US-Ukraine Business Council

UKRAINE BUSINESS/LEGAL NEWS #2
U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Tuesday, May 26, 2009

INDEX OF ARTICLES ------
NOTE: Clicking on the title of any article takes you directly to the article.
Return to Index by clicking on Return to Index at the end of each article.

1. UKRAINE HARDENS RULES FOR EMPLOYEMNT OF NON-CITIZENS
Squire Sanders & Dempsey L.L.P., Ukraine Legal Alert, Kyiv, Ukraine, Thu, Apr 23, 2009

2. UKRAINE: NEW REQUIREMENT FOR ISSUANCE OF WORK PERMITS
Asters, Attorneys at Law, Newsletter, Kyiv, Ukraine, Wed, 20 May 2009

3. SALANS KYIV EMPLOYMENT NEWSLETTER-MAY 2009
Salans Employment Newsletter, First Issue, Kyiv, Ukraine, May 2009

4. NEW RULES ON LIMITS ON TERMS OF STAY OF FOREIGNERS IN UKRAINE
Baker & McKenzie - Limited CIS law firm, Kyiv, Ukraine, Wed, May 20, 2009

5. NEW ORDER ON PROCESSING WORK PERMITS IN UKRAINE
DLA Piper Corporate Newsletter, Kyiv, Ukraine, Monday, April 27, 2009

6. FOURTH CIS LOCAL COUNSEL FORUM IN KYIV, UKRAINE
Opera Hotel, Wednesday to Friday, 24-26 June 2009
Co-Chairs of the CIS Local Counsel Forum
RULG-Ukrainian Legal Group, Washington/Kyiv, May 2009

7. UKRAINE STIMULATES USAGE OF ALTERNATIVE ENERGY
SOURCES WITH REVISED GREEN TARIFF RULES

Ukraine Law Alert, Squire, Sanders & Dempsey, Kyiv, Ukraine, Tue, Apr 28, 2009

8. DLA PIPER ADVISED UNITED COAL COMPANY (UCC), A U.S.
COMPANY, ON SALE OF 100% OF SHARES TO METINVEST GROUP
DLA Piper Ukraine LLC, Kyiv, Ukraine, May 2009

9. UKRAINE: NEW APPROACHES TO DIVESTING ARE REQUIRED TO SECURE
VALUE DURING A TIME OF UNPRECEDENTED ECONOMIC VOLIATILITY
Ernst & Young LLC, Kyiv, Ukraine, Tuesday, March 17, 2009

10. UKRAINE: VASIL KISIL SENIOR ASSOCIATE TOUCHES UPON
THE ISSUE OF ASSETS EXCHANGE AMIDST LIQUIDITY CRISIS
Vasil Kisil & Partners, Kyiv, Ukraine, Wednesday, April 15, 2009

11. ASTERS MANAGING PARTNER SPEAKS AT MEMBERSHIP MEETING OF THE
NEWLY ESTABLISHED NORWEGIAN-UKRAINIAN CHAMBER OF COMMERCE IN OSLO
Asters, Attorneys at Law, Kyiv, Ukraine, Friday, April 3, 2009

12. UKRAINE: FARMING ANTI-CRISIS LAW
Ukraine Law Alert, Squire, Sanders & Dempsey L.L.C., Kyiv, Ukraine, Wed, Mar 18, 2009

13. SALANS KYIV TAX NEWSLETTER - APRIL 2009
Salans Kyiv Tax Newsletter, Kyiv, Ukraine, Friday, April 10, 2009

14. UKRAINE: NEW DEVELOPMENT IN PRACTICE OF ANTIMONOPOLY
COMMITTEE WITH RESPECT TO NON-COMPETE ARRANGEMENTS
Legal Alert, Baker & McKenzie - CIS Limited, Kyiv, Ukraine, Mon, May 25, 2009

15. SALANS' BANKING AND FINANCE LEGAL NEWSLETTER - MARCH 2009
Salans Kyiv, Ukraine - Legal Market News, Banking and Financial Sector
March 2009, Kyiv, Ukraine, Tuesday, April 14, 2009

16. UKRAINE: CHANGES IN LEASES OF RETAIL PREMISES
AND LEASES OF STATE PROPERTY
Government allows local authorities to fix price caps for the lease of,
and for services provided at retail premises
Legal Alert, Baker & McKenzie - CIS Limited, Kyiv, Ukraine, Thu, May 7, 2009

