L&M Finance Group

Changes in legislation for March 2024.

On March 13, the EU adopted a law regulating the use of Artificial Intelligence.

This Law is aimed at protecting the rights of citizens from high-risk artificial intelligence, prohibiting certain applications that violate these rights. It also limits the use of biometric identification systems by law enforcement agencies, except in exceptional cases, and imposes obligations on other high-risk artificial intelligence systems.

Also, the Act provides clear requirements for other artificial intelligence systems with a high level of risk due to their potentially harmful effects on health, safety, fundamental rights, the environment, democracy, and the rule of law.

General Purpose Artificial Intelligence (GPAI) systems and the GPAI models on which they are based must meet certain transparency requirements, including compliance with EU copyright law.

In addition, artificially generated images, audio, or video content ("deepfakes") must be clearly labeled as such.

As internal market committee co-rapporteur Brando Benifay noted: "We finally have the world's first enforceable AI law to reduce risks, create opportunities, fight discrimination and ensure transparency."

After technical clarifications, the law must be officially adopted by the Council of the EU and published. It will enter into force twenty days after its publication in the "Official Journal" of the European Union and will be fully applicable 24 months after its entry into force, except in certain cases.

You can read more about the Law at the following link : https://lmfgr.com/tpost/zpvh1e7ms1-vroparlament-uhvaliv-pershii-u-svt-zakon .

On March 5, the Cabinet of Ministers' Resolution on strengthening control over purchasers of designated agricultural land was adopted: starting from this date, the government increased control over persons who will purchase land plots for agricultural use.

Decision No. 239 of the Cabinet of Ministers of Ukraine dated March 1, 2024 amended the Procedure for State Registration of Real Property Rights and Encumbrances, previously approved by CMU Resolution No. 1127 dated December 25, 2015 "On State Registration of Real Property Rights and Encumbrances" and the Procedure verification of the compliance of the purchaser or owner of the agricultural plot of land with the requirements specified in Article 130 of the Land Code of Ukraine, previously approved by the Resolution of the CMU of June 16, 2021 No. 637.

Now, for the state registration of the right of ownership in connection with the transfer of property to the ownership of a legal entity as a contribution (contribution of property to the statutory (composite) capital (statutory fund), initial, membership and target contributions of members of the cooperative, etc.) are submitted, in addition to a document certifying a person's right of ownership of property, act of acceptance-transfer, etc., as well as a protocol for the inspection of the acquirer of an agricultural plot of land (in the case of transfer of an agricultural plot of land).

Also, the protocol of the inspection of the purchaser of the agricultural land plot (in the case of the transfer of the agricultural land plot) is submitted for state registration of the right of ownership in connection with the transfer of property to individuals and legal entities as a result of the termination (liquidation or reorganization) of a legal entity or separation from it a new legal entity.

The authenticity of the signatures on the written statement of individuals or legal entities to whom the immovable property of a liquidating legal entity was transferred, about the distribution of property between them, is certified in accordance with the Law dated 09.02.1993 No. 3425-XII "On Notaries".

Requirements for verification of the compliance of the purchaser or owner of the agricultural plot of land, defined in Art. 130 of the Land Code. Verification of the buyer is carried out before certain events, such as the notary certification of the deed on the alienation of the land plot, the notary certification of the authenticity of the signature on the act of acceptance and transfer or another document confirming the fact of the transfer of the land plot into ownership, as well as as a result of the termination of the legal entity or separation from it of a new legal entity. Also, in the new version of the code, the Protocol for the inspection of the buyer of the land plot for agricultural purposes is laid out.

On March 1, the Cabinet of Ministers adopted a resolution amending the Model Land Lease Agreement.

Accordingly , amendments were made to the standard land lease agreement, approved by regulatory acts, in particular: Resolution of the Cabinet of Ministers dated March 3, 2004, No. 220, Resolution of the Cabinet of Ministers dated September 22. No. 1013 of 2021 "Some issues of preparation and conduct of land auctions for the sale of land plots and the acquisition of rights to their use (rent, superficies , emphytheusis)" and the Land Conservation Procedure, approved by Resolution No. 35 of the Cabinet of Ministers dated January 19, 2022, with the aim of bringing in accordance with the requirements of the Land Code, Laws dated 19.06.2003 No. 962-IV "On Land Protection" and No. 161-XIV "On Land Lease" dated 10.06.1998, taking into account the changes made by the Law dated 11.04.2023 of the year No. 3050-IX "On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine regarding exemption from payment of environmental tax, land fee and tax on immovable property, other than a land plot, for destroyed or damaged immovable property" and the Law of 27 07.2023 No. 3272-IX "On Amendments to Some Legislative Acts of Ukraine Regarding Increasing the Efficiency of Use of State-Owned Agricultural Land."

