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Key Business and Legal Issues to Consider in Light of COVID-19

 The outbreak and rapid spread of the coronavirus disease (COVID-19) has roiled markets and disrupted supply chains, threatening the global economy. It is also forcing companies to confront a host of hard questions about how they can and should conduct business during a global public health crisis.

Below, we outline questions that companies and their boards should consider as they navigate this uncertain era. Many of these questions are industry-agnostic, but all companies must also address challenges specific to the industry and regulatory environment in which they operate.

Asters has organized a multi-disciplinary task force to address the most pressing issues businesses operating in Ukraine face in responding to COVID-19. To discuss the business and legal implications for your company, please contact ourCOVID-19 task force at:

Hotline:

+380 44 495 1530

Response Team email:

covid19-response@asterslaw.com

Updated: April 9, 2020

In light of the evolving situation, we are reviewing and frequently updating the information below.

 

Competition & Antitrust

Contacts

Igor Svechkar

Alexey Pustovit

Oleksandr Voznyuk

 

Do competition laws provide for a general exemption in case of public health emergencies?

Do recent changes to various laws and regulations aimed to prevent COVID-19 have impact on competition compliance requirements and enforcement?

What measures were taken by the Antimonopoly Committee of Ukraine (AMC) to prevent negative impact of COVID-19 on competition?

Do quarantine measures and other restrictions imposed by the Ukrainian Government affect functioning of the AMC?

Does the AMC look more closely at certain markets / sectors which may be affected by the COVID-19 situation? Did the authority issue any guidance or warnings about compliance with competition laws in such markets / sectors and / or more generally?

What steps should be taken in case of doubts about legality of certain pricing, promotion, or marketing strategies developed to address the COVID-19 situation?

 

Coordination

To what extend coordination among businesses, including coordination among competitors, are permissible? Is there a special treatment for coordination in response to a crisis?

In what cases companies should inform the AMC of the planned coordination?

What kinds of coordination are unlawful per se?

 

Unilateral Conduct

To what extent price adjustments (increases) are permissible? Is there a special treatment for pricing of goods in high demand (such as face masks, hand sanitizers, other medical equipment and consumables)?

What to consider in case of allocation of scarce goods among customers?

Can a company prioritize supply to public health authorities?

In what cases a company may refuse to deal with customers?

 

Merger Control and Antitrust Clearances

Do COVID-19 restrictive measures (such as quarantine) impact timeline for receiving merger control / antitrust clearance in Ukraine?

Is there any impact on the review of notified transactions / agreements by the AMC?

Can the AMC extend duration of its clearance decision where closing of the transaction / implementation of the agreement was delayed due to COVID-19?

Is there a special treatment for transactions that result in acquisition of companies, which are likely to go out of business (e.g., due to economic crisis or other factors)?

 

State Aid

What kind of public support measures may entail state aid within the meaning of the law and require AMC clearance?

Are there any exemptions for state aid to companies facing difficulties as a result of COVID-19 crisis?

 

Unfair Competition

What practices may qualify as unfair competition under the law? Does any special treatment apply to goods in high demand (such as pharmaceuticals)?

How to safely promote goods / services to avoid potential sanctions for unfair competition? Will advertising goods / services as "COVID-19-proof" or helping to protect against the virus be lawful? 

 

Public Procurement

How recent changes to various laws and regulations aimed to prevent COVID-19 impact public procurement activities?

What are the new rules for procurement by public sector of goods / services aimed to prevent and address COVID-19? What goods / services are subject to these new rules?

Can the AMC “block” procurement of goods / services aimed to prevent and address COVID-19? Will the AMC prioritize or otherwise facilitate review of public procurement cases involving those goods / services?

 

Criminal Law & White-Collar Crime

Contact

Sergiy Grebenyuk

Which business activity may invoke criminal liability for violation of provisions on prevention of infectious diseases in course of current restriction measures? Who at the company is potentially at risk of liability for violation of the measures on prevention of spreading of the COVID-19?

Which authorities are empowered to check the fulfillment of the adopted restrictions on prevention of spreading of the COVID-19? Who may institute criminal proceedings?

Do current measures adopted to prevent spreading of the COVID-19 in any way affect terms within criminal cases or performance of investigative actions (i.e. searches, interrogations, temporary accesses)?

Can the measures adopted to prevent spreading of the COVID-19 be used as a due ground to postpone investigative actions, court hearings or prolong the term of addressing requests of law enforcement?

 

Customs & Border

Contact

Alexey Pustovit

What measures are being taken at customs border checkpoints to check individuals (including special categories, drivers, crew members, etc.) for suspected symptoms of COVID-19?