17. FRAUD RISK ON INCREASE ACROSS EUROPE AS RECESSION BITES
Ernst & Young Fraud survey reveals alarmingly high tolerance of unethical business behaviour
Ernst & Young LLC, Kyiv, Ukraine, Wednesday, May 20, 2009

18. UKRAINE: TOTAL OF 16 DEFAULTS REGISTERED IN 1ST QUARTER OF 2009
Vasil Kisil & Partners, Kyiv, Ukraine, April 2, 2009

19. KPMG SELECTS LVIV, UKRAINE, AMONG OTHER 'LOCATIONS
TO WATCH' FOR NEXT I.T. OUTSOURCING BOOM
KPMG Ukraine, Kyiv, Ukraine, March, 2009

20. CHADBOURNE & PARKE LLP SUPPORTED WORLD JURIST ASSOCIATION'S
23RD BIENNIAL CONGRESS ON THE LAW OF THE WORLD HELD IN KYIV
Chadbourne & Parke LLP, Kyiv, Ukraine, Wed, May 20, 2009

21. SALANS' BANKING AND FINANCE LEGAL NEWSLETTER - MAY 2009
Salans Kyiv, Ukraine - Legal Market News, Banking and Financial Sector
May 2009, Kyiv, Ukraine, Wednesday, May 13, 2009

22. NEW LEGAL REGULATION ON CONSTRUCTION IN UKRAINE
Salans Kyiv Real Estate & Construction Legal Newsletter, Kyiv, Ukraine, Fri, May 15, 2009

23. SALANS KYIV EMPLOYMENT NEWSLETTER, MAY 2008 ISSUE TWO
Salans Kyiv Employment Newsletter, Second Issue, Kyiv, Ukraine, May 2009

24. UKRAINE'S PROTECTION OF MINORITY SHAREHOLDERS' RIGHTS
FALLS WELL SHORT OF STANDARDS ELSEWHERE IN EUROPE
Corporate Relations Research Center Publishes Study on Minority Shareholders' Rights
Corporate Relations Research Center, Kiev, Ukraine
PRNewswire, Kiev, Ukraine, Thursday, May 14, 2009

25. UKRAINE: EXPERTS DISCUSS RISKS/OPPORTUNITIES OF M&A MARKET
Experts of Baker Tilly Ukraine and Baker & McKenzie conduct practical seminar
Baker Tilly Ukraine, Kyiv, Ukraine, Tuesday, April 14, 2009

26. NEW AMENDMENTS TO UKRAINE'S LAND CODE
Squire, Sanders & Dempsey L.L.P., Legal Alert, Kyiv, Ukraine, Wed, May 6, 2009
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1 . UKRAINE HARDENS RULES FOR EMPLOYMENT OF NON-CITIZENS

Squire Sanders & Dempsey L.L.P., Ukraine Legal Alert, Kyiv, Ukraine, Thu, Apr 23, 2009

KYIV - Pursuant to Ukrainian law, a Ukraine-based company may employ non-citizens only after obtaining a work permit (with some exceptions). On April 8, 2009 the Ukrainian government adopted a new procedure for obtaining work permits for non-citizens, replacing the procedure originally adopted in 1999. The new procedure is effective May 15, 2009.

The new procedure does not change the process for obtaining work permits in principle, but makes it more complicated, more expensive and less predictable. In particular:

The new procedure increases the number of documents to be filed with the Centers of Employment of the Ministry of Labor of Ukraine. In addition to the documents filed pursuant to the old procedure, a company must now also submit:

       (a) two color photos of the potential employee;
       (b) a certificate from the Center of Employment confirming that a company is not in debt to the Compulsory State Social Unemployment Insurance Fund;
       (c) if the potential employee resides within Ukraine, a certificate of conviction (or absence thereof) issued by the Ministry of Internal Affairs of
            Ukraine;
       (d) if the potential employee resides outside Ukraine, a certificate confirming that the potential employee is not serving a sentence or is not under
             criminal investigation, issued by authorized bodies of the country of origin or residence; and
       (e) copies of all pages of the potential employee's passport with identification data.

The new procedure changes the terms of work permits issued for specific categories of employees, for example, secondees or intra-corporate transferees. Under the old procedure, a work permit was granted for the term of hire, but pursuant to the new procedure work permits are obtained for a term up to three years, with term extensions of two years.

The new procedure increases the application fee 15 fold, from US$21 to US$300.

