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KM Partners law firm applied to the Presidential Administration of Ukraine and some other state authorities with a letter in which asks to consider the issues of compulsory quarterly declaring enterprises’ currence valuables outside of Ukraine.

21 June, 2012 Newsletters

Burdensome relations with tax authorities, retention of the excessive declaring and administration influence, inter alia, on low investment rank of Ukraine (under the report of the World Bank and International Financial Corporation “Doing Business”, 2011). Methods of administrative encumbrance often are not even stipulated in a proper way normatively or are regulated by contradictive norms.

The President has already drawn attention to this issue in his speech at a meeting of the Council of Regions on May 24, 2012 and charged the Prosecutor General Viktor Pshonka to protect the business from the pressure of state authorities.

An example of one of such factors which, fortunately, may be eliminated by relatively small efforts, may be enterprises’ compulsory quarterly declaring of currency valuables outside of Ukraine (even in their absence), negative elements of which include:

  • indications of unlawfulness and contradiction of such declaring system;fulfillment of the requirement, which is not provided by law, through the forced mechanism of  blocking foreign economic activity;
  • contradiction to the Economic Reform Program for 2010-2014 “Prosperous society, competitive economy, effective state,” approved on June 2, 2010 by the Committee on Economic Reforms under the President of Ukraine, where the highest possible support of business by reducing state interference into the economy and reducing administrative barriers for its development is declared as one of the strategic directions of reforms in Ukraine;
  • unconformity to the trend of improvement of the legislation on issues of control of currency resources circulation.

Indications of unlawfulness and contradiction of the whole system of declaring currency valuables is observed at all stages, starting with filing the declaration up to bringing to responsibility, regulated by the documents of the Cabinet of Ministers of Ukraine, National Bank of Ukraine, State Tax Administration of Ukraine and State Customs Service of Ukraine, Ministry of Finance of Ukraine and the Presidential Edict.  At the same time some letters of the National Bank of Ukraine, State Tax Administration of Ukraine and State Customs Service of Ukraine are not even registered at the Ministry of Justice of Ukraine and may not have the force of the regulatory and legal acts.

More detailed analysis of this issue is covered in our Newsletter of June 5, 2012 (Compulsory quarterly declaring enterprises’ currence valuables outside of Ukraine) in which we also suggest a range of constructive measures for problem solving.

It seems reasonable to resolve this problem and thus remove the elements which pull down the ranking of Ukraine, moreover, it is seen that this might be done by  relatively small effort and still have a big output, therefore KM Partners applied with its proposals to the state authorities, which are competent to consider these questions. We hope that appropriate measures will be taken in this direction aimed at reducing administrative burdens and facilitating the business environment in Ukraine, as well as improving the rank of Ukraine for the Ranking of the World Bank and International Finance Corporation (we also send them the copies of our letter).

The above commentary presents the general statement for information purposes only and as such may not be practically used in specific cases without professional advice.

Kind regards,

© TOV "KM Partners", 2012

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