Do the goods passing through the Ukrainian customs undergo screening for COVID-19? What are the legal grounds for that?

What are the legal grounds for disinfection and destruction of goods detected by COVID-19? Who bears the cost?

What measures have been undertaken by the Customs Service with respect to importers for customs clearance?

What measures have been undertaken by the Customs Service to ensure immediate and undisrupted processing of the COVID-19 tests, protection equipment, and disinfectants? What are the legal grounds for this?

Ensuring intellectual property rights during customs clearance of the COVID-19 tests, protection equipment, and disinfectants.

Problems with customs classification, determining a country of origin, and customs value during customs clearance of the COVID-19 tests, protection equipment, and disinfectants.

 

Data Protection and Intellectual Property

Contact

Julia Semeniy

Is unconsented processing of personal data allowed in view of COVID-19 emergencies? If yes – for what purposes and under which circumstances?

How should we arrange for obtaining consents for personal data processing in view of remote work / communications?

What are the specific requirements concerning processing of sensitive personal data (e.g. health data etc.)? Are they affected by COVID-19 emergencies?

Are we allowed to use third party's patents or other intellectual property in view of COVID-19 emergencies? If so, on what conditions?

 

Domestic Litigation

Contact

Gleb Bialyi

Andriy Pozhidayev

What are the recommendations with regard to special operating regime of Ukrainian courts for the period of COVID-19?

What is the procedure of electronic submission of procedural documents to the court in view of COVID-19?

How to prevent omission of procedural deadlines or request renewal of terms omitted due to COVID-19?

Collecting evidence: what is the confirmation of force majeure (other than the CCI certificate) in connection with COVID-19?

Why for the period of COVID-19 participation in court hearings via videoconference does not reduce court attendance?

Is there a possibility for litigants under conditions of COVID-19 to familiarize with case files remotely?

Skype, Teams and other means of communication as a way out of the situation in unclosed proceedings during COVID-19.

 

Employment & Immigration

Contact

Vadym Samoilenko

Inesa Letych

Labor & Employment

Are employers required to close their business during quarantine period?

What other measures are employers required to introduce to protect health of employees?

May employers request employees to work remotely?

Which flexible worktime arrangements are possible during the quarantine period and how to implement them?

Is it possible for the employer to reduce employees' wages for the quarantine period?

If the business closes due to quarantine measures, does the employer have to pay wages?

May the employer postpone wage payments?

Are employers entitled to unilaterally put employees on paid or unpaid leaves?

What are the maximum duration for paid and unpaid leave during the quarantine period?

Is it legal to check of the employee health condition (e.g. take temperature) in the office?

When the employer have a right to suspend employees from work as a preventive measure in view of COVID-19?

May the employer ban or restrict unessential travel of employees?

May the employer dismiss its employees for failure to comply with preventive measures?

What rules apply to employees' lay-off during Covid-2019?

How to introduce self-isolation rules within the company?

Self-isolation as a sick leave, is it possible?

Does the quarantine have effect on inspections of the State Labor Service?

Immigration

Are there any travel restriction to / from Ukraine?

What to do if a visa or residency permit has expired during the quarantine?

How does the quarantine affect administrative services of immigration authorities?

Are there restrictions regarding issuance of visa to enter Ukraine?

Will foreigners and stateless persons who could not leave Ukraine during quarantine be brought to administrative responsibility?

 

Energy

Contacts

Armen Khachaturyan

Yaroslav Petrov

Obtaining and extension validity term of the permits (licenses, special permits for subsoil use)

Obtaining a green tariff

Re-signing pre-PPA and PPA

How to respond to force majeure notifications for energy projects?

How to file a force majeure notice?

Is it possible to declare a force majeure and extend the commissioning period under PPA for the RES facility?

Procedure for tariffs payment in terms of quarantine

Procedure for documents submission to state bodies and state-owned companies in energy sphere

Procedure for signing of the documents. Implementation of a digital/electronic signature

 

Family Law Practice

Contact

Talina Kravtsova

Olga Lepikhina

How does quarantine affect the possibility to conclude agreements between spouses, including notarized marriage contracts?

Are there any changes in initiation of new court claims related to family matters?

Are there any changes in court proceedings? Is it possible to participate in court via video-conferences?

What is the procedure for execution of court rulings on funds recovery, including alimony payments?

How to organize the communication with foreign authorities within inheritance matters?

Are there any limitations in addressing Ukrainian government authorities on marriage issues for foreign citizens?

Could the custodial parent restrict the child’s communication with the non-custodial parent in view of the quarantine?

