise in terminal construction matters, state property lease, concessions, investment obligations and risks. Managing partner Tatyana Titarenko is highly active in developing the practice. Liudmila Sizonenko is another key team member.

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Who is Who

Intellectual Property Well-known Ukrainian IP boutique Doubinsky & Osharova represents an enviable number of oversees clients, as well as strong domestic brands, with the primary focus being on life science, pharmaceuticals, chemical industry, FMCG, food and beverages, agribusiness and innovations. With its long-term commitment in IP and strong international standing, the boutique is called upon to elaborate strategies of IP portfolio creation and legal protection; registration of IP objects in Ukraine and other countries; annuities and renewals; protection of well-known trademarks; IP due diligence, etc. In 2020, the team achieved a significant judicial victory in the interests of Jack Daniel’s, when the Supreme Court upheld a cassation appeal to invalidate the certificates of Ukraine on TM “BLACK JACK” and “БЛЕК ДЖЕК”, and also defended its interests against unfair competition. Another notable highlight was successful representation of Lukoil in Ukraine in a trademark dispute against Luxoil, a Russian manufacturer of motor oils. The team also acquired judicial upholding of the fact that the designation KASHTAN had become commonly used, which enhanced the trademarks protection capabilities of THREE BEARS LLC. The firm developed a strategy for protecting the rights and prohibiting the illegal use of trademarks of the BMW Group, and protected its IP rights on the Internet. With its historically extensive patent disputes portfolio, the team most recently protected the IP rights of AbbVie Inc. to inventions in accordance with the patents of Ukraine. An impressive list of clients to be disclosed includes McDonald’s, Nemiroff Vodka Co, R&A Bailey & Co, Diageo Brands, Exxon Mobil, Tiffany & Co, Toyota Motor Corporation, Daimler AG, Frank Sinatra Enterprises. The boutique has unrivalled capacity, with five dedicated partners on board. Michael Doubinsky is extremely respected for his authority and vast experience in the market. Irina Osharova manages the team handling opposition work. Tatyana Shpakovich heads the patent and trademark department. Victoria Sopilnyak is recognized for her proficient IP litigation practice and long-term commitment towards representing pharmaceutical clients. Anton Koval is known for his successful cases in recognizing trademarks as wellknown, and established focus on alcoholic drinks and food producers. Olga Sopilnyak (copyright and customs matters) and Anastasia Kazankina (disputes and IT) are among other notable members of the big team. Pakharenko & Partners, a reputable IP boutique, is known for representing an impressive list of global brand names on obtaining IP rights to patents, utility models, industrial designs, trademarks, plant varieties and other objects, and acting as a leading force in protecting IP rights at the border, and in courts. The boutique ensures maintenance of the IP rights portfolios of regular clients. For example, Pernod Ricard, Cargill Inc., Bayer, Perrigo, MASCHINENFABRIK REINHAUSEN GMBH and more than 50 other companies. In 2020 the firm assisted AGCO Corporation in obtaining titles of protection

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for 30 inventions and, in the interests of the world’s most expensive French wine brand, Chateau Petrus, overcame the refusal to protect the trademark by international registration in Ukraine. Another strong side is the firm’s anti-counterfeiting practice. Within the research period, the team successfully defended the rights of Wenger SA, Puma SE, NIKE Innovate C.V., European football body UEFA and other international brands. Managing partner Antonina Pakharenko- Anderson is a recognized authority with great connections and understanding of the market. Alexander Pakharenko is a leading name in the field of anti-counterfeiting and judicial protection of rights, both domestically and at the border on customs procedures. Notable practitioner Evgeniy Kompanets retains his focus on anti-counterfeiting measures. Vyacheslav Siklitenko received the strong support of peers for performing IP litigation. Coupled with its international presence, the broad IP practice of Baker McKenzie traditionally provides an extensive offering that encompasses protection, management and enforcement of IP rights. In 2020 the team successfully represented Berlin-Chemie in commercial litigation in a trademark cancellation action with respect to a competing generic pharmaceutical company in Ukraine in relation to Nimesil, one of the major Berlin-Chemie brands, against the competing product Nimesin. As IP counsel to British American Tobacco (BAT) and managing its trademarks portfolio, the team successfully represents it in a number of online enforcement actions against infringers of trademarks, including two UDRP actions, which resulted in the transfer of two infringing domain names to BAT Group. The team assisted clients in handling patent filing in Ukraine, particularly in areas like computer technology, nanotechnology; worked in ensuring and attaining brand identity through the work of relevant trademarks in Ukraine; controlled the unauthorized import of goods. The Kyiv office is also referred for strong credentials in developing and implementing anti-counterfeiting campaigns. Many international brand names called on for assistance with structuring franchising and a distribution relationship with partners for entering the Ukrainian market, and complex IP rights assignment projects. The team assisted Inter IKEA Systems B.V. to structure the franchising and distribution relationship with partners for entering the Ukrainian market. IP partner Ruslan Drobyazko is noted for his experience in prosecution matters and transactional IP. Oleksiy Stolyarenko, counsel, specializing in complex IP/IT matters, is endorsed for his leading standing in the relevant sector. The key team members are Myroslava Koval-Lavok, involved in prosecution work and managing IP portfolios, and Anton Kapitonenko, primarily involved in IP disputes. Highly knowledgeable in contentious IP matters, and coupled with wide advisory and transactional IP practice, Sayenko Kharenko commands expertise in all significant aspects of IP at local and

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Intellectual Property international levels. The firm reconfirmed itself as a proficient market force in enforcement actions, invalidity and infringement disputes. In 2020 the team successfully protected the rights of Oschadbank at the Supreme Court in a six-year long resonant case against Russia’s Sberbank; defended the interests at the Supreme Court of the world-famous German pharmaceutical manufacturer Bayer AG on the protection of rights to an invention, with respect to imported products, including the invention for the active substance Rivaroxaban. The firm customarily handles unfair competition matters, and most recently defended the interests of NEMIROFF from the unlawful use of goods packaging, other designations by Zbarazkyi Horilchanyi Zavod LLC without permission. With regard to transactional IP focus, the team advised Creatio on IP issues related to investment raised from US and European growth equity funds. Throughout the research period the firm was retained by clients to handle trademark oppositions, complex IP enforcement actions, legal support on combating counterfeiting, representation in criminal proceedings regarding illegal use of signs for goods and services. Yaroslav Ognevyuk is known as a knowledgeable litigator, delivering impressive results in enforcement and IP disputes. Oleg Klymchuk rejoined the firm as a counsel and head of technology, media and communication group in November 2020. Renowned attorney-at-law Tetiana Yushchenko also rejoined the team. Pavlo Kovalchuk was present across many significant IP projects. The Kyiv office of Gorodissky & Partners, a part of the Gorodissky network throughout Ukraine and Russia, is an IP boutique utilizing protection, disposal and enforcement of IP rights. The firm has a strong track record in trademark prosecution and opposition proceedings, patent prosecution and disputes, copyright protection, assignment of IP rights within transactions. The principal industries include IT, electronics, mechanics, physics, chemistry, biotech, pharma, medicine, nanotech and others. The standout case in 2020 was representing Mr. Nobuyuki Matsuhisa in a civil action against the owner of the dishonest Ukrainian registration for TM NOBU НОБУ, which was used as a title of a restaurant. The team’s recent portfolio included the cessation of unauthorized use of IP rights of a worldrenowned agricultural machinery manufacturer, achieving suspension at the customs border of a shipment of goods marked with the customer’s trademarks. The firm is hired by global tech companies to protect their IP

COUNSELINK VIGOLEX

AUTHORITIES

Other notable PRACTITIONERS

Michael Doubinsky (Doubinsky & Osharova)

Listed in alphabetical order

Oleksandr Aleksyeyenko (Marchenko Partners)

Irina Osharova (Doubinsky & Osharova)

Maksym Bocharov (Gorodissky & Partners)

Antonina Pakharenko-Anderson (Pakharenko & Partners)

Nataliya Dryuk (AEQUO) Natalia Kirichenko (DLA Piper Ukraine*)

LEADING FIRMS

Oleg Klymchuk (Sayenko Kharenko)

1. Doubinsky & Osharova 2. Pakharenko & Partners

Evgeniy Kompanets (Pakharenko & Partners)

3. Baker McKenzie

Anton Koval (Doubinsky & Osharova)

4. Sayenko Kharenko 5. Gorodissky & Partners

Maria Koval (PwC Ukraine)

LEADING INDIVIDUALS 1. Yaroslav Ognevyuk (Sayenko Kharenko)

Anna Kravchuk (Synergy IP Law Agency) Vadim Mikhailyuk (Mikhailyuk Sorokolat and Partners)

2. Oleksandr Mamunya (Mamunya IP)

Alexander Molotai (LCF Law Group)

3. Victoria Sopilnyak (Doubinsky & Osharova)

Dmytro Nikulesko (Ilyashev & Partners)

4. Ruslan Drobyazko (Baker McKenzie)

Viktoriia Ostapchuk (Synergy IP Law Agency)

5. Alexander Pakharenko (Pakharenko & Partners)

Oleksandr Padalka (Ilyashev & Partners)

Other established PRACTICES

Listed in alphabetical order

AEQUO Asters AVELLUM DLA Piper Ukraine* Gramatskiy & Partners Ilyashev & Partners Legal Alliance Company Mamunya IP Marchenko Partners Mikhailyuk Sorokolat and Partners Redcliffe Partners Synergy IP Law Agency

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Anton Polikarpov (AVELLUM) Ganna Prokhorova (Mamunya IP) Vitalii Savchuk (Legal Alliance Company) Julia Semeniy (Asters) Oleksiy Stolyarenko (Baker McKenzie) Tatyana Shpakovich (Doubinsky & Osharova) Vyacheslav Siklitenko (Pakharenko & Partners) Oleg Zhukhevych (Gorodissky & Partners) * Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Who is Who rights and handle opposition work in Ukraine. Acting on behalf of the patent holder, Allergan Sales LLC, the firm successfully challenged the refusal of the Ukrainian Patent Office to prolong the term of validity of a patent for a pharmaceutical product. Clients include Hermes International, Facebook Inc., LG Electronics Inc., Uber Technologies Inc., GlaxoSmithKline. Oleg Zhukhevych, head of legal, is endorsed for his deep expertise in trademarks and design. Maksym Bocharov heads the patent practice. Members of the key team include Olena Biloshuk (litigation) and Maksym Kravchenko (trademarks advisory). AEQUO handles trademarks and patent prosecution, copyrights, and transactional IP support, and is widely-recognized for its track record in IP litigation featured with precedent-setting cases. The firm is enlisted to handle IP portfolio management, and its industry specific experience includes pharmaceuticals, agrochemicals, IT, telecommunications and media, fintech. Among the key highlights from this past year was advising CO 100% life on patent issues related to anti-tuberculosis drugs, including patent searches and developing a patent strategy aimed at increasing the accessibility of drugs; represented Forbes in 10 trademark early termination actions based on non-use. In addition, the team successfully defended the intellectual property rights of Ukrainian pharmaceutical company Darnitsa to the Citramon TM, and continued to support it in challenging the opponent’s attempts to obtain fame status for generic mark designation of key medicinal products developed in the USSR. Most recently the firm advised the Ukraina TV channel on Ukrainian and English law matters, arbitration, and IP in the course of settlement of a dispute on possible unlawful use of The Masked Singer format elements in the Maskarad programme (in early 2021 Ukraina TV channel, Fremantle, and 1+1 media reached an amicable settlement on the adaptation of television formats The Masked Singer (Maska) and Mysteries in the Spotlight (Maskarad) in Ukraine). In 2020, the IP practice faced team departures and new hires. IP partner Оleksandr Mamunya and a group of practitioners left the firm. Nataliya Dryuk, counsel, took on the role of practice co-head. Tetiana Kudrytska, who previously worked in the public sector, joined the team as counsel and IP cohead. Alina Podolyak (previously of Eterna Law) joined the team as a senior associate. The IP practice of Asters combines notable advisory and litigation experience. The team handles trademark prosecution, opposition and enforcement, defense against infringement of patent rights and copyrights; provides advice in licensing and assignment, transfer of technology, unfair competition. During the research period the firm kept providing Biosphere Corporation, a large Ukrainian manufacturer of cosmetic and hygienic products, with assistance in registration of patents, trademarks in Ukraine and abroad; registration of designs in Ukraine; IP strategy development and maintenance of IP rights; supports IP transactions. The dedicated team is called on to handle patent disputes, obtaining security documents, trademark enforcement, working with “intellectual issues” at customs. The team is historically preferred by TV and media companies seeking protection in copyright infringement matters. Public clients include Coverack, Ferrero S.p.A., INTERCERAMA, Mahle International GmbH, Millennium & Copthorne, Soremartec S.A., Teva Pharmaceutical Industries Ltd. Partner Julia Semeniy, a strong specialist with a good reputation and active public position in the field of IP regulation, heads the IP practice. Over the past two years, the ІР team at AVELLUM has expanded its profile, and added to IP matters in M&A transactions and complex software licensing arrangements, trademark prosecution and opposition as well as IP litigation. Thus, the firm acts on patent disputes on invalidation of utility models and invalidation of trademarks. The project portfolio has a wide industry breakdown, and spans FMCG, IT, chemistry and biotechnology, fashion, retail sectors, and private equity investment sectors. Notable projects included advising American biotech company Tizona Therapeutics Inc. on registration and prosecution of an invention (cancer treatment); advising the German hypermarket chain Kaufland Dienstleistung GmbH & Co. KG, as well as the low-cost Hungarian airline WIZZ Air in connection with the prosecution of their trademarks in Ukraine. Counsel Anton Polikarpov is the head of the IP practice, recognized for his strength in trademark prosecution, as well as his solid background as an inhouse counsel. The key team members are Anna Kolodenska and Kateryna Kushchenko. DLA Piper Ukraine1 is traditionally strong in IP transactional matters, including developing IP clean-up strategies and proper IP 1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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rights transfer. The dedicated practice group is called upon by global clients for IP structuring and IP audit as well as managing IP portfolios. During the reporting period, the team worked on IP due diligence, preparation of IP clean-up documents, trademark assignment agreements, master franchise and license agreements, and advising on filing strategies. The office enjoys an exceptional following of global IT and technology leaders, retail and FMCG brands, media companies. In November 2020, partner Natalia Pakhomovska left the firm. The IP practice is supervised by legal director Natalia Kirichenko, focused on IP advisory and transactions, with contribution from Ivan Shatov. Gramatskiy & Partners continues to maintain its IP workload with a significant part of requests coming from the IT industry, HoReCa, FMCG. In 2020, the team’s work was focused on obtaining security documents for a number of trademarks, resolving trademark disputes, defending the rights of clients in lawsuits for invalidation of industrial patents, utility models. The firm also supports complex projects on organizing a software development center, securing IP rights within investment in start-ups. A number of appeals from Ukrainian manufacturers to IP lawyers were related to the protection of their copyrights to industrial design. Franchising and licensing of projects are other areas of demand. One of a handful of outstanding cases was representation in the European Court of Human Rights against Ukraine, initiated by the London-based company MB & SERVICES Ltd, which failed to protect its rights in national courts of Ukraine regarding ownership of a utility model. Among clients are such companies as KSTT Services, Global Universal Trading Ltd, AgroAlliance Group, PTS UA Services, Skywindgroup, Skywind Tech UA, Playtech Software Limited, Clickmein, Fun Food Family, Labs Technology Services. The practice leader is Borys Karas. The most sophisticated projects are overseen by Ernest Gramatskiy. Being well-known for its strong IP litigation capacities, Ilyashev & Partners continues to expand its commercial IP expertise encompassing trademark and patent prosecution, enforcement, sponsorship and advertising. The IP team has clients from various industries: aviation, wholesale and retail, light and heavy industry, pharmaceuticals, show business and TV production. The team defended the rights of Kvas Beverages LLC for a patent for the invention “Method for the production of kvass wort concentrate”; defended the interests of the Ukrainian Red Cross Society in matters on termination of violations related to the use of the Emblem of the Red Cross in the activities of Medical Center Asklepiy Plus LLC. The firm also advised the Ministry of Foreign Affairs of Ukraine on the legal mechanisms for obtaining ownership of the domain name “ukraine. ua”; advised TikTok, the popular social network for video sharing, on the requirements in Ukrainian legislation for advertising on a foreign Internet resource. The firm is currently representing the interests of beer company Persha Pryvatna Brovarnya in a conflict with the Football Federation of Ukraine regarding violation of a sponsorship agreement. The client list includes A scania Group, State Enterpise Antonov, Mars Media Entertainment, PromoVeritas, Bosca S.p.A. Oleksandr Padalka has a strong legacy for his multi-year experience in IP and unfair competition. Dmytro Nikulesko is singled out for handling significant disputes. The team includes Irina Kirichenko and Olena Sereda. In-depth expertise in pharmaceuticals and life sciences determines the core focus of the IP team in the Legal Alliance Company. The scope of practice encompasses inventions, utility models, unfair competition, trademark and patent disputes. Among the recent highlights was the win in the case regarding protection of ІР rights for the trademark of a medicine in Uzbekistan. The team also acts on a number of disputes concerning terminating of the use of trademarks and patent dispute concerning the unlicensed use of the invention. Clients include Alvogen, Berlin Chemie, Bi-It, BELUPO Lijekovi i kozmetika, Boehringer Ingelheim, Contrad Swiss SA, Delta Medical, Glenmark, Jadran Galenski laboratorij, Lekhim, Meda, Movi Health, Novartis, Reckitt Benckiser, Takeda, Teva, YURIA-PHARM and others. Vitalii Savchuk, counsel, leads representation in courts. The practice is supervised by Illya Kostin, partner. Mamunya IP is a full-circle boutique firm established in September 2020 as a result of a split in a core IP team from AEQUO. The focus of the new ambitious market player is on patent, trademark and design prosecution and enforcement, copyright, transactions and anti-counterfeiting, IP litigation. The team strengthens its high expertise in the fields of life sciences, adding new instructions, such as initiating a landmark court action against the Ukrainian

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Intellectual Property Patent Office in a matter regarding refusal to issue a supplementary protection certificate for a medicinal product to a client. Being especially recognized for its strength in patent litigation, the team currently represents Synthon International Holding B.V. in a litigation case aimed at invalidation of the opponent’s patent of a method for treatment of disseminated sclerosis. Another strong side of the team is managing anti-counterfeiting campaigns. The team has a significant prosecution workload and, in particular, deals with filing and registration of several trademarks in the name of Donelli Vini, including a “CHIARELLI FRAGOLI” mark which was opposed by TOSO S.p.A. Among the highlights of copyright cases is representing the Finik.Pro, a major Ukrainian software developer, in a copyright litigation infringement action against one of the largest banks in Ukraine and Russia. The team was reconfirmed as an IP counsel to Samsung Electronics and currently represents it in several court cases initiated by the Ukrainian Music Alliance regarding payment of copyright levies for the import of equipment into Ukraine. The boutique demonstrates a high level of client retention and new customers, among others, Jelly Belly Candy Company, Jeunesse Global Holdings, Mistral Capital Management, CO 100% life, Berlin-Chemie. The firm is managed by Оleksandr M amunya, an IP professional who is wellknown in Ukraine and abroad, recognized as a well-rounded and scrupulous litigator. One of the key figures is Ganna Prokhorova, counsel, renowned specialist in art law. At the beginning of 2021, Anastasia Mindrul (previously of Pakharenko & Partners) joined the firm as a patent and trademarks attorney. The IP practice of Marchenko Partners is focused on developing and enforcing complex IP rights protection strategies, rendering advice on trademarks, regulatory data protection and exclusivity, trade secrets, unfair competition. In 2020, the firm completed representation of NEXT PLC in a litigation and settlement enforcement connected with protection of the client’s trademark and copyright against a local online and brick-and-mortar retailer; represented NEXT Retail and NEXT PLC in opposing dishonest registrations of trademark similar to those belonging to the client. The IP team is experienced in coping with multidisciplinary cases, especially those at the intersection of IP and antitrust. The firm is currently acting in several cases which may, in future, become difficult lawsuits, as well as proceedings in the AMCU, advised on the .UA Domain Name Dispute Resolution Policy (UA DRP), licensing and sponsorship arrangements. The firm’s major clients include Carlsberg, EDANA, EVER Neuro Pharma, Koss, Master & Dynamic. Oleksandr Aleksyeyenko heads the IP and antitrust and competition practices. Sviatoslav Henyk is a key executive. Mikhailyuk, Sorokolat and Partners is a long-standing specialized IP company with representative offices in seven countries of Eurasia. The team offers a full range of issues related to patent, trademarks and legal services in the key areas of IP, as well as in domain registration, state registration of plant varieties, agrochemicals and pesticides and provision of regulatory services. The firm retains a significant volume of prosecution work. For the last year the team filed about 200 applications for patents for inventions and more than 450 applications for trademark registration to the Ukrainian Patent Office. In 2020 the firm defended a worldwide renowned automotive manufacturer in the Supreme Court in a trademark dispute related to its new brand. Among other cases were unfair competition matters, protection during unauthorized use of a customer’s trademarks on homogeneous goods; re-issuance of protection documents in Ukraine and abroad. The experienced team of IP lawyers consists of Valentin Mikhailyuk, Vadim Mikhailyuk, Anna Mikhailyuk, S ergey Sorokolat. Vadim Mikhailyuk is noted by peers for his filing and prosecution experience. Over the three years of its activity, the IP practice of Redcliffe Partners reaffirmed its market position and gained a significant following of international clients, start-ups and individuals out of pharmaceuticals and healthcare, chemicals, FMCG, TMT, visual art, crafts and design. In 2020, the IP team successfully defended the interests of Lightconverse Ltd in a court dispute regarding cancellation of the Lightconverse TM and LC TM due to non-use; advised Pharmathen on patent renewal and other related issues following the patent registration and infringement of a client’s IP rights. The firm advises a Ukraine-based tech start-up, Hurma System, with respect to an intellectual property assignment agreement. In addition, the team acts on Ukrainian patent cancellation on the ground of non-compliance with patentability requirements; renders representation in copyright lawsuits. The team is also involved in the registration of such complex IP objects as geographical indicators. Maria Koval, counsel and prac-

tice head, notably facilitated its development. Anastasia Yushyna is noticeable across many projects. Domestic boutique Synergy IP Law Agency has a solid IP prosecution and rights strategy offering, and is often enrolled for the development and legal support of business transactions involving IP assets, out-of-court settlement and negotiations in IP infringement issues, as well as extensive expertise in multijurisdictional filings. The team is preferred for its capabilities in the successful handling of complex trademark cases. In particular, during the reporting period, the agency filed for registration in Ukraine 330 trademarks for ROZETKA.UA and handled trademarks filing in Azerbaijan and Uzbekistan; acted on recognition of the trademarks “Rozetka” and “Winner” as well-known. The agency also specializes in taxation, structuring of assets and development of tax models using IP objects, legal support of IT projects and Internet projects. The client portfolio includes the following names: VIVO ACTIV LLC, NVP AJAX, Fozzy Group, Prom.ua, Minoxidil Group, Panmed LLC, MHP, Triplex Firm LLC, Karpaty Hotel and Resort Center. Two partners, Viktoriia Ostapchuk and Anna Kravchuk, enjoy strong reputation and praise for trademark protection work. The main work of Absolute Law Agency is related to protection of IP rights in courts. The most notable case in 2020 was defending the interests of a client in a dispute over the ownership of a trademark and a domain name. The main contacts are Oleksandr Hladii and Iryna Zemliana. Possessing vast experience in assisting technology companies and start-ups, Alcor, among other services, also solves IP queries. In 2020, the firm developed strategies for the transfer of IP rights, protection of IP rights for developing a new product, structuring business activities, considering risks associated with the granting of IP rights. Dmytro Ovcharenko is the main contact. Ante Law Firm obtains a steady workflow from representatives of the pharmaceutical industry. In 2020, the team acted as a counsel in all IP issues of Zdravo related to the import and sale of medicines, dietary supplements in Ukraine; provided services to Sanofi-Aventis Ukraine related to protection against unfair competition and illegal use of trademarks related to its medicines. In addition, the firm supported Lutsk Foods, which was fighting against a competitor that was using a similar product name and packaging of sauces. The landmark representation was complex advice to the Theatre 360 degrees project — creation of a video version of a premier theatrical play “The Stone Host” of the Theatre on Podil, included clearance of copyright and related rights for foreign music, used in the project; developing contract framework for many of the parties involved. Kateryna Ishchenko, counsel, heads the practice. СMS is represented through two offices in Ukraine. The IP practice of CMS Cameron McKenna Nabarro Olswang, as headed by Olga Belyakova, encompasses domestic and crossborder assignments on various IP matters, specifically on registration, transfer and structuring of IP assets. In 2020, the project portfolio addressed complex issues related to IT and media sector queries. In particular, the team provided clients with a comprehensive analysis of the current structure of relationships, including on IP issues; advised on data transfer, copyright issues, advertising. The Ukrainian IP team of CMS Reich-Rohrwig Hainz, as led by Mariya Orlyk, handled the IP aspects of corporate deals, advises on IP rights transfer, licensing, protection against infringing import. This past year saw the team advise Quadient, Inc., a world-known manufacturer of mailing equipment and provider of mailing-related services, on acquisition of an IT start-up in Ukraine, including analysis of IP rights transfer clauses in services agreements with Ukrainian software developers, and IP rights assignment clauses. The IP practice at Dentons in Ukraine predominantly advises prominent foreign companies on their regional IP affairs. The team is experienced in drafting and negotiating license and co-existence agreements, due diligence and IP elements of transaction documents, trademarks registrations and IP-related disputes. The major clients include world-renowned pharmaceutical companies, multinational media corporations, electronics giants, and global IT companies. In 2020 the team acted as a local counsel to a client, one of Russia’s major construction material companies, and provided legal advice on trademark issues in Ukraine. Oleg Batyuk, Kyiv-based

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Who is Who managing partner, is the main contact. Oksana Horban, counsel, received appraisal from IP peers, confirming versatile commitment to prosecution and litigation. The daily work of Eterna Law includes trademark prosecution in foreign countries, support of international registration, protection at the customs border of Ukraine, copyright protection, advising on franchising schemes. The firm is focused on advising a range of national and international clients in the luxury, telecom, retail, FMCG and pharmaceutical sectors. Oleh Malskyy took the role of lead partner. INTEGRITES advises local and international companies operating in pharmaceuticals, energy and alcohol sectors, with a recently growing following from IT companies and software developers. The firm keeps advising clients on the protection of IP rights on the Internet, transfer of IP rights, combating counterfeit production and registration of trademarks with the customs register. The IP practice works closely with the litigation and antitrust and competition practices, and advises clients on the use of commercial names and unfair competition, trademark and patent disputes. The firm represented VALAGRO, a leading company in the production and marketing of biostimulants and other specialty nutrients, in an unfair competition case on unlawful business reputations and the protection of IP rights infringed by unauthorized use of its signs, advertising materials, packaging of goods by competitors. In addition, the IP team acted in litigation related to the use of trademark in the domain name. Dariya Ganzienko heads the IP practice. The dispute work is guided by Oleksandr Onishchenko, the firm’s litigation partner. The IP practice of Juscutum Law Firm has traditionally been developed in close connection with its IT practice. The offering spans registration services in Ukraine and other countries, related contracts, entering of IP objects in the customs register of Ukraine, communication with state authorities on IP protection of clients. The firm handled the protection of IP rights attributed to cryptocurrencies for Binance, the cryptocurrency exchange. Major clients in 2020 were Eco Snack, Nutricia Ukraine, Se7ensky, Playboy Ukraine, Nomis Jewelry, Bonfanti Ukraine, Canvas Outdoor, Parfum Bar Ukraine, Oleksiy Durnev, Anton Ptushkin, Aroma Kava, GIOC. Vladyslav Bilotskyi joined as business partner of the IP and data protection practice in November 2020. KM Partners is known for its strong expertise in tax matters, including those related to IP, among other things, structuring of complex cross-border transactions related to the transfer of intellectual property rights. The examples of recent workflow include advising on the supply of software products and amending a licensing agreement to address property rights to software. The main contacts are Alexander Shemiatkin and Elena Bukuyeva. LCF Law Group obtained a standalone IP practice after the amalgamation with Evris Law Firm. The offering spans advisory and disputes. In 2020, the work of the IP team was focused on advising on the IP aspects of advertising and marketing campaign, rebranding; formation and implementation of a global patent strategy for customer protection and protection of IP rights abroad; transfer and license agreements; management of a client’s IP portfolio. The practice is headed by Alexander Molotai, a well-known IP practitioner. Domestic firm MK Legal Service declares IP practice as one of its key ones. The team supports a wide range of issues, inter alia, registration of IP rights, protection of client rights from abuse by third parties, registration and conclusion of IP agreements. In 2020, the

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team’s work was focused on ensured brand protection, development and support of the implementation of business models for franchising various restaurant chains. The firm’s client list takes in Gastrofamily (Dmitry Borisov’s family of restaurants), GigaGroup, Synchron, Trustee Wallet, IPharm. Maksym Kurochko, managing partner, leads the practice. Yuriy Kocherzhuk makes a significant contribution to IP projects. The focus of Peterka & Partners is advice on various IP aspects of creation, protection and exploitation. The team has worked on several projects for comprehensive legal support for manufacturers to protect the geographical indication of the origin of goods. The team provided B’s International Co, a Japanese apparel company, with complex consultancy on protecting its trademark in Ukraine. The team leader is Taras Utiralov. Cherkasy-based Rezultat Law Firm is focused on the use, transfer and protection of clients IP rights (such as copyrights, patents, software, algorithms, confidential information) both in Ukraine and overseas. In 2020, the team supported the registration of a trademark for an IT company in the EU, USA, Georgia, UK, taking into account the claims of the owners of similar trademark. Clients include Dressler Consulting and Snack Family. Maxim Polishkevych leads the practice. In 2020, the Kyiv branch of Belarusian law firm SBH Law Offices opened a new IT and IP practice due to a significant increase in the number of clients from the IT sector. The firm conducted IP due diligence for an impressive number of start-ups with indication of risks and ways for their elimination before the seed round of investments; advised on IP regulation in Ukraine, including registration and transfer of IP rights. The firm advised Mogotel Hotel Group, one of the leading hotel operators in the Baltics, on trademark issues, including development of a contract for the use and registration of TM Rixwell. The practice is led by Minsk-based partner Alexander Bondar, who has extensive experience in advising IT companies in Belarus. The combination of IT and IP matters “under one roof” is an established practice for Wolf Theiss. The recent notable projects include advising Snap, a major international software development company for the Snapchat application, on contracts with respect to IP rights and related cross-border issues; preparation and filing of an application for registration of the word “HAIRDREAMS” TM for an Austrian-based company. The team handles the IP aspects of M&A transactions, and most recently conducted due diligence of IP issues, related to agreements on the assignment of IP rights, in connection with a potential acquisition of an IP company. Taras Dumych is the main contact. Market participants also noted several players, who are not represented in our ranking landscape, but are noticeable in the IP field2. These are patent bureau Benatov & Partners and its founder Daniel Benatov (specialist in patent law with industry expertise in chemical engineering); Mariya Ortynska, managing partner of IPStyle Patent Law Company, specializing in consulting on strategic issues of IP protection in Ukraine and abroad and judicial protection; Ilarion Tomarov (expert in damages and IP protection on the Internet, IP blogger and excellent speaker) from Vasil Kisil & Partners; Arzinger and its partners Kateryna Oliinyk (arbitrator for domain disputes under UDRP and URS procedures) and Taras Kyslyy with recognized expertise in IP litigation; IP boutique Borovyk & Partners. 2

These firms have not submitted information for the present research.