The revised procedure introduces new grounds for the Centers of Employment to refuse issuance and extension of a work permit: (a) the potential employee is serving a sentence or is under criminal investigation; (b) an employer failed to timely file the documents for extension of a work permit; and (c) state or regional labor markets changed making it unnecessary to use non-Ukraine workers.

The new procedure provides that if a non-citizen works for a company on terms other than described in a work permit, that permit must be cancelled.

If a work permit is cancelled or the non-citizen has not started work without a legitimate reason, the non-citizen may be deported from Ukraine. The company that invited the non-citizen to work must reimburse the state for the expenses of the deportation.

Work permits issued according to the old procedure remain valid until the expiration of their terms.

NOTE: If you have questions about the new procedure or how it will affect your company's hiring practices, please contact your principal Squire Sanders lawyer or one of the lawyers listed in this Alert. The contents of this update are not intended to serve as legal advice related to individual situations or as legal opinions concerning such situations. Counsel should be consulted for legal planning and advice.

ABOUT SQUIRE, SANDERS & DEMPSEY
Founded in 1890, Squire, Sanders & Dempsey L.L.P. has lawyers in 32 offices and 15 countries around the world. With one of the strongest integrated global platforms and our longstanding one-firm philosophy, Squire Sanders provides seamless legal counsel worldwide.

Squire, Sanders & Dempsey L.L.P. is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

CONTACTS: Peter Z. Teluk, +380.44.220.1414; Svitlana Gubenko, +380.44.220.1405; Dmytro Sakharuk, +380.44.220.1407; Volodymyr Smelik,
+380.44.220.1413. Valentina I. Prikhodko, CSR, vprikhodko@ssd.com, Direct: +380.44.220.1408, Fax: +380.44.220.1411, Squire, Sanders & Dempsey L.L.P., Leonardo Business Center, 16th Floor, 19-21 Bohdan Khmelnytsky St., Kyiv 01030, Ukraine.
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2. UKRAINE: NEW REQUIREMENT FOR ISSUANCE OF WORK PERMITS

Asters, Attorneys at Law, Newsletter, Kyiv, Ukraine, Wed, 20 May 2009

KYIV - On 15 May 2009, the new Regulation on the Issuance, Extension, and Annulment of Work Permits for Foreigners and Stateless Persons approved by
the Cabinet of Ministries (the "Regulation") came into effect. It significantly expands the obligations of foreigners and their Ukrainian employers in regards to opportunities for a foreigner to be employed in Ukraine.

In particular, Regulation enlarges the list of required documents for work permit obtainment. Previously it consisted of such documents as: a letter of
application, justification of employment of foreigner, employer's Charter and the certificate of the State registration, draft employment contract, a duly certified copy of the Foreigner’s diploma evidencing his/her education, with a notarized Ukrainian translation, employer’s good standing certificate issued by the relevant tax authority and some other.

Now a foreigner must additionally present a certificate confirming that he/she is not under a criminal investigation or has not been convicted of a crime in the country of residence at the time of the work permit application.

Moreover, an "expat employees" (transferred from offices of the company in other countries) and a person performing services in Ukraine without a
corporate presence must submit a formalized decision of a foreign company to transfer the foreigner to Ukraine along with a copy of an employment contract, indicating the projected term of the foreigner's work in Ukraine, or a copy of the contract on direct supply of services in Ukraine. A work permit for such employees shall not exceed 3 years.

An employer will have to pay a higher state fee for issuance of a work permit in the amount of UAH 2,500 (before it was UAH 170) and a fine if a
foreigner commences working prior to obtaining a permit in the amount of UAH 12,500 (before it was UAH 850).

The Regulation introduced additional grounds for a refusal to issue, to extend or to annul a work permit. Additionally to the grounds provided by the superseded regulation, now a work permit will not be issued if, within the last 12 months, the foreigner was denied an IM-1 visa, or his/her work permit has been annulled, or he/she was expelled from Ukraine.

It appears that the Regulation makes the procedure of obtainment of work permit more thorough and complicated for employers.

ABOUT ASTERS
Asters is a Kyiv-based Ukrainian law firm founded in 1995 as Shevchenko Didkovskiy & Partners. The firm is among the most recommended law firms for Ukraine according to reputable international legal directories The Legal 500, PLC Which Lawyer?, Chambers Global, IFLR 1000, and Ukraine's legal market research publications.

A list of the firm's clients includes major international corporations, such as Beiersdorf AG, Coca-Cola, News Corp., Nissan Motor, Nokia Corporation, Philip Morris, Renault, Sopharma, Telenor ASA, Toshiba Corporation, and the world's leading financial institutions Barclays Capital, Citibank, Credit Suisse, Deutsche Bank, Dresdner Kleinwort Wasserstein, EBRD, IFC, ING Bank, Standard Bank and Swedbank AB.