What liability can be conferred on the custodial parent for restricting the child’s communication with the non-custodial parent during the quarantine period?

How can the non-custodial parent ensure contact with the child in case of any restraints from the custodial parent during the quarantine period?

What actions or inactions of a parents in relation to a child in view of the quarantine restrictions can be the grounds for deprivation of parental rights? Protective measures against unfair accusations and claims of the other parent.

How will the Convention on the Civil Aspects of International Child Abduction be applied at a time of national border closures? Will it be possible to return the child to the country of permanent residence?

 

Financing & Financial Restructuring

Contacts

Iryna Pokanay

Roman Stepanenko

Gabriel Aslanian

Kateryna Oliynyk

For Borrowers

Potential payment default (inability to pay principal / interest as usual):

Negotiating:

•     waiver of default interest and penalties 

•     grace period for the borrower

•     reduced interest rate

•     restructuring – extension of loan maturity, etc.

 

Breach of covenants (fin. ratios, undertakings, etc.) & Material adverse effect (MAE)/ Material adverse change (MAC)

Borrower’s notice to the lender on potential breach

Negotiating:

•     waiver of acceleration (immediate repayment)

•     restructuring

 

For Banks and Financial Institutions

Breach of covenants / Default

Would the introduction of the COVID-19 measures enable the lenders to give    effect to the Event of Default provisions under the financing documents?

What kind of defensive measures are available to the borrowers in connection with the COVID-19 measures?

Restructuring Procedures

Would the introduction of the COVID-19 measures impact on the ongoing restructuring procedures?

Assignment

Would the introduction of the COVID-19 measures impact on the lenders’ ability to assign their claims to third parties?

 

Real Estate

Contacts

Roman Kostenko

Oleg Boichuk 

Commercial Leases

What is the impact of COVID-19 situation on the leases of different types of commercial premises (offices, retail space, warehouses, etc)?

Whether it is possible to invoke contractual or statutory force majeure provisions in relation to lease agreements?

What legal instruments are available to landlords and tenants to address COVID-19 implications under lease agreements?

Operation of Commercial Real Estate Objects

Whether operation of commercial real estate (business centers, shopping malls, warehouses, etc) is restricted and to which extent?

Do COVID-19 restrictions affect regular maintenance of commercial real estate?

Are landlords obliged to take specific sanitary or other measures in relation to their real estate objects due to COVID-19 situation?

State of Emergency

What actions should property owners undertake in connection with actual or potential requisition or administrative takeover of property by the State?

 

Tax

Contact

Costantin Solyar

Are tax filing and payment deadlines extended for companies?

How VAT payment and VAT refund operate?

Should land and real estate taxes be paid if operations are stopped?

Can the business delay payment of payroll and social security taxes?

Should regular tax audit be expected while in quarantine?

Are there any extension for personal income tax reporting and payment for year 2019?

 

Private Clients / Wealth Management

Contact

Oleksandr Onufrienko

Inheritance matters

How to urgently prepare and issue a testament in a state of emergency in connection with COVID-19?

What to do to prepare an application for acceptance / refusing of an inheritance in view of emergency measures?

Receiving express consultations on hereditary issues

Personal assets

What do you need to do to urgently to buy / sell valuable property today?

What changes have occurred in respect of structuring and declaring personal assets due to emergency measures caused by COVID-19?

How to create a charity fund to help the underprivileged and medical institutions to overcome the effects of COVID-19?

What primary steps are required now to structure corporate rights belonging to family members?

 

Force Majeure

Contacts

Gleb Bialyi

Markiyan Kliuchkovskyi

Yuna Potomkina 

Can restrictions imposed due to COVID-19 be considered as a force majeure under Ukrainian law and in accordance with contractual provisions governed by Ukrainian law? What if the contract is governed by foreign law?

What responsibility does force majeure exclude? Can force majeure be relied on to justify a breach of a non-contractual obligation (tax obligations, obligations for payment of other statutory fees, etc.)?

Does the particular situation meet the necessary criteria for establishing force majeure situation: the existence of insuperable force (“act of God”); their extraordinary nature of such circumstances; impossibility to prevent harm (breach of obligation) under these conditions (obligation to minimize the consequences of the breach); a causal link between the circumstances and the inability to comply with the obligation? Does the contract set other criteria?

Receiving the force majeure certificate from the Ukrainian Chamber of Commerce and Industry  – is this the only instrument for excluding liability? Is it possible to appeal against the issue or refusal to issue UCCI certificate?

What actions should be taken before applying to UCCI for the force majeure certificate due to COVID-19 measures? What package of documents should be submitted and what are the requirements for such documents? Can the documents be submitted in electronic form?