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International Arbitration The reputable international arbitration practice of Sayenko harenko has a commanding position in the market, possessing a forK midable portfolio of large-scale and strategically important investment and commercial disputes. The team acted as counsel and Ukrainian law adviser under a variety of institutional rules, including those of the LCIA, SCC, ICC and ICAC. Selected recent highlights include acting for the State of Ukraine, alongside an international counsel, namely Latham & Watkins, in a USD 6.1 billion Energy Charter investment arbitration initiated by the minority shareholders of PJSC Ukrnafta under the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce. The team also acts as Ukrainian counsel of Ukraine in a USD 700 million ICSID investment arbitration initiated by a shareholder of air carrier Aerosvit; and recently successfully represented leading Ukrainian agricultural holding MHP, the claimant in the case at the ICAC at the Ukrainian Chamber of Commerce and Industry regarding termination of a multimillion-dollar supply contract with a Saudi Arabian company as well as at local Ukrainian courts in connection with the unsuccessful attempt of the respondent to set aside the arbitral award of the ICAC. Disputes based on FIDIC contracts are among areas of the practice’s focus. The firm also has a strong track record for enforcing arbitral awards in Ukraine and other jurisdictions. The 8-strong team is known for efficient representation of clients and is led by partner Olexander Droug. Volodymyr Yaremko and Andriy Stetsenko are other senior members of the team. Year on year INTEGRITES demonstrates stable extension of its international arbitration portfolio, which includes both multi-million investment treaty cases and commercial arbitrations in different venues and under different rules (LCIA, ICC, ICSID, SIAC, ICAC (Kyiv), ICAC (Moscow), GAFTA, UNCITRAL, etc.). The team’s standout feature is acting as a lead arbitration counsel. In particular, the team successfully represented the interests of Ukrainian state enterprise Ukrkhimtransamiak in arbitral proceedings against a Russian chemical giant, Togliattiazot, with over USD 190 million at stake stemming from a long-term contract for ammonia transit, and secured its win over the respondent’s application to set aside the award at the Supreme Court of Ukraine. The firm also acts as a Ukrainian law counsel to NPC Ukrenergo in its investment treaty claim against Russia, regarding the expropriation of the power grid, recreational facilities and other property following the annexation of Crimea by Russia in 2014 with USD 650 million at stake. The firm has significant commercial arbitration in its current portfolio. For example, it represented the leading steel plant in Ukraine in USD 187 million multi-party ICC arbitration related to a loan facility agreement. Olena Perepelynska, head of CIS arbitration, is one of the leading figures in the CIS arbitration community and one of the most in-demand arbitrators with a series of appointments over the past 12 months. Dmytro Marchukov leads investment arbitration cases and also heads cross-border litigation. Over the past year he received a number of instructions as a Ukrainian law expert in high-profile cases. For example, he acted as expert witness on Ukrainian law to claimants in two ICSID claims — Optima Ventures LLC, Optima 7171 LLC, Optima 55 Public Square LLC (controlled by Igor Kolomoisky and Gennadiy B ogolyubov) against the United States. Highly- active arbitration professional Serhii Uvarov was promoted to partner and the promising and visible Krystyna Khripkova was promoted to counsel. Ukrainian heavyweight Asters took over significant large-scale international arbitration cases, handling disputes under a wide range of arbitration rules (LCIA, ICAC, VIAC, SCC, AAA, UNCITRAL Arbitration Rules), and assisted its clients in enforcing foreign arbitral awards and judgments in Ukraine. The firm represents both investors and respondents in arbitrations arising under bilateral investment treaties. The team is acting as local Ukrainian counsel to Privatbank in connection with its claim brought against the Russian Federation pursuant to the Ukraine — Russia BIT. The firm recently successfully represented ASK Technology Limited, a leading Hong Kong manufacturer of multi-GPU systems for mining, rendering and AI, in a dispute with a Finnish company that was resolved in the Arbitration Institute of the Stockholm Chamber of Commerce, which revolved around a contract for the supply of equipment for

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mining Ethereum, one of the fastest growing cryptocurrencies alongside Bitcoin. The firm also expands its expertise on FIDIC contract disputes, handling complex disputes with a multitude of parallel proceedings. Markiyan Kliuchkovskyi is practice head and lead partner in commercial arbitration. Oleksiy Didkovskiy, co-managing partner, plays a key role in significant arbitral cases related to the Ukrainian banking sector. Dmytro Shemelin is known for his deep experience in investment arbitration. The senior team includes Oleksandr Volkov and Oksana Legka. Svitlana Chepurna became a general counsel in Privatbank. Eterna Law has an extensive caseload of high-value claims at the LCIA, ICC, VIAC, NAI, ICAC and other arbitration institutions. The scale of supported arbitration disputes spans shareholders’ conflicts, withdrawal of property, breach of loan agreements and debt recovery. Along with that the firm maintains its traditional presence in commodity arbitrations under the rules of GAFTA, FOSFA, SAOL, LME and LMAA, especially those arising out of sale contracts and COVID-19 related force-majeure. The core focus in 2020 included disputes in agribusiness, IT, banking, transport areas. For example, the firm acts on behalf of Ukrainian Railways JSC, the state monopoly company in the railways field, in a dispute related to the breach of a services contract by its counterparty. The firm also acts for the National Bank of Ukraine in various jurisdictions regarding a multimillion dispute on a surety agreement. The formidable practice is led by Eugene Blinov, a bright and creative arbitration practitioner with strong market support for his professional credentials in oral hearings and good representation work. Oleh Beketov, head of the international litigation practice, regularly acts as an expert in Ukrainian law in significant cases. Mykhaylo Korchynskyy, received the praise of peers for his involvement in commodities arbitration. Having one of the largest international arbitration practice teams in Ukraine, AEQUO law firm covers international investment arbitration, international and domestic commercial arbitration, and commands recognized strength in energy disputes. The firm represented Ukrgasvydobuvannya in USD 700 million SCC arbitration in a dispute over the termination of an oil and gas production joint venture. Following the tribunal decision, the joint venture’s assets were transferred to Ukrgasvydobuvannya, with Misen Enterprises and Karpatygaz compensated for their interests in those assets. The team also currently acts as the Ukrainian counsel for Naftogaz of Ukraine and its subsidiaries in international investment arbitration administered by the Permanent Court of Arbitration in The Hague in a dispute against the Russian Federation over breach of the Ukraine-Russia bilateral investment treaty due to the expropriation of the assets of Naftogaz of Ukraine in Crimea. Another benchmark win was acting for Olympic Entertainment Group, the leading provider of gaming services in the Baltic States, in a treaty dispute against Ukraine over an expropriation of business due to the controversial and politically sensitive 2009 gambling ban law, when UNCITRAL tribunal ordered Ukraine to pay EUR 7.5 million in damages. The international arbitration practice is led by partner Pavlo Byelousov who is dedicated to this practice area along with the cross-border litigation practice. Denis Lysenko, managing partner, and Myroslava Savchuk, counsel, play an important role in arbitration matters. Ksenia Koriukalova is an important team member and a promising young practitioner. ARBITRADE has broad experience of representing clients in arbitration cases under a number of arbitration rules of various arbitral institutions. The past year was marked by Dr. Yuliya Chernykh’s involvement as an expert on points of Ukrainian law in investment treaty cases before the International Centre for Settlement of Investment Disputes (ICSID), Permanent Court of Arbitration (PCA), as well as before the High Court of Justice in the Business and Property Courts of England and Wales. Most recently she was authorized to provide her opinion on issues related to the acquisition of shares in Ukrtatnafta using promissory notes within the framework of PAO Tatneft v. Ukraine. Among commercial arbitration cases, the firm has a rich portfolio of successful resolution of disputes arising out of contracts for sale and purchase of

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Who is Who

International Arbitration complex industrial equipment. The team represented a claimant, Promoboronexport, the State Enterprise for Foreign Trade and Investment, specializing in the export and import of military and special-purpose equipment in arbitration proceedings against Polish enterprise WOBI-STAL sp. z o.o., related to the non-delivery of goods before the Court of Arbitration at the Polish Chamber of Commerce. Another renowned strength of ARBITRADE is its experience in agricultural commodities arbitrations under the auspices of GAFTA and FOSFA. The firm is regularly instructed on arbitration cases as well as pre-arbitral settlement negotiations in disputes arising out of international contracts for the sale and purchase of agricultural commodities. The senior management team includes Pavlo Trytenichenko and Dr. Ivan Vashchynets. Dr. Yuliya Chernykh is, apart from her work as a party representative and expert, an active arbitrator with cases under the rules of ICAC at the UCCI, ICC and SCC. AGA Partners (until May 2020 the firm acted as amalgamated firm of AVELLUM) preserves its leadership position in commodities arbitration, and has built up experience of arbitrations beyond the bounds of agribusiness and trade, including pharmacy, construction and real estate, banking and retail. The firm successfully represented Eastmarket Grain LLP as a seller in GAFTA arbitration at First tier and Appeal proceedings against a Cyprus trading company under a sale contract governed by English law. In addition to numerous GAFTA and FOSFA arbitrations the firm led four arbitrations in the International Commercial Arbitration Court at the Chamber of Commerce of Ukraine, including successful representation of Ferrit Ltd in a debt collection claim against a Hong Kong trading company regarding delivery of coal mining equipment to a Ukrainian mine in Donetsk Region prior to the Russian military invasion in Eastern Ukraine. The team is also active in the area of enforcement procedures after receipt of an arbitral award both in Ukraine and abroad. The firm is involved as a local cocounsel representing Ukraine as the state in the investment arbitration. Ivan Kasynyuk and Iryna Moroz guide the practice, with strategic input from Aminat Suleymanova. This past year was a reboot one for VELLUM’s international arbitration practice. A In late May 2020 the firm announced the departure of AGA Partners team and continued cooperation as an alliance. The firm’s caseload maintained solid commercial and investment arbitrations, including disputes arising out of several supply agreements, guarantees and indemnities, shareholder disputes. The firm represented a large Czech industrial manufacturer, Ferrit S.r.o., in four parallel arbitrations which arose out of four supply contracts before the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry. Partners Mykola Stetsenko and Glib Bondar are involved as Ukrainian law experts in large investment arbitrations. Mykyta Nota and Kostiantyn Likarchuk (previously — Kinstellar) rejoined the firm as a counsel and senior partner and practice head, respectively. Being present across all major arbitration cases of the firm, Oleksii Maslov was noted as a new generation practitioner. Ilyashev & Partners is one of the most recognized Ukrainian law firms for domestic and cross-border dispute resolution, including international arbitrational matters. The firm

LEADING FIRMS

Other notable PRACTITIONERS

1. Sayenko Kharenko

Julia Atamanova (LCF Law Group)

2. INTEGRITES 3. Asters

Oleh Beketov (Eterna Law)

4. Eterna Law

Pavlo Byelousov (AEQUO)

5. AEQUO

Andrey Bychkov (Ilyashev & Partners)

LEADING INDIVIDUALS

Sergiy Gryshko (Redcliffe Partners) Ivan Kasynyuk (AGA Partners)

1. Olena Perepelynska (INTEGRITES)

Andriy Kolupaev (Lexwell & Partners)

2. Markiyan Kliuchkovskyi (Asters)

Krystyna Khripkova (INTEGRITES)

3. Olexander Droug (Sayenko Kharenko)

Kostiantyn Likarchuk (AVELLUM)

4. Yuliya Chernykh (ARBITRADE)

Roman Marchenko (Ilyashev & Partners)

5. Eugene Blinov (Eterna Law)

Dmytro Marchukov (INTEGRITES)

Other established PRACTICES

Listed in alphabetical order

Olexander Martinenko (Kinstellar) Listed in alphabetical order

ARBITRADE AGA Partners AVELLUM Ilyashev & Partners

Oleksiy Maslov (AVELLUM) Iryna Moroz (AGA Partners) Mykyta Nota (AVELLUM) Myroslava Savchuk (AEQUO) Dmytro Shemelin (Asters)

Kinstellar

Aminat Suleymanova (AGA Partners)

LCF Law Group

Serhii Uvarov (INTEGRITES)

Lexwell & Partners

Volodymyr Yaremko (Sayenko Kharenko)

COUNSELINK AGA PARTNERS

Kuznetskyi Business Center, 16/64 Fedorova Street, Kyiv, 03150, Ukraine Tel.: +380 44 237 7933 +380 44 237 7943 +380 48 738 0893 E-mail: reception@agalawyers.org Web-site: www.agalawyers.org

SERGEYEVS' LAW OFFICE

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

has a reputable track record of representations before ICAC (Kyiv), LCIA, ICC, SCC, VIAC, arbitrations as well as recognizing and enforcing arbitral awards in Ukraine and abroad. In addition, its partners Roman Marchenko and Mikhail Ilyashev are regularly appointed as experts on Ukrainian law in the most high caliber arbitration cases of the last few years. For example, Roman

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Who is Who Marchenko acts as an independent expert on Ukrainian law, appointed by the law firm Fieldfisher, in a lawsuit filed by state-owned Privatbank against Igor Kolomoisky, Gennadiy Bogolyubov and a number of other defendants in the High Court of London. The team recently successfully handled arbitration and cross-border litigation proceedings regarding the collection of loans from the Creative group of companies. The team is currently representing the interests of State Enterprise Ukrspetsexport in the Permanent Court of Arbitration attached to the Economic Chamber of North Macedonia in a dispute with the Minis-

try of Defense of the Republic of North Macedonia on the collection of debts from the Ministry under a contract for the maintenance of helicopters, the supply of equipment and training of specialists; and also protected the interests of J.S. Corrugating Machinery Co. Ltd, one of the largest China-based machinery manufacturers, in the recognition and enforcement in Ukraine of two arbitration awards published by the China International Economic and Trade Arbitration Commission (CIETAC) for the payment by Ukrainian companies of a principal debt. Andrey Bychkov is increasingly visible in energy and maritime

INTERNATIONAL LAW FIRMS* Clyde & Co acts as a legal counsel of the State of Ukraine in the Philip Morris International and others vs. Ukraine case, and provides legal services to Ukraine in the investment arbitration case Sinequanon Investment vs. Ukraine. The team includes partners Ivan Urzhunov, Hery Frederic Ranjeva and Nadia Darwareh. Headquartered in Washington DC, international law firm Covington & Burling has extensive experience of handling matters in Ukraine and for Ukrainian entities, including a number of investor-state arbitrations. In particular, the team acts for Naftogaz of Ukraine in a USD 5 billion investment claim against the Russian Federation under the UkraineRussia BIT for Russia’s expropriation of Naftogaz’s assets in Crimea, also acting for several other Ukrainian investors in disputes under the Ukraine-Russia BIT. For example, the firm represented DTEK Krymenergo on claims valued at over USD 500 million against the Russian Federation for the expropriation of its energy supply and distribution business in Crimea. Another core competence to note is public international law disputes. The team represents the Ministry of Foreign Affairs of Ukraine before the International Court of Justice in its case against the Russian Federation to hold Russia accountable for its violations of international law in Crimea and eastern Ukraine under the Convention for the Elimination of All Forms of Racial Discrimination and the International Convention for the Suppression of the Financing of Terrorism. The firm also acts for the government of Ukraine in two sea law sea cases under the UN Convention on the Law of the Sea (UNCLOS) in the Black Sea, the Sea of Azov and the Kerch Strait. Other core competences include international commercial arbitration and white-collar investigations. Washington-based partner Marne Cheek heads the desk. The key partners are J onathan Gimblett, Gregory Lascelles, Craig Pollack and Jeremy Wilson (London), David Zionts and Nikhil Gore (Washington DC), David Pinsky and Erin Thomas (New York). Eversheds Sutherland provides legal services related to protecting the interests of Naftogaz of Ukraine in foreign jurisdictions (including foreign state authorities, organizations, institutions, foreign courts, foreign financial institutions, before other entities and individuals) in all respects related to the execution of an arbitral award in favor of Italia Ukraina Gas S.p.A. (IUGAS), and potential arbitration proceedings upon a potential claim from IUGAS (or its successors) at the Arbitration Institute of the Stockholm Chamber of Commerce. Fieldfisher represented minority shareholders in Ukrnafta PJSC against Ukraine in investment arbitration brought at the Stockholm Chamber of Commerce under the Energy Charter Treaty; acts for Gilward Investments BV against Ukraine in an investment treaty arbitration on the expropriation of the claimant’s investment in a Ukrainian airline under ICSID rules. Arik Aslanyan, partner, is head of the Russia and CIS group, which is based at the firm’s London office. Hogan Lovells has a consistent presence in complex, high-stake litigation and arbitration proceedings related to Ukraine. The firm’s international arbitration team is experienced in both investment treaty and commercial arbitration cases. In particular, the firm is enlisted by Ukrainian high-wealth individuals for representation in shareholder disputes, and also acts for Ukrainian corporations in arbitration regarding breach of English law facility agreements. The team is based in London, and includes partners Michael Davison, Alex Sciannaca, Ben Hornan. Holland & Knight acted as a legal counsel to the Ministry of Justice of Ukraine in the Oksana Baiul vs. Joseph Lemire, Olympic Champions LTD (Delaware), Olympic Champions Ltd (BVI), State of Ukraine and Does case. The firm was also hired as Ukrainian legal counsel in the Mykola Ivanenko and others vs. Ukraine case.

King & Spalding is hired as legal counsel to Ukraine in the Motor Sich shareholders vs. Ukraine case. The team includes Thomas Sprange, Robert Savage, Kateryna Frolova, Ella Gasan Zade. Latham & Watkins (London) is legal counsel to the State of Ukraine in the Littop Enterprises Limited, Bridgemont Ventures Limited and Bordo Management Limited vs. Ukraine case at the Energy Charter investment arbitration under the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce, in which the claim was USD 6.1 billion. The firm also represents Ukraine’s interests in the Gilward Investments B.V. vs. Ukraine case ICSID investment arbitration initiated by a shareholder in Aerosvit, a Ukrainian partly state-owned airline company. The claim ran to USD 700 million. Quinn Emanuel Urquhart & Sullivan is legal counsel to the State of Ukraine in international arbitration proceedings regarding compensation for losses incurred in connection with the violation of property rights to a shareholding in the Zhytomyr Confectionery Factory (Mr. Ihor Boyko vs. Ukraine case). London-based partner Alex Gerbi is experienced in disputes relating to Ukraine, Russia and other CIS territories. Sherman & Sterling (Paris) has an impressive track record of representing the State of Ukraine in investment arbitrations. In particular, the firm was hired as legal counsel for Ukraine in the State Development Corporation VEB.RF vs. Ukraine case. The firm also acts as French counsel to the Ministry of Justice in the Todini Construzioni Generali S.p.A. vs. State Road Agency of Ukraine case and handles representation of the State of Ukraine in Emergofin B.V. (Netherlands) and Velbay Holdings Ltd (Cyprus) vs. Ukraine at the International Center for Settlement of Investment Disputes, which arose out of the Supreme Court’s decision (2015) to expropriate the claimants’ majority stake in the Zaporizhzhya Aluminium Plant. Van Bael & Bellis’ London office handles all forms of international dispute resolution, including investment arbitration, commercial arbitration and cross-border litigation. Nicholas Lawn, head of international dispute resolution at the London office, has a particular focus on investment arbitration. He has special regional expertise in disputes related to CIS countries and has acted on a number of Ukraine-related commercial disputes both before arbitral tribunals and the English High Court. Wikborg Rein Advokatfirma AS (Norway) acted as legal counsel to NJSC Naftogaz of Ukraine with regard to providing protection for the rights and interests of Ukraine during the settlement of the dispute between NJSC Naftogaz of Ukraine and PJSC Gazprom, and provided legal services related to the representation of Naftogaz in all relations with Italia Ukraina Gas S.r.l. (or its successors), including, but not limited to, the new arbitration proceedings on the claim of Italia Ukraina Gas S.r.l to NJSC Naftogaz of Ukraine and the enforcement of the arbitration award in favor of Italia Ukraina Gas S.p.a. Winston & Strawn acts as legal counsel of the State of Ukraine in the Tatneft vs. Ukraine case as well as in the Republic of Tatarstan, the Ministry of Land and Property Relations of the Republic of Tatarstan case. Maria Kostytska, partner of the Paris and Washington DC offices, is the leading counsel. Withers is a legal counsel to Ukraine in the Todini Construzioni Generali S.p.A. vs. State Road Agency of Ukraine case. It also provided legal services to protect the interests of Ukraine in the Olympic Entertainment Group AS vs. Ukraine case. Chinese Yingke Law Firm is legal counsel to the Ministry of Justice of Ukraine in the Xinjiang Communications Construction Group Co., Ltd vs. State Road Agency of Ukraine case.

* This piece of research is based on submissions of international law firms and information available in public sources, in particular, the Official Resource on Public Purchasing in Ukraine — ProZorro.

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Who is Who

International Arbitration disputes, as well as in recognition and enforcement of arbitral awards. The team also includes Roman Protsyshyn, Sergey Nedelko and Marina Riashchenko (joined in 2020). Kinstellar’s Ukrainian office demonstrated its particular focus on post-M&A disputes and protection of assets. The highlight of 2020 was representing a minority shareholder of a large Ukrainian agricultural company operating a land bank in eastern and central Ukraine in ICC arbitral proceedings seated in London, commenced by a sovereign wealth fund in a post-M&A dispute for breach of the shareholders’ agreement and other transaction documentation and for compensation of damages. Another side of the practice was representing Galicia Distillery PJSC in proceedings before Ukrainian courts in relation to recognition and enforcement of an arbitral award rendered by a tribunal in arbitration proceedings under the Commercial Arbitration Rules of American Arbitration Association. Practice head Kostiantyn Likarchuk, partner, and Mykyta Nota, counsel, left the firm in 2020. Olexander Martinenko joined from the Kyiv office of CMS Cameron McKenna Nabarro Olswang as a partner and head of the dispute resolution and commercial practices since October 2020. He acts as an expert in Ukrainian law on a regular basis in the most resonant investment arbitration disputes. LCF Law Group maintains an investment arbitration caseload, representation in commercial disputes in ICAC (Kyiv), and handles prearbitration settlements. In 2020 the firm acted as Ukrainian law counsel to the Ministry of Justice of Ukraine in arbitration under a FIDIC contract versus Todini Construzioni Generali S.p.a. as well as in investment arbitration versus Olympic Entertainment Group, a Baltic gaming provider. The firm’s team also represented the interests of Danish Banke Elektromotive in arbitration proceedings regarding fulfilling a contract for the development and production of an experimental model before ICAC (Kyiv). Dr. Julia Atamanova heads the practice. Being renowned for representing the State of Ukraine in investment disputes, and state-owned companies in commercial arbitration proceedings, Lexwell & Partners is customarily retained for large-scale strategic arbitrations. In particular, the firm is the Ukrainian law counsel in an investment dispute between Ukraine and minority shareholders in Ukrnafta, and acts for Naftogaz of Ukraine in LCIA proceedings with Littop Enterprises Limited and others regarding corporate governance of Ukrnafta. The firm currently represents a Ukrainian seed distributor in an international arbitration case at the International Seed Federation against a major French agricultural holding regarding delivered seeds. Another lasting investment highlight is representing the State of Ukraine in international arbitration proceedings under the claim of international investor Mr. Igor Boyko regarding compensation for losses incurred in connection with the violation of property rights to a shareholding in the Zhytomyr Confectionery Factory. Igor Nagai and Zhanna Goriacha are the core members of the team, as led by Andriy Kolupaev. The team at Redcliffe Partners acts in the main in arbitration under investment treaties, representing the claimant’s side. Sergiy Gryshko is a partner and head of dispute resolution. Apart from his practice as a counsel, he acts as an expert on issues of Ukrainian law. The milestone investment case of 2020 was PAO Tatneft v. Ukraine before the High Court of Justice in the Business and Property Courts of England and Wales Commercial Court, where Sergiy Gryshko acted as expert on issues of Ukrainian law and procedure for Tatneft. ANTIKA Law Firm represents clients in a broad range of disputes in arbitrational institutions as well as at all stages of enforcement procedures, including recognition and enforcement of foreign courts and international arbitrations awards. The projects team includes partners Dr. Alexey Kot and Maxim Korchagin. The firm’s partners are also regularly retained as Ukrainian law experts in multimillion arbitration disputes and have good connections among international law firms. The dispute resolution team at Baker McKenzie’s Kyiv office is involved in representing clients in international commercial arbitration and in court proceedings on recognition and enforcement of foreign arbitral awards in Ukraine and abroad. Ihor Siusel is lead partner. The dispute resolution practice of CMS Reich-Rohrwig Hainz Ukraine is headed by partners Maria Orlyk and Anna Pogrebna. Oleksandr Protsiuk, counsel, currently advises on a number of cases involving international arbitrations in different jurisdictions. The firm advises a long-standing client in numerous court and arbitral proceedings in Ukraine, including various debt collection cases proceedings against its Ukrainian customers.

The Kyiv office of Dentons acts as an arbitration counsel alongside its Paris office. In 2020 the team represented Misen Enterprises AB in a dispute under the bilateral investment treaty between Ukraine and Sweden, as well as on a joint activity agreement between Misen and public joint-stock company Ukrgasvydobuvannya. The firm also represents an international investor in litigation and potential international arbitration against the shareholders of a Ukrainian company regarding claims of breach of representations and fraud arising from the client’s acquisition of shares in the Ukrainian company. Paris-based partner Anna Crevon and Oleg Batyuk, Kyiv managing partner, lead the practice. The focus of Maksym Sysoiev is on energy-related disputes and developing the practice of investment arbitration in the renewable sector. Prominent for its domestic litigation performance, Ukrainian law firm EQUITY retains its involvement in cross-border disputes and international arbitration cases, also acting on recognition and enforcement of arbitral awards in Ukraine. The firm recently acted as a cocounsel alongside Fangda Partners (Beijing) for a Ukrainian producer of cardboard as a respondent in the CIETAC arbitration of an agreement for the supply of equipment from China to Ukraine; and also acted as a co-counsel for a leading US engineering company as a respondent in the SCC arbitration of an agreement for the supply of equipment to Ukraine. Oleg Malinevskyi is lead partner. The team includes Oksana Varakina, counsel, and Maksym Khitrykh, associate. The Ukrainian office of Swiss-based Fortior Law specializes in solving commercial disputes which arise in the trading of crude oil, petroleum products, grains and other commodities and in the chartering of vessels and carriage of goods by sea, as well as investment arbitration matters. The team is enlisted regularly to act for clients (such as Integral Petroleum, United Petroleum Trading Switzerland, Petrochemical Logistics) in various arbitrations, including the LCIA, LMAA, GAFTA, SCAI and others. Danil Hristich, senior associate, is the practice head. Odesa-based law firm Interlegal specializes in maritime, shipping, international trade and related commodities arbitration. The team has a pipeline of cases in GAFTA, FOSFA and LMAA. In a recent highlight, the firm acted in the interests of a marine engineering company on nonpayment of funds for work performed, via the LMAA and handled some GAFTA arbitrations related to non-payment of funds for the goods. Artem Skorobogatov and Alexey Remeslo are the main contacts. Southern Ukrainian law firm Jurline, which is based in Odesa, is one of the few regional law firms that have experience of accompanying arbitration cases in GAFTA, FOSFA, LCIA, LMAA. Throughout the past 12 months the firm also acted in commercial arbitration. Daria Minchenko acts as practice head. For the last two years Yuriy Katser, head of legal at KPMG Law, acted as the Ukrainian law expert in four large-scale international arbitrations, including two international arbitrations involving Ukrnafta under LCIA and SCC arbitration rules. Ukrainian dispute resolution boutique VB PARTNERS increased its expertise in investment arbitration. The team is representing, alongside international company Joseph Hage Aaronson LLP, the interests of a shareholder in Delta Bank Belarus regarding compensation for losses incurred as a result of nationalization of business on the territory of the Republic of Belarus at the International Centre for Settlement of Investment Disputes. Arzinger is a renowned heavyweight in arbitration matters. The firm's core outlook is for investor-state and energy disputes. The lead partner is Markian Malskyy, who specializes in legal support in investment projects as well as international commercial and investment arbitration. Oksana Karel, practice co-head, is noted for her strong procedural skills1. The arbitration community continually notes the leading role of Irina Nazarova, managing partner of ENGARDE, for her solid reputation as an arbitration practitioner acting as both counsel and arbitrator. Dr. Irina Paliashvili, RULG — Ukrainian Legal Group, is consistently retained as a Ukrainian expert in international arbitration, and possesses unique experience of energy projects, oil and gas regulation and production sharing agreements in Ukraine, Russia and the CIS region.

These firms have not submitted information for the present research.

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Who is Who

International Trade:

Trade Remedies and WTO, Commodities, Commercial Contracts The formidable and well-versed international trade practice of Sayenko Kharenko is considered the most experienced on the market, acting across all types of trade defense remedies both in Ukraine and abroad, and possesses unique expertise of WTO dispute settlement procedure, different regulatory issues related to export control, products safety, protection of consumers and sanctions work. The broad portfolio involves representing both domestic producers protecting the Ukrainian market and foreign producers trying to gain an individual approach in the course of proceedings, customers, importers, associations. The practice team represented the interests of LLC AscaniaFlora in a safeguard investigation related to the import of fresh cut roses notwithstanding the country of origin and export; represented Zhejiang Baokang Wheel Manufacture Co., Ltd. in anti-dumping investigation related to imports into Ukraine of aluminum wheel disks with origin in China and Russia. As for international markets, the firm represents the interests of PJSC Manufacturing Association StalkanatSilur in an anti-dumping investigation related to imports into the USA of prestressed concrete steel strand with origin, among others, from Ukraine. This past year the firm also extended the number of investigations related to imports into the Eurasian Economic Union to its trade remedies caseload. The team is at the forefront of representations in sunset and interim reviews as well as in anti-circumvention investigations. The WTO practice acted on behalf of companies of the DF Group in WTO arbitration proceedings to identify the reasonable period of implementation in DS493. Another substantial part of the practice is distribution and agency agreements, development of the franchising chain and trade compliance (technical regulations, ecological standards, sanctions). In a recent highlight the firm is instructed on a consistent basis for law product safety and product liability requirements. The robust practice group is led by well-rounded and reputed Anzhela Makhinova, with a key contribution from Victoria Mykuliak and Tetyana Tanchyn. Visible practitioner Ivan Baranenko left the firm for education abroad. Ilyashev & Partners boosted its trade remedies practice, setting important precedents, and expanded its advisory on customs and export control, trade sanctions and sensitive political restrictions, preference agreements and rules of origin. The firm is increasingly sought for its policy-making and GR competence. The international trade practice is highly proficient in representing national producers in trade investigations, and is present in the majority of recent proceedings. For example, the team defended the interests of Karpatnaftochim in safeguard investigations against imports of caustic soda and polymeric materials regardless of the country of origin and export in Ukraine; achieved imposition of preliminary anti-dumping duty in the course of representing the interests of Druzhkovka Hardware Plant regarding the import of bolts from China; acts for a number of producers of cement in anti-dumping investigation related to the im-

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port of cement products originating from Turkey; handled representation of PJSC Odeskabel and Yuzhcable Works PJSC in the safeguard investigation against the import of wires to the territory of Ukraine. Being mandated by the Ukrainian state to represent its interests in the claim by the EU estimated at USD 1.3 billion within the framework of the EU — Ukraine Association Agreement regarding the moratorium on exporting round wood, the team reached a favorable outcome in December 2020. The practice enhanced trade litigation, sanctions, as well as trade policy advice and GR. In particular, the firm developed and promoted a draft law on changes to the Customs Code of Ukraine regarding temporary measures to defend national interests. Olena Omelchenko is acclaimed for her proficiency and deep understanding of trade policy. Oleksiy Gorbatiuk is a key team member with a strong practical background. Asters proliferated its trade remedies profile, capturing new significant representations with a sharp focus on defense in trade investigations. The robust practice grabbed an impressive following of foreign producers and importers, and is present in the majority of investigations initiated by Ukraine. For example, the firm defended leading foreign chemical producers and Ukrainian importers in safeguard investigations regarding imports into Ukraine of mineral fertilizers with nitrogen, phosphorus and potassium, and nitrogen fertilizers (in particular: ammonium nitrate, urea and mixtures of urea and ammonium) regardless of the country of origin and export. The team represented LLC DEPS TELECOM, a leading importer of wires into Ukraine, and EURASIA TELECOM Sp. z o.o., one of the largest EU exporters to Ukraine, in a safeguard investigation regarding imports of wires to Ukraine. Other ongoing anti-dumping investigations, among others, include imports of cement originating from the Republic of Turkey, import of plywood originating from the Republic of Belarus, turn-tilt mechanisms for window and balcony door units originating in the Republic of Turkey. Notably, the firm advises embassies and trade missions in Ukraine. The litigation aspects of trade defense are among recent areas of growth. The firm represented EuroChem in a court dispute regarding the decision by the Interdepartmental Commission on International Trade to renew anti-dumping measures applied to imports of ammonium nitrate originating from the Russian Federation. The practice is co-led by two partners — Alexey Pustovit (fronts practice development function and benefits from his competition background) and Gleb Bialyi, who is historically focused on representing clients from chemical and fertilizers industries, and metallurgy, and revealed recent involvement in trade litigation. The market praises the high standards of work done by Anton Sintsov. This past year the team was strengthened with the arrival of Dr. Olesia Kryvetska as a counsel, noted for her strong academic background. The international trade practice of AEQUO exhibits a considerable offering spread across trade remedies, complex customs issues

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Who is Who

International Trade and export controls. The firm also houses in-depth specialization in international sanctions and trade restrictive measures, also assisting with product compliance and recall. The firm continues to expand its trade investigations portfolio, focusing on representation of importers. In a recent highlight the team represented the interests of the China Chamber of International Commerce in an anti-dumping investigation on imports of pipes originating from China; acted for three companies of state-owned XINYEGANG Group and Jingjiang Special Steel Co., in an investigation into imports of pipes and tubes originating from China; represents three companies of France’s Saint-Gobain Group in an anti-dumping investigation against imports of insulation materials; protected the interests of Elm-plastic GmbH in a safeguard investigation into imports to Ukraine of syringes regardless of the country of origin and export without imposition of safeguard measures. The firm has an accomplished commercial practice assisting with structuring supply, distribution and franchising. The firm recently advised Applied Molecular Transport Inc. on drafting contractual instruments related to the supply of medicine samples for conducting clinical trials in Ukraine; provides ongoing legal support to Inditex Group on customs valuation, customs payments, and commercial issues. Oleksandr Tereshchenko, senior associate, represents clients in trade investigations and advises on bilateral free trade agreements. In December 2020 Mariya Nizhnik (previously — First Deputy Chair of the Antimonopoly Committee of Ukraine and a member of the Interdepartmental Commission on International Trade) rejoined the firm as a partner and practice lead. Corporate and M&A partner Anna Babych heads the commercial and distribution practice. Managing partner Denis Lysenko supervises tax and customs projects. Given its globally recognized practice of structuring supply chains across various jurisdictions, Baker McKenzie is a port of call for Ukrainian manufacturers and big multinational corporations for product regulation, customs clearance and supply contracts, export and import controls in Ukraine, structuring direct sales on the Ukrainian market and organizing supply chains around the world. The trade team maintains involvement in anti-dumping and safeguard cases, as well as review of trade remedies. Sanctions compliance is another recent area of growth. The office handled representation of PJSC ArcelorMittal Kryvyi Rih during a probe into alleged discriminatory and/or hostile actions by the Republic of Belarus affecting the legitimate rights and interests of Ukrainian entities engaged in foreign economic activities. Hanna Shtepa heads the international commercial and trade practice in the Kyiv office. Nadiia Filozop is noted for involvement in trade remedies matters and sanctions advice.

TRADE REMEDIES AND WTO

COMMODITIES

LEADING FIRMS

1. Sayenko Kharenko

1. AGA Partners

2. Ilyashev & Partners

2. ARBITRADE

3. Asters

3. Eterna Law

Other established PRACTICES

Listed in alphabetical order

Other established PRACTICES

AEQUO

Fortior Law

Baker McKenzie

Interlegal

Attorneys’ Association Gestors INTEGRITES

LEADING INDIVIDUALS 1. Ivan Kasynyuk (AGA Partners)

Sergii Koziakov & Partners

LEADING INDIVIDUALS

2. Iryna Moroz (AGA Partners) 3. Eugene Blinov (Eterna Law)

1. Anzhela Makhinova (Sayenko Kharenko)

4. Pavlo Trytenichenko (ARBITRADE)

2. Olena Omelchenko (Ilyashev & Partners)

5. Artem Skorobogatov (Interlegal)

3. Gleb Bialyi (Asters) 4. Alexey Pustovit (Asters) 5. Yaroslav Snigur (Attorneys’ Association Gestors)

Other notable PRACTITIONERS

Listed in alphabetical order

Oleksiy Gorbatiuk (Ilyashev & Partners) Victoria Mykuliak (Sayenko Kharenko) Anton Sintsov (Asters) Oleksandr Tereshchenko (AEQUO)

Attorneys’ Association Gestors is known for its established trade remedies practice. The firm currently supports Small Enterprise FIRMA PKT in the preparation of an anti-dumping complaint in an anti-dumping investigation regarding the import of aluminum disks originating from China and the Russian Federation; acts for the Association of Furniture and Woodworking Enterprises of Ukraine in an anti-dumping investigation

Other notable PRACTITIONERS

Listed in alphabetical order

Yuliya Chernykh (ARBITRADE) Alexey Remeslo (Interlegal) Dr. Ivan Vashchynets (ARBITRADE)

COUNSELINK AGA PARTNERS

Kuznetskyi Business Center, 16/64 Fedorova Street, Kyiv, 03150, Ukraine Tel.: +380 44 237 7933 +380 44 237 7943 +380 48 738 0893 E-mail: reception@agalawyers.org Web-site: www.agalawyers.org

ID LEGAL GROUP

5A, H. Skovorody Street, Kyiv, 04070, Ukraine Tel.: +380 44 482 5780 +380 44 482 5785 +380 67 719 1177 +380 66 719 1177 E-mail: info@id-legalgroup.com Web-site: id-legalgroup.com

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Who is Who r egarding import of plywood originating in Belarus. The practice is led by Yaroslav Snigur. INTEGRITES demonstrated its growing trade remedies portfolio, representing importers in trade investigations and advising domestic producers in bringing complaints for initiation of such probes. In a recent highlight the firm acts for 12 leading Ukrainian dairy products producers in initiating a safeguard investigation against import of certain dairy products into Ukraine. Acting on the importer side, the firm represented caustic soda importer LLC Nikolaev Alumina Plant, which is part of RUSAL Group, in a safeguard investigation against caustic soda imports coming into Ukraine; represented NBT AS (Norway) during a safeguard investigation against the import of wires to the territory of Ukraine. In addition, the firm advises Centravis Production Ukraine PJSC, one of the largest specialized enterprises for producing seamless stainless-steel pipes and tubes, on revision of current antidumping measures related to the import of stainless pipes produced in Ukraine into the territory of the Eurasian Economic Union (EAEU). The practice is led by Sergey Lakhno and Yevgen Ivanets, both known for their economic backgrounds. The arbitration team, as headed by Olena Perepelynska, is experienced in GAFTA proceedings and enforcement of GAFTA arbitral awards in Ukraine. The firm traditionally assists clients with cross-border contracts, customs matters, and also sanctions compliance advice. Most recently the firm advised BGS Rail, a Ukraine-based company established by Baltic Ground Services, on the acquisition of railway wagons by a Ukrainian company specializing in the lease of different types of wagons. Viktoriya Fomenko acts as lead partner. Sergii Koziakov & Partners is increasingly active in trade remedies, export control, customs, cross-border supply issues. Throughout 2020 the firm successfully represented Compo Expert GmbH (Germany) and Agropolychim AD (Bulgaria) in a safeguard investigation regarding imports into Ukraine of mineral fertilizers with nitrogen, phosphorus and potassium, regardless of the country of origin and export, acted for a number of leading foreign chemical producers in a safeguard investigation on imports of nitrogen fertilizers (in particular: ammonium nitrate, urea and the mixtures of urea and ammonium), regardless of the country of origin and export. The team is currently acting for Belarusian producers and exporters Soyuz-Cable in a safeguard investigation regarding imports of wires to Ukraine regardless of the country of origin and export. Nataliia Isakhanova is practice lead. Andrii Pylypenko is singled out by peers during assessment. Market insiders noted the presence of Dynasty Law Firm with the key practitioner Snizhana Karagodina in the trade remedies space. The market also noticed the recent visibility of MORIS GROUP in entering trade investigations space. AGA Partners (it operated under the AVELLUM brand name until late May 2020), conducts major cases for the world’s largest trading companies and corporations, and captured the long-standing loyalty of the largest Ukrainian agricultural holdings. The team is a top choice in commodity arbitration, namely GAFTA, FOSFA and LMAA cases. The firm advised Astarta Holding LLC, one of the biggest agriholdings in Ukraine, concerning its trading model and developed a sale contract template governed by English law for the sale of agricultural commodities to be used by the whole group globally, and also advised it in a complex dispute arising under a sale contract governed by English law with a major Qatar trading company. AGA Partners successfully represented the State Food and Grain Corporation of Ukraine in GAFTA arbitration against buyers (Switzerland) in a dispute concerning the

recovery of the price for delivered goods. The largest commodities practice on the market is led by Ivan Kasynyuk and Iryna Moroz, supported by a number of executives — Iurii Gulevatyi, Dmytro Koval and Ievgen Boiarskyi. Aminat Suleymanova, managing partner, preserves her strategic role for client development. Ukrainian boutique ARBITRADE retains its position as one of the leading counsels in structuring trade in agrarian commodities and subsequent dispute resolution. The firm is highly sought after by Ukrainian and foreign traders in agricultural commodities for representation in pre-arbitral settlement negotiations in disputes arising out of international contracts for the sale and purchase of agricultural commodities, and arbitrations under the auspices of GAFTA/FOSFA under English law, as well as in arbitration under ICAC rules at the UCCI. For example, the firm successfully represented Bunge SA in a dispute with the subsidiary companies of Agroprosperis Group on the late delivery of soybeans; advised AGROTRADE A.G., a German cattle and crops exporter, on the consequences of its non-delivery of soybean meal of Argentinian origin to a Turkish counterparty under a contract coming under Iranian law. Two partners, namely Pavlo Trytenichenko and Dr. Ivan Vashchynets, lead the practice. Yuliya Chernykh commands considerable knowledge in commodities arbitration. Odesa-based law firm Interlegal, with six offices across the Black Sea region, traditionally advises on trade contracts governed by GAFTA, FOSFA proformas and represents clients in subsequent arbitration proceedings. The workload of the international trade team includes disputes on freight and debt recovery, product liability. Given its strong focus on maritime law, the firm is retained for advice to trade companies on issues related to obligations under sale contracts and relationships with carriers, freight forwarders and terminals. The practice is led by Artem Skorobogatov (Ukrainian law contracts) and Alexey Remeslo (English law contracts)1. Eterna Law maintains a stable presence in commodity arbitrations under the rules of GAFTA, FOSFA, SAOL, LME and LMAA. Most recently the firm acted in an India-seated arbitration matter arising from fraudulent misappropriation of cargo. The firm is experienced in anti-dumping investigations and appeals in Ukrainian courts against imposed duties. The team maintained advising Detskiy Mir, a longstanding client and large multinational retailer, on franchises, licensing and supply agreements in CIS countries. Eugene Blinov traditionally leads commodities arbitrations. Mykhaylo Korchynskyy was endorsed during peers’ review for his strong representation of clients in GAFTA/FOSFA arbitration. Oleh Malskyy is in charge of cross-border commercial arrangements. International firm Fortior Law has international trade as one of its main practice areas. The office in Kyiv is experienced in soft commodities, advising on contentious issues which arise between traders and their counterparties, owners, terminals, freight forwarders, surveyors, port authorities, and handles dispute resolution under GAFTA and FOSFA contracts. Another area of focus is hard commodities, particularly in the trading of crude oil and petroleum products in Eastern Europe and Central Asia. The firm also advises on trade finance. Major clients include Integral Petroleum SA, United Petroleum Trading Switzerland SA, East-West Logistics LLP, Petrochemical Logistics LTD, Blockchain Optimization SA. Danil Hristich is the practice head. Sergey Platonov is another key practitioner. 1

In 2020 Natalya Myroshnychenko and Andrey Perepelitsa left the firm.

