Restrictions of Consular Services, Law on Combating Gambling Addiction

National Bank of Ukraine Reduces Discount Rate to 13.5%

The Board of the National Bank of Ukraine has decided to reduce the discount rate from 14.5% to 13.5% starting from 26 April 2024, the NBU press service reports.

Thus, given the weakening of actual and expected price pressures, as well as reduced risks to international financial support, the NBU continues the cycle of easing interest rate policy. This is expected to support credit growth and economic recovery without posing additional risks to price and financial stability.

In addition, the NBU’s baseline scenario envisages a reduction in the key policy rate to 13% this year.

New Restrictions on Provision of Consular Services: Relevant Government Resolution Has Already Entered into Force

By its Resolution No. 443 dated 23 April 2024, the Cabinet of Ministers of Ukraine amended clause 11 of the Procedure, according to the updated version of which, obtaining a passport of a citizen of Ukraine, as well as a passport of a citizen of Ukraine for traveling abroad by a male citizen of Ukraine aged 18 to 60 years, is carried out at the territorial body/territorial subdivision of the State Migration Service of Ukraine (SMS). At the same time, such passports may not be sent to a separate subdivision or foreign diplomatic mission of Ukraine.

Restrictions do not apply to persons subject to the provisions of paragraphs 21-23, 27 of the Rules for Crossing the State Border by Citizens of Ukraine.

This includes, in particular:

persons with disabilities;
persons accompanying their spouse, who is a person with a disability, abroad;
persons who have one of their parents or the parents of their spouse from among persons with disabilities of I or II group and accompany one of such parents abroad;
persons who provide permanent care for persons with disabilities of I or II group and accompany them abroad;
persons raising a child with a disability under the age of 18;
persons who take care of an adult child who is a person with a disability of I or II group;
persons in need of constant care;
persons who are guardians of persons with disabilities recognized by the court as incapacitated, who accompany such persons abroad;
persons with disabilities or other persons in need of permanent care who live (stay) in institutions regardless of their form of ownership and subordination and receive social services for inpatient care, palliative care, and supported living;
parents, guardians, custodians, foster parents, foster parents who provide support to children with diseases listed in clause 22 of the Rules;
legal representatives or other authorized persons accompanying orphans, children deprived of parental care, who have not reached the age of 18 and are living or enrolled in institutions for round-the-clock stay;
persons from the defense and security forces affected by the military aggression of the Russian Federation against Ukraine who are undergoing treatment abroad.

Parliament Adopts Draft Law on Combating Gambling Addiction as a Basis

On 24 April 2024, the Verkhovna Rada of Ukraine adopted as a basis the Draft Law No. 9256-d, which is expected to create preconditions for combating gambling addiction and improving state regulation of gambling and lotteries.

“The preparation of the revised Draft Law was a response to the problem of the growing problem of gambling addiction during martial law, in particular, among military personnel who are under extreme stress, which may cause increased risks of gambling addiction and therefore require additional protection mechanisms,” the explanatory note to the Draft Law says.

Mainly, the Draft Law proposes the following:

toughening requirements for gambling advertising (including a ban on advertising on the Internet). It also proposes to increase penalties for violations in this area (from 300 to 600 minimum wages);
a system of measures to prevent and counteract the operation of prohibited gambling and/or gambling facilities, including by monitoring the Internet to identify websites and/or mobile applications that provide access to gambling on the Internet without a license in Ukraine establishing additional criteria for license revocation, improving requirements for impeccable business reputation of officials of gambling organizers, establishing requirements for gambling service providers;
introduce the impossibility for a player to use more than one account to make all payments with a gambling organizer, which will allow for an effective response to the behavior of a player with signs of gambling addiction.

Law on Succession in Labor Relations Adopted

On 25 April 2024, the Verkhovna Rada adopted the Law “On Amendments to the Labor Code of Ukraine on Succession in Labor Relations” (Draft Law No. 8244).

Among others, the Draft Law stipulates that an employer must continue to validate an employment contract with employees in the event of a transfer of his business or some part thereof to another person. The employer must also inform employees of the date of such succession.

For the purposes of the Law, a business transfer or transfer of a business entity is a change of ownership of an enterprise, institution, organization, their reorganization (merger, acquisition, division, transformation), spin-off, while preserving the type of economic activity carried out by the alienator.
Soon the Law will be submitted to the President of Ukraine for signature.

Verkhovna Rada Adopts Draft Law on Establishment of a “White Business Club” as a Basis: Key Provisions

On 24 April 2024, the Verkhovna Rada adopted as a basis (in the first reading) Draft Law No. 11084, which provides for the creation of a special tax administration regime for taxpayers with a high level of voluntary compliance with tax legislation (the so-called “white business club”), which will have additional rights and will be subject to relaxed control during the period of martial law in Ukraine.

Thus, the draft law proposes to establish in the tax legislation such a category as taxpayers with a high level of voluntary compliance with tax laws, the list of which will be maintained by the tax authorities and updated quarterly.

The criteria for inclusion in such a list include:

absence of sanctions imposed on the taxpayer, a decision on riskiness, tax debt, arrears, significant unreconciled tax liabilities, and identified violations of tax legislation (in particular, in terms of reporting),
maintaining the number of employees at the level of at least 5 people with salaries not less than 110% of the average industry salary in the region,
tax payments not less than the industry average.

The tax administration of taxpayers with a high level of voluntary compliance with tax legislation during the period of martial law will be carried out with the following peculiarities:

such persons will not be subject to documentary inspections, except for unscheduled ones;
in case of inspections, their duration may not exceed 5 calendar days;
individual tax consultations for such persons will be provided within an accelerated period – within 5 calendar days from the day following the day of application;
the taxpayer is to be assigned an official of the territorial body of the State Tax Service who will be responsible for interaction with the taxpayer (compliance manager);
upon request, the taxpayer will have the right to receive information on tax information available to the supervisory authority that may indicate tax risks in the taxpayer’s favor, as well as advice on how to eliminate such risks within 5 days.

Currently, the draft law has been widely criticized, including by the Business Ombudsman of Ukraine and the Union of Ukrainian Entrepreneurs.

Therefore, the final version of the draft law may undergo significant changes during the second reading. At the same time, the proposed tools to weaken the government’s influence on businesses that demonstrate significant profitability, provide high wages and comply with tax laws may become an additional incentive for business development in times of war. We will continue to monitor this issue.