Does the UCCI take into account the opinion of the contractual counterparty when making a decision? How can such a party protect its rights if the UCCI issues the force majeure certificate to the counterparty due to COVID-19? What are the prospects of defense in court? To which court should the actions of the UCCI and counterparties be appealed?

 

Land & Construction

Contact

Anzhelika Livitska

General sanitary and anti-epidemic requirements for the organization of construction during quarantine

Special requirements to and prohibitions of construction works in certain regions

Responsibility for violations of regulatory requirements

The competence of regulatory bodies under quarantine, taking into account the reform of the State Architectural and Construction Inspection of Ukraine; liability issues

 

Corporate and M&A

Contact

Vadym Samoilenko

Does the COVID-19 pandemic release joint-stock companies from the obligation to hold annual shareholders meetings by 30 April 2020?

What options of holding participants/shareholders/board meetings may be available to companies under COVID-19 restrictive measures (such as quarantine)?

Does the company have the right not to admit to or to exclude from participating in physical participants/shareholders/board meetings persons with COVID-19-like symptoms (e.g., fever, cough)?

What limited liability company directors' duties should evolve in the COVID-19 situation?

How the COVID-19 pandemic affects annual reporting obligation of joint-stock companies?

What measures should be taken by joint-stock companies whose supervisory boards' powers expire in 2020? 

Do quarantine measures and other restrictions imposed by the Ukrainian government affect functioning of state registrars?

 

Technology & Communications

Contact

Yuriy Kotliarov

Provision of telecommunication services under the terms of emergency situation or emergency state.

The specifics of exercising power by regulators, law enforcement authorities and other state agencies in telecom, technology, cybersecurity and data protection sectors under the terms of emergency situation or emergency state.

Obtaining radio spectrum licenses, numbering permits and permits for operation of radio transmitting equipment under the terms of emergency situation or emergency state.

Restriction of consumer rights under the terms of emergency situation or emergency state, data gathering and tracking of movements of consumers by state authorities.

Use of electronic form and digital signature in contracts, accounting documents and internal documentation.      

Increase of tariffs, change and decrease of tariff plans, degradation of quality of service and implementation of other special terms for provision of telecom services by telecom operators and internet-providers. 

 

Pharmaceuticals & Healthcare

Contact

Viktoriya Podvorchanska

Pharmaceutical and Medical Device Companies

Customers are switching to deferred payments. What can be done to protect the company against the risk of customers' non-performance due to force majeure?

Medical representatives have limited or no direct access to healthcare professionals. What legal steps should be taken (including in terms of personal data protection) to ensure smooth online communication?

What are the new simplified regulatory procedures for brining medicinal products, medical devices and personal protective equipment (PPE) for combating COVID-19 outbreak to Ukrainian market?

Are there limitations on export of PPE and/or other products from Ukraine? What types of products do they cover?

Can unregistered (i.e. not having a local marketing authorization) medicines be supplied to Ukraine in view of COVID-19 situation? What is the legal process for such supplies and further use of such products in Ukraine?

Is off-label use of medicinal products permitted for treatment of COVID-19?

What are the tax and customs exemptions for medicinal products, medical devices, disinfectors and PPE required to prevent and address COVID-19?

What is the new legal process for supplying goods, works and services required to address COVID-19 outbreak to public sector entities? 

How does the quarantine imposed by Ukrainian Government impact marketing authorization and clinical trial submissions and process?

Is there a fast-track procedure for regulatory approval of clinical trials of medicinal products for treatment of COVID-19?

Does the nation-wide quarantine have effect on inspections by, and administrative services of, the State Service for Medicinal Products and Drug Control?

Is there a possibility of compulsory licensing mechanism being used during COVID-19 emergency? What is the local process for compulsory licensing?

What legal risk factors should be considered in terms of pricing, marketing and promotion strategies for medicinal products and medical devices in view of COVID-19?

What are the permissible statements on COVID-19 in marketing and promotion materials? What legal leverage does a company have if a competitor is making false statements on COVID-19?

What are the rules for distance trading with, and delivery of, medicinal products?

Healthcare Providers

Is there an obligation for a healthcare provider to notify the Ministry of Health on suspension of its activities during quarantine?

What obligations do private healthcare providers have to notify state authorities on patients known or suspected to have COVID-19? What could be the legal consequences if a notification is not provided?

How does the quarantine affect inspections of healthcare providers by the Ministry of Health?

How does a private healthcare provider / laboratory arrange COVID-19 testing services for its clients? What steps should be taken to mitigate associated legal risks?

 

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