INTERNATIONAL LAW FIRMS Van Bael & Bellis (VBB) possesses unmatched experience in representing Ukrainian companies in trade defense investigations in the EU as well as in other jurisdictions. The Brussels-based practice team represented Metinvest in a major trade defense investigation in the EU regarding imports of flat steel products. It also represented the entire Ukrainian steel industry in an EU safeguard investigation against imports of various steel products. Interpipe is regularly represented in EU trade investigations as well as in EU Court proceedings. The firm’s trade defense practice on behalf of Ukrainian clients is led by partner Yuriy Rudyuk, with significant contribution from Sergiy Beketov. The Geneva office focuses on WTO matters and provided extensive legal support to the government of Ukraine

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in several WTO dispute settlement proceedings against the Russian Federation. The team included Joanna Redelbach and Tetyana Payosova, guided by partners — Philippe De Baere, Clotilde du Parc and Isabelle Van Damme. Another global legal services provider involved in trade remedies is Mayer Brown. Nikolay Mizulin, a Brussels-based partner, was named during the poll. Ukrainian counsel noted several foreign law firms active in the commodities area involving Ukrainian clients. These are Clyde & Co, Ince & Co, Hill Dickinson, Stephenson Harwood, Reed Smith.

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Who is Who

International Trade Odesa-based law firm Legrant retains its focus on maritime and shipping, and regularly represents clients on contractual disputes that have arisen from international trade. The firm has experience in arbitration under and GAFTA, FOSFA and LMAA proceedings, and often represents the interests of international traders. Tatyana Titarenko is the key contact. Lamwell Law Firm and its managing partner Andrii Shulga were noted for expertise in commodities during the poll. AVELLUM has multidisciplinary expertise in conducting tax efficient contractual structures for supply chains, customs issues, trade contracts, production and distribution agreements. With an extensive portfolio of foreign banks, credit agencies and international financial institutions and a stellar banking practice, the firm has an established practice in international trade finance. The firm’s arbitration practice advises on arbitration cases which originated from trade contracts. During the period under research the team acted in four arbitrations before the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry, and acted in insolvency proceedings in Ukraine connected to the international supply of oil products. Application of sanctions is another area of focus. The workflow is managed by three partners, namely Mykola Stetsenko, Glib Bondar and Vadim Medvedev. Gramatskiy & Partners provides robust expertise in cross-border trade contracts, inter alia, structuring export and import deals, export control, customs clearance, currency liberalization, logistics, transportation matters. The firm is heavily involved in structuring supply chain agreements and logistic services, as well as tolling arrangements. The established practice includes soft agricultural commodities, food and beverages, technology and engineering services. The firm is particularly keen on supporting cross-border supply of technological equipment, and also structures the export of software products and support services abroad. Andrii Trembich heads the practice. Nobles has a sharp focus on advising global companies on establishing and expanding suitable sales, distribution and logistics systems to Ukraine, structuring of supply chains, franchising, e-commerce business. The firm assists with distributorship agreements between foreign manufacturers and Ukrainian distributors, including IP-related issues, regulatory and customs. Clients include Advanced Micro Devices, Inc., Denmark’s Export Credit Agency, KIA Motors, GAP Inc., GE Healthcare, Eterna Shirts, Zooplus AG, Spacebit Global Ltd. The practice is led by two partners, namely Alexander Weigelt and Volodymyr Yakubovskyy. Lviv-based law firm First Chair Legal focuses its offering on trade configurations, customs compliance, and renders support in achieving authorized economic operator status. International companies from a range of sectors (e.g., medical technology, electric equipment, transport, metalworking, furniture fittings manufacturing, etc.) are among its clients. The firm recently assisted a Nordic fish producer with market entrance, trade configuration, and legal support of tolling. The practice is led by managing partner Oleg Kyryievskyi, and of counsel Marius Bordalba.

COMMERCIAL CONTRACTS

Established PRACTICES

Listed in alphabetical order

AEQUO AVELLUM Baker McKenzie Eterna Law Gramatskiy & Partners INTEGRITES Nobles Sayenko Kharenko

The commercial and distribution practice of Peterka & Partners, coupled with its CEE network, provides advisory on shaping contractual relationships, and has an industrial focus on the automotive and pharmaceutical sectors. The firm delivered legal advisory to Crown Equipment Corporation, a US-based company, one of the largest manufacturers of powered industrial forklift trucks in the world, regarding executing a dealer agreement with one of its distributors; assisted Mekoprint, a Danish-based producer and global supplier of electronic ware, with various cross-border agreements underlying the company’s business in Ukraine. Taras Utiralov is the key contact in Ukraine.

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Who is Who

Labor & Employment The Kyiv office of Baker McKenzie is called upon by global and Ukrainian companies from various industries, including agriculture and transportation, retail and consumer goods, banking and financial institutions, embassies and non-governmental organizations, healthcare and pharmaceuticals. The firm provides a complete offering, acting on a wide range of labor and HR compliance issues, hiring and termination of staff, change in management, appointment of foreign nationals, negotiations with trade unions. The dedicated team is instructed for conducting employment law audits, internal corporate investigations, transfer of employees, and due diligence reviews of employment law liabilities in corporate acquisitions. Employee privacy rights and data protection is another area of focus. Long-standing expert Mariana Marchuk is known for her extensive experience in this practice and contribution with legislative amendments. Partner Lina Nemchenko heads the office’s employment and migration group. The full-service firm Sayenko Kharenko commands a sizeable labor and compliance practice spanning multijurisdictional employees’ transfers (as part of major M&A transactions), employee incentive plans, stock options and other employee benefits issues, employment reclassification risks associated with foreign companies engaging Ukrainian independent contractors, teleworking and other COVID-19 related employment issues. The practice stands out for the dedicated team, which conducts amicable (alternative) dispute settlement. The practice recently advised Eurofins Agro Testing on employment-related matters in connection with the liquidation of a Ukrainian subsidiary. Other recent instructions include redundancies, out-staffing issues, labor disputes, internal policy compliance. The firm’s client roster includes Agroscope, Coca-Cola, Greif, Kyivstar, Creatio. The employment team is co-led by Iryna Bakina and Dr. Svitlana Kheda. The key executive team includes Olga Kyriusha and Kuzma Pozychaniuk. The full-service Ukrainian law firm Asters has a formidable standalone practice commanding a full range of labor and employment issues, and is regularly instructed by leading multinationals and domestic companies. The firm is retained for structuring employment relations, employee compensation matters, staff redundancy and termination, immigration, implementation of flexible and remote work time arrangements, employment compliance. Given the firm’s sizeable corporate and M&A practice, it advises major corporates on the employment aspects of acquisitions and management of complex employment reorganizations. The firm actively expands its experience of representation with trade unions, including collective negotiations and development of collective agreements. In a recent highlight the practice team boosted its litigation engagement and was sought after for legal support in resolution of conflict situation and collective labor disputes, litigations related to disciplinary measures and reinstatement. Of late the team supported a private individual, a former top-

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manager of several local subsidiaries of international businesses, in employment and pension law matters related to development of a personal pension plan and successful litigation against the state Pension Fund. Inesa Letych, is highly active in practice development. Vadym Samoilenko, partner, provides general supervision of the practice. The well-versed employment practice of Ilyashev & Partners is called upon by big domestic industrial leaders and Ukrainian branches of multinational corporates, as well as private individuals. The team renders representation in dismissal disputes, regulatory claims, negotiates labor conflicts and handles ongoing advisory support. The firm has extensive experience in representation with labor unions and in collective bargaining, developing benefits system, employees transfer and relocation, employment compliance. The firm acted for subsidiary company Messer Ukraine in an employment dispute with a former commercial director; represented the interests of the rector of the National Aviation University in its dispute with the Ministry of Science on cancelling its decision on his dismissal and appointment of a replacement. In the research period the team advised JSC Concern Titan-2 on the employment of Ukrainian citizens by a foreign person in Ukraine; Suntech Innovation on the specifics of labor relations during quarantine. State Enterpise Antonov and various companies in the Antonov Group, Coca-Cola Beverages Ukraine, Unilever Ukraine, Wargaming and others are clients. Leonid Gilevich specializes in employment, compliance, and splits his time with the corporate and M&A practice. Valeriia Gudiy possesses unique experience of interaction and dispute resolution with trade unions, support during inspections by the state regulatory authorities and handling administrative disputes. The Kyiv employment team of Dentons is known for its remarkable international clients following, seeking consistent advisory and international assignments which frequently relates to M&A, restructuring and reorganizational initiatives and resulting employment law matters. The firm has extensive practice in connection with replacement of top executives and management, transfer of employees, redundancies, compensations, maternity leaves, immigration, labor rules and work permits, employment and benefits related litigation. The office recently advised an international software developer on COVID-19 quarantine implications on the work process of its employees, including personal data protection in connection with home video violence matters. The office also conducts internal corporate investigations and performs various compliance trainings. Partner Volodymyr Monastyrskyy has a strong standing and is renowned for consistent corporate and compliance practice and assisting with employment disputes. Ukrainian law firm ADER HABER has a well-regarded team with a solid advisory practice and employment disputes track record. The offering covers the complete spectrum regarding the hiring, transfer and

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Who is Who

Labor & Employment dismissal of personnel, international mobility of executive personnel, collective bargaining agreements, strikes and trade unions. The firm lately advised Chanel LLC on obtaining work permits for 32 posted foreign workers, and Coca-Cola Ukraine Limited on labor issues. The firm is an exclusive advisor of the whole group of Nestle S.A. companies, and represents the interests of its Ukrainian subsidiary, Technokom Ltd, in a dispute with a trade union on collective bargaining. The past year was notable for the team in establishing a completely new judicial practice since the court equated a labor council to a trade union. Another notable dispute is representing AVK Confectionery LLC, one of the leaders of the Ukrainian confectionery market, in a lawsuit with a former employee for recognition of discrimination in labor rights. The client portfolio includes such names as Inditex Group, Fresco Decorative Arts, L`Elite Group Srl. With her long-standing commitment to employment matters, practice head Tetyana Ivanovych is known for her extensive experience in sophisticated disputes involving trade unions.

LEADING FIRMS

LEADING INDIVIDUALS

1. Baker McKenzie

1. Mariana Marchuk (Baker McKenzie)

2. Sayenko Kharenko 3. Asters

5. Dentons

Other established PRACTICES

4. Inesa Letych (Asters)

Listed in alphabetical order

5. Tetyana Ivanovych (ADER HABER)

ADER HABER Ante Law Firm AVELLUM

AVELLUM acts for major multinational corporations on the employment implications of large multijurisdictional deals, including corporate reorganizations and business spin-offs. The firm often covers employment matters in terms of supported M&A deals, and develops step-plans for the transfer of employees. The scope of advisory spans sensitive matters related to the dismissal and appointment of top management, launching and terminating business operations in Ukraine, policies on management board and management remuneration. The firm has a growing following of IT clients seeking sector specific advice on employment structuring. Among recent highlights is advising ClinTec International on employment issues related to structuring of employment relationships; Atlantic Group with replacement of management in a Ukrainian subsidiary; Spectrum Equity in relation to the creation of a co-working hub. C lients encompass ABB Asea Brown Boveri Ltd, Drylock Technologies N.V., MTI, Euromoney. Bogdana Parkhomchuk is the key employment practitioner. Mykola S tetsenko supervises the practice as lead partner.

ILF

CMS Cameron McKenna Nabarro Olswang handles the employment aspects of its complex mandates, multijurisdictional

3. Volodymyr Monastyrskyy (Dentons)

4. Ilyashev & Partners

Ante Law Firm has a solid practice of representing clients from aviation, pharma and healthcare sectors. The team renders constant legal assistance to many international airlines operating in Ukraine with their labor law issues. For example, as the representative office of Ernest S.p.A. was closed in early 2020, the firm dealt with termination of all employment agreements acting as the internal HR and legal department. On the dispute front Ante dealt with a number of labor disputes between top managers and employers. In 2020 the firm resolved some complicated staff dismissal issues for a few global pharmaceutical companies. The firm’s clients include Perrigo Ukraine, Sanofi-Aventis Ukraine, Servier, Ukrainian office of the Council of Europe, Zdravo, Beko Ukraine. Andriy Guck is lead partner.

СMS is represented through two offices in Ukraine and their employment practices are part of a big CEE employment network.

2. Svitlana Kheda (Sayenko Kharenko)

CMS Cameron McKenna Nabarro Olswang DLA Piper Ukraine* Eterna Law EVERLEGAL EY Ukraine GOLAW Gramatskiy & Partners

INTEGRITES KPD Consulting Legal Alliance Company Marchenko Partners Wolf Theiss * Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

Other notable PRACTITIONERS

Listed in alphabetical order

Oleksandr Aleksyeyenko (Marchenko Partners) Leonid Gilevich (Ilyashev & Partners) Valeriia Gudiy (Ilyashev & Partners) Margarita Karpenko (DLA Piper Ukraine*) Halyna Khomenko (EY Ukraine) Oksana Kneychuk (Eterna Law) Kateryna Manoylenko (GOLAW) Serhiy Silchenko (Roland Law Office) Illya Tkachuk (INTEGRITES) Mykola Voitovich (Gramatskiy & Partners)

COUNSELINK SERGEYEVS' LAW OFFICE

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

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VDOVYCHEN & PARTNERS

Lagoda Business Center, 21 Poliova Street, Kyiv, 03056, Ukraine Tel.: +380 44 586 7777 +380 98 586 7777 E-mail: office@ov-partners-com Web-site: www.ov-partners.com

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Who is Who mployment matters, being traditionally active in the energy and natue ral resources, IT and technology, transport, professional services sectors. The firm acts on redundancies and individual terminations, immigration, employment aspects of corporate deals, employees transfer, employment due diligence and the restructuring of employment relations. For example, the office advised Scatec Solar on employment law matters relevant to the change of the country manager in Ukraine; Acciona Energia on restructuring the upper-management structure and implementing it. Olga Belyakova acts as lead partner. The practice of CMS Reich-Rohrwig Hainz, as led by Maria Orlyk, advised on the mass transfer of employees, labor issues rising from complex corporate governance issues and compliance matters, management appointment. The employment practice of DLA Piper Ukraine1 is a part of the cross-border group, and is retained on employment issues by Ukrainian subsidiaries of its big multinational clients as well as by their headquarters. The office customarily covers employment aspects within M&A global transactions and outsourcings, sustainable termination strategies, legal aspects of labor safety audits, trade unions and collective bargaining agreements, and became more involved in advising on downtime, partial unemployment benefit and redundancy. The firm advises global technology leaders, and the leading names from pharmaceuticals, healthcare, manufacturing, FMCG and other sectors. Among disclosable names are Adobe, Pfizer, Jabil, Dialog Semiconductor, NEQSOL, Perion Network, Marriott International. Managing partner Margarita Karpenko heads the employment practice group. Another key executive is Maksym Tesliar, who has a special focus on conducting labor law audits and advisory. Eterna Law assists on employment matters as part of its corporate, regulatory, finance and tax advice for clients from IT, telecommunications, FMCG, pharma, NGOs and other sectors. This wide-ranging offering spans employment agreements, termination, transfer of employees, development of motivation systems, benefits, immigration compliance. Recent highlights include advising an array of Chinese companies on registration of legal entities in Ukraine and obtaining residence permits for their personnel. Selected clients include Dufry Ukraine, Monarch Aircraft Engineering Ukraine LLC, Christian Dior Couture Ukraine, Auchan Ukraine. The practice is led by Oksana Kneychuk. EVERLEGAL advises on employment matters a rising out of corporate reorganizations, and on a standalone basis. The scope of work includes employment law compliance, termination, engagement of expats, migration rules, appointing top management, engagement of outstaffed personnel, reductions and top management separations, personnel transfer. The team advised a large European private equity fund, and an innovative technology company in the area of e-commerce and B2B payments, in connection with employment matters of their recently acquired Ukrainian subsidiaries. Employment disputes are another area of practice focus. Yevheniy Deyneko acts as lead partner. Andriy Olenyuk and Oleksandr Ruzhytskyi are also actively involved in employment projects. EY Ukraine is a point of choice for big multinationals seeking advice on employment measures connected with COVID-19 in Ukraine, implementation of long-term incentive plans (including share-based and cash-based plans), appointment of high executives, complex terminations, pension strategies, headcount reduction, etc. The team carried out several labor law due diligence projects, advised on the structuring of working arrangements and employment of foreign individuals in Ukraine, introduction of remote work, amendment of the companies’ employment related policies and documents. The key practitioners in this practice are Olga Gorbanovskaya and Halyna Khomenko. The GOLAW employment practice is focused on resolution of disputes related to the dismissals and transfers of employees, reinstatement, payment of salaries and compensation for non-pecuniary damage, disputes related to the full material responsibility of employees and damage compensation. The firm utilizes a strong combination of labor and tax expertise, often retained for advising on incentive systems. The firm quite recently advised Ubisoft Ukraine on the drafting of option agreements for the purchase of corporate rights for the company’s top employees. The firm has a historically well-established following of retail companies. Another strong side of the practice is representing government institutions in disputes over the protection of honor, dignity and business reputation, namely the abolition of in1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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accurate information that has been published. Kateryna Manoylenko acts as lead partner. Gramatskiy & Partners has a long-term and diverse expertise in the field of employment and labor dispute resolution. The workflow comes mainly from the domestic clientele, and spans labor due diligence and compliance, structuring of labor relations with top management and independent contractors, development of labor contracts, a system to develop conditional “golden parachutes”, redundancies, compensation policies, data protection and privacy, outstaffing. The firm is keen to handle employment litigation. Clients include companies from the real estate, engineering, transport and logistics, HoReCa, IT sectors, such as City Capital Group, Seven Hills, Finrostorg Group, Celentano, Danfoss Group, Plant Quant, Playtech Software Limited, Clickmein, SKYWIND Tech UA, Ulma Opalubka Ukraine and others. The unchangeable practice leader is Mykola Voitovich. ILF has a broad breadth of expertise in advisory, taking in challenging matters, and precedent-setting labor disputes. This past year the firm was sought after for legal assistance with introduction of remote work, development of specific motivation systems for employees, development of a material liability system, developing collective bargaining agreements and civil contracts. The firm is a point of choice for advising on redundancies, and is regularly mandated by employers for representation on dismissal claims. Serhiy Silchenko has a strong reputation for his experience handling complex disputes2. Throughout 2020, INTEGRITES enjoyed an upsweep in its labor and employment portfolio, with special requests for complex social security projects and redundancy dismissals, contingency planning, compliance investigations, labor safety, employment of foreigners, assistance with inspections of relevant regulatory authorities and litigation. The firm also maintains assignments from supported corporate deals and business restructuring, in particular, advised Sibelco Group on employment matters, including the changing of top managers, which arose due to the acquisition of companies in Ukraine. Leroy M erlin, a French headquartered home improvement and gardening equipment retailer, enlisted the team to conduct compliance investigation, dismissal and assisting in dispute mediation. Among other significant areas of focus are distance work, conflict situations, data protection and GDPR requirements, personnel policies, change of working conditions. The solid client portfolio includes, among others, Verallia, Scatec Solar, NBT AS, Air Products, Servier, MAI CEE Insurance Brokers, BGS Rail, COMMUNISIS. Corporate and M&A partner Illya Tkachuk heads the practice, and is highly active across complex mandates of big corporate clients. Dr. Julian Ries, partner, leads the instructions of German clients, and concentrates on mediation and compliance. Inna Kostrytska (advisory) and Yurii Sivovna (litigation) are also key practice figures. KPD Consulting renders employment support to its established clients on an ongoing basis, including change of top managers, developing of hiring and firing options, work permits for foreigners for managerial positions, development of compliant labor policies and procedures, inspections of supervisory bodies. The firm also handles representation in dismissal and reinstatement appeals by acting for both sides — employers and employees. The firm’s client portfolio takes in Business Center Illinsky, ZED-Ukraine LLC, MOS International, Diebold Nixdorf (ex-Winсor Nixdorf) LLC, Artemis Ukraine. Partner Kyrylo Kazak heads the employment, labor law and white-collar crime practices. Legal Alliance Company advises pharmaceutical and healthcare market players. Its scope includes labor agreements, development of corporate labor policies and documentation, restructuring of labor relations, layoffs and employers’ liability, work conditions, outsourcing and outstaffing, trade union activities, labor disputes in mediation and in courts. In a recent highlight the firm advised an international non-governmental organization on downsizing procedures in one of its branches in Ukraine due to its liquidation. Other recent workflow, among others, included communication with trade union options, implementation of outstaffing work models, regulation on wages and collective agreements. Publishable clients include Adamed, Alcon, Astellas, Berlin Chemie, Boris Medical Clinic, Contrad Swiss, Delta Medical, Glenmark, Lekhim, Jadran Galenski laboratorij d.d., Orion Corporation, Reckitt Benckiser, Takeda, Teva. Illya Kostin is lead partner. 2

In March 2021 he established Roland Law Firm.

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Who is Who

Labor & Employment Marchenko Partners possesses notable expertise in developing termination strategies, employment aspects of mergers and acquisitions, including non-compete and non-solicitation aspects, corporate governance policies, confidentiality matters. Most recently the firm advised British Airways on the appropriate procedure of staff reduction carried out in its representative offices; provided Ferring Pharmaceuticals with general advice on legal issues pertaining to labor relations with management. DP World and SALIC UK are among its clients. Versatile practitioner Oleksandr Aleksyeyenko, who also acts on antitrust and IP projects, leads the employment practice. Wolf Theiss is consistently preferred by Ukrainian subsidiaries of foreign companies. During the pandemic the office has assisted clients to arrange distance work and work from an office, different possibilities of labor restructuring, labor compliance. Recent assignments include advising the Ukrainian subsidiary of a large IT company, Snap Inc., on employment matters with respect to the company’s employees and executives; advising Federal-Mogul Aftermarket GmbH on the hiring and firing of employees, change of their financial labor conditions, as well as obtaining temporary and permanent residence permits for foreign employees. The team is experienced in advising on the employment aspects of corporate and M&A transactions, in particular, it conducted due diligence of employment matters for Ukrainian companies which DSM Nutritional Products Ltd was aiming to acquire in the course of a global M&A transaction. The practice is headed by Olga Ivlyeva. Being highly-focused on the IT sector, Alcor provides a wideranging offering for R&D offices in Ukraine, including employment. The firm supports the migration processes of foreign IT specialists and their families in Ukraine, and further advises on stock incentive plans. Dmytro Ovcharenko is the key contact. The labor and employment practice of ESQUIRES includes drafting contracts and other documents governing labor relations, protecting the legal rights and interests of employees and employers, advising on the late payment of wages and other violations. The firm also handles employment disputes, in particular regarding dismissal and reinstatement. Public clients are the Pirogovo Museum, U online technologies LLC. Viktoria Kovalchuk is the responsible partner. EXPATPRO law firm is focused on migration issues, especially on IT staff relocation from overseas to Ukraine. This past year the practice was loaded by urgent relocation of IT specialists from Belarus, and assisted clients in obtaining work permits, residence permits, tax ID numbers, address registrations, official employment. Among other things, the firm advises on the legal aspects of recruiting during market entries, and implementing remote work in compliance with labor regulation. Vasyl Cherednichenko heads the migration team. KM Partners advises on contentious and non-contentious matters, including employment agreements, collective agreements, obtaining job permits for foreign citizens, redundancies, support in audits on labor issues conducted by state authorities, transfer of employees. The firm handles representation of the interests of employers in court disputes with former employees. The firm has of late advised on the transition to new wage systems. Alexander Shemiatkin is the main contact. KPMG Law advises on global mobility, employment contracts with senior management, remuneration structuring, confidentiality and non-competition agreements, outstaffing. The recognized advantage is multidisciplinary expertise in payroll and tax compliance. The clients come from IT, energy, transportation, manufacturing and machinery sectors. Yuriy Katser and Ivan Demtso are the key contacts.

Nobles assists, in the main, Ukrainian subsidiaries of multinational corporations with their employment matters on the ground, including choosing the form of employment, drafting of employment contracts and the contracts of managing directors, structuring salaries and work schedules, obtaining work permits for non-Ukrainian employees, etc. This past year the firm was called upon to advise on working conditions during the pandemic and safety responsibilities. Clients include H&M Hennes and Mauritz AB, Gap Inc, GE Healthcare, Xantis Pharma, BayWa, Spacebit Global Ltd, Zooplus AG, Fr Meyer’s Sohn (GmbH & Co.) KG, Auto1 Group AG, Intelity Inc. Volodymyr Yakubovskyy and Alexander Weigelt are lead partners. Peterka & Partners, headed by Taras Utiralov, provides labor and employment advisory services to the Ukrainian branches of the firm’s international clients. The scope of assignments included advice on hiring and dismissal, obtaining and prolongation of work and residence permits for management and employees, indexation of salaries, compliance. Of late the office performed complex human resources due diligence for the Ukrainian subsidiary of World Courier, one of the largest specialty logistics groups in the world. The list of clients includes World Courier, HSH Chemie, KRKA, Mammoet (SHV Holdings), Mekoprint, Polpharma, Bioveta, Algol, Acer, ACO Industries, Loupedeck. Redcliffe Partners established a standalone employment practice that currently encompasses both advisory and litigation. In the period under research the firm advised on the hiring of executive and non-executive directors, non-compete and non-solicitation matters, personal data transfer, hiring policies, transfer of employees, personnel redundancies, regulation on wages and collective agreements, trade union legislation, hiring of foreigners and immigration matters. Among recent highlights is advising the European Investment Bank on all employment matters that arise in connection with its operations in Ukraine; Ukrainian Energy in connection with the proposed hiring of workers and other personnel; UiPath on the hiring of top management and IT professionals for its StepShot project. Zoryana Sozanska-Matviychuk is lead partner. The Kyiv branch of Belarusian firm SBH Law Offices is called upon by IT companies seeking relocation of their employees and family members from Belarus to Ukraine, employment and registration of employees in Ukraine. This past year the relevant support was rendered to document automation software Panda Doc, software solutions provider Oxagile, mobile games publisher SayGames, Belarusian IT-companies Yellow and SoftTeco and others. It is noteworthy that the firm advised EPAM on labor issues arising from its current business activities in Ukraine. Vdovychen & Partners advises on employment agreements and labor disputes. The previous year the firm participated in a dispute regarding the dismissal of an employee and the use of trade secrets; provided support in a dispute over the theft of property by employees; appeal of disciplinary suspension from duties. The advisory practice covered development of collective agreements and orders during the quarantine period. Oleg Vdovychen is lead partner. Vasil Kisil & Partners is traditionally endorsed by the market for strong performance in high-profile employment matters, including disputes. Oksana Voynarovska and Valeriya Savchuk are the key figures3.

The firm has not submitted information for the current research.