In particular, the standard land lease agreement stipulates that in the case of transfer of state-owned land to a joint-stock company, the term of the agreement is 50 years. The amount of rent is not less than 12% of the normative monetary value. In the Land Conservation Procedure, the list of areas subject to conservation due to contamination by chemical substances and the location of military facilities has been supplemented. The Land Conservation Procedure includes a list of land plots that are subject to conservation due to chemical contamination due to emergency situations, armed aggression, and martial law, as well as due to the presence of military facilities.

On March 12, the President of Ukraine signed the law on lobbying.

This draft law defines the legal basis of lobbying in Ukraine. It establishes the terminology in the field of lobbying, defines the scope of the law, the principles of lobbying, the issue of creating the Transparency Register as an information and communication system that ensures the collection, accumulation, protection, accounting, display, processing, and provision of information about lobbying subjects and their reporting. The law also establishes the legal basis for lobbying, requirements for a lobbying contract, rights and obligations of lobbying subjects and objects, lobbying subject reporting, monitoring of compliance with lobbying legislation.

The adopted law on lobbying in Ukraine is aimed at ensuring the regulation of lobbying, reducing the level of corruption in the processes of adoption of normative legal acts, as well as ensuring equal rights of citizens, public organizations, and businesses regarding influence on state bodies. It is also stated that the adoption of this law complies with the recommendations of the European Commission and GRECO regarding the regulation of lobbying in accordance with European standards and reducing the influence of oligarchic structures on the legislative process in Ukraine.

As reported, the law will be put into effect no later than January 1, 2025, but two months after the start (announcement) of the launch of the Transparency Register.

You can read more about the Law at the link: https://lmfgr.com/tpost/3s7raazbc1-zakon-pro-lobyuvannya-priinyato .

On March 21, the law on fining persons who committed offenses in the sphere of lobbying was adopted.

The purpose of the law is to establish regulatory and legal regulation of lobbying in Ukraine in accordance with international practices and standards by introducing administrative responsibility for lobbying.

It is determined that the regulator for violations will rely on the National Agency for the Prevention of Corruption (NAPC), which will draw up protocols according to the articles specified in the law.

Accordingly, the law provides for punishment for the following offenses committed by persons directly or indirectly involved in lobbying, in particular:

- lobbying without registration in the special Register of "lobbyists" (transparency)
- implementation of lobbying by a person who, upon acquiring the status of a lobbying subject, did not report the presence of circumstances that exclude the possibility of such a person being a lobbying subject.
- submission of inaccurate information in the report to the Transparency Register
- non-submission or untimely submission of an application to the NAKC to stop lobbying.
- violation of restrictions on the subject of lobbying, or the implementation of lobbying
- as well as the punishments prescribed by law, in case of repeated commission of the above offenses.

The Law on Administrative Offenses in the Field of Lobbying shall enter into force at the same time as the Law on Lobbying, namely after two months from the date of the start of operation of the Transparency Register, but no later than January 1, 2025.

Since March 20, there have been changes in access to bank secrecy.

The National Bank of Ukraine has updated the Rules for the storage, protection, use and disclosure of bank secrecy, considering the changes to the Law of 07.12.2000 No. 2121-III "On Banks and Banking Activities" (hereinafter - Law No. 2121), which the People's Deputies adopted in November 2023 .

Please note that the procedure for disclosing banking secrets about customer accounts has not changed. Banks will continue to guarantee the secrecy of the bank account, account transactions and information about the client. Information about transactions, bank accounts or payment cards, as before, can be provided by the bank exclusively:

- to the clients themselves (their representatives).
- by court decision.
- law enforcement or state bodies that have the relevant powers, but only in the cases, in the manner and to the extent established by Law No. 2121.

According to the norms of the previous edition of Law No. 2121, law enforcement officers could ask banks for bank account numbers, balances of funds on them and transactions. Now this list is supplemented with the possibility to obtain information about the bank client's payment card number. This information can be provided only at the request of the above-mentioned authorities. Information about the payment card number will help law enforcement officers to investigate cases of payment fraud, including social engineering, phishing, etc., since payment transactions can only be made using the payment card number, without using the account number.

In March, the Government adopted a resolution on the creation of real estate registers.

