State Budget 2024, PEP Monitoring, Ukraine Signed Declaration on the Safe Use of AI

The Government Finalises the Draft State Budget for 2024 for the Second Reading

On 02.11.2023, the Verkhovna Rada received and submitted for consideration the draft law on the State Budget of Ukraine for 2024 (Draft Law No. 10000), amended by the Cabinet of Ministers.

In particular, the revised version clarified a number of key macroeconomic indicators, namely:

  • the level of expected consumer inflation was reduced from 10.8% to 9.7%;
  • the forecasted average hryvnia exchange rate was updated to UAH 40.7 per USD, compared to UAH 41.4 per USD in the previous forecast;
  • revenues increased to UAH 1,768.5 billion;
  • expenses increased to UAH 3,355 billion;
  • the maximum deficit was reduced to UAH 1,571.5 billion.

The Law on Enhanced Monitoring of Politically Exposed Persons entered into force

On 29.10.2023, the Law of Ukraine dated 17.10.2023 No. 3419-IX came into force, amending the definition of the status and supervision of politically exposed persons (“PEPs”).

We have previously noted that the Law, inter alia, cancels the status of a PEP within three years after dismissal from office and introduces a lifetime PEP status for MPs, Supreme Court judges, members of the High Council of Justice and other senior officials.

In addition, the Law also provides for the following:

  • the obligation for the PEP, upon termination of its public obligations, to notify the bank at its request of the performance (termination) of such obligations;
  • 12 months after the PEP’s dismissal, banks and other financial institutions should review his or her risk. If the financial transactions conducted by such a person during this time were low risk and if such a person does not pose a risk inherent in a PEP, the primary financial monitoring entities (PFMEs) are not required to conduct ongoing in-depth monitoring of business relations with such a person (i.e., to establish the sources of such a person’s wealth and the sources of funds for his or her transactions);
  • the obligation of the PFMEs to provide written explanations to the PEP client within five business days, justifying the reason for refusing to conduct financial transactions or establish business relations;
  • a fine of up to UAH 1.7 million for PFMEs for improper application of a risk-based approach to PEP, i.e. for abuse of strict financial monitoring in relation to PEP (e.g. assignment of an unreasonable risk level, unjustified refusal to conduct financial transactions, etc.)

The Government Resolution on the Classification Procedure and the National Waste List came into force

On 31.10.2023, Resolution No. 1102 dated 20.10.2023 on approval of the Waste Classification Procedure and the National Waste List came into force.
For more details on the Resolution, please read our post here.

We would like to remind you that the Law “On Waste Management”, which came into force on 09.07.2023, introduced a new classification of waste in accordance with the requirements of EU legislation. According to it, waste is divided into hazardous and non-hazardous ones.

With the entry into force of the National Waste List, business entities will classify waste according to a new list of wastes similar to the European one and, in accordance with the Classification Procedure, will determine the code based on the hazardous properties of the waste.

For tax purposes, the National Waste List and the Waste Classification Procedure approved by this Resolution shall apply from 1 January 2025.

The NBU has Set the Discount Rate at 16%

On 27.10.2023, the NBU Board set the discount rate at 16%.

Ukraine has Signed the International Declaration on the Safe Use of AI

At the Artificial Intelligence Safety Summit held in the UK on 1-2 November 2023, participants, including Ukraine, signed the Bletchley Declaration on Artificial Intelligence (AI) Safe Use.

One of the main goals of the Declaration is a collective agreement of countries to develop and implement risk-based AI regulation policies that would prevent negative consequences. At the same time, the summit stressed that AI is a useful technology for economic growth and sustainable development.

However, the technology cannot develop without any supervision and requires established “rules of the game”.