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Who is Who

Litigation Ukrainian dispute resolution powerhouse Ilyashev & Partners has well-affirmed positions in domestic and cross-border dispute resolution, supported by arbitration and white-collar crime practices. The firm possesses a network of its own offices in Ukraine, Russia and Estonia, and ensures confident representation in the regions — Kharkiv, Dnipro and Odesa. The highly-diverse litigation expertise spans an extensive range of disputes, inter alia, shareholder disputes, labor and employment, property rights, contractual, real estate, tax, IP, insolvency proceedings, debt recovery. The firm also commands an established track record in such specific litigation, as aviation, maritime, insurance, as well as regulatory disputes. The team is often enlisted for cross-border debt collection matters involving CIS countries. The highlights of the past year include representing the interests of the creditor Indumet Limited in a USD 280 million debt collection case under four loan agreements with the Industrial Union of Donbas Corporation; representing the interests of Indumet SA in a dispute related to recognition and granting permission for the execution on the territory of Ukraine of the decision adopted by the London International Arbitration Court on the recovery of funds. The team has a leading position in the bankruptcy field, including cross-border proceedings. Another resonant ongoing case is representing the interests of the VEB.RF in the process of invalidating the results of the auction for the sale of shares in PJSC Prominvestbank. The firm consistently supports the state-owned enterprise Antonov, among other cases, representing it in a dispute over a contract with NATO Support and Procurement Agency; and advises State Enterpise Ukrspetsexport on the prospects for recovering compensation for the Zubr vessel expropriated by the Russian Federation. The firm’s partners preserve an active litigation practice demonstrating personal involvement. In addition to a workflow in domestic courts Roman Marchenko is involved in some of the largest cross-border litigations on the market, renowned for his role for the Ukrainian extension of BTA Bank against Mukhtar Ablyazov, and his role as an expert in Ukrainian law in cases in UK and US courts in resonant disputes of Privatbank with Igor Kolomoisky, Gennady Bogolyubov and others. Mikhail Ilyashev is referred to as a strong litigator, providing strategic guidance to the team and personal involvement in court proceedings. Taking part in the most challenging cases, Oleh Trokhymchuk and Valeriia Gudiy were noted as strong, well-rounded litigators. Andrey Bychkov, Andrii Konoplia are noted as key practitioners. Market participants also singled out the names of Oleksandr Denysenko and Galyna Lefor. Being retained by big industrial corporations and top Ukrainian businessmen, EQUITY accumulated sensitive high-value disputes, outlining its reputation as an outstanding litigation market force. The firm has recognized strength in insolvency disputes, acting on both sides. The work highlights included disputes within the framework of a project for restructuring the debt of the Azovmash Group of companies to 10 creditors. The team represented PJSC UkrInCom in bank insolvency proceedings following the withdrawal of the license by the National Bank of Ukraine in 2016 and obtained a major victory for the client in the Supreme Court, which confirmed that the bank was unlawfully declared insolvent. Furthermore, the team continued acting for the client on enforcing non-performing loans. The firm represented the corporate non-government pension fund of the NBU in a series of disputes to return withdrawn assets in the amount of around USD 100 million. In 2020 the team had continued working with its regular clients, such as Kaizen Holding OU (leading manufacturer of wagons and heavy machinery in Ukraine), Helen Marlen Group (a leading luxury

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retailer representing the world’s top designers in Ukraine) and developed a strong practice of enforcement of NPLs and distressed assets, advising and representing the largest finance companies in Ukraine, including LLC Finance Company, LLC Expert Invest, Finance Company Helios. The firm also has a formidable portfolio of large-scale tax disputes, acting on behalf of domestic industrial heavyweights. Over the last couple of years the firm also fostered its involvement in cross-border matters. All partners and practitioners are involved in the firm’s litigation practice. Oleg Malinevskiy leads highly sensitive cases, and was endorsed for strong performance in the Supreme Court of Ukraine. Serhiy Chuyev is dedicated in banking disputes, court restructuring and bankruptcy. Vyacheslav Krahlevych handles agrarian and land litigation, as well as white-collar crime. The senior team counsel includes Dmytro Tylipskiy, Oleksiy Stepanenko, Andriy Ivaniv and Oksana Varakina. The firm’s senior partner, Viktor Barsuk, plays a strategic role in practice development. Asters, the biggest full-service Ukrainian law firm, commands one of the largest litigation capacities in the country, accumulating high-end domestic and cross-border dispute resolution work. The scope of disputes spans commercial, regulatory, tax, IP, labor and family law disputes. The team runs the biggest case in the market acting for Privatbank in a series of interrelated disputes (around 600) associated with the 2016 nationalization of the largest commercial bank in Ukraine (total value of disputes — more than UAH 250 billion); represents its interests in a dispute with NOVOFARM LLC, Pointex Sale LLP on UAH 4.03 billion debt collection under loan and guarantee agreements. Another public resonant case is Privatbank’s dispute with the Surkis family and their related entities, where the Surkises are claiming back their deposits, bailed-in in the course of nationalization in 2016. In the field of cross-border litigation the work highlight is acting as local Ukrainian legal counsel for Ukraine in the USD 3 billion Eurobond dispute with Russia, with respect to the validity of the loan on various grounds, principally on the grounds of duress arising from Russian threats and aggression leading up to entry into the loan and beyond. The firm has a well-established practice of representation in disputes with the Antimonopoly Committee of Ukraine and challenging the decisions of the Interdepartmental commission on International Trade. In a recent highlight the firm represents EuroChem in a court dispute regarding the decision to renew anti-dumping measures applied to imports into Ukraine of ammonium nitrate originating from the Russian Federation. The domestic litigation team is managed by partners Andriy Pozhidayev, active in high impact banking disputes, and Gleb Bialyi, focused on commercial and regulatory disputes. The cross-border litigation practice is co-headed by the firm’s co-managing partners, Oleksiy Didkovskiy and Serhii Sviriba. Litigation is a flagship practice of LCF Law Group, referred for its exceptionally well-versed team. The firm has a long-term commitment to debt recovery disputes, insolvency proceedings, and highly-specialized disputes in the areas of financial services and insurance disputes, as well as disputes with regulators. The firm’s caseload includes sophisticated high value cases with numerous parallel proceedings. Recent highlights included representation of VR Global Partners in a credit dispute with Ukrzaliznytsia as well as representation of the First Ukrainian International Bank in a debt collection dispute involving Ukrzaliznytsia as the successor of Donetsk Railway. The firm’s partners are active litigators. Anna Ogrenchuk is endorsed for her strong procedural expertise and high level of client loyalty; Artem Stoyanov is

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Who is Who

Litigation DOMESTIC LITIGATION

LEADING INDIVIDUALS

LEADING FIRMS

1. Mikhail Ilyashev (Ilyashev & Partners)

1. Ilyashev & Partners

2. Oleg Malinevskiy (EQUITY)

2. EQUITY

3. Anna Ogrenchuk (LCF Law Group)

3. Asters 4. LCF Law Group 5. Sayenko Kharenko

4. Roman Marchenko (Ilyashev & Partners) 5. Andriy Pozhidayev (Asters)

Other established PRACTICES ADER HABER ANTIKA Law Firm Ario Law Firm AVELLUM AVER LEX Baker McKenzie Eterna Law GOLAW

6. AEQUO

6. Artem Stoyanov (LCF Law Group)

7. INTEGRITES

7. Yuriy Petrenko (ADER HABER)

Hillmont Partners

8. Alekseev, Boyarchukov and Partners

8. Andriy Porayko (EVERLEGAL)

9. EVERLEGAL

9. Andriy Savchuk (MORIS GROUP)

10. MORIS GROUP

10. Oleksiy Koltok (Sayenko Kharenko)

Other notable PRACTITIONERS

Listed in alphabetical order

Gramatskiy & Partners

Kinstellar L.I. Group Lexwell & Partners Pavlenko Legal Group VB PARTNERS

REGIONAL COUNSEL

Oleh Beketov (Eterna Law)

Artur Megeria (L.I. Group)

ANK Law Office

Gleb Bialyi (Asters)

Oleksandr Onishchenko (INTEGRITES)

AS Legal

Hrygoriy Pavlenko (Pavlenko Legal Group)

ILF

Maksym Boyarchukov (Alekseev, Boyarchukov and Partners) Sergey Boyarchukov (Alekseev, Boyarchukov and Partners)

Olena Pertsova (AEQUO)

Interlegal Jurline

Olga Prosyanyuk (AVER LEX)

Andriy Guck (Ante Law Firm)

Oleksandr Ruzhytskyi (EVERLEGAL)

Sergeyevs’ Law Office

Valeriia Gudiy (Ilyashev & Partners)

Oleksandr Shkelebey (ESQUIRES)

Shkrebets & Partners

Valentyn Gvozdiy (GOLAW)

Ihor Siusel (Baker McKenzie)

Andrii Hvozdetskyi (ADER HABER)

Olena Sukmanova (Sayenko Kharenko)

Olexiy Kharytonov (ILF)

Andrey Syvak (Shkrebets & Partners)

Julian Khorunzhyi (Ario Law Firm)

Andrii Trembich (Gramatskiy & Partners)

Iryna Kobets (LCF Law Group)

Oleh Trokhymchuk (Ilyashev & Partners)

Ihor Kravtsov (LCF Law Group)

Volodymyr Vashchenko (VB PARTNERS)

Andrey Kuznetsov (ANTIKA Law Firm)

Lyudmyla Volkova (AVELLUM)

Yevgen Levitskyi (AEQUO)

Olga Vorozhbyt (DLA Piper Ukraine*)

Kateryna Manoylenko (GOLAW)

Volodymyr Yenich (AVER LEX)

Dmytro Marchukov (INTEGRITES) Vadim Medvedev (AVELLUM)

* Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Listed in alphabetical order

Law Firm De-Jure

Pavlo Byelousov (AEQUO)

Mykola Kovalchuk (L.I. Group)

Listed in alphabetical order

Legrant

COUNSELINK JURLINE

Royal Gardens Business Center, 66/1 Frantsuzky Boulevard, Odesa, 65062, Ukraine Tel.: +380 48 235 6517 +380 48 738 0893 E-mail: office@jurline.ua Web-site: www.jurline.ua

ID LEGAL GROUP

5A, H. Skovorody Street, Kyiv, 04070, Ukraine Tel.: +380 44 482 5780 +380 44 482 5785 +380 67 719 1177 +380 66 719 1177 E-mail: info@id-legalgroup.com Web-site: id-legalgroup.com

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Who is Who admired for his client relationship role and strategic guidance of debt recovery litigation. Ihor Kravtsov and Yulia Atamanova are present across a wide range of disputes. Olena Volyanska is especially active in insolvency cases. Iryna Kobets was promoted to counsel and head of litigation, and was further noted by peers for her good understanding of bad debt issues. Sayenko Kharenko houses a big litigation team experienced in domestic disputes and on the international arena. The firm is retained by sound international companies, banks, prominent industry heavyweights to handle commercial, property, contractual, debt recovery, tax, IP, labor and regulatory disputes. The team acted for Auchan Group of Companies within the high-profile case on the illegal alienation of land plots belonging to the client in Odesa Region; SELEKTSIYA LLC, a part of the Monstera group of companies, in the second round of the court proceedings on invalidation of a decision of the local authority to terminate its right of permanent use of land. The firm’s recent portfolio features corporate and property disputes. In particular, the firm represents Henkell Freixenet Company in 18 court disputes related to the attempt to take possession of its shares in the Kyiv Sparkling Wine Plant Stolichny, which is fully-owned by the company. Backed by the firm’s strong antitrust practice, the litigation team is also retained for subsequent disputes, for example, representation of Japan Tobacco International in a court dispute related to the challenging of the AMCU’s decision to impose a fine; Idea Bank in the appeal against AMCU’s decision in the field of protection against unfair competition. In December 2020, the firm opened an office in Strasbourg for protection of its clients in the European Court of Human Rights. The team is led by partners Sergey Pogrebnoy and Olena Sukmanova1. Counsel Oleksiy Koltok, who manages litigation projects, receives strong support of the market for his well-rounded experience and hard-working approach. Another important litigator is Sergey Protyven. The international arbitration and cross-border litigation team is led by Olexander Droug, supported by Volodymyr Yaremko. Counsel Vitalii Odzhykovskyi is at the forefront of tax litigation. IP partner Yaroslav Ognevyuk is in charge of IP litigation matters. AEQUO’s well-tailored litigation practice consists of multidisciplinary sub-teams specialized in major types of disputes, including banking and finance sector, corporate and restructuring disputes, property rights, tax and disputes with governmental authorities, disputes involving intellectual property as well as commercial and investment arbitration. Recent landmark matters include representing UMG Investments, a Ukrainian investment group focused on industrial and commodities sectors, in a unique litigation related to expropriation of a land plot owned by an individual, to extract mineral resources of national significance — fire clay used in the steel industry; representing the Ukrainian subsidiary of one of the world’s largest steel companies ArcelorMittal Kryvyi Rih, in a dispute with the Ukrainian tax authorities. This past year the team defended the rights of the Ukrainian pharmaceutical company Darnitsa at the Supreme Court to shares in the Borshchahivskiy chemical-pharmaceutical plant. The firm also advised Ukraina TV channel on Ukrainian and English law, arbitration, and IP matters in a dispute regarding the world-known Masked Singer TV format. The big team has two partners and three counsel on board. Denis Lysenko, managing partner, specializes in tax and regulatory disputes as well as in international arbitration of energy disputes. Pavlo Byelousov acts for a range of Ukrainian and international companies in domestic courts and international arbitrations, with a special focus on energy, investment, and commercial disputes. Corporate disputes are the domain of the bright and market praised counsel Olena Pertsova; tax and regulatory disputes are led by Myroslava Savchuk; financial and banking disputes, commercial litigation, bankruptcy, and restructuring are covered by Yevgen Levitskyi. INTEGRITES handles a variety of high-end litigation work, equally well-presented in both domestic courts and the cross-border arena. The versatile team of domestic litigation acts on commercial, tax, labor, regulatory disputes, recently added cases on appealing against high-stake decisions of the AMCU. The team is also retained by foreign lenders to represent their interest in insolvency proceedings of Ukrainian corporate borrowers. Public cases included representation of the interests of the State Enterprise Ukrkhimtransamiak, one of the world’s major operators of ammonia pipeline, in Ukrainian litigation regarding setting aside an ICAC arbitral award, initiated by Russian chemical giant Togliattiazot with over USD 190 million at stake; representing the large Ukrainian oil-extraction plant, Dniprooliya, and its Turkish majority shareholders in a corporate dispute with a local partner. Another work 1

In June Olena Sukmanova left the firm to continue her career in-house.

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highlight was joining on behalf of S yvashEnergoProm LLC, a Ukrainian subsidiary of NBT, one of the largest investors in the Ukrainian renewables sector, two already pending court proceedings on the side of the energy market regulators, to restore the functioning of Ukraine’s green energy market. The firm showcases its expanding presence in multijurisdictional cases, with particular experience in shareholders disputes. Cross-border litigation head Dmytro Marchukov constantly acts as a legal expert in high-profile foreign proceedings, for example, as a Ukrainian law expert before the High Court of Justice in London for Ukrainian businessman Vadim Shulman against other high net worth individuals in relation to the failed investment in an infrastructure project in the south of Ukraine. Oleksandr Onishchenko heads domestic litigation, and is particularly involved in debt recovery, invalidation of transactions and contracts in court, and bankruptcy. Serhii Uvarov, promoted to partner, is the first point of choice for cross-border energy disputes. Olena Perepelynska, head of international arbitration, regularly represents clients in jurisdictions outside of Ukraine. Viktoriya Fomenko, partner, handles tax disputes. Alekseev, Boyarchukov and Partners is a powerful domestic litigation force with an established caseload of high value debt reco very disputes, where the team acts for banks and financial companies. In 2020 the firm continued subsequent representations in a series of litigations on behalf of Sberbank, Ukrgasbank, financial company Investohills Vesta. Many cases arrive from the bankruptcy practice, which is the firm’s calling card. Sergey Boyarchukov and Maksym Boyarchukov are the main points of contact. Over the last couple of years Ukrainian law firm EVERLEGAL confidently enhanced its litigation practice by completing the team and types of disputes. The core focus is banking, tax and corporate matters, commercial and employment disputes. Alongside expansion of the banking clients portfolio, the firm strengthened its workload of banking disputes. The team is currently advising the National Bank of Ukraine, OTP Bank, and Investment Company Concorde Capital on tax, criminal defense, mortgage and other matters. A series of debt collection matters is provided on behalf of Alfa-Bank, Ukrsibbank, Universal Bank and other clients. Real estate and land disputes is another area of focus, acting for big corporate clients in complex disputes regarding the ownership rights to buildings, restoration of lease rights, etc. The wide dispute resolution practice has three partners on board — Andriy Porayko, mostly known for representation of banks, Oleksandr Ruzhytskyi — commercial and employment disputes, Vsevolod Volkov dealing with cross-border litigation. Promoted to counsel, Oleksandr Pashynin has a vivid focus on banking litigation. MORIS GROUP is a recognized domestic litigation force with an extensive track record in banking litigation, commercial disputes and tax controversies. This past year the firm obtained a new wave of instructions from energy sector clients. The team handles complex legal support to Ukrteplo LLC in a case regarding leasing four thermal power plants for 30 years from the national company NJSC Naftogaz of Ukraine and restructuring the debt to Naftogaz; represents the interests of an electricity supplier, Kleimon LLC, in a dispute with a state monopolist, the National Energy Company Ukrenergo, in terms of electricity transmission volumes. The team represents a long-standing client, Karpatnaftokhim, in a dispute with the National Commission for State Regulation of Energy and Public Utilities, regarding the effect of tariffs for the transmission of electricity. Litigation on protecting client reputation is another area of recent focus. The team’s client portfolio takes in Allrise Capital Inc, Farmak LLC, Imexbank JSCB, Ukrlohistica LLC, Ivano-Frankivskcement LLC, The Orthodox Church of Ukraine, Green Team LLC. In addition, the tax litigation practice, as headed by Vasyl Andrusyak, has strong credentials. The 11-lawyer litigation team is located in two offices — Kyiv and Ivano-Frankivsk. Partner Andriy Savchuk obtained praise from peers as a well-rounded practitioner. Ukrainian law firm ADER HABER showcased a sharp focus on disputes in the banking and financial sector, retail and FMCG, industry and energy, including commercial litigation, debt recovery, tax, insurance and employment disputes. This past year the team represented the interests of related parties of JSC UKOOPSPILKA in a resonant case on the claim of the Deposit Guarantee Fund (DGF) for damages of the insolvent bank; acted for Dragon Capital in a dispute against the DGF and Bank Kyivska Rus to declare illegal and to cancel the results of a public tender for the sale of real estate and the obligation to enter into a contract on the sale of such property. In 2020 the firm acted on a number of sophisticated energy disputes and represented the interests of Kyivgas JSC in a dispute against DTEK Kyiv Electrical Grid PJSC, KYIVENERGO JSC and Kyivteploenergo Municipal Enterprise

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Who is Who

Litigation for debt collection for natural gas distribution services provided. Long-standing litigator Yuriy Petrenko, managing partner, heads the practice, and is strongly involved in client relationships. The rising professional Andrii Hvozdetskyi, promoted to partner, also coheads the team. In addition, the firm stands out for employment disputes, as led by Tetyana Ivanovych. Tatiana Daniltseva is in charge of tax litigation. Aleksandra Fedotova handles real estate and land disputes. Enjoying a very well-established reputation for representing large domestic and international clients, ANTIKA Law Firm is retained for comprehensive commercial and administrative disputes, including contractual breach, matters involving consumer rights protection as well as tax disputes and challenging the decisions of state authorities. Its recent track record included representing Nasosenergomash in a dispute on cancellation of tax notices. The team was recently involved by Alliance Holding on challenging the decision by the regional ecology inspection to rectify formal irregularities on documents confirming the quality of petroleum products offered for sale to consumers at its fuel station. In 2020 the firm demonstrated a strengthening in its portfolio of tax disputes, acting for large taxpayers. The team is recognized among international counsel, who regularly enlisted the team as a Ukrainian law advisor during consideration of cases in English courts. Henkel Ukraine, Henkel Bautechnik, AWT Bavaria LLC, Insurance Company Persha PJSC, Shell Brands International AG, USENCO NADRA LLC (Ukrainian subsidiary of Cadogan Group) are all selected clients of the firm. The firm’s litigation practice is managed by dedicated partner Andrey Kuznetsov. Maxim Korchagin and Alexandra Fedorenko are important team members. Partner Dr. Alexey Kot runs arbitration work and combines litigation practice with scientific activity. Ario Law Firm is a vivid domestic litigation force with strong credentials in bankruptcy proceedings, as well as business protection, debt recovery and property disputes. In 2020 the firm continued representing the interests of the Lybid Hotel Complex in a corporate dispute in connection with a raider attack on corporate rights and protected interests of the public organization ECO Rivnenschyna in the case of declaring illegal and revoking the conclusions on the environmental impact assessment issued by Technoprivod Invest Group, which is part of the Kronospan international group of companies. The firm’s criminal defense practice team supports the litigation practice in comprehensive cases involving parallel criminal proceedings. The practice is led by Julian Khorunzhyi, senior partner. Partners Yevhen Hrushovets, Ruslan Sydorovich, Andriy Fylyk — are all important team members. In 2020 AVELLUM handled a wide range of high-profile domestic and cross- border commercial disputes, including corporate, debt recovery, insolvency, tax disputes. A particular area of strength is representing international and local clients in recovery of debt and enforcement of collateral in Ukraine. The firm’s selected case portfolio includes representation of the world’s leading investment funds as owners of the majority of notes issued by Mriya Agro Holding Plc in 11 insolvency proceedings of the Mriya group of companies. The representative example of

CROSS-BORDER LITIGATION

Established PRACTICES

Listed in alphabetical order

AEQUO ANTIKA Law Firm Asters AVELLUM Baker McKenzie DLA Piper Ukraine* Eterna Law Ilyashev & Partners INTEGRITES Hillmont Partners Kinstellar Sayenko Kharenko * Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

Notable PRACTITIONERS

Listed in alphabetical order

Oleh Beketov (Eterna Law) Pavlo Byelousov (AEQUO) Oleksiy Didkovskiy (Asters) Olexander Droug (Sayenko Kharenko) Dr. Alexey Kot (ANTIKA Law Firm) Kostiantyn Likarchuk (AVELLUM) Roman Marchenko (Ilyashev & Partners) Dmytro Marchukov (INTEGRITES) Olena Perepelynska (INTEGRITES) Serhii Uvarov (INTEGRITES)

antitrust litigation includes representing British American Tobacco in challenging a EUR 245 million fine imposed by the Antimonopoly Committee on the Ukrainian subsidiaries of four leading international tobacco producers and their distributor in Ukraine for alleged concerted anti-competitive practices. Another area of focus includes cross-border shareholder disputes and disputes arising out of international joint ventures. The team has seen transformations over the past year. Tax partner Vadim Medvedev maintained his focus on sophisticated regulatory and tax disputes. Kostiantyn Likarchuk re-joined from Kinstellar as senior partner in January 2021. He is well-versed in cross-border disputes and regularly acts as an expert on Ukrainian law before foreign courts. Earlier in 2020 the team was enhanced with the arrival of two experienced counsel (both from Kinstellar): Mykyta Nota focused on competition and antitrust, arbitration, and cross-border litigation; Lyudmyla Volkova focused on domestic litigation proceedings, administrative law matters, and arbitration. The market leader in criminal defense, AVER LEX attorneys at law boosted its standalone litigation practice. The team is known for its business protection caseload, which consists of commercial litigation and criminal proceedings, asset tracing and debt recovery, defense against fraudulent takeover of business, assets and property rights, raiding attacks, corporate conflicts. The firm also extended its representation in appealing against sanctions, and the protection of honor, dignity and business reputation. The firm strengthened its senior staff and promoted Volodymyr Yenich and Kateryna Stashkiv to partner and counsel, respectively. Managing partner, Olga Prosyanyuk, is endorsed for her pro-active approach and hard work, maintains her focus on strategic and sophisticated cases. The Kyiv office of Baker McKenzie is regularly involved in complicated disputes, including cross-border proceedings. The recent litigation portfolio includes a number of commercial disputes and bankruptcy proceedings in Ukraine; a dispute arising from investment and raider attack protection, ownership disputes involving multiple parties, antitrust disputes, credit and mortgage matters, tax and customs matters, intellectual property and consumer rights protection. The dispute team is also involved in challenging the decisions of regulators. The Kyivbased dispute resolution practice group is headed by partner Ihor Siusel. Kseniia Prokhur (Pogruzhalska) is the key executive figure. The diversified dispute resolution practice of multi-offices Eterna Law combines both domestic and cross-border litigation. The portfolio spans corporate conflicts between shareholders, including multiple jurisdictions, debt recovery, insurance and contractual disputes. Public highlights take in representation of the largest Belarusian holding, a manufacturer of building materials, in a dispute with the Interdepartmental Commission on International Trade in connection with application of final anti-dumping measures by levying a duty on the import of cement from the Republic of Belarus. A big part of the firm’s work is providing expert opinions on Ukrainian law in the courts of England. Oleh Beketov, senior partner and head of international litigation, acted as a Ukrainian law expert in some of the largest Ukraine-related foreign litigations in the past years — Privatbank cases, inter alia, in a lawsuit which is being considered by the High Court of Justice in London, and against the former owners and managers of the bank for damages and the return of unjustifiably acquired property, which is being considered by the

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Who is Who Local Court of Limassol (Cyprus); and for Dargamo Holdings Limited and Sergiy Taruta in a large dispute between the former shareholders of the Industrial Union of Donbas. Aleksandr Lugovskyi is responsible for general commercial and international trade disputes. Litigation partner Denys Kytsenko, who focused on Ukrainian litigation projects, left the firm, and Nataliia Koroviakovska joined as responsible for national litigation projects. GOLAW traditionally stands out for its strong track record of tax cases regarding unlawful accrual of tax liabilities, cancellation of registration as a payer of VAT, customs disputes, and enhanced performance in disputes arising from contractual relations, including improper performance by a debtor of contractual obligations, debt collection as well as insolvency proceedings. The firm is also well known for protecting the interests of government and public figures and has a rep-

utation as one of the most vivid teams in labor disputes. The practice head is the firm’s partner, Kateryna Manoylenko. Valentyn Gvozdiy, managing partner, takes over the leading role in the most challenging matters. Domestic law firm Gramatskiy & Partners demonstrates sustainability of its litigation practice, which comprises disputes with banks and financial institutions, debt recovery, mortgage, land as well employment litigation. The firm represents Seven Hills Group in a series of disputes with Boryspil District State Administration, Gosgeokadastr of Kyiv Region, individuals, related dispute invalidation of orders, cancellation of registration of land plots and renewal of entries in the land register. In the recent portfolio there are also cases regarding recognition of the right to privatization. Andrii Trembich is the head of dispute resolution, and is particularly focused on the insolvency area.

INTERNATIONAL LAW FIRMS* Dutch law firm Bergh Stoop & Sanders has been advising the Ministry of Justice of Ukraine in the long-term dispute between the State of Ukraine, four Crimean Museums and the Allard Pierson Museum in Amsterdam regarding Crimean treasures that had been given on loan to the museum in Amsterdam for the exhibition Crimea — Golden Island in the Black Sea, which was held for several months in 2014. The decision of the Amsterdam District Court is currently under appeal. International law firm Covington & Burling has extensive experience handling matters in Ukraine, including investor-state arbitration, international commercial arbitration, public international law disputes, commercial disputes under English Law. In 2020 the firm represented the Ministry of Foreign Affairs of Ukraine in an action filed against Ukraine by Law Debenture Trust Corporation in the High Court of England and Wales. The firm has also acted for Ukrainian businessman Oleg Mkrtchan and his related corporate entities in a high-profile case in litigation proceedings at the High Court in London regarding the sale of an indirect interest in the Industrial Union of Donbas. The team working on this case includes Craig Pollack, Greg Lascelles, Eddy Eccles, Jonathan Heath, Alexander Gudko and Charlotte Raynor. Enyo Law is a London-based disputes boutique firm. In 2020, the team acted for Gennady Bogolyubov, a Ukrainian businessman, in defense of two claims brought in the High Court of England alleging fraud. These are the cases: Privatbank vs. Bogolyubov and Kolomoisky, and Tatneft vs. Gennady Bogolyubov, Igor Kolomoisky, Alexander Yaroslavsky and Pavel Ovcharenko. The key partners are George Maling, Tim Elliss, Olivia Gare. Evgeniya Rubinina, partner and international arbitration lawyer, is another key figure. Eversheds Sutherland provides legal services related to protecting the interests of Naftogaz of Ukraine in foreign jurisdictions (including foreign state authorities, organizations, institutions, foreign courts, foreign financial institutions, before other entities and individuals) in all respects related to the execution of an arbitral award in favor of Italia Ukraina Gas S.p.A. (IUGAS). Fieldfisher acts for Ukrainian businessman Igor Kolomoisky in defense of the claim brought by state-owned Privatbank in the High Court of England alleging fraud as well as in the Tatneft vs. Gennady Bogolyubov, Igor Kolomoisky, Alexander Yaroslavsky and Pavel Ovcharenko case. Freshfields Bruckhaus Deringer continues to provide legal services to protect the interests of Naftogaz of Ukraine in foreign jurisdictions on all issues arising in international trade activities. Gateley has extensive experience handling matters in Ukraine, including banking litigation, white-collar crime and commercial disputes under English law. The firm represents the state-run Deposit Guarantee Fund in asset recovery assignments. The firm is also currently acting for a high-profile Ukrainian businessman in a number of non-contentious matters. The team working on these cases is led by partner Richard Healey and includes Alex Thompson, Emily Drake, Olena Golovtchouk, Elena Solovyeva and Julia Purcell.

Hogan Lovells regularly represents Ukrainian companies and businessmen in resonant high-stake litigation in English courts. The firm represents Privatbank in fraud proceedings in the High Court of England against former shareholders Igor Kolomoisky, Gennady Bogolyubov and others, in which Privatbank is claiming over USD 2 billion. Another recent case is representing Sergiy Taruta in fraud proceedings in the High Court of England involving Vitaliy Haiduk, Oleg Mkrtchan and others. The firm also is legal counsel to the Deposit Guarantee Fund on representing the interests and protecting the rights of insolvent banks and banks under liquidation in courts of foreign jurisdiction and international arbitrations. London-based partners Richard Lewis and Michael Roberts are involved in the firm’s projects. Holland & Knight acts as a legal counsel of Ukraine in appeal proceedings in the USA in the Oksana Baiul vs. Joseph Lemire, Olympic Champions LTD (Delaware), Olympic Champions LTD (BVI), State of Ukraine and Does case. The firm is also hired as a legal counsel of the National Bank of Ukraine in the Oleg Zhukovskiy vs. National Bank of Ukraine case before the United States District Court for the Southern District of Florida. Swiss Jacquemoud & Stanislas provides legal services related to protecting the interests of the State of Ukraine in a dispute with Euronews SA for the return of financial guarantees, allocated to ensure the terms of the agreement with the European Language Union regarding the holding of the Eurovision Song Contest in Ukraine in 2017. Legance — Avvocati Associati (Milan) is a legal counsel to Ukraine in the civil case of Rocchelli’s relatives (an Italian journalist killed in Slovyansk during combat actions) and others vs. the State of Ukraine before a court in the Italian city of Pavia. Mishcon de Reya is legal counsel to Ukrainian businessman lexander Yaroslavsky in the Tatneft v Gennady Bogolyubov, Igor A Kolomoisky, Alexander Yaroslavsky and Pavel Ovcharenko case. Norton Rose Fulbright acted as the lead counsel to the Law ebenture Trust Corporation PLC in the ongoing USD 3 billion EuroD bond dispute with Russia in the High Court of England and Wales. Osborne Clarke handled a shareholder dispute over the distribution of profits from a company. Artem Doudko, partner, is head of Russia and CIS disputes. London-based PCB Litigation LLP is legal counsel to the Deposit Guarantee Fund on representation of interests and protection of rights of insolvent banks and banks under liquidation in courts of foreign jurisdiction and international arbitrations. Quinn Emanuel Urquhart & Sullivan acted as the lead counsel to Ukraine in the ongoing USD 3 billion Eurobond dispute with Russia in the High Court of England and Wales, as well as the legal counsel for Privatbank in Madison Pacific Trust Limited vs. Shakoor Capital Limited and JSC Privatbank case in the High Court of England and Wales. The firm has also acted for Ukrainian businessperson and politician Vitaliy Haiduk and his related corporate entities in a high-profile case in litigation proceedings at the High Court in London regarding the sale of an indirect interest in the Industrial Union of Donbas.

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Who is Who Hillmont Partners boasted its litigation practice by showcasing a significant caseload on both fronts — domestic and international. In particular, the firm deals with asset tracing and recovery, administrative, commercial, insolvency and pre-insolvency matters, shareholder disputes. Selected projects include acting for Komaksavia Airport Invest Ltd in obtaining an award for interim measures against the Republic of Moldova in investor-state arbitration proceedings in relation to the concession agreement over Chisinau International Airport; representing Glovoapp Ukraine in multiple dispute resolution proceedings; representing a Ukrainian subsidiary of Scania Sweden, a major transportation company in Europe, in a commercial dispute with a dealer regarding the termination of a dealer agreement and recovery of lost revenues; representing Delta Wilmar in a dispute with the State Ecological Inspection of Ukraine. Notably, the firm acts in large-stake disputes. For example, it represents the national grid operator NPC Ukrenergo in a court dispute related to attempted recovery in favor of the State Enterprise Guaranteed Buyer of UAH 25 billion for non-payment for provided services. Splitting his time between Kyiv and London offices, co-managing partner James Hart acts as a relationships partner to practice clients. Co-managing partner Serhii Nyzhnyi, who was responsible for domestic commercial and investment dispute resolution and cross-border litigation, passed away in late 2020. The practice is supported by Andrii Chornous, counsel, one of the rising professionals in handling cross-border debt recovery and restructuring projects. Andrii Nyzhnyi, a former judge at one of the District Courts of Dnipro, joined as a co-managing partner. Kinstellar utilized the experience of cross-border and domestic litigation, recognition and enforcement of foreign judgments, with particular focus on post-M&A and shareholder disputes, administrative and regulatory matters. Lead partner Kostiantyn Likarchuk was instructed as an expert on Ukrainian law by a successful defendant in a USD 2 billion dispute in the English Commercial Court, in terms of the proceedings involved wide-ranging accusations of fraud made by Vitaliy Haiduk and Sergiy Taruta against Oleg Mkrtchan. The team advised Anna Tigipko, a British high net worth individual, in connection with pending litigation in London relating to family law matters and related proceedings on recognition of English court orders in Ukraine. The team is keen to represent clients appealing against a decision of the Antimonopoly Committee of Ukraine, For example, represented the interests of British American Tobacco, its Ukrainian affiliates, on challenging the decision alleging that the company was involved in anticompetitive concerted action with other tobacco companies in Ukraine and local distributor Tedis Ukraine. Mr. Andrey Adamovskiy, a Ukrainian high net worth individual, is represented in a major multijurisdictional shareholders’ dispute concerning the treatment and division of the assets and liabilities of Oledo Group, involving Ukrainian, Cypriot, and BVI courts as well as handling comprehensive parallel proceedings. In October 2020 Olexander Martinenko joined as a partner and head of the dispute resolution and commercial practices. Kostiantyn Likarchuk, Mykyta Nota and Lyudmyla Volkova left for AVELLUM. One of the key practices of L.I. Group is handling distressed assets issues, particularly in the area of bankruptcy and restructuring. The team represents the interests of clients in terms of debt collection, foreclosure of mortgages, non-performance of financial leasing, recognition of property rights, and protects the interests of banks from recognizing credit and mortgage contracts as invalid. The firm’s client portfolio spans large commercial banks and financial companies. Another vivid area of practice is challenging the regulatory decisions of state authorities. In particular, the team successfully represented Lifecell mobile operator in court disputes with the Antimonopoly Committee of Ukraine. The practice is led by two partners, Mykola Kovalchuk and Artur Megeria. Year on year Lexwell & Partners demonstrates a prominent track record in tax disputes as well as in administrative and civil court matters. Recently, the team, as headed by Andriy Kolupaev, represented Podilsky Cement in a number of civil disputes, as well as in criminal cases related to the downsizing of the company. The firm also represents ArcelorMittal Kryvyi Rih in appealing decisions adopted by Kryvyi Rih City Council regarding the establishment of land tax rates and rents. Another prominent case is representing the interests of the distributor and dealer of Toyota/Lexus cars in Ukraine in a number of disputes on protecting the rights of consumers regarding the quality of sold cars. In 2020 Pavlenko Legal Group accompanied dozens of cases. The team defended the interests of companies in the areas of telecommunications and media, banking and finance, real estate, oil

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and gas, agriculture and other markets. The lion’s share of the firm’s caseload consists of banking disputes, such as bad debts recovery, surety, mortgage, bank loans, assets protection, as well as disputes with state authorities and business protection. The team acted for the Myronivsky Plant of Groats and Feed Stuff on the invalidation of the agreement; represented the interests of OTP Bank in a dispute regarding the refund of overpayment of income tax; represented the interests of the Financial company Investohills Vesta in a number of disputes over the invalidation of contracts, recognition of property rights, as well as in bankruptcy proceedings. Vitaliy Burdak is the responsible partner. Referred during peers’ review as a hard-working litigator, Hrygoriy Pavlenko is noted as a key executive. VB PARTNERS commands vast experience in resolving corporate disputes and disputes related to shareholder agreements, protecting business from raider attacks, and has unrivalled strength in challenging the decisions of state authorities. In particular, the firm was one of the first in Ukraine to succeed in lifting sanctions imposed on a EU company by Ukraine. The firm is also experienced in filing applications to the European Court of Human Rights regarding violations of the right to peaceful enjoyment of property. The firm is regularly retained by shareholders and top management of commercial banks. The team recently rendered representation of Premium Bank shareholder’s interests regarding the annulment of the decision of the National Banks of Ukraine on its liquidation; represents the interests of shareholders in the commercial bank Premium in a lawsuit for recovering damages by the NBU, caused due to the decision to liquidate the bank. In addition, the firm represents the interests of Scania, an international vehicle company, in a lawsuit against local dealers, for recovery of lost profits and losses incurred in connection with improper compliance with the terms of dealer agreements and the contract for the maintenance of the service workshop; represented the interests of a foreign international company, SkyEng, an online school for learning English, in a litigation regarding the recognition of illegal registration of a trademark on the territory of Ukraine. Volodymyr Vashchenko is lead partner. In addition to a primarily white-collar crime focus, the firm’s partners Denys Bugay, Oleksandr Lukianenko and Denys Shkarovsky are also directly involved in the litigation practice. The litigation practice of Absolute Law Agency is centered on debt recovery disputes, loan agreements, commercial, administrative and tax disputes. The team recently represented SA Production Association Yuzhniy Machine-Building Plant named after A.M. Makarov in a tax dispute as well as on the recognition of an audit as unlawful and cancellation of its results. The firm has an established following among commercial banks and financial companies. Partners Oleksandr Bondarchuk, Oleksandr Hladii and Iryna Zemliana are the main contacts. Ante Law Firm represents clients in various disputes mainly related to aviation and pharmaceuticals, as well as private clients. The year of 2020 was also rich in employment litigation. The team is known as a precedent-setting law firm representing airlines in passenger claims. Furthermore, the firm won a case for Sanofi worth USD 1.8 million and recently represented it in a damages claim that arose from illegal actions by the state execution service (bailiffs). Clients retaining the team for dispute resolution work include Zdravo, DFU Agro, Lufthansa group and other international airlines. The litigation team is led by its managing partner, Andriy Guck. ARBITRADE often acts in cases with an international element, representing both Ukrainian and foreign parties. Particular strengths include complex commercial cases; administrative disputes with state authorities in relation to tax and customs matters. In addition, cases related to imposition of sanctions over companies by Ukrainian authorities boosted the team’s litigation practice. In 2020 the team represented Mont UA in a high-profile and rather unprecedented case against the President of Ukraine regarding his decision to impose personal sanctions on a number of Russian and Ukrainian companies operating in Ukraine and allegedly financing activities that are contrary to the interests of the State of Ukraine. The firm also successfully represented the interests of co-authors of the book “Ave, Ukraina!”, whose rights were violated by an unauthorized attempt at publication by another co-author. Being among prominent firms in international arbitration, recognition and enforcement of arbitral awards is another established area of focus. Pavlo Trytenichenko is the responsible partner. CMS operates in Ukraine throughout two offices.