The introduction of real estate registers in Ukraine will help solve problems with registration of property rights, calculation of subsidies, provision of social services and fight against corruption. Information from the registers will ensure interaction between information systems at different levels of management and prevent fraud regarding property rights and complications in registering a place of residence. As the Ministry of Digitization notes, local self-government bodies are learning how to fill in the EDRA and RBS, which is an important step for the further integration of Ukraine into a single European digital space. More than 1,300 communities have already been connected to the test environment, most of which have already completed theoretical and practical training. We expect that representatives of all communities will soon complete their training. After all, this is the key to quickly connecting specialists to the "pre-environment" and obtaining full access to keeping registers.

Among such registers, it is planned to create three basic ones :

- administrative-territorial units (YEDRATO).

- address (EDRA).

- buildings and structures (RBS).

This project is coordinated by the Ministry of Development of Communities, Territories, and Infrastructure together with the Ministry of Digital Transformation with the support of USAID / UK aid project "Transparency and Accountability in State Administration and Services / TAPAS" and EU4DigitalUA.

On March 12, the Ministry of Justice published the decision of the National Commission for Securities and the Stock Market (NCSCFR), which approved the Regulation on the form and content of the ownership structure of legal entities.

This Regulation establishes the form and content of the ownership structure of legal entities subject to state regulation and supervision by the National Bank of Ukraine, with the exception of banks and other legal entities subject to state regulation and supervision by the National Bank of Ukraine, as well as legal entities specified in Article 51 of the Law dated 06.12.2019 No. 361-IX "On preventing and countering the legalization (laundering) of proceeds of crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction", in particular: professional participants in capital markets and organized commodity markets; issuers, including corporate investment funds (CIF); legal entities providing information services on capital markets and organized commodity markets; legal entities engaged in trade repository on capital markets and organized commodity markets; rating agencies included in the State Register of authorized rating agencies; non-state pension funds.

Information on the ownership structure of the supervised entity must be filled in for the following items:

- all key participants of the supervised entity, which is a joint-stock company (all founders at the stage of creation).

- all persons who have a share in the authorized capital of a supervised entity created in a different form, except for a joint stock company.

- of all key participants of legal entities that are joint-stock companies (in each chain of share ownership).

- all persons who have a share in the authorized capital of legal entities created in other forms, except for a joint-stock company (in each chain of share ownership).

- all natural persons who have the possibility of significant influence on the management or activities of the supervised entity.

Information on the ownership structure of the supervised entity is submitted in paper or electronic form. This decision enters into force 90 calendar days after the termination or cancellation of martial law.

On March 18, the Ministry of Justice approved an order to postpone the introduction of fines for the submission of inaccurate data on the KBV from April 1 to September 1, 2024.

Considering this order, the imposition of penalties for the inaccuracy of data will begin to be implemented starting from September 1, 2024, in case it is not postponed again.

From April 1 , in accordance with the adopted law on the State Budget, the minimum wage (MZP) will increase.

In connection with the increase in the minimum wage, it is necessary to recalculate the tariff rates and salaries for enterprises whose terms of payment are determined based on the minimum wage.

The dimensions of the subsistence minimum will remain unchanged until the end of the current year:

- for children under 6 years of age – UAH 2,563.
- for children aged 6 to 18 years – UAH 3,196.
- for able-bodied persons – UAH 3,028.
- for persons who have lost their ability to work - UAH 2,361.

The total subsistence minimum per person is UAH 2,920 per month.

The minimum wage is a state social guarantee and is mandatory for all enterprises, regardless of the form of ownership, as well as for individuals who use employees.

According to the Law "On Wages", the amount of an employee's salary cannot be less than the amount of the minimum wage for a full monthly (hourly) rate of work.

When calculating the minimum wage, additional payments for work in dangerous conditions, for night and overtime work , as well as bonuses for holidays and anniversaries are not considered.

If the salary of an employee who works full-time during a month is less than the legally established amount of the minimum wage, the employer must pay a supplement to the level of the minimum wage along with the salary.

If the number of wages due to the frequency of payment is less than the minimum wage, then an additional payment is made to the level of the minimum wage.

If the employee works part-time or does not perform the full monthly (hourly) rate of work, then his salary is paid in proportion to the performed rate of work.

It is planned to resume customs inspections from May 1 .

According to the Government's decision, starting from May 1, the moratorium on the following checks will be lifted:

- scheduled documentary checks.
- unscheduled documentary checks (on-site and off-site).
- opposite animals.
- completion of initiated and pending inspections by February 24, 2022.

The moratorium on inspections will remain for taxpayers who are registered in temporarily occupied territories, territories of active and possible hostilities (according to the list of the Ministry of Reintegration). The main basis for conducting inspections will be the availability of information that indicates that the company violated the requirements of the legislation on customs matters. Customs officials will be given the right to check monetary, financial, and accounting documents, reports, contracts, declarations, calculations and other documents related to foreign economic transactions.