Asters law firm is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

CONTACT: Asters, Attorneys at Law, Leonardo Business Center, 14th floor, 19-21 Bohdana Khmelnytskogo Str., Kyiv, 01030, Ukraine, Tel. + 380 44 230 6000 Fax + 380 44 230 6001. Svitlana Novikova, Business Development, Marketing and PR, svitlana.novikova@asterslaw.com
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3. SALANS KYIV EMPLOYMENT NEWSLETTER - MAY 2009

SALANS Employment Newsletter, First Issue, Kyiv, Ukraine, May 2009

KYIV, Ukraine: IN THIS ISSUE: 1. Amendments introduced to the procedure for issuing employment permits; 2. Amendments introduced to the procedure for payment of unemployment benefits

1. Amendments introduced to the procedure for issuing employment permits ----------

On 14 May, a new procedure for issuing employment permits for foreigners and stateless persons comes into effect, as approved by decree No. 322 of the Cabinet of Ministers of Ukraine of 8 April 2009 “On approval of the procedure for the issuing, renewal and cancellation of employment permits for foreigners and stateless persons” (“Decree No. 322”),

Decree No. 322 extends the list of documents to be submitted to an employment centre in connection with the issuing (or renewal) of employment permits for foreigners and stateless persons. It is necessary to submit the following additional items:
     1) photographs of relevant foreigner or stateless person;
      2) certificate issued by the relevant authority evidencing that the foreigner is not serving any conviction and is not under investigation [issued in such
         foreigner’s home country];
      3) certificate issued by an employment centre evidencing that the employer has no debts to the Fund of Mandatory Social Insurance for Unemployment;
          and
      4) copies of the pages of the foreigner’s passport containing principal identification data.

It will also be necessary to certify any documents issued in another country and prepared in a foreign language in accordance with the laws of the issuing country, and to legalize such documents, unless otherwise stipulated in an international treaty to which Ukraine is a party.

In addition, the following increases have been made: (і) the amount of the fee payable for consideration of the application for issuing or renewal of an employment permit has been increased from UAH 170 to the equivalent of four minimum salaries (as at 1 May 2009 such fee is UAH 2,500); and (іі) the amount of the fine payable by an employer of a foreigner without an employment permit has been increased from UAH 850 to the equivalent of twenty minimum salaries (as at 1 April 2009 such fine is UAH 12,500) per person.

2. Amendments introduced to the procedure for payment of unemployment benefits ----------
The Constitutional Court of Ukraine concluded that the provisions of subparagraph 13, paragraph 4, section I of the law of Ukraine No. 799-VI of 25
December 2008 "On amendments to certain Ukrainian laws mitigating the effects of the global financial crisis on employment" (the “Law”) are incompatible with the Constitution of Ukraine and decided that such provisions were to become invalid as of the date of approval of its decision by the Constitutional Court of Ukraine, which in this case was 28 April 2009.

Subparagraph 13, paragraph 4, section І of the Law stipulated that, from 25 December 2008, payment of unemployment benefits to persons who terminated their previous employment by mutual agreement shall commence on the 91st calendar day following the person’s registration, as per the established procedure, with the State Employment Service.

Based on a decision of the Constitutional Court of Ukraine, benefits shall once again be paid to such persons from the 8th rather than the 91st calendar day.
Salans is a full service international law firm. Salans has its offices in Almaty, Baku, Barcelona, Beijing, Berlin, Bratislava, Bucharest, Budapest, Frankfurt, Hong Kong, Istanbul, Kyiv, London, Madrid, Moscow, New York, Paris, Prague, Shanghai, St. Petersburg and Warsaw.

Salans is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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4. NEW RULES ON LIMITS ON TERMS OF STAY OF FOREIGNERS IN UKRAINE

Baker & McKenzie- CIS Limited law firm, Kyiv, Ukraine, Wed, May 20, 2009

KYIV - On 6 May 2009, the Cabinet of Ministers of Ukraine amended the "Rules for Entry of Foreigners and Apatrides into Ukraine, Their Transit Through
and Exit From Ukraine", which were approved by Resolution of the Cabinet of Ministers No. 1074, dated 29 December 1995 (the "Rules"). Those amendments (the "Amendments") became effective as of 15 May 2009.