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Who is Who

Litigation During this past year the dispute resolution team at CMS ameron McKenna Nabarro Olswang, as led by counsel Olga C Shenk, has been extremely busy with sophisticated cases. In particular, the team enjoys recognized strength in energy disputes and has expertise in a wide variety of disputes and other contentious matters, including cross-border disputes, fraud and FCPA-driven investigations. Senior partner Olexander Martinenko left for Kinstellar. The dispute resolution practice at CMS Reich-Rohrwig Hainz Ukraine is headed by partners Maria Orlyk and Anna Pogrebna. The office is busy with projects for a number of international clients in cases against Ukrainian debtors, in particular, complex debt recovery proceedings against a Ukrainian borrower and several warrantors in connection with a fixed-term loan agreement and respective security package. Oleksandr Protsiuk is an important team member. The Kyiv office of Dentons has experience of cross-border and domestic commercial litigation, including commercial real estate and product liability disputes, IP litigation, and also a successful track record in local tax and customs disputes. With big multinationals among its clients, the firm is retained for a wide range of matters requiring litigation in Ukraine. In 2020 the team represented a multinational automotive company in court proceedings regarding regaining property from illegal possession against conditions of leasing agreements. The team also advised one of the leading companies for asset-based financing solutions in Europe on restructuring and recovery matters regarding a loan agreement with a Ukrainian company in the FMCG sector. Managing partner Oleg Batyuk is the key contact. The dispute resolution team of the Kyiv office of DLA Piper2 is known for sophisticated cases, including multijurisdictional assignments. Among disclosable highlights is representation of PwC Ukraine in a dispute with the National Bank of Ukraine on issues of professional liability, before Ukrainian courts. The recent portfolio also includes regulatory, debt recovery, employment and tax disputes. The practice team is also praised for its solid advice on jurisdictional issues. The team is led by Olga Vorozhbyt, partner, head of litigation and regulatory. Oleksii Gerasymchuk, senior associate, is the key executive figure. ECOVIS Bondar & Bondar is focused on dispute resolution primarily in the Ukrainian aviation industry. The firm represented Ukraine International Airlines in a number of litigation cases with the Ukrainian State Air Traffic Services Enterprise (UKSATSE) on UKSATSE’s alleged abuse of its monopoly position on the market via establishment of an overrate for air navigation services. Oleg Bondar, managing partner, is practice head. ESQUIRES law firm has a principal focus on disputes in the banking area, including debt recovery and mortgage matters, as well as property disputes. The team has an established track record of representing clients as plaintiffs on protection of honor and business reputation through refutation of inaccurate information about professional activities, and also acts for non-resident creditors with monetary claims to Ukrainian borrowers under bankruptcy procedures. Notably, the team is retained by parties of multijurisdictional disputes advising on their court cases in Ukraine. The firm’s client list takes in the ICU group of companies, Skytrans LLC, Translogist Sistem LLC (Moldova), Limagrain Ukraine, Modem LLC and others. Oleksandr Shkelebey is the responsible partner. The Ukrainian office of Swiss Fortior Law is focused on solving commercial cross-border disputes with a Ukrainian element which arise in the trading of commodities, and its core competence is disputes governed by English law. As a highlight in cross-border litigation, the firm represents investors in a dispute against the sham-project London Football Exchange. Danil Hristich, senior associate, is the practice lead. Attorneys’ Association Gestors is focused on commercial litigation, takeover and insolvency related disputes. The firm represented PJSC Donetskoblgaz before the Supreme Court regarding appeal to an order issued by the state labor authority; handles ongoing representation of JSC Chornomornaftogaz in disputes related to return of the Titan-2 crane-mounting vessel to the owner. The practice is led by partners Andriy Tsvetkov and Vitalii Makhinchuk. In addition to its calling card — tax litigation, KM Partners also maintains a solid caseload in commercial, labor disputes, debt collection, real estate, land and corporate matters. The team also covers 2

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

resolution of disputes against supervising authorities in architectural control, firefighting, ecology, antitrust and consumer rights protection. The leading experts on tax litigation are the firm’s partners Alexander Minin and Alexander Shemiatkin. Dispute resolutions on transfer pricing and customs practice are led by Ivan Shynkarenko. Commercial disputes are led by Maxim Oleksiyuk. Given the extensive client portfolio consisting of international and Ukrainian banks, lessors and financial companies, domestic law firm KPD Consulting handles representation of creditors in comprehensive debt collection litigation. The team recently received a block for debt collection in favor of the ING Bank Ukraine from individuals; represented Porsche Mobility LLC in a series of disputes against debtors. Leading national and international suppliers of products, as well as property owners, also regularly hire the firm for litigation work. For example, the firm protects the interests of Mars JSC, one of the largest property owners in the central part of Kyiv, against the grabbing of land by an unscrupulous procedural opponent. Igor Kalitventsev, managing partner, heads the dispute resolution practice. Yevhen Litvinov and Victor Ivaniuk make up the key executive team. KPMG Law Ukraine, which is reputable in tax disputes, diversified its dispute resolution practice, encompassing labor and commercial litigation. The recent caseload includes providing turn-key assistance in the recovery of dividends from one of the biggest Ukrainian gas and oil companies (including at the enforcement stage); and supporting a client in complex commercial disputes regarding collection of damages, penalty and partly invalidation of the contract. Yuriy Katser, head of legal, is the core figure in commercial litigation, and also contributes to the development of litigation practice regarding application of transfer pricing rules. Initially fully focused on pharmaceutical and healthcare sectors, Legal Alliance Company acts in corporate disputes, antimonopoly and competition, IP, tax disputes, regulatory disputes. The firm is sought after for patent disputes. Most recently the firm acted in disputes on cancellation of registration of similar trademarks, patent disputes regarding unlicensed use of an invention, protection in tax matters, including VAT refunds from the state budget. The core litigation team includes Illya Kostin and Vitalii Savchuk. Legal and Economic Security (LES) attorneys at law disputes resolution practice combines tax, ecological matters as well as disputes in the field of land, construction and real estate, including appeals in court as to inaction, actions and decisions of officials of public authorities and local government bodies, authorized bodies of urban planning and architecture, bodies of state architectural and construction control. Sergiy Kolisnyk, managing partner, is the key contact. The Ukrainian office of Peterka & Partners handles representation in commercial and administrative disputes, including court proceedings against Ukrainian citizens regarding the collection of debts with further enforcements of court decisions. In 2020 the office represented Raiffeisenbank a.s., a Czech bank belonging to one of E urope’s leading banking groups, as a creditor in insolvency proceedings of several companies of a major, problematic agricultural group. Another highlight case is representing Reticulum Power, a leading Czech company in investments, corporate restructuring, purchasing debts and administration, before Ukrainian courts in connection with debt recovery in Ukraine with the application of Czech law. Partner Taras Utiralov is the core contact. The Kyiv office of SBH Law Offices spreads its litigation practice across bankruptcies, debt collection, assets protection matters, protection of honor and dignity. Kseniya Prokonova, partner in Ukraine, left the firm. The dispute resolution team of Sokolovskyi & Partners handles numerous tax and customs disputes, as well as debt recovery, distressed assets, commercial, land, civil and labor disputes. The firm is known for its focus on insolvency litigation and bankruptcy. The client portfolio spans domestic mid-sized business. Tetiana Lysovets, senior partner, leads the practice. Vdovychen & Partners is known for its strong tax litigation work and also growing caseload in administrative and commercial cases, including invalidation of investment agreements, appealing against land lease agreements, debt and damages recovery, bankruptcy, corporate and employment disputes. Managing partner Oleg Vdovychen is the main contact.

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Who is Who The Kyiv office of Wolf Theiss is a port of choice for foreign investors, firm’s clients, seeking representation in Ukrainian courts. The team advises a Polish plumbing equipment producer in connection with a corporate dispute with the minority shareholder and ex-management of its Ukrainian subsidiary, including labor dispute matters; advises a Canadian company in Ukraine in connection with litigation and a criminal investigation case against the ex-managers of a Ukrainian agricultural company for their defrauding of a Canadian investor. Moreover, the firm continued advising thyssenkrupp Materials Services GmbH in bankruptcy proceedings with respect to one of its customers from Ukraine that defaulted on payments for supplied products. Taras Dumych, managing partner, is the main contact. Oleg Alyoshin, partner of Vasil Kisil & Partners*, is one of the most experienced arbitration and cross-border disputes practitioners. He is regularly hired as a Ukrainian law expert in high-end cases. A ccording

to public sources, he is instructed by defendants as a Ukrainian law expert before the High Court of Justice in London in a case brought by Ukrainian businessman Vadim Shulman against other high net worth individuals. Vasylyna Odnorih is a renowned and promising practitioner.3 Arzinger* has traditionally a strong litigation practice, with representation in the regions of the firm’s presence — Lviv and Odesa. Partner Markian Malskyy heads the firm’s international arbitration and cross-border litigation. Newly-promoted counsel Oleksii Prudkyi received feedback as a talented court room litigator and is seen across domestic proceedings.

Firms marked with * have not provided information for the current research. The text is based on the results of the poll and interviews, as well as public sources.

REGIONAL COUNSEL Odesa-based ANK Law Office commands a 20-attorney litigation team, and enjoys standout expertise in trials centered on maritime law. In particular, the team represented the interests of shipowners from Singapore BW DRY CARGO in the case against the ecological inspectorate, which was examined by the Supreme Court; the interests of one of the major port operators of the port of Odesa during the consideration of a court dispute with the Ukrainian Sea Ports Authority related to the application of a reduction coefficient to the rates of payment for services to provide access to berths for the purposes of grain cargo transshipment. The client roster also includes Agro-Reni, Brooklyn-Kiev, SC CTO of the company HHLA, Vector Oil Trade, Novolog, Risoil Terminal. Oleksandr Kyfak and Nadiya Sofronkova act as lead partners. Artem Volkov, head of the maritime practice, is highly active in litigation work. Odesa-based law firm AS Legal is focused on banking and finance disputes, bankruptcy procedures, commercial and family property disputes. The team represented the interests of JSC Odesteplokomunenergo in a dispute on ownership rights defense due to raider attack to the half-constructed real estate object and regarding a constitutional complaint aimed at limiting the Ministry of Justice’s powers to terminate real estate title registration, which break the constitutional right to real estate property of individuals and legal entities. The firm also acts for the private enterprise Bazalt in its damages recovery dispute with the Fontanska village council of Odesa Region. Maxim Andreev and Vitalii Shvets are the core points of contact. Odesa-based Law Firm De-Jure has a solid track record of civil and commercial matters. In 2020 the firm handled disputes over debt collection, business division, land protection. Gryhorii Tripulskyi and Olena Bernaz are core practitioners. Lviv-based First Chair Legal supports foreign investors and litigates in corporate, commercial disputes and against public authorities. In a recent highlight the firm represented one of the biggest dairy product manufacturers in a dispute related to the protection of business reputation; represented a construction company in a major land case. Mariia Khoma heads the practice. The managing partner, Oleg Kyryievskyi, contributes to the most sophisticated matters. With offices in Kharkiv and Kyiv, ILF has a diversified dispute resolution team, which handled corporate and commercial matters, debt collection, business protection, trials with the tax authorities. Among the standout features is systematic representation of clients before the European Court of Human Rights. The litigation portfolio in 2020 took in defending the interests of the IT company Scorto Solutions in a dispute related to the recovery of funds paid under a software development contract; representing Ivankov Agricultural Firm in debt collection under a real estate lease agreement. Among other disputes in the recent caseload are asset protection and a precedent-setting case on a dispute between religious communities. ILF took an active role as a legal counsel of healthcare reform in Ukraine, and extends its scope on judicial protection of patients and doctors. Olexiy Kharytonov is lead partner. The core dispute resolution focus of 6-offices Black Sea law firm Interlegal is shipping, ship arrest and claims handling on the side of shipowners or charterers. The team also litigates disputes on com-

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mercial and trade issues, supply breach, penalties and debt recovery. Partners Arthur Nitsevych and Nikolay Melnykov are the key faces of the practice. Jurline, an Odesa-based law firm, boasts a formidable litigation team handling corporate, tax, construction, maritime disputes. The team recently provided legal support to TIS-Mindobryva, in a dispute initiated by the Ukrainian Sea Ports Authority regarding the recovery of debt for the use of a berth in the sea port of Yuzhniy. The firm also handled disputes on recognition of ownership rights to shares in a hotel complex in Odesa. The firm’s caseload takes in cases on debt collection under distribution and supply agreements, employment contracts, and recovery of losses. Selected clients of the firm include Illichivsk Grain Terminal, Glencore Agriculture Ukraine, TIS-Grain Ltd, PALMA Group Companies, LLC Transinvestservice. V italiy Cherkes is lead partner. Volodymyr Zubar, Maxim Kapelist and Oleksandr Vovk are other partners involved in litigation. Legrant is one of the most vivid legal teams involved in litigation in the sea ports and maritime industry in the southern regions of Ukraine. The firm possesses experience representing the interests of shipowners, freight forwarders, cargo owners, cargo transportation agents, container lines in complex shipping and contractual disputes related to insurance claims. Another important part of its dispute resolution practice is tax disputes. The firm’s recent litigation practice includes protecting the right to receive a discount when paying port dues, substantiation of the illegality of detention of a vessel in the port at the request of environmental inspectors, cancellation of special sanctions imposed by the Ministry of Economy. The key contact is managing partner Tatyana Titarenko. Liudmila Sizonenko is noted as a vivid litigator. Odesa-based maritime boutique Sergeyevs’ Law Office is customarily focused on maritime-related dispute resolution. In 2020 its caseload included settlement of claim in litigation versus the Ministry of Infrastructure of Ukraine and Maritime Administration of Ukraine on the implementation of international norms to national legislation; legal support of insurance claims settlement negotiations and litigation (compensation by P&I clubs in connection with the loss of seafarers’ work capacity and loss of life); settlement of the claim of crew members of the vessel “Ginger” in a maritime claim for unpaid wages; litigation with Bilhorod-Dnistrovskiy Sea Port on defending the interests of the Sea Port Trade Union. Partners Yuriy Sergeyev and Svetlana Sergeyeva are the main contacts. Kharkiv-based Shkrebets & Partners is among the strongest and most reputable litigation firms in Eastern Ukraine. The lion’s share of its recent portfolio consists of tax litigation, labor disputes, debt recovery proceedings related to the energy sector, administrative disputes. The team is known for representing industrial, energy and municipal names such as Kharkiv CHPP-5, Municipal Enterprise Kharkiv Heating Networks, industrial enterprises of Kharkiv Region. The team took part in a resonant public case having represented interests of the author, publishing house and printing house on the ban on the publication and distribution of the book “The Vasyl Stus Case” by Vakhtang Kipiani. Andrey Syvak acts as lead partner. Evgeniy Shkrebets, Yuriy Artukh and Oleksii Meniv are other partners of the firm involved in litigation work.

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Who is Who

Pharmaceuticals & Healthcare Industry-focused Legal Alliance Company offers a comprehensive suite of services to the healthcare and pharmaceutical industries, serving international and national companies across antitrust and competition, corporate, IP, labor and employment and white-collar crime. The firm is exceptionally well-versed in handling regulatory work and policy making, advising on public procurement and state price regulation. Among the recent highlights of the firm are protecting the interests of a large European manufacturer of medical devices in connection with the decision of the conformity assessment body and restoration of its rights; current regulation of stem cell activity and necessary actions to comply with legal requirements; issues related to clinical trials of medicines in Ukraine; drug regulation and legal support of medicine registration. The firm is also referred for its strong competition practice, regularly representing the interests of leading pharmaceutical companies at the Antimonopoly Committee of Ukraine, assisting with promotion of products in pharmacies and retail chains, distribution and pricing. Clients include GSK, Boehringer Ingelheim, Boris medical clinic, Lisod clinic, Takeda, Adamed, Yuria-Pharm, Acino, Orion Pharma, ReFuture clinic and others. Dmytro Aleshko is a well-regarded figure acting across the full-circle of sector regulation. Andrii G orbatenko is at the forefront of competition work; Oleksii Bezhevets handles corporate instructions; Illya Kostin takes in IP and labor workflow. The Kyiv office of Baker McKenzie advises research-based multinational pharmaceutical and medical device companies on complex transactional, tax, antitrust, investigations and compliance, intellectual property rights protection and contractual matters. The firm is known for its strategic focus on transactional work, being the leader in supported M&A in the pharmaceutical and healthcare sector in Ukraine, and advising local pharmaceutical companies seeking outbound investments. Among the significant recent projects is advising the shareholders of Biopharma, a leading Ukrainian manufacturer of pharmaceuticals and healthcare products, on the carve-out of its non-plasma business and its further sale to Stada AG, which is one of the largest financial investments in the Ukrainian pharmaceutical industry; representing Bayer AG in connection with a merger control filing relating to the disposal of its Animal Health Business to Elanco, a world leader in developing products and services that enhance animal health. The firm acts as the official legal adviser to the Association of Pharmaceutical Research

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and Development (APRaD) to prepare legal analysis of reforms in the healthcare area. The healthcare industry group in the Kyiv office is led by partner Olha Demianiuk, an experienced transactional lawyer. The multidisciplinary team consists of experienced healthcare regulatory lawyer Olha Sviatenka, and leadership bench — Oksana Simonova, Mariana Marchuk, Ihor Siusel, Hennadiy Voytsitskyi, Oleksiy Stolyarenko and Olga Gavrylyuk. CMS Cameron McKenna Nabarro Olswang has significantly strengthened its expert presence in the practice of life science and healthcare by integrating domestic firm Danevych.Law in November 2020. The firm is a port of choice for regulatory and compliance, IP, clinical trials, implementation of patients support programs in Ukraine. In 2020 the team advised clients specifically on clinical trials of investigational medicines for treatment of COVID-19 and vaccine candidates for preventing COVID-19; contributed to the urgent implementation of emergency legislation in the area of prevention of COVID-19. Recent projects include providing legal advice to Eli Lilly on the commercial terms and conditions of collaboration with local distributors, including advising on application of bonuses, rebates and compensations; advising a leading educational and research institution on the launch of clinical trials in Ukraine. The team is the exclusive legal advisor for several world-renowned pharmaceutical companies and deals with complex issues, such as investigation of cases of falsification of medicines in Ukraine, particularly the investigation of an unprecedented case of large-scale counterfeiting and illicit trade in medicines. Renowned expert Borys Danevych became a partner and head of life sciences in Kyiv. The team from Danevych.Law includes Anastasiya Filipiuk, A rtem G rudinin, A nastasiya Maistruk. With the launch of healthcare reform in Ukraine, ILF became a legal counsel for dozens of clinics, hospitals, medical institutions, consistently and methodically helping to implement new requirements in the operational activities of healthcare facilities. The firm is proficient in healthcare regulations, expanding its client profile with primary care centers and private healthcare operators. The daily work of the team includes, among other things, preparation of documents for obtaining a license to conduct economic activities in medical practice; audit of medical institutions; development and legalization of an individual model of staff motivation, development

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Who is Who

Pharmaceuticals & Healthcare of internal documents for the implementation of a quality control system for the provision of medical services at enterprises; advising medical institutions and developing guidelines. The firm is enlisted for complex support for the opening of a private medical practice for provision of medical care, comprehensive legal support for the economic activities of a medical institution. Another recognized strength of the practice is GR. The head of the practice is Olena Khytrova, a well-known professional in the healthcare sector, noted as a good expert in the area of transformation of public healthcare institutions1. Extensive industry specialization and a multi-practice offering has allowed Asters to retain an impressive bench of clients — manufacturers and suppliers of pharmaceutical/biotechnological products and medical equipment. The firm is equally well-versed to handle complex regulatory assignments, IP, competition, transactional support and litigation. The team’s experience encompassed advising pharmaceutical companies on the application of the new Bolar provision for Ukraine, advising on criminal issues related to the illegal sale of gray import medicine, tax risks associated with marketing programs, competition investigations. Asters continues its pro bono legal support to Tabletochki Charity Foundation in connection with various regulatory and advocacy initiatives in the healthcare sector. As a result, among other things, the M inistry of Health of Ukraine took a number of steps to improve the efficiency of public procurement of medicinal products for children with cancer. The team has extensive experience in obtaining permits for the acquisition of companies and portfolios of pharmaceuticals. For example, obtained clearance for the acquisition by Cheplapharm Arzneimittel GmbH from Sanofi, a portfolio of 12 cardiology brands. Alexpharm LLC, Association of M arket Operators of Medical Devices (AMOMD), Becton Dickinson International, IGAR LLC, Tetapharm LLC are among disclosable clients. The practice is headed by Viktoriya Podvorchanska, counsel, which has strong regulatory expertise. The team is complemented by two partners — Julia Semeniy (IP) and Igor Svechkar (competition law). With expertise across multiple practice areas, AEQUO’s team advises a range of domestic and multinational pharmaceutical companies. The offering spans M&A transactions, complex IP matters, competition, commercial, litigation. The firm advised Applied Molecular Transport Inc. on drafting contractual instruments, inter alia, related to the supply of medicine samples for conducting clinical trials in Ukraine. The team handles a number of projects for long-standing client and Ukrainian pharmaceutical company Darnitsa: successfully defended in the Supreme Court of Ukraine the company’s rights to shares in the B orshchahivskiy chemical-pharmaceutical plant; defended the IP rights to the Citramon trademark; supported in challenging the opponent’s attempts to obtain fame status for a generic mark on one of the key medicinal products developed in the USSR; represents Darnitsa against one of its competitors, 1

In 2021 she left ILF.

LEADING FIRMS

LEADING INDIVIDUALS

1. Legal Alliance Company

1. Dmytro Aleshko (Legal Alliance Company)

2. Baker McKenzie

2. Olha Demianiuk (Baker McKenzie)

3. CMS Cameron McKenna Nabarro Olswang

3. Borys Danevych (CMS Cameron McKenna Nabarro Olswang)

4. ILF 5. Asters

Other notable PRACTITIONERS

4. Olena Khytrova (ILF) Listed in alphabetical order

5. Viktoriya Podvorchanska (Asters)

Andrii Gorbatenko (Legal Alliance Company) Andriy Guck (Ante Law Firm)

Other established PRACTICES

Illya Kostin (Legal Alliance Company)

AEQUO

Oleksandr Mamunya (Mamunya IP) Olha Sviatenka (Baker McKenzie) Igor Svitlyk (Dentons) Alla Tsymanovska (Ilyashev & Partners) Galyna Zagorodniuk (DLA Piper Ukraine*)

Listed in alphabetical order

Ante Law Firm Dentons DLA Piper Ukraine* Ilyashev & Partners INTEGRITES Mamunya IP

* Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

Zdorovye, in a complex unfair competition case. The practitioners of the firm are involved in drafting legislation to combat patent trolling and “evergreening” patents. The life sciences and healthcare industry team is co-headed by Nataliya Dryuk and Tetiana Kudrytska. Ante Law Firm advises a growing number of pharmaceutical companies and medical device distributors on IP, media, labor, medicines and medical devices regulations, taxation, commercial, antitrust and competition. The team successfully represented the interests of Sanofi-Aventis Ukraine in several projects: defended its interests in the Supreme Court in a marketing services case initiated by opponents; represented interests in a claim for compensation for damages resulting from illegal actions of the state executive service (bailiffs); advises in an unfair competition case involving the use of the Sanofi brand by another company. Zdravo also receives constant support from Ante on legal issues arising in connection with participation in public procurement, including claims proceedings at the AMCU, litigations and inquiries of law-enforcement bodies regarding the import of medical devices. The team also advises Perrigo Ukraine on the drafting of internal company policies regarding COVID-19. The team is led by Andriy Guck, who acts on regulatory issues, competition and litigation, with the significant contribution of Kateryna Ishchenko, focused on IP and pharma regulation. In 2020 Dentons revealed its growing practice advising clients such as global pharmaceutical corporations and clinical trials companies on regulatory compliance and employment. The office’s recent caseload includes market entry which takes in regulatory and market authorization requirements; advertising and marketing; competition and trade, including commercial agreements; distribution, promotion, hospitality, sponsorship, limitations for healthcare professionals. The firm has unique experience in advising on clinical trials and operation of contract research organizations, biobanking and regulation of biobanks activities under Ukrainian law. Volodymyr Monastyrskyy manages the practice. Igor Svitlyk is singled out for his strong expertise in clinical trials.

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Who is Who The Kyiv office of DLA Piper2 is retained by global pharmaceutical companies and their representatives in Ukraine. The recent focus of the dedicated team was on areas of IP strategy and brand portfolio management, product liability, corporate, tax, regulatory and compliance, corporate reorganizations and antimonopoly matters. The firm regularly advises on commercial practices and distribution of pharmaceuticals in Ukraine and public procurement issues. In 2020, the cross-practice was particularly active in conducting proactive reviews of compliance systems and controls surrounding various aspects of pharmaceuticals companies’ operations. Key clients include Sanofi, Pfizer, IQVIA, Egis Pharmaceuticals, Takeda. The industry has two partners on board. Galyna Z agorodniuk advised pharma companies on competition compliance and commercial practices. Illya Sverdlov focuses on tax-related matters in pharmaceuticals. In 2020 Ilyashev & Partners boosted its healthcare practice and retained a strong following among pharmaceuticals clients, seeking support in competition, IP and litigation. The firm represents patients and private healthcare providers in contentious issues and regulatory assignments, and has significant experience of clinical negligence and insurance. In particular, the team represents the interests of a client in a precedent case at the stage of pre-trial investigation on the confirmation of a medical error; represents the interests of a private person in the preparation of a claim for compensation for material damage by the organizers of a clinical trial of an experimental drug for multiple sclerosis, which led to the development of thyroid oncology. The firm conducted due diligence of the documentation of medical center Gravimed and specific patient regulation. This past year the firm successfully represented the interests of Biopharma, a leading Ukrainian pharmaceutical manufacturer in the Supreme Court in a dispute with the AMCU on the cancellation of the decision on violation of competition law; defended the interests of a client in disputes over the invalidation of patents for utility models and certificates for trademarks. The client roster includes Astellas Pharma Europe BV, Kalcex, MoviHealth, network of pharmacies Podorozhnyk, Ukrainian Red Cross Society and others. The sizeable team includes IP practitioners — Oleksandr Padalka and Dmytro Nikulesko, focused on pharma competition Olga Samoilenko. Alla Tsymanovska attained success in a number of high-profile medical cases. INTEGRITES retains a significant client following among pharmaceutical companies, acting on operation issues, disputes, and comprehensive projects such as construction of complex medical facilities. The team represented the interests of one of the leading pharmaceutical companies in the EU in a dispute over national reregistration of a drug; advises Servier on the day-to-day corporate, employment and immigration matters of a Ukrainian subsidiary; acts on a project related to the design, construction and equipping of a hospital. Other recent work included taxation, corporate rights, employment. Partners Serhiy Shershun (antitrust and competition), Viktoriya Fomenko (tax), Illya Tkachuk (corporate, employment), Oleksandr Onishchenko (litigation) are involved in advising sector clients. Renowned for its strong IP team, established in September 2020 boutique Mamunya IP now has life sciences among its core industrial focuses. Clients include major foreign and domestic innovative and generic pharmaceuticals manufacturers, patients’ organizations. The team provides for support with managing clients IP assets portfolio, patent and trademark enforcement, including litigation, anti-counterfeiting, regulatory advice, protection against unfair competition, advertising regulation. Recent areas of growth include revocations of the permit for the sale of pharmaceuticals on the basis of IP violation, judicial review of additional certificates of protection. Contentious patent mandates make up the team’s standout expertise. In particular, the team represents the Synthon International Holding in a litigation case aimed at invalidating the opponent’s patent for method of treatment of disseminated sclerosis; successfully represented the CO 100% life in complex patent litigation aimed at increasing the accessibility of drugs. Another important highlight is ongoing representation of the client in a largescale anti-counterfeiting matter handled by the Prosecutor-General’s Office of Ukraine against cross-border operations with fake medicines. Well-known IP specialist Oleksandr M amunya, founding partner, is highly regarded as a patent litigator. 2

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Doubinsky & Osharova is a leading IP boutique in Ukraine, with strong performance for clients from life science, pharmaceuticals and the chemical industry. The team advised on compulsory licensing and the application of standards in pharmaceuticals; acted as the IP representative of one of the world leaders in the pharmaceutical industry and revealed a series of third party trademarks that are confusingly similar to the famous brand of a client; protected IP rights AbbVie Inc. to inventions according to patents of Ukraine and also defended the IP rights of a number of other clients from the healthcare industry for an invention under patents of Ukraine. The unsurpassed Victoria Sopilnyak, partner, has many years of experience working with clients from the pharmaceutical and healthcare industry. EVERLEGAL’s team has experience of the pharmaceutical market of Ukraine and abroad, acting as a legal partner for small, midsize and growing businesses, as well as for global leaders. The team provides legal support in starting a business, ongoing activity and resolving disputes. The team advised one of the largest pharmaceutical companies in obtaining AMCU approval for a m erger; represented the largest pharmaceutical company in Ukraine in a complex dispute regarding the ownership rights to a building in Kyiv. Yevheniy Deyneko, managing partner, is a key practice contact. EY continues to assert its expertise in complex tax matters in the pharmaceutical and healthcare industries, and assists with general business issues. EY acted as Horizon Capital’s lead legal counsel and tax advisor on investing in Liki24, a Ukraine-based ecommerce platform for medicine delivery. In addition, in 2020 the team provided legal and tax advice regarding the choice of business presence in Ukraine for a leading Latvian manufacturer in the chemical and pharmaceutical sector, which is considering extending its activity in Ukraine. Albert Sych, Borys Lobovyk and Vladimir Kotenko are key practice contacts. Experts also highlight the work of Iryna Kovalenko, senior associate, for her strategic approach in advising authorities on the implementation of ongoing healthcare funding reform. IP boutique Gorodissky & Partners is retained by sound clients from such sectors as chemicals, biotech, pharma, medicine. During 2020 lawyers and patent attorneys dealt with a number of pharmaceutical patent lawsuits and registration of assignment in patent rights. For example, on behalf of the patent holder, Allergan Sales LLC, the firm filed a suit with a court against the Ukrainian Patent Office’s decision to refuse to prolong a patent’s term of validity. The team was also enlisted in amendments to the claims of a patent, assists a pharmaceutical company in preparing for possible patent infringement litigation that might be initiated by an opponent in the near future. Oleg Zhukhevych and Maksym Bocharov are the main contacts. Peterka & Partners provides legal services to producers of medicines, medical devices and diet supplements, marketing authorization holders and wholesale distributors across the CEE region. The Kyiv team often works at the intersection of different practices. For example, the office rendered legal advice to Bioveta Ukraine on various labor issues, and assisted international pharmaceutical company KRKA with salary indexation. Significant projects in 2020 include legal support to Polpharma, the largest Polish manufacturer of pharmaceuticals regarding the activities of its subsidiary in Ukraine, including numerous contractual matters. The main contact is Taras Utiralov, partner and director for Ukraine. Vdovychen & Partners continues to advise clients on medical and healthcare matters, and accomplished a number of noteworthy projects this past year. In particular, the team’s work was focused on such issues as client protection in connection with the supply of low-quality equipment for medical procedures, support in alienation of corporate rights to a medical company, support of debt repayment by a medical institution, including tax-related aspects. The main practice contact is managing partner Oleh Vdovychen. Market participants single out standout positions and the most diverse practice of Arzinger3 under the guidance of Lana Sinichkina, who is noted for her legislative drafting of reform of public procurement of pharmaceuticals. Yevgenia Ocheretko, counsel and practice co-head, has developed strong regulatory expertise in recent years. 3

The firm has not submitted information for the current research.

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Who is Who

Private Clients: Wealth Management, Family Law With a strong following of Ukrainian high net worth individuals (HNWI) and politically exposed persons (PEPs), AVELLUM advises on the setting up of wealth management structures and succession instruments, developing family trust structures and foundations, private tax and strategic immigration planning. In addition, the firm is known for its strong tax advisory practice, which ensures a workflow of tax compliance and advising on electronic PEP declarations. Another area of focus is assisting clients with acquisition of personal assets, such as foreign high-end real estate, investment instruments, antique items and pieces of art, and protecting estates from hostile takeover attempts. The practice utilizes the expertise of two teams — corporate and private wealth management guided by Mykola Stetsenko, and tax advisory led by Vadim Medvedev. Asters, the largest domestic law firm, is traditionally sought for private client work in Ukraine, and enjoys a well-established following among high net worth individuals, family funds, entrepreneurs and top managers. The recent caseload includes development and implementation of asset ownership structures in different jurisdictions; succession plans; investment in personal funds; inheritance; wealth structuring, planning and transfer. The firm also provides extensive taxation advice, inter alia, tax residency status, income tax implications, tax structuring and multijurisdictional compliance. The wealth management practice has two partners on board, namely Oleksandr Onufrienko and Constantin Solyar. The firm possesses an extensive family law practice working on, among other things, dissolution of marriages and division of property between spouses, alimony recovery, determination of the child’s place of residence and child custody; implications of common law marriage; inheritance issues, including disputes over inheritance property in Ukraine and abroad. The team also possesses unique expertise in advising on reproductive technol-

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ogies and surrogate motherhood in Ukraine. The family law practice is co-led by Talina Kravtsova and Olga Lepikhina. With its standalone private wealth management practice, Sayenko Kharenko has an established workflow of private and business assets structuring, including setting up trust structures, foundations and family offices. During the period under research the team advised on structuring personal assets in light of newly-adopted CFC legislation in Ukraine, structuring of investment into real estate abroad, fundraising, currency and AML regulations, completion of KYC procedures (including description of sources of funds), preparation of e-declaration, compliance requirements of foreign banks; entering into prenuptial agreements governed by foreign law. Alina Plyushch is lead partner. Dmitriy Riabikin and Dmytro Hotsyn are the key team members. Ukrainian full-service law firm AEQUO provides a full range of private client services to wealthy individuals and families, shareholders, entrepreneurs and top executives, utilizing the expertise of its corporate, tax, real estate and other practices. The firm is enlisted to assist with the establishment of family structures, spanning foreign jurisdictions, structuring personal wealth, assets succession planning, trusts and estates, issues of philanthropy and charities. Advice on personal taxation and currency control in Ukraine, tax consequences of investment transactions, as well as complex cross-border tax arrangements and tax compliance also belong to the team’s remit. The firm recently assisted a private US investor in real estate on the acquisition of property in the historic central section of Kyiv close to foreign embassies. The firm is also approached for protection of honor, dignity, and business reputation, and assists with divorce, distribution of marital property and assets. The practice is co-led by two partners Anna Babych and Denis Lysenko, who

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Who is Who

Private Clients are supported by Vasyl Mishchenko and Oksana Krasnokutska. Coupled with its international presence, Baker McKenzie develops global wealth management strategies, spanning structuring personal wealth, its management and transferring in core investment centers and new wealth management jurisdictions. The firm is keen to advise high net worth individuals and their families on tax structuring of inbound and outbound investment, as well as personal tax residence, personal tax situations, relocating personal values, multijurisdictional tax and currency control compliance, succession planning mechanisms. Partner Hennadiy Voytsitskyi heads the tax practice group and wealth management practice. Roman Koren is the dedicated practitioner. ADER HABER has a diverse private client practice meeting the queries of wealthy individuals, businessmen, beneficiaries and top managers of Ukrainian and foreign companies, MPs and other state authorities. The firm rapidly expands its project portfolio with cross-border assignments, advising private clients on structuring their private assets, trust establishments, cross-border inheritance, acquisition of property and real estate abroad, and a wide scope of family law matters. In a recent highlight the team acted on a series of complex cross-border family law cases, in particular, divorce procedures with cross-border elements, property division, raising and maintenance of children, maintenance of a spouse, etc. For example, the firm represents the interests of Leonid Chernovetsky, ex-businessman, political and public figure, the third Mayor of Kyiv, fourth head of Kyiv City State Administration, MP of Ukraine of II-IV convocations, on ensuring the exercise of the right of access to a minor child in accordance with the Convention of 1980 on the Civil Aspects of International Child Abduction, the most effective ways to return an abducted minor child to Israel, termination of the agreement on child custody and financial maintenance of a mother. Practice head Tetyana Ivanovych has a sharp focus on addressing complex cross-border instructions. Eterna Law provides legal and tax advice to Ukrainian and CIS high net worth individuals on private wealth structuring, its preservation and tax planning. High value property acquisitions and sale, inter alia, jets, yachts, helicopters piece of art, and legal support in obtaining financing, is another popular service of this practice. In addition, the firm supports investments in foreign jurisdictions, controlled foreign companies (CFC) related reporting requirements in Ukraine, and assists with opening savings accounts in foreign banks and the appropriate compliance procedure. Nickolas Likhachov joined the firm as a partner of the banking and private clients practice. In 2020, EY Ukraine advised HNWIs and top executives of international companies with business structuring solutions, estate and succession planning, personal taxation and immigration compliance, pension planning and other matters. Advisory services related to controlled foreign companies rules, recently adopted in Ukraine, and tax compliance are another area of recent focus. Olga Gorbanovskaya and Halyna Khomenko are the key contacts for this practice.

