On 13 December 2011 the President of Ukraine signed the recently adopted Law of Ukraine "On Amendment of Some Legal Acts of Ukraine (Regarding Humanization of Liability for Offences in the Sphere of Business)" (the "Law"). The Law aims to improve the legal climate for business in Ukraine by removing certain business practices from the purview of criminal law and, accordingly, law-enforcement authorities. The Law came into force on 18 January 2012.
The Law decriminalized the following offences to the level of the administrative infractions: (a) unlawful actions with privatization papers; (b) failure to comply with terms and conditions of privatization for state and municipal companies; (c) working in certain areas of business without proper authorization; (d) failure to return to Ukraine earnings in foreign currency; (e) concealment of permanent insolvency; (f) illegal actions in the course of bankruptcy; (g) issuance of securities without registration; (h) coercion into anticompetitive concerted actions; (i) illegal opening and use of bank accounts in a foreign currency abroad; (j) fraudulent bankruptcy and some other offences. Now the liability for these offences varies from a minimum of UAH 510 to a maximum of UAH 85,000 (appox. USD 64 – USD 10,625).
The following actions remain the criminal offenses but a maximum punishment for most of them has been limited to fines in combination with confiscation of property and/or prohibition to work in certain positions: (a) money laundering; (b) obstruction of legal business activity; (c) illegal gambling; (d) illegal production, storage, distribution, transportation of goods subject to excise duties; (e) sham business activity; (f) illegal actions with credit cards or other equipment money transfers; (g) tax evasion; (h) intentional leading of a business entity into bankruptcy; (i) financial resources fraud; (j) manipulations at stock exchange; (k) some crimes related to issuance and trading of securities; (l) illegal use of insider information; (m) illegal privatization of state and municipal property; (n) some crimes related to abuse of official powers and to business activities. Now the fines vary from a minimum of UAH 510 to a maximum of UAH 850,000 (appox. USD 64 – USD 106,250). The imprisonment remains a possible punishment only for the most severe crimes.
Finally, the Law establishes the bail as the primary precaution measure in the criminal investigation process. Bail may vary from UAH 5,100 to UAH 289,000 (appox. USD 640 – USD 36,125) depending on a crime's gravity. However, the bail cannot be less than the amount of a civil claim, monetary damage or illegal profit from the crime. If the accused person cannot pay the bail, other pretrial measures (including pretrial detention) may be applied.
For further information please contact associate Yaroslav Petrov.