The European Parliament Approved Uniform Rules for Crypto-Assets: Impact on Ukrainian Business
On 20.04.2023, the European Parliament approved the Draft Regulation approving the unified rules for the legalization and regulation of crypto-assets in the EU – the MiCA.
MiCA will be applied to legal entities and individuals, engaged in the emission of crypto-assets, admission to trading or provision of any other services related to crypto-assets in the EU. Inter alia, MiCA determine who is a crypto-assets service provider. Thus, the MiCA will be applied to any person whose activity or business is related to the provision of one or more crypto-assets services to third parties on a professional basis.
The Draft Regulation define the criteria that a crypto-assets service provider must meet, in particular:
- obtaining a license (so, a provider will be able to work in all EU member states);
- having a registered office on the territory of the EU;
- compliance with a high level of organizational requirements;
- having insurance coverage;
- compliance with the procedure for processing and storing the personal data of clients;
- having minimum authorized capital at the level of EUR 50,000 to EUR 150,000 (depending on the type of service).
It is expected that MiCA will enter into force in July 2023, after approval by all EU member states and will start to apply from July 2024, and the provisions on issuers and crypto-assets service providers – from January 2025.
Considering Ukraine’s status as a candidate for EU membership and the adoption of Law No. 2074-IX dated 17.02.2022 “On Virtual Assets” (which has not yet entered into force), the Ukrainian cryptocurrency business must adapt its activity the new MiCA market standards in the future. MP Yaroslav Zhelezniak announced the development of relevant changes to the legislation.
The Regulatory Norms for the Launch of E-residency have been Changed
On 21.04.2023, the NBU Resolution No. 53 dated 20.04.2023 entered into force providing for the softening of several administrative restrictions to create conditions for the launch of the electronic residency project.
Thus, the NBU allowed e-residents (after paying taxes in Ukraine) to transfer to their accounts abroad funds in foreign currency received from non-residents to Ukrainian bank accounts for services or work provided.
Let us please remind you that on 01.04.2023, the Law of Ukraine dated 06.10.2022 No. 2654-IХ entered into force establishing the possibility for foreigners and stateless persons, who have acquired the status of e-resident and registered themselves as an individual entrepreneur, to carry out business activities and pay taxes in Ukraine without leaving the country of residence.
Ukraine and the EU Agreed on Mutual Recognition and Enforcement of Court Decisions
According to the statement on the website of the Council of the EU, on 24.04.2023, the Council of the EU established contractual relations with Ukraine within the framework of the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.
The Hague Convention (2019) is an international treaty that obliges member states to recognize and enforce judgments rendered in civil or commercial matters in other member states.
The mutual enforcement of court decisions is an important step to increase work efficiency of the national judicial system and will further strengthen the ties between the EU and Ukraine.
The Convention will enter into force for Ukraine on 01.09.2023.
The President Signed the Law on Prohibition of Propaganda of Russian Imperial Policy
On 21.04.2023, the President of Ukraine signed the Law of Ukraine “On Condemnation and Prohibition of Propaganda of Russian Imperial Policy in Ukraine and Decolonization of Toponymy” (Draft Law No. 7253), which prohibits, inter alia:
- use and public reproduction of Russian imperial policy symbols (which includes symbols of the Tsardom of Russia, the Russian Empire, the USSR and the Russian Federation), its officials, their quotes and slogans,
- the assignment to legal entities of names that promote or contain such symbols or landmarks, monuments, historical and cultural places, settlements, dates, events, which are related to the aggressor state.
After the Law enters into force (3 months from the date of its publication, which is currently expected):
- legal entities whose activities violate the restrictions and prohibitions established by Law will have a month to remove symbols of Russian imperial policy from their names, documents and symbols (in the event of non-compliance with the mentioned requirements the activity of such legal entities may be terminated by the court at the request of the Ministry of Justice of Ukraine),
- owners of trademarks, which contain Russian imperial symbols of the aggressor state, are obliged to bring such trademarks into compliance with current legislation within 3 months.