1. NOT MORE THAN 90 DAYS STAY WITHIN 180 DAYS
According to the new wording of Article 19 of the Rules, except for holders of certain limited types of visas (e.g., student visas, work visas),
foreigners may stay in Ukraine only as follows:

(1) a foreigner from a country, the citizens of which need a visa, may stay for the term of the validity of his/her visa, but for not more than for 90
days within 180 days counting from the date of the first entry; and

(2) a foreigner from a country, the citizens of which do not need a visa, may stay for up to 90 days within 180 days counting from the date of his/her
first entry, unless otherwise stipulated by a bilateral agreement to whichUkraine is a party. This limitation applies even if the visa (i.e., a business visa, a private visa, etc.), which has been issued to the foreigner, is valid for 6-months, 1-year, or longer.

This limit also applies to citizens, i.e., both tourists, private and business visitors, etc., of the EU, Japan, the USA, and all other countries, for which the requirement for a visa has been waived (since 2005) for visits of less than 90 days. Therefore, it will not be possible any longer to enter Ukraine for 89 days, to exit for a brief period, and, in a couple of days, to re-enter for the next 89 days.

If a foreigner needs to spend more than 90 days within the above-mentioned 180 days period, then an application for an extension must be filed within the appropriate division of the Ukrainian Ministry of Interior at least 3 business days before the expiration of the 90 days.

If such extension is granted, it will be valid only for a continuous stay in the country (i.e., until the expiration of the term of the individual's visa or of another allowed period, as the case may be), but not for re-entry into Ukraine. If the extension is not granted, then the foreigner must leave the country before the 90-days period comes to an end.

2. ALERT TO CITIZENS OF WTO MEMBER COUNTRIES
The Amendments have abolished the third item in Article 19 of the Rules, which previously allowed citizens of WTO member countries to spend up to 180
days within a year in Ukraine.

According to oral information from a responsible officer of the State Borderguards Service, those foreigners from WTO member countries, who have
already spent more than 90 days in Ukraine starting from 1 January 2009 (in reliance on the now-abolished third item of Article 19 of the Rules), will not be exempted from the abovementioned limitations, and the records indicating the duration of their stays in Ukraine will not be reset.

3. ALERT TO FOREIGN EMPLOYEES OF REPRESENTATIVE OFFICES
Foreigners, who are employees of Ukrainian legal entities, are eligible to obtain Ukrainian work permits, work visas, and temporary residence permits. The combination of these three documents will allow them to enter/exit Ukraine as many times and at such times as may be necessary within the term of validity of their work permits.

In contrast, foreigners, who are employed by Ukrainian representative offices of foreign companies, are not eligible for a Ukrainian work permit, in the oral opinion expressed by a responsible officer of the Kyiv City Employment Center (which opinion is not necessarily grounded on any specific Ukrainian legislation and, as such, is subject to challenge before the Ukrainian courts).

As a result, a foreigner employed by a representative office will not be able to obtain a work visa and a temporary residency permit, for which a work permit is a prerequisite, at least not unless and until a Ukrainian court will rule that such foreigner is eligible for a Ukrainian work permit.

As a result, such foreign employees of representative offices will not be exempted from the above mentioned restriction on the number of days that they can spend in Ukraine, but rather will be allowed only to stay 90 days within 180 days.

4. CONSEQUENCES OF SPENDING MORE THAN 90 DAYS IN UKRAINE
As we have noted in our earlier Legal Alerts, the State Borderguard Service has launched a computerized system for recording each foreigner's entries
into and exits from Ukraine. This system automatically marks the commencement of the 180 day period upon a foreigner's entry into Ukraine and
calculates the number of days spent by the foreigner in Ukraine. Both the date of entry and the date of exit count towards the number of days spent in
Ukraine.

If a foreigner spends more than 90 days within 180 days (without obtaining an extension of stay mentioned above), then such foreigner may be subject
to a fine of between UAH340 and UAH680 and, in addition, may be banned from entering Ukraine for a period of between 6 months and 5 years.

If a foreigner exhausts the 90 days within a 180 day limit of stay, such foreigner will not be permitted to re-enter the country until the 180 day limit expires. Thus, all foreigners, who do not have temporary residence permits (or permanent residence permits), should very carefully calculate the number of days which they spend in Ukraine and plan their visit(s) and the duration of their stay(s) in the country accordingly.