WEALTH MANAGEMENT

FAMILY LAW

LEADING FIRMS

1. AVELLUM

1. Asters

2. Asters

2. AGA Partners

3. Sayenko Kharenko

3. ADER HABER

4. AEQUO

4. Ilyashev & Partners

5. Baker McKenzie

5. Legard

Other established PRACTICES

Listed in alphabetical order

Other established PRACTICES

ADER HABER

ESQUIRES

Eterna Law

EXPATPRO

EY Ukraine

INTEGRITES

GOLAW

Jurline

Gramatskiy & Partners

KPD Consulting

Listed in alphabetical order

Ilyashev & Partners

Notable PRACTITIONERS

INTEGRITES KPMG Law

Oleh Holubnychyi (Legard)

Legal House Group

Notable PRACTITIONERS

Listed in alphabetical order

Tetyana Ivanovych (ADER HABER) Listed in alphabetical order

Anna Babych (AEQUO) Oleksandr Boboshko (KPMG Law) Viktoriya Fomenko (INTEGRITES) Ernest Gramatskiy (Gramatskiy & Partners) Tetyana Ivanovych (ADER HABER)

Talina Kravtsova (Asters) Galyna Lefor (Ilyashev & Partners) Olga Lepikhina (Asters) Iryna Moroz (AGA Partners) Aminat Suleymanova (AGA Partners)

Vadim Medvedev (AVELLUM) Oleksandr Onufrienko (Asters) Alina Plyushch (Sayenko Kharenko) Constantin Solyar (Asters) Mykola Stetsenko (AVELLUM) Hennadiy Voytsitskyi (Baker McKenzie)

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COUNSELINK AGA PARTNERS

Kuznetskyi Business Center, 16/64 Fedorova Street, Kyiv, 03150, Ukraine Tel.: +380 44 237 7933 +380 44 237 7943 +380 48 738 0893 E-mail: reception@agalawyers.org Web-site: www.agalawyers.org

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Who is Who GOLAW is sought after in the structuring of multinational business in foreign jurisdictions, particularly in the EU; tax planning and advisory in connection with CFC requirements. Most recently the team, as led by Max Lebedev, supported the family office registration and creation of investment funds abroad; advised high net worth individuals on the security of business assets and property management. Gramatskiy & Partners has long-term relationships with entrepreneurs and high net worth individuals, private clients with significant business interests. The firm is approached for establishing family trusts abroad, inheritance and succession, migration, family matters. Another notable feature of recent experience is structuring investment in luxury assets and overseas property. This past year the firm assisted clients in purchasing yachts, investing in a collection of expensive wines through the purchase of a portfolio (account) in the “Wine Bank” (Berlin); purchase of an English family’s vintage library; acquisition of cottages and apartments, etc. Ernest Gramatskiy heads the private advocacy practice. Ilyashev & Partners regularly represents shareholders, businessmen, HNWIs in complex, often cross-border litigation matters, including asset disputes, shareholders conflicts, and inheritance matters. The firm expands its tax advisory offering, acting on structuring family business taxation of personal revenues, and is approached for tax consulting services in Estonia, where the firm has an office in Tallinn. The firm advises Tetiana Yeremeyeva, widow of deceased Igor Yeremeyev, who was a member of the Ukrainian Parliament and co-owner of the Continuum Group (WOG group of fuel companies, Kherson refinery and others) on the tax consequences of her obtaining assets under the settlement agreement in the trust registered in the BVI by her deceased husband. The firm has a standalone family law practice dealing with international divorce issues and international child custody, unmarried couple’s rights, separation of property, financial settlements, and inheritance matters involving other jurisdictions. The firm represents the interests of the widow of a Ukrainian politician, who died in a transport accident in the course of tracing inherited property abroad and asset protection. Defamation cases are another focus. Nina Bets, one of the key tax practitioners of the firm, is involved in advising private clients. Galyna Lefor is in charge of family law assignments. INTEGRITES assists Ukrainian and foreign HNWIs, politicallyexposed persons, on ownership structures in Ukraine and abroad, private investments, succession matters, personal taxation. The firm was retained to develop ownership and succession target structures in terms of the recently adopted BEPS law. Tax partner Viktoriya Fomenko leads broad advisory practice, including estate planning, investment structuring and taxation. Dispute resolution partner Dmytro Marchukov was instructed to act as the Ukrainian law expert in several unrelated high-profile litigations. Litigation partner Oleksandr Onishchenko leads family law litigation involving divorce proceedings, children arrangement orders and custody, and division of matrimonial assets. KPMG Law advises high net worth individuals as well as their personal managers. The scope of its offering includes structuring private assets, personal tax residence and resolving complex international tax matters across various jurisdictions. In 2020 the firm provided tax consulting services with respect to the new rules on Ukrainian controlled foreign companies and advice on tax structuring, including the tax implications of UBOs. The key figures are Oleksandr Boboshko and Oksana Olekhova. Legal House Group commands a standalone wealth management practice enlisted to advise HNWIs on acquisition of property, income declaration, establishing communication with its business. Notably, the firm provides proof of crypto-income services demanded by individuals who receive income from innovative products. The firm was consistently called upon in the structuring of personal and family assets and declaration of the personal assets of individuals; structuring of crypto assets into a trust. Notably, the firm rendered legal support of “hard compliance procedure” for the return of a deposit from ABLV bank in the procedure on its liquidation. Natalia Radchenko and Lana Golian are the lead partners. AGA Partners is constantly preferred by Ukrainian and foreign private individuals in settlement of complex family law matters, particularly spousal property division issues, the place of residence of children, divorces, maintenance for children, alimony recovery, and inheritance disputes. The team is also widely enlisted to act on reten-

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tion of children cases between Ukraine and other countries under the Hague Convention of October 1980. It is noteworthy that the team has expertise in leading cases under English Law. The team advises couples from the UK, USA, New Zealand, Sweden, Austria, and Hungary in the application for assisted reproductive technologies in Ukraine and their passing through surrogacy programs. Aminat Suleymanova and Iryna Moroz are the lead partners. The senior executive team includes Oleksandr Gubin and Olena Sibirtseva. The team of Legard attorneys at law (established as a split from domestic dispute resolution firm Mitrax) retained its extensive representation of clients in family law matters. The firm handles representation in divorce proceedings entailing property division (including corporate rights, oversees property, banking accounts abroad), develops and implements amicable resolution agreements, alimony and maintenance recovery; determining the place of residence of children. The firm acts in litigation on termination and verification of parental rights. Oleh Holubnychyi is lead partner. Inna Tuta is another important practitioner. Domestic law firm ESQUIRES extends its legal offering on family law, representing citizens of Ukraine, USA, Germany and the Republic of South Africa. The firm recently handled a cross-border dispute over the participation of a father in the upbringing of a child; acted on alienation of a spouse’s property without his consent and knowledge; acted in a hereditary dispute and accompanying succession procedure. Viktoria Kovalchuk is a responsible partner. EXPATPRO is a specialized law firm focused on providing immigration law services for foreign citizens who live or relocate to Ukraine. The offering extends to application for visas to Ukraine, work and residence permits. Family law is another service offered to Ukrainian clients and expats, including marriage registration, concluding marriage contracts, contesting and recognizing paternity, as well as on divorce. The firm also offers complex legal support of surrogacy programs in Ukraine in the interests of couples from Europe, North America and Australia. The private client practice is led by partner Vasyl Cherednichenko. Platon Danylenko is in charge of the family law workload. The Odesa-based law firm Jurline is a popular choice for entrepreneurs and their family members in respect of estate structuring, tax planning, wealth management. Its offering includes creation of charitable foundations and organizations, support for socially significant projects, acquisition of real estate in Ukraine and abroad, as well as obtaining residence permits and work permits for non-residents in Ukraine. Recent highlights include legal support of the division of shares in the restaurant business — the famous “Steakhouse” and “Kompot” restaurants located in downtown Odesa. The firm also has a well-established portfolio of family disputes with representation in courts in cases involving property division between spouses, including corporate rights, settlement of disputable situations regarding children, particularly in determining their place of residence. Inheritance matters make up another important area of practice. Volodymyr Zubar heads the wealth management practice. Vitaliy Cherkes is in charge of family law issues. KPD Consulting is active in inheritance, family, housing and other civil issues, and supports its private clients in property transactions. Olena Domanchuk, practice head, represents clients in court proceedings on the division of property between spouses, recovery of alimony for children, determining their place of residence, recognition of the ownership of hereditary property. Civil lawsuits make up another area of the firm’s focus. The private client practice of domestic criminal law focused firm CREDENCE concentrates on protection from offensive actions by raiders, removal of arrests and other restrictions, including property located abroad. The firm represents Mrs. Lilia Podkopayeva, Olympic champion and businesswoman, in connection with daily business and charity activities, supporting Dostupne Batkivstvo (Affordable Parenthood) LLC, ILD Holding LLC, Charitable Foundation by Lilia Podkopayeva, Generational Health LLC, as well as conducting audits of business processes for potential risks. Vasil Farinnik and Natalia Drigval are responsible partners. Oksana Voynarovska, a partner of Vasil Kisil & Partners, is a known name for handling divorce proceedings, property division and inheritance matters. Svitlana Trofimchuk, managing partner of LexArs, is another visible family law practitioner.

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Who is Who

Real Estate, Construction, Land The real estate and construction practice group of multinational law firm Baker McKenzie is widely praised as a top legal counsel on the real estate market, preferred for high-end property transactions, privatization, project development, property and land lease. The firm is also active in the areas of retail, energy and infrastructure. The benchmark project of 2020 is advising IKEA, a Swedish multinational conglomerate that designs and sells furniture, kitchen appliances and home accessories, on the launch of its first offline store in Ukraine. Another sound project of 2020 was organizations hiring the office to support the purchase and/or leasing of their office and residential premises in Kyiv. The firm advises the EBRD and Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine on reforming the construction sector’s regulatory framework in Ukraine, and assists with the introduction of internationally recognized contract conditions (FIDIC) into Ukrainian contractual practices. Selected clients include Amstar Europe, ArcelorMittal, Auchan Ukraine, Bayer, the British Embassy, McDonald’s Ukraine, La Societe des Centres Commerciaux, Unibudinvest Venture Fund, Pegasus. The practice has two partners on board. Renowned market figure Serhiy Piontkovsky has a recognized client relationship role and maintains guidance of privatization projects. Lina Nemchenko acts on large-scale commercial development projects. Andrii Grebonkin is singled out by peers as a technical and well-trained practitioner. Nataliya Tyschenko and Elmaz Abkhairova are part of the team. СMS is represented through two offices in Ukraine. CMS Cameron McKenna Nabarro Olswang is keen on a wide scope of work, including acquisition and sale, land use issues, property management, construction financing, retail and office leases. The firm reveals growing activity in various regions of Ukraine and, what is notable, supports greenfield development projects. The firm carried out extensive due diligence of one operating shopping mall, Lubava, in Cherkasy; and advised on all real estate related matters in the development of the Nikolsky shopping mall in Kharkiv. The Kyiv outfit is a market leading firm in the energy sector, and is traditionally busy with structuring investments, acquisitions in the renewable energy market and handling the wide scope of real estate and construction instructions within. In a recent highlight, the firm continued to advise Scatec Solar ASA, a large Norway-based solar power developer, on the continuous expansion of its solar portfolio in Ukraine. The team’s recent focus has also been the hospitality area and logistics assets, and industrial and mixed-use property development projects. Lead partner Natalia Kushniruk was named a hardworking, reliable professional, with particular reference for her M&A and lease advice. The executive team includes Maksym Morozov and Viktor Komziuk. CMS Reich-Rohrwig Hainz advises on acquisition of real estate, production sites, land plots, construction regulations and permits, relocation of premises and lease matters. The office is retained by clients from renewable energy, shipping and logistics, manufacturing sectors. Anna Pogrebna heads the practice.

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The Kyiv office of DLA Piper1 is the primary choice for big international companies seeking advice on their investment projects, real estate transactions, and commercial lease queries. The firm is actively retained to act on the tenant side in such areas as retail, IT, luxury industry. Among landmark public projects was legal support to a European retail food brand Billa (part of REWE Group) in the course of lease extension for its flagship store in Kyiv located within the building of the Besarabsky Rynok in the historical center of the capital, which is owned by Kyiv municipal authorities. The firm also keeps its transactional focus by supporting acquisition of a stake in the property of the largest Ukrainian developer. Key sector areas of growth to note are energy projects, as well as infrastructure assets, especially port infrastructure. The client roster includes Cargill, Pfizer, Perion Network, Ubisoft, Mariupol Investment Group. Lead partner Natalia Kochergina was named “matriarch” of the Ukrainian real estate market. Yevhen Husakov is another visible practitioner. Ukrainian law firm AEQUO houses one of the largest commercial property deals portfolios in the market, and demonstrates strong expertise in construction projects, regulatory engagements, commercial lease and sophisticated disputes with precedent-setting consequences. The firm has a notable presence in high-stake acquisitions on behalf of investment firms and real estate investors. The practice team represented its consistent client, Dragon Capital, in a number of purchases, in particular the Industrial Park Ryasne-2, acquisition of the business center for its further transfer to the Kyiv School of Economics for longterm use. The firm renders ongoing advice to an American investment company, Allrise, with regard to the structuring of its investments in distressed loan portfolios and real estate in Ukraine, and on the landmark acquisition of the Chornomorets Stadium in Odesa, which belonged to Imexbank. The firm’s real estate practice works closely with the banking and finance practice, and commands real estate finance and mortgage expertise. In particular, the firm advised Industrialbank on financial restructuring, which required creation of a mortgage over the Khreschatyk Hotel, located in downtown Kyiv, and assisted the bank in establishing a mortgage over the Plaza Sport Outlet in Kyiv. Another exceptional feature of the firm is its well-established standing in retail, exemplified by the resonant acquisition of Billa Ukraine from REWE Group by Novus Ukraine, one of the firm’s clients. The litigation team led by Olena Pertsova continued the defense of UMG Investments in a dispute over expropriation of land for public use. Mykhaylo Soroka proves on a continuous basis to be an expert in this field and enjoys the respect of peers for his exceptional knowledge. Renowned banking partner Yulia Kyrpa demonstrates continuous involvement in real estate deals and in developing the real estate practice. Counsel Bohdan Dmukhovskyy is another key figure in this practice. The well-versed practice of Gramatskiy & Partners covers all reas of real estate — commercial, residential, industrial, HoReCa, a leisure, social and municipal infrastructure. Given its long commitment to relations with major market players (developers, construction and 1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Who is Who

Real Estate, Construction, Land engineering companies, strategic investors), the firm is called upon to support large-scale construction and reconstruction projects, asset and share deals, lease of various types of premises and land. The firm advised the Tarantino Family group, a network of restaurants in Ukraine, on purchase of the Arsenal Plaza Business Center. Another notable area of the firm’s expertise is privatization. Most recently the firm represented Bastion Group on acquisition of PJSC Kyivpasservice, which owns bus stations and railway stations in Kyiv and Kyiv Region, during privatization. The firm represents the interests of Graal LLC, Parus Group and Kan Development on the restructuring and restart of the project for rebuilding European Square in downtown Kyiv with the construction of the Stolychnyi multi-storey office and hotel complex. City Capital Group generates a series of projects supported by the firm. For example, construction and lease of the Business Park City Gate business complex, construction of the gated community Garden Bay Resort, construction of a hotel on the Boryspil Highway and others. The firm has an established position in the retail sector, and advised Panorama-Invest LLC on construction and certification process of the Trade Center Market on Lisova. The team has also acted as legal counsel in numerous co-working projects in Kyiv. Yurii Gorda is visible in due diligence work, and Igor Reutov is noted for his transactional performance. Paul Jebbs is a London-based of counsel. Ernest Gramatskiy has worked for many years on the development of an enviable base of clients, and is seen as a high-caliber real estate market figure. AVELLUM demonstrates an increase in real estate advisory work, and preserves its prominent role as a legal counsel for highend share and asset deals. The firm is experienced in property investment deals, acting for both domestic and international shareholders, investors and developers, involving such assets as terminals to oil storage facilities, investment into development of recreational, residential and commercial premises, leisure real estate development. The firm is active in the retail and FMCG market, rendering legal support for joint investment with a view to developing commercial facilities and selling the operational business covering a chain of shops located in all major cities of Ukraine, advised on the transfer of lease and ownership rights to real estate objects. Recent highlights take in advising A Development on joint investment in the construction of a real estate complex in the center of Kyiv, consisting of large commercial areas, two business centers, and underground parking lots and a total investment exceeding USD 35.7 million.

AUTHORITIES

LEADING INDIVIDUALS

Ernest Gramatskiy (Gramatskiy & Partners)

1. Lina Nemchenko (Baker McKenzie)

Serhiy Piontkovsky (Baker McKenzie)

2. Natalia Kochergina (DLA Piper Ukraine*)

LEADING FIRMS

3. Natalia Kushniruk (CMS Cameron McKenna Nabarro Olswang) 4. Vladyslav Kysil (KPD Consulting)

1. Baker McKenzie 2. CMS Cameron McKenna Nabarro Olswang

5. Aleksandra Fedotova (ADER HABER)

3. DLA Piper Ukraine*

Other notable PRACTITIONERS

4. AEQUO 5. Gramatskiy & Partners

Anastasiya Bidakh (Sayenko Kharenko)

6. AVELLUM 7. Asters

Oleg Boichuk (Asters)

8. ADER HABER 9. Sayenko Kharenko

Alexander Burtovoy (ANTIKA Law Firm)

10. KPD Consulting

Dr. Oleksiy Feliv (INTEGRITES)

Other established PRACTICES

Dmyro Grybov (Ilyashev & Partners) Listed in alphabetical order

ANTIKA Law Firm Dentons EY Ukraine Ilyashev & Partners INTEGRITES JN Legal Kinstellar Redcliffe Partners TOTUM

Royal Gardens Business Center, 66/1 Frantsuzky Boulevard, Odesa, 65062, Ukraine Tel.: +380 48 235 6517 +380 48 738 0893 E-mail: office@jurline.ua Web-site: www.jurline.ua

Yuriy Khapko (TOTUM) Roman Kostenko (Asters) Yulia Kyrpa (AEQUO) Anzhelika Livitska (Asters) Maksym Maksymenko (AVELLUM) Oleg Matiusha (Kinstellar) Mykhaylo Soroka (AEQUO) Mykola Stetsenko (AVELLUM) Svitlana Teush (Redcliffe Partners) Bohdan Yaskiv (TOTUM)

* Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

REGIONAL COUNSEL

COUNSELINK JURLINE

Listed in alphabetical order

VIGOLEX

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Listed in alphabetical order

ANK Law Office Jurline Krolevetskyi & Partners Law Firm De-Jure Shkrebets & Partners Rezultat Law Firm

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Who is Who The firm is also known for its expertise in energy financing and subsequent input from its real estate team. Recently promoted partner Maksym Maksymenko, head of the practice, was named an ambitious rising star with in-depth knowledge, and gained the respect of peers for his efforts to be a brand-ambassador of Ukraine for a foreign audience. Mykola Stetsenko, star individual for M&A work, has a long track record of real estate property acquisition deals. Asters acts for an impressive array of international and domestic clients, utilizing experience across commercial, industrial, office, infrastructure areas, and handling property transactions, operational and regulatory queries, construction and lease. The firm advises its consistent client, Irish Bank Resolution Corporation Limited (IBRC), in relation to the major shopping mall Univermag Ukraina and office building Business Center Leonardo as owned by Quinn Properties Ukraine, in which IBRC holds an interest, across negotiation and registration of leases, land and reconstruction matters, operational issues and risks. The team is highly active in advising on construction and operational issues tied to implementation of renewable energy projects, and infrastructure projects, including FIDIC contracts, tenders and structuring matters. Most recently the team advised the consortium of EMIT Group S.r.l. and Atzwanger in connection with a contract for the reconstruction of a water treatment plant in a Ukrainian city; Ateliers de France, a construction and architectural company, in connection with construction of a major rehabilitation and health complex next to Kyiv. PRADA Group constantly prefers Asters for full support of all day-to-day legal issues and operation of its first mono-brand boutique in Ukraine, including issues tied to operations during the ongoing quarantine. The practice team’s expertise contributes to ongoing complex disputes handled by the firm. The practice has two partners and a counsel on board. Splitting his time with the corporate and M&A practice, Oleg Boichuk is focused on real estate transactions. Roman Kostenko is engaged in lease and construction work. Anzhelika Livitska is known for handling renewable energy projects, and is particularly praised for her exceptional knowledge of environmental law, industrial construction and commitment to legislative proposals. Ukrainian law firm ADER HABER houses a well-versed practice dealing with property transfers, land development and division, securing land use approvals, supporting lease portfolios in commercial and retail sectors, and managing land bank extension matters. The team’s

highlights include the first transaction in Ukraine on the management of corporate rights of an agricultural holding with a land bank of about 60,000 hectares, under a contract concluded by ARMA (National Agency of Ukraine for the Detection, Search and Management of Assets Derived from Corruption and Other Offences). This past year the team advised on the construction and reconstruction of residential and office buildings, infrastructural and industrial construction, land management and urban planning. For example, the firm represented Sinohydro Corporation Limited, a Chinese state-owned hydropower engineering and construction company, which is a contractor in a large infrastructure project for the rebuilding of roads in Ukraine, namely the project to rebuild the M06 highway (bypassing Zhytomyr), and handled the issue of relocation of the transmission line, which was complicated by unresolved land issues. MERX PJSC, a large construction and business centers lease holding and a long-standing client, regularly instructs the firm on its projects involving real estate acquisition deals, construction and lease matters. The team is also called upon in litigation regarding breach of lease contracts and land use matters. Practice lead partner Alexandra Fedotova is known as a versatile real estate lawyer, and was acclaimed for her profound knowledge of court case law. The key executive team includes Dmitriy Nikolov, Iaroslava Lahan and Artem Vitsenko. The full-service law firm Sayenko Kharenko has an outstanding client base, instructing it for the structuring of real estate acquisition deals and ownership, performing real estate due diligences, construction agreements, commercial lease and relocation, regulatory and permitting issues. The firm also commands broad practice of real estate related disputes. Given the firm’s confident presence in the renewable energy sector, the team is loaded with industrial construction assignments. For example, the firm acted as a legal counsel of the Representative Office of Power Construction Corporation of China regarding construction of the Syvash Wind Farm. The firm rapidly expands its infrastructure portfolio, being present in the most landmark projects of 2020. Thus, the dedicated group advised an international consortium on participation in both pilot tenders for the concession of Kherson and Olvia sea ports. In 2020, the litigation team secured a sizeable workflow. In particular, the firm represents the interests of a client in a local court regarding the invalidation of agreements for participation in construction financing for commercial property in the center of Kyiv; represents Auchan in litigation related to the protection

REGIONAL COUNSEL The Odesa-based ANK Law Office is one the most vivid counsel in southern Ukraine, which is called upon to handle significant construction projects and the largest port infrastructure mandates. This past year the firm assisted its clients in the completion of construction projects commenced in previous years, particularly those connected with agribusiness. ANK acted as legal counsel to Autogroup Kropyvnytskyi in carrying out the project on the construction and putting into operation of a RENAULT dealership showroom in Kropyvnytskyi, which was unveiled in April 2020. The firm also acted as legal counsel to owners of Milano hotel in Odesa on the signing of an agreement with Radisson regarding rebranding of the hotel and introduction of the standards of the Radisson hotel chain. Other clients include Brooklyn-Kiev, SC CTO of the company HHLA, Olimpex Coupe International, Metalsukraine Corp. Ltd, VG Trade. The team includes Dmytro Kolodiazhnyi, Kateryna Bondarenko, Vladyslav Brig, and is led by founding partner Oleksandr Kyfak. Jurline is a legal counsel to leading construction companies in Odesa Region, and assists in the implementation of their major projects. The firm regularly advises on developing construction schemes, real estate transactions, and acquisition of land plots, property rights and regulatory matters. The firm advised on the implementation of a contract for dredging services in the port of Constanta (Romania). Clients take in ZARS, Kadorr Group, TIS, TIS-Grain and other domestic and foreign companies. The practice includes Nina Rizun and Oleksandra Khrishcheva, as led by Volodymyr Zubar and Maxim Kapelist. Krolevetskyi & Partners, a vivid law firm based in Kharkiv, renders legal advice for construction and rebuilding works, development projects, real estate purchase and sale, as well as investment activity. The firm acts for Avenue Development Ltd on attracting finance for construction of residential premises in Kharkiv. Stalkonstruktsia-1

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LLC hired the firm for legal assistance with major renovation of a food processing company in Kharkiv, reconstruction of a mining and refining plant and project development of industrial buildings. Viktoriia Zaitseva is the practice head. Odesa-based Law Firm De-Jure works on residential premises and is a port of call for significant building companies as well as private investors — both residents and non-residents. The firm is focused on property selling and buying, structuring investments and attracting finance in real estate and construction, performing risk advisory, compliance of premises and authorization. Grygorii Tripulskyi is the main figure. Kharkiv-based law firm Shkrebets & Partners is traditionally active in real estate property and land plot rights disputes, and is known for supporting significant industrial construction in the region. The firm’s portfolio encompasses recovery of real estate finance, regulatory disputes, acquisition of land plots and real estate premises. Privatization is another area of expertise. Public clients include Municipal Enterprise KharkivZelenbud and Kharkiv Zoo. Anton Martynenko is the practice head. Cherkasy-based Rezultat Law Firm is a vivid player in the respective region, and is endorsed by real estate practitioners from capitalbased firms. The firm is enlisted for developing urban planning documentation, execution of property rights and the commissioning of residential and non-residential premises. This past year saw the firm represented the interests of Children’s Camp in obtaining the lease for a lake, including land tenure and participation in a land auction. The firm is experienced in supporting industrial construction. For example, it acts for Adana 3 LLC in connection with the construction of a production facility for processing and freezing berries; and supports the commissioning of photovoltaic power plant LedBud. Artem Suchylo and Liubov Polishkevych are the main practitioners.

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Who is Who

Real Estate, Construction, Land of property rights to land plots. The sizeable team is led by Oleksandr Nikolaichyk (M&A, investments in real estate); Sergey Pogrebnoy (real estate disputes and conflicts). Anastasiya Bidakh is visible on the market, with its recent focus being on development and construction projects. Volodymyr Yaremko is in charge of contentious matters in infrastructure and construction. At the end of 2020 the practice was reinforced with a double lateral hire from Auchan Retail Ukraine — Svitlana Gurieieva and Olena D enisova joined as partner and senior associate, respectively. KPD Consulting is a respected domestic practice with broad expertise in real estate acquisitions, commercial and industrial real estate construction projects, lease of office premises and production facilities, and vivid advisory to the banking sector on real estate, construction and collateral matters. In 2020 the firm advised ING Bank Ukraine with respect to mortgaging of the assets of Obolon, the largest national brewery. The firm’s notable experience in the construction area is exemplified by its recently advising Rustler Property Services on rebuilding of a shopping mall in Mykolaiv. The firm houses infrastructure expertise, in particular, it advised DCH Infrastructure and Real Estate regarding two prospective infrastructure projects: construction of new airport terminal in Dnipro and construction of a transshipment sea port complex in southern Ukraine. The team was mandated by a management company for industrial innovation park Ecopolis-Kharkiv LLC, part of the DCH Group, to advise on various regulatory matters pertaining to establishing of the industrial park, arranging the land title and cooperation with local authorities. The lead partner is proactive Vladyslav Kysil, who is well regarded for his knowledge of procedural issues. Counsel Mykhailo Semka is a key member of the team. ANTIKA Law Firm has an established workflow of real estate development projects and commercial real estate operations, business and transaction structuring; contractual and investment mechanisms instructions. The firm represents its established client, AWT Bavaria, in particular rendered legal support for the acquisition of three communally-owned land plots at an auction in the city of Dnipro. Maxibud Engineering, LLC requested the firm to advise on existing legal options for assignment of the land plot for further implementation of development project and commencement of construction work. Alexander Burtovoy is lead partner, supported by Maxim Korchagin and Vasiliy Sheretko. Dentons is notably active in energy, infrastructure, retail and real estate development sectors. The firm’s real estate expertise is vividly applied in its renewable energy practice, inter alia, supporting construction of renewable energy plants and production facilities, and handling acquisitions of project companies. The firm advised Grasshopper Solar Corporation on real estate and land matters in connection with its business activities in Ukraine. The firm advised in a landmark deal on the retail market, having represented REWE Group on the sale of the Billa supermarket chain in Ukraine, which encompassed 35 Billa supermarkets. Another notable area of focus is real estate financing. Most recently the office provided complex legal advice to a leading Canadian developer in connection with the financing and development of real estate projects in Ukraine. Volodymyr Monastyrskyy is lead partner. The EY Ukraine real estate and construction team is experienced in retail, energy, agriculture, oil and gas, and confirms its very well- established positions in infrastructure. For example, EY provided all round legal support with pre-feasibility assessment of potential options for private investment in the infrastructure of four regional airports in Ukraine, with a focus on real estate matters. EY is present in the new pipeline of PPP transactions in Ukrainian sea ports formed after the recent success of pilot concessions in Kherson and Olvia sea ports. EY works as legal and financial advisor on the project prefeasibility analysis of transferring assets of the First and Container Terminals of Chornomorsk sea port into concession. Another notable project in 2020 was advising international fund regarding the development of a memorial and museum complex. The team also covers real estate aspects within the framework of financial restructuring procedures handled by EY. Borys Lobovyk, Bogdan Malniev and Kateryna Oliinyk are the main figures. Ilyashev & Partners is a market-leading dispute resolution force regularly called upon for representation in high value property rights and regulatory disputes, and enriched its practice portfolio with real estate acquisitions and privatization matters. For example, the firm advised Budpostach, a leading national player of professional equipment and the tooling market in Ukraine, with respect to privatization of state property in Kyiv. The team advises Dream Team Company during

the settlement of issues related to the use of agricultural land in the Artsyzsk District of Odesa Region; and represents Absolute Holding in a dispute regarding privatization of two office buildings in Kyiv. The firm is known for its extensive work in corporate conflicts and debt recovery matters. For example, the firm represents DH Invest Neruhomist LLC (the company owns property rights to lease of premises in Respublika Shopping Center) in litigation with a bank on recovery of debt under a loan agreement. The team includes Leonid Gilevich, Artem Mikhailov and Maksym Reshtakov (joined from Vasil Kisil & Partners). Dmytro Hrybov was singled out as a rising star due to delivery of an impressive level of services. INTEGRITES maintains its sustainable client portfolio, advising the biggest international developers on the Ukrainian renewables market and large investors in the infrastructure sector. The firm continued to support NBT, Total Eren, Scatec Solar, EuroCape/Longwing, ÜMITLI on construction, commissioning and operation, as well as drafting of FIDIC-based EPC contracts. The real estate team acts on the firm’s mandates on corporate restructuring and joint ventures, asset deals and wide range of lease matters. The firm advises Aptiv Services Ukraine, a global technology company, on leasing industrial premises which will be used as an assembly plant for supplies in the region. Managing partner Dr. Oleksiy Feliv is known for implementing highscale multilevel wind and solar power projects. Another highly-focused practitioner is Gennadii Roschepii2. Domestic law firm JN Legal is focused primarily on real estate and construction, being present across development of construction of residential premises and commercial property projects. The firm advises its long-standing client Creator Bud in the course of construction of 20 residential premises complexes in Kyiv, Lviv and Ternopil. It is noteworthy that the firm assisted with allocation of a land plot for construction of a new hotel of the Intercontinental Hotel Group and provides full legal support to the project. ATB Corporation instructs the firm to support acquisition of land plots and expansion of its network of supermarkets in Ukraine. Ian Levitas is the main point of contact. The Kyiv office of Kinstellar spans its activity on supporting transactions involving real estate, construction and infrastructure projects, complex land regulatory matters and commercial lease and sublease, privatization and real estate disputes. The firm played a vivid role in infrastructure projects, namely sea port concession and PPPs in roads and the municipal transport sector. The team represented Qatari port operator QTerminals LLC in the first ever and largest port concession tender in Ukraine followed by the agreement for the 35-year concession of Olvia port, and is currently advising the World Bank Group on the Project Policies, Legal Framework, Financing and Private Sector Participation Study (PFPSP) for the Troyeschina Rapid Transit in the Ukrainian capital. Privatization highlights take in ongoing advisory for the State Property Fund of Ukraine on matters related to privatization of Odesa Port Plant. The real estate team also acts within the framework of renewable energy projects, and construction matters within industrial projects of the firm’s clients and municipal infrastructure mandates. In 2020 the office increased the number of assignments from the retail sector, most recently advising Inditex Ukraine in relation to review, improvement and enforceability of certain provisions of their template lease and sublease agreements. The firm’s client roster also includes McDonald’s Ukraine, Mitsubishi Corporation, Syngenta. Practice head Oleg Matiusha is endorsed for his PPP expertise in infrastructure projects, as well as knowledge in construction law, acquisition and lease. He is also noted for his unique expertise as a local real estate expert in arbitration proceedings. Redcliffe Partners is a highly-active legal counsel in M&A and project finance in the renewable energy market and infrastructure sector, and possesses a fast growing real estate team covering relevant aspects of these mandates. Inter alia, the team rendered Ukrainian property, construction and regulatory advice in terms of acting for Morgan Securities Plc in connection with project finance for the construction and operation of a wind farm to be located in Zaporizhzhya Region. Another notable example is ongoing follow-up support for the EBRD and IFC with amendment of the mortgage and pledge agreements with regard to real estate and other property following the commissioning of certain terminal facilities within two extended parallel senior secured loans to M.V. Cargo to finance the construction of a new private grain terminal in the Black Sea commercial port of Yuzhniy. Significant workflow consists of real estate due diligence of target projects in M&A in the renewable sector, advising foreign investors in 2

Left the firm at the beginning of 2021.

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Who is Who construction activities in Ukraine. Svitlana Teush is lead partner, with recognized expertise in construction matters and FIDIC projects. Ukrainian law firm TOTUM is a reputable real estate boutique with a full-circle offering for mainly domestic clients — construction and engineering companies, investors and developers, industrial leaders in various economic sectors, associations of co-owners of multiapartment houses, private investors. A significant part of the portfolio is centered on land law regulations, allocation and legal status of land plots, comprehensive due diligence, land use, land lease agreements. In a recent highlight, the firm assisted Industrial Technical Company Agromat Ltd in executing its right to rent a land plot. The firm has notable expertise in land duties and fees, urban planning and land zoning, as well as issues regarding cultural heritage. This past year the team reached two precedent practice setting cases, inter alia, change of designated purpose of a land plot for city planning needs without a detailed plan of the territory, and establishment of court practice for reduction of land tax. In addition, the firm assists with reconstruction of buildings in Kyiv, and supports investment projects aimed at modernizing and expanding industrial facilities, commercial property construction and lease. The strong side of the team is its exceptional knowledge of specific city planning regulations, enabling it to receive complex commercial and communal property lease mandates and assess investment projects prior to their launch. The firm recently extended its activity in investment projects using PPP, and also offers GR support. The clients include Industrial and Construction Group Kovalska, Ukrbusiness Group Alliance, Lithome Group Ukraine, Kyyivska M akaronna Fabryka, Energy and Industrial Group Tekhenerhomash, KDD Engineering, EVON Group and others. Both partners were referred for experience in their respected fields. Yuriy Khapko takes in real estate and construction work, while Bohdan Yaskiv leads the provision of land law advice. Andriy Kravets & Partners renders legal support on the acquisition of commercial properties, i.e. land parcels, office buildings, hotels, premises for industrial use, and negotiates and drafts property acquisition agreements. The firm’s client list takes in, among others, Ukrainski Kovbasy, Mekos and Sophia, a group of companies owning a business center situated in Kyiv. Founded in 2019, Ukrainian boutique Dictio commands a full- service offering in real estate and construction, including specific dispute resolution. The client roster includes prominent construction holdings, investment and development companies, suppliers and manufacturers of construction materials, investors, domestic and foreign companies, high net worth individuals. The team was retained by Electrum Ukraine, which specializes in comprehensive support to investment projects, construction of energy facilities, regarding the construction of one of the largest wind power plants. The main dispute highlight is representation of developer Oniks Build, a leading U krainian construction company that implements residential, commercial, industrial construction and reconstruction projects, in a dispute with the architectural and construction control authorities regarding the commissioning of an apartment block in downtown Kyiv. Clients include Hempel Ukraine and DCH Investment Management. Olena Shtohryn, managing partner, rapidly expands the firm’s client portfolio and partnership network. ESQUIRES handles legal support in the acquisition and transfer of office premises and land plots, due diligence, reconstruction projects, operations with land banks and subsequent regulations. The client roster takes in, among others, RiverHouse LLC, Lithome Group Ukraine LLC, Aventus LLC, Progres LLC. Viktoria Kovalchuk is the practice head.