NOTE: Baker & McKenzie - CIS, Limited, Renaissance Business Center, 24 Vorovskoho St., Kyiv 01054, Ukraine; Tel: +380 44 5900101; Fax: +380 44 5900110, www.bakernet. For More Information: Mariana Marchuk, Associate, +380 44 590 0101; mariana.marchuk@bakernet.com or Oksana Vynarchyk, Associate, +380 44 590 0101; oksana.vynarchyk@bakernet.com.

Baker & McKenzie is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
Promoting U.S.-Ukraine business relations & investment since 1995.
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5. NEW ORDER ON PROCESSING WORK PERMITS IN UKRAINE

DLA Piper Corporate Newsletter, Kyiv, Ukraine, Monday, April 27, 2009
KYIV - On 15 May 2009, the new Order on Issuance, Prolongation and Cancellation of Permits for Use of Foreigners’ and Stateless Persons’ Labour ("Order"), approved by Resolution of the Cabinet of Ministers of Ukraine No. 322 dated 8 April 2009 will enter into force. The new Order introduces some procedural changes into the process of work permits obtaining which, in their turn, can hardly make the life of employers easier.

Comparing to the effective Procedure of Processing Work Permits in Ukraine for Foreigners and Stateless Persons the following main changes are to be introduced by the new Order:

Extended the list of documents which should be filed to the Employment Centre for issuance of work permits. Besides other required documents, each employer will have to provide the Employment Centre with the certificate confirming absence of convictions of the candidate for employment.

If at the moment of the processing of the documents the candidate resides in Ukraine the certificate should be issued by the Ministry of Internal Affairs of Ukraine. Otherwise, the certificate should be issued by the respective state body of the country of candidate’s residence;

Extended the list of reasons which may lead to denial in issuance of work permits;

The fee for the processing of the documents for issuance of work permit has been increased and shall constitute an equivalent of 4 (four) minimal monthly salaries, that currently equals to UAH 2,500 (under the effective order – UAH 170);

The fine for use of foreigners labour without work permits has been increased and shall constitute an equivalent of 20 (twenty) minimal monthly salaries, that currently equals to UAH 12,500 (under the effective order – UAH 850).

Please do not hesitate to contact us should you have any questions on the above. Arthur Kotenko, Partner, T +380 44 490 9562, E-mail arthur.kotenko@dlapiper.com; Ivan Lyakh, Associate, T +380 44 490 9575, E-mail ivan.lyakh@dlapiper.com.

DLA Piper Ukraine LLC is a member of the U.S.-Ukraine Business Council, Washington, D.C., www.usubc.org. DLA Piper Ukraine LLC is part of DLA Piper, a global legal services organization and was International Law Firm of the Year 2008 in Ukraine.
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6. FOURTH CIS LOCAL COUNSEL FORUM IN KYIV, UKRAINE
Opera Hotel, Wednesday to Friday, 24-26 June 2009

Co-Chairs of the CIS Local Counsel Forum
RULG-Ukrainian Legal Group, Washington/Kyiv, May 2009

Dear Colleagues,

We are pleased to announce that the fourth CIS Local Counsel Forum will take place in Kyiv, Ukraine on Wednesday-Friday, 24-26 June 2009 at the exquisite Opera Hotel. The Forum will be hosted by the RULG-Ukrainian Legal Group. Registration is now open at http://www.rulg.com/cisforum/registration.asp

We are heartened by the fact that, despite the economic crisis which has affected the CIS region as much as the rest of the world, we have received numerous inquiries from the Forum Delegates insisting that the fourth Forum be held this year. Our Delegates believe that we have to withstand the crisis as a community, and need each other now even more than in good times - the CIS Forum has always been a place where numerous referrals were exchanged and new projects generated.

The encouragement from many of you convinced us that we need to make our best effort, and this effort will be rewarded for everybody with new contacts, ideas, projects and alliances, just as at previous Forums.

The inaugural CIS Local Counsel Forum was held in Kyiv on 28-30 June 2006, hosted by RULG-Ukrainian Legal Group, and was the first ever wide-scale meeting of the international legal community with the best Local Counsel law firms from the CIS economic region (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan).

Since then, the CIS Forum has evolved into an informal network of managing and senior partners of CIS and international law firms, meeting annually in different venues chosen by the Delegates. The second Forum was successfully held in Baku on 20-22 June 2007, hosted by the prominent Azeri law firm Fina LLP.

The third Forum was hosted by the leading Russian law firm of Egorov Puginsky Afanasiev & Partners on 25-27 June 2008 in St. Petersburg and was the largest and most spectacular Forum so far.

LEADING BUSINESS LAWYERS
The Forum meetings bring together leading business lawyers from the CIS economic region and from around the world, with an approximately equal split between representatives of the international legal community and of the CIS legal community. The Delegates share the Mission of the Forum - "Bringing together the CIS and international legal communities with the aim of creating joint business opportunities and long-term cooperation".

This Mission reflects the 21st century reality, in which global investors view the CIS countries as a broad and dynamic economic region with intertwined business connections and comparable legal systems. The motto of the Forum is "Know Your Local Counsel - Recognize an Opportunity".

FORUM'S WEB SITE
The Forum's Web site http://www.rulg.com/cisforum provides you with detailed information about the Forum, its Mission and Concept, a valuable database of the best CIS Local Counsel Firms (CIS Local Counsel Questionnaires), media coverage and comments from the Delegates, as well as comprehensive information about every Forum, including the Programs, Lists of Delegates and Guests, Bios and Presentations of Moderators and Panelists and wonderful pictures, which reflect the open and exciting spirit of the Forum.

Considering the challenging economic times, we chose Kyiv as the venue for the fourth Forum because it is the easiest and most cost-effective location for most of the Delegates: it has excellent airline connections, most of the CIS and international Delegates do not need a visa to come to Ukraine and many of the Delegates can combine the trip with other business tasks.

Finally, Kyiv is not only a business capital, but also a major historic and cultural center: the Delegates and their Guests will enjoy this splendid city of Slavic and Byzantine heritage mixed with a modern Mediterranean atmosphere.

DRAFT PROGRAM IS POSTED
The draft Program of the fourth Forum is already posted on the Web site http://www.rulg.com/cisforum/forum_program.asp, and other information will be posted as preparations progress.

This year's program, in addition to traditional regional updates and substantive panels, is devoted to one big idea: "Legal Services & Business" - how we, as practicing lawyers, can make a positive impact on our clients' businesses, what business needs from us, and what we can do to make ourselves more useful and productive for our clients.

Another new idea is short "Open Microphone" sessions between the panels, during which Delegates can provide brief updates on the most important developments in their practice. The Delegates will be able to sign up for "Open Microphone" sessions one week before the fourth Forum on a "first-come, first-serve" basis.

As always, in addition to a busy Forum Program, the Delegates will be offered delightful social events on 24-26 June 2009, as well as an optional City Tour on 27 June 2009. There will also be a separate cultural Guest Program offered on 25-26 June 2009. As always, registered Guests will be included in all social events of the Forum.

As with all previous Forums, we will have to carry out registration promptly to secure all the sites and special rates we were able to obtain for the Forum Delegates and Guests. Space will be limited, and we will close registration promptly upon reaching capacity.

Therefore, we encourage you to register and to reserve your hotel room in Kyiv, as well as to make your travel arrangements, as early as possible. We will process registrations on a "first-come, first-serve" basis, and due to capacity limitations we can register no more than three Delegates from any one law firm.

All registration information is available at http://www.rulg.com/cisforum/index2.asp. Other information will be posted as preparations progress.

We look forward to seeing you in Kyiv!

Co-Chairs of the CIS Local Counsel Forum:
Irina Paliashvili, RULG-Ukrainian Legal Group, P.A.
John Whittaker, Clyde & Co LLP
Dimitry Afanasiev, Chairman of Egorov Puginsky Afanasiev & Partners

NOTE: RULG-Ukrainian Legal Group, P.A. is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
LINK: http://www.rulg.com/cisforum/index.asp
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7. UKRAINE STIMULATES USAGE OF ALTERNATIVE ENERGY
SOURCES WITH REVISED GREEN TARIFF RULES

Ukraine Law Alert, Squire, Sanders & Dempsey, Kyiv, Ukraine, Tue, Apr 28, 2009

KYIV - Last September Ukraine's parliament adopted the first law in the country designed to stimulate use of alternative sources of energy through introduction of the so-called "green" tariff – a special tariff by which electricity generated from alternative sources must be purchased at the Wholesale Electricity Market (the Green Tariff). However, the law did not accomplish its goals, possibly because of its generality and ambiguity.

In response, on April 1, 2009 Ukraine's parliament fundamentally changed the rules on implementation of the Green Tariff by adopting the Law of Ukraine "On Amendment of the Law of Ukraine 'On Electrical Energy' Regarding Stimulation of Usage of Alternative Sources of Energy" No. 1220-VI (the Green Tariff Law), which went into effect on April 22, 2009.