KPMG Law Ukraine demonstrates a mixture of advisory and dispute representation. In particular, the team advised one of the leading international groups in clinical trial services during acquisition of a Ukrainian company, owning a nine-floor business center located in Kyiv and related land plots. Given its established workflow in renewable energy sector the firm renders comprehensive legal support to E-Group in connection with development and financing of the solar power plant. The representative cases from the dispute portfolio include representation of China National Complete Engineering Corporation Ukraine in the court dispute regarding its rights to the land plot; long-lasting representation of CTPark Lviv in a court dispute with the Special Anti-Corruption Prosecutor’s Office, which seeks invalidation of the land sale and purchase agreement under which the land plot for development of the first industrial park in Ukraine was purchased. Sergey Popov and Yuriy Katser are the key contacts. Legal & Economic Security (LES) commands an urban development practice. The firm acts on regulatory compliance issues and disputes appealing limitations. The firm is particularly known for its environmental practice, which is essentially required for handling development projects. Serhiy Kolisnyk, managing partner, is the main contact. Lexwell & Partners advises on property transactions, and represented the interests of an Austrian investor on the acquisition and operation of a number of business centers in the heart of Kyiv. The firm advises Sumitec Ukraine, part of the Sumitomo Corporation, on the acquisition of a land plot for further construction of industrial facilities and expanding its activity in Ukraine. Andriy Kolupaev is the key contact. The focus of MK Legal Service is on the HoReCa sector, with an established following of leading restaurant chains in Ukraine. The firm has experience in investment and construction projects, lease, regulatory compliance and related disputes. In 2020 the firm supported its clients in negotiations with landlords on lease relations during the quarantine period caused by the COVID-19 outbreak. Its public clients include Gastrofamily, Dmitry Borisov’s family of restaurants, a large restaurant chain, which unites more than 50 diverse restaurants. Maksym Kurochko, managing partner, is the main contact. Vdovychen & Partners continues to develop its advisory service for construction and reconstruction support, and handles real estate and land disputes. The firm quite recently advised on the development of the gated community in a neighborhood of Kyiv; rendered full legal support in reconstruction of the building into a trade and office center in the heart of the Ukrainian capital. On the dispute front the team acted in a case on the recognition of a land lease agreement as invalid. Oleg Vdovychen and Andrii Molchanov are the main figures. The Kyiv office of Wolf Theiss regularly assists foreign companies entering the Ukrainian market with real estate lease, also conducting subsequent work as part of broader transactions and industrial construction projects. The office handles construction and land issues pertaining to development of renewable energy projects. For example, the firm advises Optimum Solar Kft., a leading Hungarian solar power equipment producer and developer of solar power projects, among others, conducted legal due diligences of land use rights, construction permits and licenses, assets and liabilities of the projects contemplated as targets for investments. The firm also advises on a range of lease matters. For example, it advised Oracle in relation to the lease and construction of office premises in the city of Odesa. The practice is led by managing partner Taras Dumych.

GOLAW assists with real estate and construction work pertaining to renewable energy projects. The firm rendered comprehensive legal support for receipt of the necessary documents for the construction of the Khmelnytsky biofuel power plant; advised Beycelik-Elawan, a joint Spanish-Turkish company, on the development of long-term lease agreements for private land plots for a wind farm project. Another highlight is comprehensive legal support for Ubisoft Ukraine, a subsidiary of a well-known French IT group, in connection with the change of office for the Ukrainian branch. Max Lebedev and Oleksandr Melnyk are active in practice assignments.

Ukrainian law firm Arzinger* with offices in Kyiv, Odesa and Lviv, is traditionally named among active legal counsel in corporate transactions, real estate acquisitions, real estate finance, construction projects, commercial property lease. The practice is led by managing partner Timur Bondaryev3.

KM Partners acts on regulatory assignments involving land matters, ownership and use of land plots, protection of agricultural land, land lease and subsequent disputes. The firm possesses broad experience in supporting the construction works of its clientele. Taxation within real estate and land transactions is another renowned expertise of this leading tax firm. Maxim Oleksiuk is lead partner.

Natalyia Dotsenko-Belous, Transactional Law Boutique, is referred during peers’ review. Inna Sukhostavets, Instanto, was endorsed for her unique and extensive experience in working with FIDICbased construction contracts in Ukraine.

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Vasil Kisil & Partners*, a long-standing domestic counsel, is praised by peers for its solid expertise, with particular focus on representation of buyers in acquisition of real estate, and advising on construction matters. Alexander Borodkin is the practice head.

The firms marked with * have not submitted information for the current research.

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Who is Who

Retail The Kyiv office of Baker McKenzie is customarily preferred as a legal counsel to multinational retail operators for designing market entry strategies and expansions. The extensive offering includes M&A, competition, regulation, tax and customs, intellectual property protection and data privacy issues, compliance, dispute resolution. The firm has a market leading real estate practice constantly loaded with mandates on matters of commercial leasing, lease renewals and ongoing leasehold management issues, reconstruction and extensions. Recent highlights include advising IKEA on launching an offline business in Ukraine. The IP practice team proliferates its presence in anti-counterfeiting actions and online and offline enforcement matters. The team also represents banks and other lenders on financing for retail companies and operators of shopping malls. Clients include Auchan Ukraine, Flügger group A/S, McDonald’s Ukraine. Retail and FMCG clients are serviced by different practice groups, as led by Vyacheslav Yakymchuk (corporate and M&A), Ruslan Drobyazko (IP), Serhiy Piontkovsky and Lina Nemchenko (real estate, employment). The full-service Ukrainian law firm AEQUO is equally well-versed to advise on corporate transactions, competition, tax, regulatory matters and litigation. The M&A team, as led by Anna Babych, acted on a benchmark deal in the Ukrainian retail market when it advised Novus Ukraine in connection with the acquisition of Billa Ukraine. The firm further advises on franchising and distribution schemes, implementation of discounts and rebates, dissemination of misleading information. The firm is consistently instructed by its long-standing client, Epicentr K, the largest DIY retailer and distributor, most recently defending its rights in claims of misleading advertising in the course of an investigation by the AMCU; represented Mandarin Group at the AMCU in connection with the divestment of the Blockbuster mall. The team also possesses a wealth of expertise in e-commerce, and advised USAID on the development of e-commerce in Ukraine, inter alia, customs clearance, export controls, complex regulatory matters, product compliance, certification, etc. This past year the firm advised Inditex, one of the world’s largest fashion retailers, on a corporate restructuring and in setting up an online shop. The dispute practice was boosted by representations in regulatory, tax and commercial litigations, guided by Denis Lysenko and Olena Pertsova. The consumer and retail group in the firm is led by competition partner Sergey Denisenko. Recognized competition expert Mariya Nizhnik re-joined as a partner. The full-service law firm Asters is preferred by major international retailers including, consumer goods and household appliances, food, beverage, fashion, pharmacies and gasoline retail, luxury brands, consumer goods manufacturers and distributors. The multi-practice offering includes antitrust, corporate, tax, employment, IP, criminal law, real estate. The market-leading competition team advises retail companies on investigations, joint arrangements, dealership and competi-

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tion compliance. The firm is also enlisted for Ukrainian law aspects of corporate restructuring and business operation matters. Expansions and project development is another area of recent mandates. The firm assists PRADA Group, a long-standing client, on all day-to-day legal issues and the operation of its first mono-brand boutique in Ukraine, including issues related to operations during the quarantine; provides ongoing legal advice to Irish Bank Resolution Corporation Limited (IBRC), including on a range of corporate matters in relation to a major shopping mall (Univermag Ukraina), in which IBRC holds an interest. Partners Oleg Boichuk (real estate, M&A) and Alexey Pustovit (competition), and counsel Olena Radko (corporate, commercial) are among key figures. The Kyiv office of DLA Piper1 commands multidisciplinary experience representing retailers and consumer product manufacturers, including supermarkets, cosmetics retail chains and luxury apparel brands in Ukraine. The office traditionally acts as a legal counsel on lease matters and, in addition, advised on adjustments caused by the COVID-19 epidemic. Another area of work is franchising and distribution, including localization from the Ukrainian law perspective. The client roster includes Billa, Bomond Group, Burberry, Mondelez, GAP, Wendy’s. Natalia Kochergina advises on real estate matters. Natalia Kirichenko took over instructions on the intellectual property and commercial practices. ADER HABER, a dynamic domestic law firm, draws on a strong real estate offering, employment, health and safety issues affecting the sector, as well as dispute resolution practices. In addition to retail supermarket chains, clothing brands and landlords, as well as clients operating in the food and beverages sector, the client portfolio was extended with luxury brands. The team, as led by Tetyana Ivanovych, handles representation of Technocom Ltd and Nestle Ukraine LLC, Ukrainian subsidiaries of Nestle S.A., Coca-Cola Ukraine Limited, AVK Confectionery on a wide scope of employment matters. Tax partner Tatiana Daniltseva represents Fudmerezha (ТМ Velyka Kyshenya), a Ukrainian retail chain, in tax disputes, and Inditex Group in appealing against a fine imposed due to violations in regulations on the recruitment of disabled persons. Aleksandra Fedotova runs real estate workflow. GOLAW has notable clients among international clothes and fashion, food, cosmetics and FMCG retailers. The firm handles corporate matters, including governance issues, as well as regulatory work, employment and competition. Another area of traditional focus is its tax advisory, representation in regulatory and tax disputes. The firm advised GAP Ukraine, an international leader in fashion retail, 1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Who is Who

Retail on the payment of dividends and reduction of the authorized capital of a subsidiary in Ukraine. The practice is led by Max Lebedev (corporate), Iryna Kalnytska (tax), Kateryna Manoylenko (employment). Given an extensive presence on the real estate market and many years of experience in commercial property advisory, G ramatskiy & Partners is particularly preferred for real estate and commercial leasing matters, advising developers and landlords. Other strong fields of work are structuring distribution and supply chains, regulatory, inspection support and representation of retailers before state authorities. The firm handles legal support on the reconstruction of the Trade and Entertainment Center Chocolate and manages subsequent leasing to retailers; assisted New Complex & General Construction on the launch of the entertainment zone in a trade center. PJSC Dniprovskyi Rynok and City Capital Group (Darynok trade center) are among other sound clients. The practice team is led by Yurii Gorda.

LEADING FIRMS 1. Baker McKenzie 2. AEQUO 3. Asters 4. DLA Piper Ukraine* 5. ADER HABER

Ukrainian law firm Nobles is retained by global clothing and food retailers, advising both conventional and web-based businesses. The firm is particularly keen to support market entries, and structuring of operations for operating businesses in Ukraine. The team’s offering spans corporate, confidentiality, commercial, currency control, antitrust, regulatory, IP, tax law issues. In addition, this past year the team was especially busy giving advice on lease obligations, re-opening of stores, safety requirements, distributorship agreements with Ukrainian distributors. GAP Inc, H&M Hennes & Mauritz AB, Zooplus AG, Eterna shirts are among the firm’s clients. The main contacts are Volodymyr Yakubovskyy and Alexander Weigelt.

Other established PRACTICES

Sayenko Kharenko has a multidisciplinary team approach for the most required services from the sector, including real estate, tax and dispute resolution. In a recent highlight the firm represents Reckitt Benckiser Household and Healthcare in a number of tax disputes related to a refusal by tax authorities to give a VAT refund. Another established client, Auchan Ukraine, instructs the firm for various Ukrainian law issues, including real estate investment issues, regulatory, land matters. The firm strengthened its real estate expertise with two experts from the retail sector — Svitlana Gurieieva joined as partner and Olena Denisova as senior associate, both from Auchan Retail Ukraine.

Nobles

Dentons advises large retailers, including supermarkets, luxury brands, on corporate transactions, competition, encompassing lease and real estate, employment, tax. This past year the firm acted on a landmark M&A deal, representing REWE Group, a German diversified retail and tourism co-operative group, on the sale of the Billa supermarket chain in Ukraine. Another area of recent activity was employment advice, including the legal implications of COVID-19 quarantine on the work process of employees. Oleg Batyuk, managing partner, is the main contact. Ilyashev & Partners is mostly known as a dispute resolution heavyweight that addresses a wide range of litigation work sector wise. The firm represents retail clients in regulatory and commercial disputes, as well as shareholders matters, competition and pricing, land. The dedicated attorneys represented the Allo Group of Companies in refuting information published on YouTube by one of the journalists of the 1+1 TV channel. Wine Bureau (Good Wine network) hired the firm to advise on land issues. Mikhail Ilyashev is the lead partner. INTEGRITES advises clients on corporate restructuring, tax and customs, competition, intellectual property, personal data protection. The firm continued advising European retailers on employment and compliance, additionally assisting on remote work and peculiarities of work under COVID-19 regulations. In particular, the team advises Leroy Merlin on various employment-related issues in Ukraine and conducting of compliance investigation. Another sound client, KFC, enlisted the firm for advice on franchise agreements in Ukraine, particu-

Listed in alphabetical order

GOLAW Gramatskiy & Partners

Sayenko Kharenko * Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

larly on maintenance of retail prices. Viktoriya Fomenko, tax partner, and Serhiy Shershun, competition partner, are the key contacts. Odesa-based law firm Jurline is a legal counsel to distributors, suppliers, manufacturers, shopping and entertainment centers. The offering for the sector includes franchising, distribution, lease and sublease, advertising and compliance with legal requirements for consumer protection. Fontan Sky Shopping Center, Bastion are among the clients. Daria Minchenko is the main contact. Vdovychen & Partners entered the market with investment advisory and structuring supply chains for hypermarkets. In 2020 it supported greenfield investment in launching the childhood nutrition retail chain. Tax advisory is another important service. Oleg Vdovychen is the key contact.

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Who is Who

Tax and Transfer Pricing The stellar Ukrainian practice KM Partners has a full-circle tax offering, which handles comprehensive advisory and litigation, complex tax structuring, customs matters, transfer pricing and respective white-collar crime. Big multinationals and sound domestic taxpayers consistently choose the firm as a tax counsel. The dispute team successfully defended the world’s largest manufacturer of chocolate products in a dispute with the tax authority regarding negative value VAT and VAT refund; developed legal positions and grounding for the complaints of several clients to the European Court of Human Rights. The team accompanies a number of cases on the cancellation of tax notifications-decisions that were issued by the controlling authority in connection with the violation of the registration deadline for tax invoices. In a transactional highlight, the firm provided legal support to a Ukrainian IT consulting and software development company, on the sale of the company’s assets to an international group of IT companies; supported automotive corporation on elaboration of contractual schemes of interaction between a supplier of vehicles, dealers, and clients within a trade procedure, including tax and commercial risks of different scenarios of cooperation. The firm rendered advice to one of the leading manufacturers of packaging for tobacco products in Ukraine on the provision of a range of services for the development of a processing scheme for tolling raw tobacco on the territory of Ukraine. The firm also has an extensive practice in the field of transfer pricing regulation, including representing companies in court proceedings. Preeminent partner Alexander Minin is named as a luminary by the market. Alexander Shemiatkin is a prominent figure in the tax litigation sphere. The workflow on transfer pricing practice and customs matters is guided by Ivan Shynkarenko. Other key members of the team are partners Elena Bukuyeva and Inna Taptunova. EY Ukraine has one of the largest tax practices in the country, being hired by leading domestic and multinational companies, and the government, government bodies and business associations. The practice has a variety of engagements — international tax structuring, transaction support, tax dispute resolution, tax compliance, transfer pricing. Furthermore, EY is often referred for its significant tax policy efforts. The firm has unrivalled experience in tax support of PSA projects. For example, it provided tax and regulatory support of production sharing agreements for Vermilion Energy, Aspect Energy, DTEK Oil&Gas. The industry-wise client portfolio consists of market leaders from IT manufacturing, maritime services, oil and gas, telecommunications, media, FMCG and financial services. The transfer pricing practice team acted on preparation of transfer pricing documentation, the report on controlled transactions, assistance throughout transfer pricing audit procedures. In order to expand its network to western regions, in February 2020 EY opened a new office in Lviv. The sizeable team is led by partners — Olga Gorbanovskaya, Iryna Kalyta and Halyna Khomenko.

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Igor Chufarov heads the transfer pricing practice. Vladimir Kotenko is a stellar individual who guides the practice. Baker McKenzie is a highly-experienced legal counsel on sophisticated international tax planning for major corporations, including international and domestic VAT planning in relation to sales structures, transactional work, controversies and litigation. The Kyiv office often renders Ukrainian tax advice as part of sophisticated cross-border multijurisdictional restructuring projects, structuring private wealth, and commands additional capabilities in transfer pricing mandates. The firm continued advising Remington Seeds, one of the largest global seed producers, with respect to a strategic agreement with MAIS to purchase its seed plant and farming operations in Ukraine, including on related Ukrainian tax ramifications; and advises Glencore, a multinational commodity trading and mining company, on significant market expansion and related acquisition of Ukrainian assets. The office is a point of choice for many global multinationals seeking legal support on tax ramifications stemming from their operating models in Ukraine. Tax partner Hennadiy Voytsitskyi is among top recognized tax practitioners, mostly referred for his long-standing commitment to transactional tax planning. Roman Koren is another key member of the tax practice. DLA Piper Ukraine1 is a fully-fledged tax practice with strong capacities in advisory, transactional support, growing its presence in tax controversies, and possessing a very well-established offering in transfer pricing. The tax practice works alongside other practice teams on large-scale M&A and post-merger integrations and restructurings, tax advice on restructuring of business operations and assists with resolving double taxation issues. The Kyiv office’s transfer pricing practice is an integral part of the global transfer pricing team, advising clients like Alcatel Lucent, EPAM, Maersk, Omya, Sanofi, Studio Moderna. Tax partner Illya Sverdlov heads the team. Lyudmyla Dzhurylyuk leads transfer pricing projects. Housing one of the largest tax teams in the country, KPMG Law is very well placed to provide full-circle tax service, utilizing general advisory, tax planning and structuring, disputes and transfer pricing. The team defended the interests of ED&F Man, one of the largest suppliers of food, sugar, spices and coffee, in a dispute with the tax authority on an additional VAT charge; assists Viva Décor, Sintra Trading, Viva Décor Trading (part of the Sintra group of companies) in courts on a transfer pricing dispute and case regarding VAT. The interests of PRADA Ukraine were successfully protected in a tax dispute regarding “fictitious” business transactions. The tax team advised on the tax aspects of the financial model under a sample production sharing agree1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Who is Who

Tax and Transfer Pricing ment (PSA) for development of hydrocarbon deposits in Ukraine. Another area of recent focus included tax implications that could arise in connection with adoption of the new Anti-BEPS law. One of the most market referred tax practitioners, Larysa Antoshchuk, head of the tax controversy practice, handles representation in disputes, including transfer pricing disputes2. Another promising litigator is Nataliia Musiienko. The transfer pricing practice is considered to be the largest in the market, and welcomed a new head in Yaroslav Kotlyar3. In addition, the private client practice, as led by Oleksandr Boboshko, offers structuring of private assets. Oksana Olekhova, heads the tax advisory group, and Sergey Popov is head of tax and legal. Sayenko Kharenko, a member of Andersen Global, possesses a versatile tax practice, including transactional tax structuring, general corporate tax advisory and transfer pricing, tax litigation. Among the team’s dispute highlights is representing Reckitt Benckiser Household and Healthcare in a number of tax disputes related to the long-term and regular refusal of VAT refund to the tune of around USD 3.6 million; represents Samsung in a tax dispute regarding VAT assessments on transactions related to writing off of fixed assets and product samples. Moreover, the team’s dispute portfolio contains one of the first transfer pricing tax disputes in Ukraine related to application of transfer pricing methods. Most recently the team conducted vendor tax assistance to Bel Group on the divestment of a Ukrainian business, Bel Shostka Ukraine, as part of a global transaction. Among other instructions are post-BEPS international corporate and tax structuring matters, intergroup transaction planning, dividend payments. In addition, the firm has a standalone wealth management practice with subsequent tax expertise. The white-collar crime practice took in tax driven criminal proceedings. The firm customarily enjoys a strong following among multinational clients. For example, Cygnet Ukraine, Konica Minolta, Porsche Ukraine, Shell Ukraine, Syngenta, VFS Global, Philip Morris Ukraine, Unilever Ukraine, Agromino, Creatio Inc., OH Holding Limited, Orexim Group. Lead partner Svitlana Musienko is highly regarded for her strong expertise in international tax planning. Vitaliy Odzhykovskyy is noted for his prowess in tax litigation. Dmytro Korbut is experienced in transactional tax. AVELLUM comes recommended as a prominent legal counsel on international tax planning projects, transaction structuring, tax prudent succession planning, and also offers representation in sophisticated tax disputes. The tax practice works closely with capital markets corporate teams, covering tax matters of corporate and sovereign issuances of Eurobonds, corporate and M&A transactions, payment of dividends from Ukraine, tax issues of cross-border investments. The firm advised Uber Shuttle on all the tax aspects of operation of an innovative platform aimed at matching up customers together to share one high capacity vehicle in Ukraine. The team is regularly sought after for tax advisory on different matters connected with cross-border 2

In July 2021 she joined Asters.

In March 2021 Mykola Mishin and Volodymyr Chyzhykov left KPMG Ukraine and established A1 Consulting. Konstantin Karpushin became a CEO of Codebridge Technology, Inc.

CONSULTING

AUTHORITIES Vladimir Kotenko (EY Ukraine)

LEADING FIRMS 1. KM Partners

Alexander Minin (KM Partners)

2. EY Ukraine 3. Baker McKenzie 4. DLA Piper Ukraine*

Other notable PRACTITIONERS

5. KPMG Law 6. Sayenko Kharenko

Igor Davydenko (Dentons)

7. AVELLUM 8. Asters

Viktoriya Fomenko (INTEGRITES)

9. EUCON Legal Group

Valentyn Gvozdiy (GOLAW)

10. GOLAW

Other established PRACTICES

Listed in alphabetical order

Iryna Kalnytska (GOLAW) Listed in alphabetical order

AEQUO Avidbiz Dentons Gramatskiy & Partners Ilyashev & Partners INTEGRITES Legal House Group Redcliffe Partners

Iryna Kalyta (EY Ukraine) Pavlo Khodakovsky (Avidbiz) Roman Koren (Baker McKenzie) Denis Lysenko (AEQUO) Vasyl Mishchenko (AEQUO)

Vdovychen & Partners Oksana Olekhova (KPMG Law)

LEADING INDIVIDUALS 1. Svitlana Musienko (Sayenko Kharenko) 2. Hennadiy Voytsitskyi (Baker McKenzie) 3. Illya Sverdlov (DLA Piper Ukraine*) 4. Yaroslav Romanchuk (EUCON Legal Group) 5. Vadim Medvedev (AVELLUM)

Sergey Popov (KPMG Law) Natalia Radchenko (Legal House Group) Alexander Shemiatkin (KM Partners) Olga Solovyova (Avidbiz) Constantin Solyar (Asters)

* Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Who is Who contracts and tax implications and risks of transfer of IP rights, tax aspects of ownership structures and structuring of the operational activities of clients. The team continues to represent solid domestic clients in tax disputes challenging tax assessments, and also advises on the strategy for administrative dispute with customs authorities. The firm further expands its portfolio of transfer pricing projects. Selected client names of the tax team include J.P. Morgan, Citigroup Global Markets Limited, Uber, Jacobs Douwe Egberts Ukraine, Caterpillar Financial Ukraine. Tax partner Vadim Medvedev is known for experience in handling international tax planning mandates and work for private clients. The full-service law firm Asters possesses a stellar international tax structuring offering and presence in sophisticated disputes with an unprecedented volume of claims. The tax practice team traditionally works on the firm’s M&A and corporate transactions, debt financing, cross-border contracts. The firm boasts an expansive roster of multinational and domestic clients who are advised on tax implications arising out of restructuring their businesses in Ukraine, implementation of stock option plans and distribution of dividends. The firm has a well-established following of high net worth individuals seeking advice on Ukrainian tax residency, tax disclosure and compliance abroad, anticipated launch of automatic information exchange, impact of newlyadopted CFC legislation. Among the litigation highlights of the team is successful defense of the Globus Shopping Center in a dispute with the tax authority over VAT and corporate profit tax adjustments totaling USD 10 million, including penalties. The practice expertise expands to oil and gas, pharmaceuticals, mobile telecom, e-sports, gambling, public contracts and infrastructure projects. The clients, among other companies, are ED&F Man (Ukrainian Sugar Company), IFC, Privatbank, Molson Coors, Toyota Ukraine, Ukrzaliznytsia. Constantin Solyar is lead partner. Tax litigation focused counsel Oleksandr Maydanyk left the firm. EUCON Legal Group offers a full-circle tax offering, encompassing tax advisory, tax litigation and transfer pricing. The group is known for a strong following among Polish clients and operates throughout two offices, in Kyiv and Warsaw. A significant workload is accumulated by Ukrainian business seeking Polish tax law advice. This past year the firm conducted tax structuring and planning for the launch of the new plant of client Agaris Myco Ukraine; advised Elektrum Polska, LLC on the tax consequences of financing solar power plant construction in Ukraine. Another recognized strength of the group is its Kyiv-based litigation practice, which represents clients in challenging the results of tax audits, additional charges in corporate profit tax, VAT, VAT refund, category of risky enterprises. The recent client portfolio consists of agrarian, energy, engineering, infrastructure, IT, transport companies. The standalone transfer pricing group is the firm’s calling card, which is enforced by its membership in TPA Global. The dedicated practitioners assist with transfer pricing documentation and reports, but also develop tax policies and structuring of intra-group transactions in Ukraine and abroad. The firm’s client roster includes Ukrrichflot PJSC, Milkiland, Zepter International Ukraine, Dreyfus Commodities Ukraine Ltd, Ukrtrade Company, Fresh Food Logistics, Plastics Ukraine, Pruszynski Ukraine. The firm’s formidable practice is led by a number of prominent practitioners. Volodymyr Bevza is consistently active in the tax litigation arena. Larysa Vrublevska heads the transfer pricing group. Andrii Romanchuk, head of the Warsaw office, advises Ukrainian and CEE companies on the tax aspects of their business in Poland. Yaroslav Romanchuk is confirmed as one of the top recognized tax professionals in Ukraine, splitting his time between strategic guidance, client development and strong social activity in the business community. GOLAW is known for its strong dedication to tax law, especially keen to represent clients in complex disputes with the tax authorities. The firm provided full legal support to Evyap Trading Ukraine in challenging a tax notice decision as to additional tax obligations due to the allegedly free use of a trademark and provision of advertising services for a non-resident on a free of charge basis. The firm’s tax advisory practice advises on the tax consequences of real estate transactions, restructuring of financial liabilities, taxation of cross-border commercial contracts. Clients include Enkom a.s., Export Guarantee and Insurance Corporation (EGAP), Mercer, TIU Canada, Aviareps, GAP, Marks & Spencer (Fiba Retail Group), Evyap Trading, Zara (Inditex Group), Himagro, Red Bull, Oriflame, Network21, Sherp, Kniazha Vienna Insurance Group, Ukrcreditfinance. Iryna Kalnytska is known for her proficient performance in tax disputes. Managing partner Valentyn Gvozdiy is a renowned tax practitioner with a long-term practice commitment. Ukrainian law firm AEQUO commands a full-service tax practice, ranging from transactional tax projects, international tax planning and

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restructuring, to sophisticated controversies and litigation. Sectorwise the team is active across IT, retail, banking, financial services and fintech, agriculture, consumer goods, metallurgy, mining and energy. In addition, the standalone private clients’ practice boasts a variety of personal tax issues. The firm advised Allrise on the tax structuring of its investments in distressed loan portfolios and real estate in Ukraine. Another notable highlight is acting for Raiffeisen Bank International in a tax planning project for a new digital bank in Ukraine. The firm boosted its tax disputes portfolio, and successfully represented the Ukrainian subsidiary of one of the world’s largest steel companies, Arcelor Mittal Kryvyi Rih, in a dispute with Ukrainian tax authorities challenging corporate tax liabilities in the Supreme Court of Ukraine. The firm currently acts for ProCredit Bank in a tax dispute on application of penalties for violation of terms for registration of VAT invoices. Vasyl Mishchenko is focused on tax structuring of transactions and tax risk management. Myroslava Savchuk is vividly active in tax litigation matters. Denis Lysenko, managing partner, supervises the practice and is actively involved in multijurisdictional group restructurings and disputes focusing on cross-border taxation. Dedicated boutique firm Avidbiz with offices in Kyiv, Tallinn, Warsaw, Vienna and Munich, offers tax planning and business structuring of international holding groups, corporate finance, M&A, supporting international transactions, investments in EU, AML, banking and litigation in resolving tax disputes. In a recent highlight the firm assisted Dneprochem LLC with tax consultation and restructuring in accordance with new legislation in Ukraine; advised BKS Finance Baltic OÜ, an Estonian company engaged in wholesale sale of equipment, on VAT taxation, VAT returns, reverse charge mechanism in the EU for EU supply, dividends distribution to its Ukrainian shareholder; rendered legal support to Private Join Stock Company Ukrenergomontazh with regard to purchasing the equipment of a radiation control system for construction of a radiation monitoring system at SSE Chornobyl NPP. The firm is also highly active in handling tax issues pertaining to debt restructuring, goods supply, tax planning for acquiring companies, investing in IT start-ups. Renowned tax practitioner Pavlo Khodakovsky (previously a partner at Arzinger and Deputy Minister of Finance of Ukraine) joined the firm in March 2020. Olga Solovyova is managing partner. Dentons is a port of choice for many international clients seeking advice on local and cross-border tax matters, including tax structuring, implications of M&A deals and investment activity. The Kyiv office consistently assists with establishing efficient tax and customs structures for delivery and supply into Ukraine. The firm possesses standout expertise in the energy sector, advising prominent market players on tax law matters in connection with acquisitions and implementation of their energy projects in Ukraine. Tax issues pertaining to investment structures in private banking is another notable area of expertise. Igor Davydenko is lead partner and practice head. Valeria Tarasenko is another key tax practitioner in Kyiv. Gramatskiy & Partners is keen to render tax advisory as an essential part of investment projects and cross-border trade, commercial activity, and handles representation during tax inspection and tax disputes. The firm is highly preferred by real estate companies for tax structuring of their businesses in the field of construction and development. The team acted for LLC New Complex, LLC Greidis in the course of tax structuring of the sale of non-residential (commercial) real estate through the introduction of real estate objects into the authorized capital of LLC and alienation of shares in the authorized capital as an investment asset. The dispute team supported a court case on appealing against a tax notice on additional VAT and income tax charges on behalf of Parklane LLC; cancellation of tax notifications-decisions on additional accrual of tax liabilities acting for Caspiy Group LLC. In the period under research the firm was also enlisted for advising the client on transfer pricing regulations. The firm’s tax practice is led by Vitalii Tymchuk. Ilyashev & Partners commands recognized strength in tax litigation, and rapidly extended its corporate support tax practice and private client advisory. Coupled with its network of offices, the firm is enlisted for advising on tax aspects requiring consideration within a framework of international restructuring. In a recent highlight the firm maintained an extensive dispute portfolio, challenging tax assessment notices, restoration of the right to VAT credit and VAT refund, land duties and appeals against penalties. Among recent cases was representation of the Ukrrichflot shipping company in appealing against additional charges of land duty in the amount of USD 2 million; State Corporation Ukrspetsexport in appealing against tax notices; Poltava

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Who is Who

Tax and Transfer Pricing Petroleum Company in a series of disputes, in particular, rent underpayment. It is noteworthy that the firm advised the Ukrainian Center for European Policy on the preparation of legal analysis of the impact of certain aspects of the implementation of the Association Agreement signed between Ukraine and the EU on the development of the e-commerce market and electronic identification, including fiscal policy features. The tax practice team includes Ivan Maryniuk, Dmytro Lazebnyi and Nina Bets in Kyiv, Ruslan Mannapov (Moscow office), Vitali Galitskihh (Tallinn office). Roman Marchenko is the responsible partner. INTEGRITES continues to demonstrate extensive growth in tax advisory mandates, and high-scale tax disputes. The team attracts a high-profile clientele, enlisting it for handling tax efficient structuring for investment projects, M&A, corporate restructuring and reorganization of business units, payment of dividends, establishment of representative offices in Ukraine, BEPS legislation, new risks related to application of controlled foreign companies (CFC) rules in Ukraine. The firm covers tax advice of consistent clients like NBT AS, Scatec Solar, EuroCape, Sibelco Group in their business ventures in Ukraine. The firm has a strong tax disputes profile, including VAT refund and accrued VAT credit, excise tax, payment for subsoil use and land tax. The team demonstrated expertise in transfer pricing disputes acting for Dunapack, Ukraine’s leading producer of corrugated packaging, in a dispute regarding the application of transfer pricing methods. The firm’s client portfolio was enriched by sound industrial heavyweights. Viktoriya Fomenko had a strong performance on both advisory and controversy fronts. Legal House Group possesses a wideranging tax practice encompassing tax structuring of business models and the operational activities of its clients, conducts tax audits of business structures, and supports tax audits and challenges their results. Most recently the team handled the structuring of the business model of B-Pro company; due diligence of business processes of GLOVOAPP Ukraine LLC, and acted for Wings Group (TM Kryla) on structuring the attraction of investment. Other clients include Biznes-Konstruktor, GMS, Pragmatic Play, Salvi, Khlebodar TM, Fortkom LLC, Sanmax TM. Natalia Radchenko is lead partner. Redcliffe Partners is increasingly focused on general tax advisory, administration and tax compliance, transactional tax and tax disputes. The tax team works closely with the firm’s corporate and M&A practice, and most recently provided tax support with the structuring of the acquisition of leading FinTech company YayPay by Quadient. The practice has standout expertise in the taxation of the oil and gas industry and PSA treatment. The firm also provided pro bono support in relation to complex tax matters to Parliamentary Committees responsible for taxation and oil and gas policies. Recent clients encompass Allseeds Group, CMA CGM Ukraine, Representative Office of EIB, and others. The practice is led by the firm’s counsel Oleksandr Markov with key contributions from Kateryna Kuzmenko. Vdovychen & Partners is well-placed to represent clients in tax disputes, often

LITIGATION

LEADING FIRMS

Other notable PRACTITIONERS

Listed in alphabetical order

Vasyl Andrusyak (MORIS GROUP)

1. KM Partners 2. Sayenko Kharenko

Volodymyr Bevza (EUCON Legal Group)

3. KPMG Law

Serhiy Chuyev (EQUITY)

4. EUCON Legal Group 5. GOLAW

Tatiana Daniltseva (ADER HABER)

6. AVELLUM 7. MORIS GROUP

Oleg Dobrovolskyi (ID Legal Group)

8. Lexwell & Partners

Viktoriya Fomenko (INTEGRITES)

9. AEQUO 10. Sokolovskyi & Partners

Valentyn Gvozdiy (GOLAW)

Other established PRACTICES

Listed in alphabetical order

ADER HABER Amber Law Company Asters EQUITY Gramatskiy & Partners

Natalia Kurilenko (Sokolovskyi & Partners) Vadim Medvedev (AVELLUM) Svitlana Musienko (Sayenko Kharenko) Andriy Reun (LCF Law Group)

ID Legal Group Ilyashev & Partners INTEGRITES VB PARTNERS Vdovychen & Partners

LEADING INDIVIDUALS 1. Vitaliy Odzhykovskyy (Sayenko Kharenko)

Myroslava Savchuk (AEQUO) Evgeniy Shkrebets (Shkrebets & Partners) Vladyslav Sokolovskyi (Sokolovskyi & Partners) Volodymyr Vashchenko (VB PARTNERS) Oleg Vdovychen (Vdovychen & Partners)

2. Alexander Shemiatkin (KM Partners) 3. Larysa Antoshchuk (Asters) 4. Yaroslav Romanchuk (EUCON Legal Group) 5. Iryna Kalnytska (GOLAW)

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REGIONAL COUNSEL Jurline Krolevetskyi & Partners Legrant Shkrebets & Partners

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Who is Who ccompanying criminal proceedings in tax evasion matters and ada visory on tax operations and business structuring. The firm is particularly experienced in appealing against additional tax charges on corporate profit tax, VAT accruals and land duties. In 2020 the firm increased its advisory workload by reviewing business models from tax perspectives, conversion of debt into equity, tax consequences of real estate sale, debt assignment. Oleg Vdovychen and Andrii Molchanov are responsible partners. MORIS GROUP is retained to handle representation of energy, real estate and construction, alcohol beverages and drinks producers in tax disputes. In particular, the firm represented brewery Radomyshl PJSC in a tax dispute over UAH 41.9 million on fulfillment of storage obligations by this alcoholic beverage manufacturer, collection of tax debt, cancellation of penalties for the unlawful alienation of property under a tax lien and other disputes. Zakarpatnerudprom PJSC is supported in cancellation of tax charges — an additional charge of corporate income tax on a loan from a non-resident, VAT and tax on immovable property. The group’s recent caseload includes appealing against the tax charges of excise tax and fines on violation of terms of registration of VAT bills. Vasyl Andrusyak is the practice head, referred to as an “energetic” tax litigator. Being mostly known as a litigation-centered tax practice, domestic firm Lexwell & Partners continues its representation of big industrial companies in appealing against tax charges in especially large amounts, and also gradually extends its advisory offering. The firm represents ArcelorMittal Kryvyi Rih in an administrative court and court of appeal on tax charges, with the total amount exceeding USD 55 million that was moved to the Supreme Court. The firm also acts as a tax advisor to CRH in the course of acquisition of a controlling stake in Mykolaivcement from the Lafarge Group; advised Toyota Ukraine on tax accounting that arose after introduction of an electronic docflow in operations with authorized dealers of Toyota/Lexus in Ukraine. Andriy Kolupaev and Igor Nagai are the main figures. Seasoned domestic firm Sokolovskyi & Partners is regularly enlisted to handle dispute work. The lion’s share of its caseload relate to appeal against decisions of tax and customs authorities, inter alia, calculation of customs value, changes in classification of goods,

penalties and fines, reality of transactions, additional VAT and corporate profit tax, land tax. Among public highlights is representation of Geozem Makariv, LLC in a UAH 13 million VAT refund procedure; Recont Invest, a producer of equipment for the energy power sector in appealing against non-registration of VAT invoices caused by allegedly risky operations. The firm has a focused criminal defense practice specializing in tax evasion matters. The sizeable team has three partners on board. Natalia Kurilenko and Vladyslav Sokolovskyi act in disputes and tax advisory. Tetiana Lysovets guides the criminal law practice. Possessing an advisory and dispute tax offering, ADER HABER is acclaimed for its strong expertise in controversial cases. The team successfully represented PJSC Kyivgas, the company responsible for distribution and transportation of gas in the city of Kyiv, and Fudmerezha (ТМ Velyka Kyshenya) in appealing against an additional tax charge of VAT and corporate profit tax; continued handling long-lasting representation of Yandex.Ukraine LLC in tax litigation challenging penalties and accrual of a fine for non-payment of the single social contribution due to imposed sanctions. Another noteworthy recent case is acting for Investcapital LLC, a member of Dragon Capital, in defending its right to a tax credit. A significant share of tax disputes is conducted for agricultural companies and exporters. The practice is co-headed by Tatiana Daniltseva, partner, and Stanislav Karpov, counsel. AMBER Law Company demonstrates a consistent focus on tax litigation, and is preferred by a range of domestic clients, especially from the tobacco industry. The firm has a strong track record in VATrelated cases, particularly in appealing against blocking of registration of tax notes, accruing additional amounts of taxes and imposing financial penalties, seizures of so-called VAT limits, VAT risks compliance, reinstatement of the status of VAT taxpayer. The firm also acts in litigation regarding tax debt collection and reimbursement of signed off payments in the VAT electronic administration system. The practice head is Veronika Zarubytska. As a flagship domestic litigation firm, EQUITY is consistently chosen by big industrial enterprises in their tax disputes. The firm handles representation of the Azovmash group of companies in a tax Advertisement

Oleg Dobrovolskyi Partner, Attorney, ID Legal Group

LANGUAGES

Ukrainian, Russian

MEMBERSHIP

ADDRESS: Tel.: +380 67 719 1177 E-mail: info@id-legalgroup.com Web-site: id-legalgroup.com

EDUCATION

Taras Shevchenko National University of Kyiv

PRACTICE AREAS

Tax law, finance law, economic law, criminal law and business protection, client protection during relations with control bodies and in courts, legal support for activities of business entities

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• Member of the Board of Ukrainian Attorneys Association (UAA) • Chairman of UAA Committee on Tax Law • Chairman of the Public Council under the State Tax Service of Ukraine • Member of the Public Council under the State Tax Service of Ukraine

DEGREE

Ph. D. in Law

PROFESSIONAL EXPERIENCE

Oleg Dobrovolskyi is a professional attorney with more than 19 years of successful professional experience. Partner of ID Legal Group since 2016. Oleg Dobrovolskyi received grounded professional legal and economical experience while specializing in the area of tax law and business protection as well as client protection in disputes with the State Fiscal Service of Ukraine and supervisory bodies. He acts as a consultant to foreign and domestic companies on different aspects of do-

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ing business in Ukraine. Cases with his participation are always successful and reliable! Before becoming a partner in ID Legal Group Oleg Dobrovolskyi received professional experience in the area of tax law by occupying management posts in fiscal service bodies. The practical knowledge and skills acquired became the foundation for creating a leading law firm in the field of tax law by the name of ID Legal Group. He has a notable number of publications in nationwide and professional editions. ID Legal Group partner Oleg Dobrovolskyi is recognized as one of the best lawyers in the field of tax law by Rating Client`s Choice. TOP 100 Best Lawyers of Ukraine — 2020 The team of ID Legal Group — partners and 30 qualified and experienced lawyers, attorneys, auditors, accountants and tax consultants that take an integrated approach to unconventional situations related to doing and protecting business. The credo of ID Legal Group is: “Throughout the legal field, knowing the sequence of actions of supervisory bodies, the team at ID Legal Group will ensure the security of your business. We foresee potential risks and the behavior of fiscal bodies so that there is no such thing as lost cases for us.”

Who is Who

Tax and Transfer Pricing dispute regarding the accrual of SDRs and land tax, VAT and the registration of a VAT tax credit; Arterium Corporation, a leading Ukrainian pharmaceutical company, in tax disputes. The team also extends its advice to personal taxation and application of double taxation treaties, commercial issues. Serhiy Chuyev is in charge of the tax litigation workload. ID Legal Group is a tax boutique with established following of domestic clients, rendering support in terms of tax inspections, tax disputes and additionally assists with transfer pricing. Carrying out a pre-inspection audit is one of the firm’s standout services. This past year clients’ requests also concerned exclusion from the category of risky enterprises, assessment of commercial contracts from the tax perspective. The separate transfer pricing group offers full-circle assistance, starting with conducting controlled transactions, documentation risk analysis and preventing controversies. The firm’s offering is supported by criminal law practice with the focus on tax matters. Oleg Dobrovolskyi is focused on tax controversies. Anna Ignatenko took in the economic side of provided services. The tax practice of VB PARTNERS has a focus on high-value tax disputes and works in synergy with its white-collar crime practice, handling representation in criminal proceedings with regard to tax evasion. The notable feature of the tax team is its proficient performance on VAT recovery, and established expertise in additional charges of tax liabilities. The firm represented Svitland Development, a leading development company, appealing against the additional accrual of tax liabilities in the amount of USD 40 million in the interests of the owner of one of the largest office centers in Ukraine. The firm currently acts for an industrial enterprise in the course of administrative and judicial appeal of audit results, where a VAT refund and negative value of VAT were unreasonably reduced. Vladimir Vashchenko confirms his consistent presence in dispute work. Denys Shkarovsky is present in criminal proceedings involving tax evasion.

TRANSFER PRICING

Established PRACTICES

Listed in alphabetical order

AVELLUM Baker McKenzie DLA Piper Ukraine* EUCON Legal Group EY Ukraine ID Legal Group KM Partners KPMG Ukraine

СMS is represented in Ukraine through two offices. CMS Cameron McKenna Nabarro Olswang advises on the tax aspects of corporate reorganizations and M&A, cross-border trade, tax issues of IP rights transfer, customs clearance and regime. The office has an impressive client portfolio of energy clients, enlisting its advice on tax and customs matters arising in the course of their business operations in Ukraine. Other clients include sound names from IT, technology and media, retail, pharmaceuticals, food industries. Ihor Olekhov took over the role of the lead partner. Olga Shenk acts on tax litigations challenging tax notifications-decisions. Viktoriia Stavchuk is an important tax practitioner. CMS Reich-Rohrwig Hainz advises on M&A related and post-acquisition tax matters, taxation of payments, IP related tax implications, etc. The office advised Quadient Inc. on acquisition of YayPay Inc., an IT start-up in Ukraine, including tax structuring of the transaction and analysis of the tax risks of creating a permanent establishment in Ukraine for a foreign target company. Following completion of a complex multijurisdictional transaction on acquisition by MANE Group of the distributor chain, the office continues to provide regular support on tax issues to its subsidiary in Ukraine. Anna Pogrebna is lead partner. Domestic firm ESQUIRES represents domestic clients in tax disputes, in particular, additional VAT charge and application of penalties, challenging penalties for violating the deadlines for registration of tax invoices, appeal against the refusal to write off debts. Viktoria Kovalchuk is lead partner. Eterna Law advises on the tax aspects of corporate matters, such as structuring of crossborder ownership and the tax consequences of distributing dividends; M&A deals, royalties. The firm has a strong following of private clients seeking advice on tax planning, personal income taxation with regard to cross-border activities, succession planning, domiciliation. Among public clients are Khortytsa, the Ukrainian Tennis Federation and Alfa Bank. Oksana Kneychuk is a partner of international tax planning and corporate structuring practice. Oleh Beketov acts as lead partner in tax disputes. KPD Consulting is sought after for contesting the decisions and resolutions of tax authorities. The team recently represented Diebold Nixdorf in a tax dispute. On the advisory front the tax team advised Kiev Real Estate Recovery Fund K.F. Limited on all the tax aspects of attracting and managing USD 4 million into a Ukrainian real estate investment fund, with detailed

COUNSELINK ID LEGAL GROUP

5A, H. Skovorody Street, Kyiv, 04070, Ukraine Tel.: +380 44 482 5780 +380 44 482 5785 +380 67 719 1177 +380 66 719 1177 E-mail: info@id-legalgroup.com Web-site: id-legalgroup.com

Notable PRACTITIONERS

Listed in alphabetical order

Igor Chufarov (EY Ukraine) Volodymyr Chyzhykov (A1 Consulting) Yaroslav Kotlyar (KPMG Ukraine) Mykola Mishin (A1 Consulting) Yaroslav Romanchuk (EUCON Legal Group) Ivan Shynkarenko (KM Partners) Illya Sverdlov (DLA Piper Ukraine*) Hennadiy Voytsitskyi (Baker McKenzie) Larysa Vrublevska (EUCON Legal Group)

VDOVYCHEN & PARTNERS

Lagoda Business Center, 21 Poliova Street, Kyiv, 03056, Ukraine Tel.: +380 44 586 7777 +380 98 586 7777 E-mail: office@ov-partners-com Web-site: www.ov-partners.com

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* Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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Who is Who advice on different tax regimes and implications from the acquisition of real estate assets, renting them out and their further sale with profit. The firm advised Cromos Pharma Ukraine in a tax planning matter and tax aspects for implementation of commission agreements in their business activity. Vitaliy Patsyuk is lead partner. Legal Alliance Company is sought after by pharmaceutical and healthcare companies for tax advice on structuring and running business activities in Ukraine, distribution of pharmaceuticals, task risks. It is noteworthy that the firm rendered advice on VAT consequences and correct VAT administration with regard to the import and sale of the favorable group of goods needed to fight the COVID-19 pandemic. Johnson & Johnson, Interdez LLC, JADRAN-GALENSKI LABORATORIJ d.d are among its clients. Oleksii Bezhevets is a partner. MK Legal Service is followed by clients from HoReCa, telecommunications and IT, trade sectors, and provides general tax support and representation in tax disputes. The firm’s public clients include Gastrofamily — Dmitry Borisov’s family of restaurants, a large restaurant chain, which unites more than 30 diverse restaurants, GigaGroup, a group of telecommunications and technology companies, a startup called Trustee Wallet, Medical Data Management, Mirta Ukraine. Maksym Kurochko, managing partner, is supported by Volodymyr Salnikov and Yuriy Kocherzhuk. Given a strong following from international companies with businesses in Ukraine, the tax practice at Nobles is focused on advising and supporting investments, commercial transaction structuring, currency control compliance, debt assignment and settlement, profit/investment repatriation, import and export relations, sophisticated cross-border payments. This past year the team advised Ivoclar Vivadent AG, one of the world’s leading and most innovative dental companies regarding taxation of its Ukrainian representative office; H&M Hennes & Mauritz on the corporate and tax aspects of territorial expansion in Ukraine. The tax aspects of intra-group restructurings are another area of focus. Alexander Weigelt and Denis Vergeles are the main contacts. LCF Law Group expanded the scope of its tax practice through amalgamation with Evris Law Firm in March 2020. It strengthened the firm’s tax litigation capabilities, added high-value contentious tax mandates, tax structuring assignments, cross-border advisory, and transfer pricing services. The dispute portfolio includes appeals against additional tax charges and VAT refund disputes. Advice on tax effective structuring of business transactions, including CFC rules, and preparation of transfer pricing documentation is another area of incoming requests. Industry specific expertise extends to agribusiness, retail, energy, gambling, real estate. Andriy Reun is a tax partner. Olena Palamarova is another key practitioner. Peterka & Partners, a Czech law firm with a network of CEE offices, is a point of choice for European companies seeking tax advisory with regard to their entering the market, expansion, contracts and related activity in Ukraine, as well as mitigation of tax risks. In a recent

highlight the office rendered tax advisory to AppKnit, a top mobile app development services firm with regard to tax aspects related to the contemplated model of work in Ukraine, and to the Ukrainian subsidiary of PEKM Kabeltechnik, a leading global supplier of commercial vehicle component systems regarding the tax aspects of launching additional benefits services for their employees. The office showcased a standalone tax disputes practice, and represented clients in challenging the results of tax audits, disputes regarding VAT refunds and additional accrual of VAT. The industrial coverage of the tax practice encompasses engineering, machinery, transportation, pharmaceuticals. Galyna Melnyk heads the practice. Stron Legal Services is focused on advising e-commerce and fintech projects providing clients with international tax structuring. In 2020 the firm opened its Cyprus office. Most recently the firm handled the tax structuring of an e-commerce business that sells access to e-books and videos; an online casino in Europe; conducted tax due diligence for a fintech project and selected appropriate jurisdictions in terms of tax burden for registering legal entities, and also performed international structuring of the holding and groups of companies. Oleg Derlyuk, managing partner, is the main contact. The Kyiv office of Wolf Theiss is preferred by foreign businesses entering the Ukrainian market and seeking tax structuring assistance, as well as permanent tax advice of their investment and operational activity, corporate reorganizations on the ground. The team advised Federal-Mogul Motorparts on its residency status for applying a double taxation treaty, taxation of commercial and non-commercial representative offices and limited liability companies, VAT recovery and permanent establishment risks. The firm has increased its following of IT clients, in particular, it recently advised an IT product company headquartered in the US on various tax matters in connection with relocation of its IT business from Belarus to Ukraine; advised Nvidia Corporation, a leading technology company manufacturing graphics hardware, on various tax matters related to the operation of its IT business in Ukraine. The practice head is Mykhailo Razuvaiev. The full-service law firm Arzinger* is a notable counsel in tax disputes and structuring of corporate deals. Kateryna Gupalo and Dmytro Trut are observed in tax litigation and criminal proceedings on tax evasion.4 Tetyana Berezhna from Vasil Kisil & Partners*, is admired by peers for her presentational skills and proficiency in tax disputes.

The firms marked with * have not submitted information for the current research.

REGIONAL COUNSEL Jurline, a domestic law firm based in Odesa, advises on the tax implications of business activity and transactions, and represents taxpayers in their disputes with Ukrainian tax and customs authorities. After a series of wins in courts of the first and appellate instances, the firm continued representation of TIS-Grain Ltd in the port of Yuzhniy in the Supreme Court appealing against UAH 46.8 million tax liabilities for VAT payment. In 2020 the firm handled litigation on complaint against the actions of the State Fiscal Service of Odesa Region in deprivation of the status of a single tax payer; and represented a pharmaceutical enterprise for challenging additional charges of customs duties. Tax advice is rendered to such clients as TIS-Mindobryva, Illichivsk Grain Terminal, TTV-Dom. Vitaliy Cherkes and Maxim Kapelist act as lead partners. Odesa-based law firm Legrant has a distinctive focus on tax disputes, acting for traders, exporters and stevedore companies. The litigation related to additional VAT and corporate profit tax liabilities, refusal to register tax invoices, appealing against the results of tax a udit concluding transactions with counterparties as fiction. Managing partner Tatiana Titarenko is the main contact.

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Kharkiv-based Krolevetskyi & Partners has strong positions in the region, advising on the tax aspects of property alienation and disposal of corporate rights, assisting within tax inspections and guiding clients in disputes. The firm represented the State Enterprise Kharkiv Plant of Armored Tanks in litigation appealing against the result of tax audit and additional charges and penalties, and challenged the application of fines and sanctions for untimely registration of tax invoices. The firm covered tax aspects of corporate reorganization and advised on personal taxation in the course of income declaration. Ruslana Pyvovarova is the practice head. The Kharkiv-based law firm Shkrebets & Partners is widely recognized for its strong track record of tax disputes. The significant taxpayers of the region, such as industrial, power generating and municipal enterprises, prefer the firm as its legal counsel in tax litigation on challenging VAT, corporate profit tax and other liabilities, penalties and additional accruals, tax debt recovery, blocking of tax invoices. Recent representations were handled for PJSC Kharkiv CHP-5 and municipal enterprise Zhylkomservis. Evgeniy Shkrebets and Yuriy Artukh are responsible partners.

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Who is Who

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Who is Who

Transport: Aviation, Maritime & Shipping Ante Law Firm retains the most diverse practice and high caliber aviation clients. The firm is the primary choice for major airlines in all their activities in Ukraine, including litigation, taxation, competition, labor, regulatory, etc. The scope of aviation law advice also covers cargo, handling and warehouse services operations. Clients encompass Qatar Airways, Emirates, British Airways, Alitalia, Lufthansa group, Air France-KLM, Bees Airline and others. This past year Ante advised head offices of air carriers regarding regulations introduced due to the pandemic; acted for a representative office of Qatar Airways in a court case against the State Aviation Service of Ukraine regarding the applicability of Ukrainian aviation rules to foreign air carriers, which is a precedent case.Ticket sales agents and tour operators also form a strong niche of the practice.In addition, the firm supported airlines in their restructuring processes, and demonstrated huge progress in aviation finance. For example, the team advised Bees Airline, a new Ukrainian air carrier, on the lease of planes and Lviv Airport on various regulatory issues. Advising start-ups in aviation and NDC aggregators is a new practice domain. Andriy Guck is the leading aviation lawyer in Ukraine, with an exceptionally multifaceted practice. Over the past two years the team’s members have become vivid experts in specific fields of aviation, inter alia, Maria Tereshchenko was involved in passenger claims and court cases, and Anna Iliashenko advised on drones and regulatory matters, including aircrafts registration and permits. ECOVIS Bondar & Bondar is an aviation industry focused firm. The firm is a long-standing legal counsel to Ukrainian International Airlines (UIA), the biggest domestic air carrier. The firm represents UIA in connection with resolving the consequences of the Boeing 737-800 accident near Tehran, Iran in January 2020, advising on negotiating with the government authorities of Iran, Ukraine, insurers, etc. regarding the provision of compensation to relatives of victims in Ukraine, representing the client’s interests in investigations, criminal/civil proceedings in Ukraine. The firm currently represents UIA in a number of litigation cases against the Ukrainian State Air Traffic Services Enterprise (UKSATSE) with regard to the UKSATSE’s abuse of its monopoly position on the market by establishing an overrate for air navigation services, and on restructuring UIA’s debt owed to UKSATSE. Other a reas of recent focus encompassed labor law, corporate and restructuring issues related to significant staff reductions due to the

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crisis in aviation industry caused by the COVID-19 lockdown and border closure. Oleg Bondar is known as an UIA lawyer for many years. Oleksandr Povar is another key executive. Ilyashev & Partners has a strong reputation in aviation and aerospace disputes, as well as competition, aircraft safety and product liability concerns. The firm continues to represent long-lasting client State Enterprise Antonov, a Ukrainian aircraft manufacturing and service company, in a dispute regarding a Ilyushin USD 80 million contract with the NATO Support and Procurement Agency. The firm recently advised Black Swift Leasing 32681 DAC on compliance with Ukrainian aviation law of an Aircraft Engine Lease Agreement project concluded by UIA. The firm has expertise in the defense field, and represents the interests of State Enterprise Ukrspetsexport in an arbitration case against the Ministry of Defense of Northern Macedonia on debt recovery for technical support of helicopters, equipment supply and professional training. The aviation practice team is headed by Roman Marchenko. The firm has its own office in Odesa, and spent the year of 2020 representing shipowners and P&I clubs on various shipping disputes related to cargo claims, crew claims and port claims. Ukrrichflot is consistently represented in a variety of disputes, particularly in a dispute with the Ukrainian Sea Ports Authority and captain of the Mykolaiv Sea Port regarding recognition of refusing entry into cargo handling as illegal and material damage recovery; dispute on damage recovery due paid channel duty; recovery of paid vessel duty. The firm advised the shipowner of m/v New Challenge — Challenge Shipping Ltd and British Marine (P&I club) in the course of an incident in Mykolaiv sea port, when the firm established itself as the first practice in Ukraine to ensure acceptance by the state ecological inspectorate of the Letter of Guarantee and Undertaking issued by owners P&I club as security. Sergey Nedelko, Odesa office head, is at the forefront of the maritime practice. Mykola Skvortsov joined the team this past year. Ukrainian law firm Asters has an impressive bench of aviation clients, including Ukrainian and international cargo and passenger airlines, airports, aviation insurers and other aviation industry enterprises. The firm is consistently retained by air carriers for advice on corporate, competition and commercial law, employment, operations in Ukraine. The firm handles ongoing representation of Silk Way

WWW.UKRAINIANLAWFIRMS.COM

Who is Who

Transport: Aviation, Maritime & Shipping irlines, a cargo airline with its head office A and flight operations at Heydar Aliyev International Airport in Baku (Azerbaijan) on labor, insurance and social security law and with respect to disputes over reimbursement of damages to relatives of a deceased Ukrainian crew member, reimbursement of damages to injured crewmembers, and on disputes over plane damages.The firm has unique expertise in aviation insurance. For example, Asters advised Hansa Reinsurance Brokers AG, an aircraft reinsurance company, on Ukrainian aviation and reimbursement of damages law and practice with respect to disputes over the reimbursement of damages caused by an aircraft crash that was successfully settled within mediation proceedings. The multidisciplinary practice is led by three partners — Gleb Bialyi, Oleksiy Demyanenko and Vadym Samoilenko. The Kyiv office of Kinstellar acted on regulatory assignments in the aviation sector, competition and litigation. In particular, the firm provided antitrust legal advice to Pegasus Hava Taşımacılığı A.Ş. (Turkey) in relation to its discount campaigns, compliance with general requirements for avoiding unfair competition and false advertising in Ukraine. The firm is representing Wizz Hungary’s Representative Office at the Antimonopoly Committee in connection with the authority’s recommendations to major Ukrainian carriers alleging unfair competition practices during COVID-19 pandemic restrictions.Aviation practice head Oleksiy Burchevskyy left the firm in November. Vincent Morand, a senior consultant based in the Prague office, is the new practice head. INTEGRITES is called upon to advise on specific tax and customs matters arising in the aviation industry and day-to-day operations, as well as quarantine restrictions, employment and compliance. In addition to advising big international airlines, the firm is retained by aviation services providers, ground handling, cargo and full-freight handling providers on a variety of services agreements and sanction law issues. Over the last couple of years the firm extended its presence in the railway sector and, in particular, supported several sale and purchase and lease agreements. Automotive is another area seeing a growing client following. Managing partner Dr. Oleksiy Feliv leads sectorrelated work. CMS Cameron McKenna Nabarro Olswang is known for its expertise in aviation finance, aircraft leasing and transfer, and also assists aviation industry players with their operations in Ukraine, including employment

GENERAL AVIATION

LEADING FIRMS

1. Ante Law Firm

1. Interlegal

2. ECOVIS Bondar & Bondar

2. ANK Law Office

3. Ilyashev & Partners

3. Jurline

4. Asters

4. Legrant

5. Kinstellar

5. Ilyashev & Partners

Other established PRACTICES

INTEGRITES

AGA Partners

LEADING INDIVIDUALS

Royal Gardens Business Center, 66/1 Frantsuzky Boulevard, Odesa, 65062, Ukraine Tel.: +380 48 235 6517 +380 48 738 0893 E-mail: office@jurline.ua Web-site: www.jurline.ua

Listed in alphabetical order

Eterna Law Sergeyevs’ Law Office

1. Andriy Guck (Ante Law Firm)

LEADING INDIVIDUALS

2. Oleg Bondar (ECOVIS Bondar & Bondar)

1. Arthur Nitsevych (Interlegal)

3. Roman Marchenko (Ilyashev & Partners)

Other notable PRACTITIONERS

2. Artem Volkov (ANK Law Office) Listed in alphabetical order

3. Volodymyr Zubar (Jurline)

Oleksandr Povar (ECOVIS Bondar & Bondar)

4. Artem Skorobogatov (Interlegal)

Maria Tereshchenko (Ante Law Firm)

5. Sergey Nedelko (Ilyashev & Partners)

AVIATION FINANCE

Established PRACTICES

Listed in alphabetical order

Ante Law Firm CMS Cameron McKenna Nabarro Olswang DLA Piper Ukraine* * Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

COUNSELINK JURLINE

MARITIME & SHIPPING

Other notable PRACTITIONERS

Listed in alphabetical order

Ivan Kasynyuk (AGA Partners) Oleg Kutateladze (Jurline) Oleksandr Kyfak (ANK Law Office) Nikolay Melnykov (Interlegal) Kostiantyn Moriakov (ANK Law Office) Iryna Moroz (AGA Partners)

SERGEYEVS' LAW OFFICE

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

WWW.UKRAINIANLAWFIRMS.COM

Alexey Remeslo (Interlegal) Yuriy Sergeyev (Sergeyevs’ Law Office) Liudmila Sizonenko (Legrant) Tatyana Titarenko (Legrant)

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Who is Who issues. The firm helps with structuring contractual relations with stakeholders and local personnel. Ihor Olekhov and Olga Belyakova are the main partners for contact. The Kyiv office of DLA Piper1 renders legal support with the acquisition, disposition, leasing and financing of aircraft (both fixed wing and helicopters), aviation equipment, flight simulators and related assets. The firm is traditionally preferred by large aircraft lessors for representation in leasing deals. Another area of focus is handling aviation regulatory and government compliance matters, navigating international aviation laws, regulations and government policies. Pegasus Aviation is among disclosable clients. The practice is led by Oleksandr Kurdydyk and Dmytro Pshenychniuk. The Kyiv office of Dentons has standing expertise in aircraft leasing matters, and also established an offering in service agreements between aircraft maintenance and engineering companies and industry players. Given its extensive employment practice the firm is retained to assist with labor law and the employment of foreigners, as well as with corporate and competition issues. Oleg Batyuk, Kyiv managing partner, is the main contact. Jurvneshservice, headed by Dr. Ganna Tsirat, is a vivid market expert in aircraft financing and lease matters. Long-standing Ukrainian firm Interlegal, which is headquartered in Odesa and has six offices across the Black Sea Region, houses a deep bench of practitioners with wide-ranging capabilities across maritime and shipping. The firm advises shipowners, charterers and shipping agents in maritime disputes, including vessels arrests, lay time and demurrages, cargo claims, penalties appeal. In 2020 the firm demonstrated extensive practice of ship repair cases, and acted on behalf of the P&I club in a case on the collision of vessels at a ship repair plant. The firm is a traditional port of choice for legal support in the purchase and sale of vessels, sailing yachts, barges, and other maritime issues. This formidable practice is led by Nikolay Melnykov and Irina Voyevodina (yachting and corporate matters); Arthur Nitsevych and Artem Skorobogatov (transport and logistics); Alexey Remeslo (shipping). Among other visible team members are Karyna Gorovaya and Vitalii Tolstik. Natalya Myroshnychenko has left the firm. Preeminent Odesa-based ANK Law Office is customarily called upon by the world’s leading P&I clubs and insurers under issues connected with the payment of compensation for loss of life, disability compensation and personal injury claims of Ukrainian seafarers during their employment on board foreign vessels and other marine perils. The firm rendered legal support to Brooklyn-Kiev LLC during a project on wreck removal of bunkering vessel DELFI, which sank in the water area of Odesa port on 22 November 2019; represented Agro-Reni in the process to sell a merchant vessel. In addition, ANK was selected as legal counsel to the Maritime Anti-Corruption Network (MACN) and assisted shipowners (MACN members) whose vessels called Ukrainian ports in 2020. The firm also provides legal support to NORDEX Energy GmbH on arbitration in the German Association of Maritime Arbitrators (GMAA) under the court claim of BBC Chartering Carriers on recovery of losses caused by maritime accident with m/v LOUIS, which took place in Mykolaiv on 18 October 2019. In addition, the firm successfully protected the interests of the owners of m/v BW ACORN (BW Dry Cargo) in the Supreme Court of Ukraine in a landmark case related to the control of segregated ballast, which become the precedent for similar cases. The practice team is led by prominent maritime lawyers Artem Volkov,with the support of Kostiantyn Moriakov, who successfully represented shipowners in so-called “ecological claims”. Nina Kostiuk is another key member of the team. Oleksandr Kyfak, the top respected lawyer and founder, continues to play a strategic role in its development. Jurline, one of the leading law firms in southern Ukraine, is focused primarily on supporting investment in port infrastructure facilities and pure maritime law. The firm is experienced in supporting the entire chain of the logistics and transportation market, including customs clearance, disputes with customs and tax authorities, supporting the activities of forwarders, brokers, carriers (including passenger transportation), working with permits. The firm assists with formalizing relationships and settling disputes related to the carriage of goods by rail, road and sea transport, including full legal support of transport and forwarding activities and customs clearance. In addition, expertise in this industry is complemented by the 1

Effective 14 June 2021, the Kyiv office of DLA Piper was acquired by Kinstellar.

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practice of registering sea-going vessels under foreign flags, formalising the purchase and sale and mortgage of a fleet, and support for large loans secured by vehicles.Recently, the firm successfully represented its client, TIS-Mindobryva Ltd, in the claim of the Ukrainian Sea Ports Authority for the recovery of debt for the use of berth №17 in the port of Yuzhniy. Being closed to sea ports and terminals, the firm is called upon by enterprises belonging to the maritime complex including, among others, PJSC Severtrans, PJSC Odesavtotrans, LLC Vesta, SK Petroleum, LLC Teka (Sarmont Group Holding), MV Cargo,Atlas Crewing, Baltic Control Ukraine. The most recognized partners of the firm are Volodymyr Zubar and Oleg Kutateladze. The sizeable team includes Maxim Kapelist, Vitaliy Cherkes, Vitaliy Kutateladze. Legrant, an Odesa-based law firm, is proficient in matters pertaining to maritime litigation. The firm is especially known for representing shipowners and shipping agents as well as port operators in various disputes with the Ukrainian Sea Ports Authority regarding appealing port duties, administrative, sanitary and vessel duties, as well as recovery of payments for imposed services. Another strength of the litigation team includes successful cases in challenging ecological control requests entailing keeping vessels in ports, and competition advice in the sector. Tatyana Titarenko, managing partner, is known for her strong involvement in business development. The maritime law community singled out Liudmila Sizonenko as a competent litigator with industry knowledge. AGA Partners has an accomplished shipping practice integrated into the firm’s international trade and arbitration offering. The team frequently handles disputes that arise in the course of transportation of goods by sea, inter alia, charterparty claims, demurrage compensations, cargo claims. Highlights include representing an agri-trading company at LMAA (London) arbitration, where the shipowner exercised duress against the client to obtain payment of alleged damages at a loading port for which the client was not responsible. Ivan Kasynyuk and Iryna Moroz are the main contacts. Eterna Law traditionally acts on a variety of arbitration disputes arising out of breach of charter parties, shipping arrangements, contractual agreements, default of payment, misappropriation of cargo and non-delivery of goods.The firm acts on behalf of state rail monopoly Ukrainian Railways JSC in a dispute that arose in relation to the breach of a services contract by the client’s counterparty, namely by its actions and/or inaction and/or goods of improper quality caused significant damage and, furthermore, it refused to pay the penalty provided by the contract. Other areas of legal services for the transport industry include tax, sanctions advice and litigation. International arbitration partner Eugene Blinov is the main point of contact. Sergeyevs’ Law Office, an Odesa-based boutique, possesses a wide legal offering of maritime, labor, corporate, tax, business consulting, compliance and dispute resolution, including mediation. The firm has a focus on representation of seafarers and the rights of their families, and also acts for manning/crewing agents, shipowners and ship management companies. This past year the firm reached full settlement of the claim of crew members of the vessel Ginger in a maritime claim for unpaid wages; defended the interests of the Sea Port Trade Union in litigation against Bilhorod-Dnistrovskyi Sea Port. The firm is experienced in the settlement of marine insurance cases, and most recently acted on settlement negotiations and litigation, inter alia, compensation by P&I clubs in connection with the loss of seafarers’ work capacity and loss of life. The core figure is Yuriy Sergeyev, who is a renowned maritime professional. Svetlana Sergeyeva is another key figure. International law firm Fortior Law has an office in Kyiv, with its key focus being on arbitration and dispute resolution in shipping and international trade. The firm is active in handling disputes under charter parties and bills of ladings and representation in LMAA in other arbitrations. Danil Hristich and Sergey Platonov are recognized among dedicated practitioners, especially for their involvement in challenging the USPA’s actions on the collection of port dues at Ukrainian ports (channel due, tonnage due, administrative due and others). Gramatskiy & Partners regularly advises on the formation of a contractual set for transportation, logistic and forwarding services, and transport regulation, inter alia, permits and licensing for crossborder auto transportation. The firm assists with the purchase and lease of transportation vehicles, as well as with insurance agreements. Ernest Gramatskiy supervises the practice.

Ukrainian Law Firms 2021. A Handbook for Foreign Clients

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Ukrainian Law Firms 2021. A Handbook for Foreign Clients