The Green Tariff Law significantly changes the rules on implementation of the Green Tariff in Ukraine. The main change is that instead of the unified Green Tariff approach introduced in September 2008, the Green Tariff Law differentiates the Green Tariff depending on the source of alternative energy and the type and capacity of the generation facilities.

To address the risk of devaluation of Ukraine's currency, the Green Tariff Law also introduces a fixed minimal Green Tariff nominated in euros pursuant to the official euro/UAH exchange rate as of January 1, 2009. In addition, the Green Tariff Law stimulates manufacturing and consumption of materials from Ukraine, as well as works and services required for construction of the generation facilities that use alternative sources of energy.

Green Tariff Amounts and Approval Procedure
The Green Tariff may by used by companies no later than January 1, 2030. According to the law implementing it, the Green Tariff is approved by the National Electricity Regulatory Commission of Ukraine (NERC) for: (a) each company, that uses alternative sources of energy for generation of electricity; (b) each type of alternative energy; and (c) each generation facility.

The basis for calculation of the Green Tariff is a retail tariff approved by NERC for consumers with the second class of voltage for January 2009 in the amount of 58.46 kopeks per kilowatt-hour (kWh) without VAT (the Basic Tariff). Applying various coefficients to the Basic Tariff, the Green Tariff Law differentiates the Green Tariff depending on the type of alternative source of energy and the type and capacity of generation facilities as specified in the table below.

Surprisingly, the Green Tariff Law does not specify rules for calculation of the Green Tariff for electricity generated from other renewable sources treated by the law in Ukraine as alternative, such as geothermal sources, waves and ebbs, gas of sewage stations, biogases, coal methane and exhaust gases. We expect that Ukraine's parliament will adopt rules for calculation of the Green Tariff for electricity generated from "missed" sources of energy.

We also anticipate that in the near future NERC will cancel the current detailed procedure on approval of the Green Tariff adopted pursuant to the law of September 2008 and introduce a new one, complying with the Green Tariff Law.

The Green Tariff Law promotes the quick introduction of green technologies into Ukraine's energy sector. In particular, the Green Tariff Law specifies that the Green Coefficient for electricity generated by generation facilities that use alternative sources of energy and are constructed or substantially upgraded after 2014, 2019 and 2024 decreases 10, 20 and 30 percent respectively from its default rates indicated in the table above. Regarding "substantial upgrade," the Green Tariff Law specifies it as an increase in the initial value of the facilities' generation equipment of more than 50 percent.

Fixed Minimal Green Tariff
The Green Tariff Law sets a mechanism for protection of investors from devaluation of Ukraine's currency during construction and exploitation of generation facilities based on alternative sources of energy. In particular, the law specifies that in any event the Green Tariff approved by NERC for a particular company may not be less than a fixed minimal Green Tariff.

The minimal Green Tariff is nominated in euros and equal to the Green Tariff calculated using the Basic Tariff and coefficients valid as of January 1, 2009 and the official euro/UAH exchange rate set by the National Bank of Ukraine as of January 1, 2009 (1 euro = 1085.546 UAH).

Each time the NERC approves the Green Tariff for a company, it must make sure that the Green Tariff is not less than the Minimal Green Tariff converted into UAH pursuant to the official euro/UAH exchange rate set by the National Bank of Ukraine at the date of last approval of the Basic Tariff.

Stimulation of Manufacturing and Consumption of Materials,
Works and Services From Ukraine-based Companies
Through the mechanisms of the Green Tariff, Ukraine's parliament stimulates consumption of materials, works and services from Ukraine during construction of generation facilities based on alternative sources of energy.

The Green Tariff Law provides that a generation company has the right to charge its customers the Green Tariff only if, starting from January 1, 2012, the share of materials, works and services from Ukraine used for construction of a generation facility based on alternative sources of energy is not less than 30 percent of its total value, and starting from January 1, 2014 – not less than 50 percent.

The Green Tariff Law does not specify the procedure for calculating of the share of materials, works and services used from Ukraine in the construction of generation facilities based on alternative sources of energy. Instead, the Green Tariff Law requires NERC to develop such a procedure within three months after the law goes into effect.

The Green Tariff Law also stimulates domestic development and manufacturing of equipment and components used for generation of energy from alternative sources by fixing a retail tariff for electricity for registered manufacturers at the level of January 1, 2009.

State Guarantees in Case of a Change in the Law
By means of a separate provision of the Green Tariff Law, the state of Ukraine guarantees companies that generate electricity from alternative sources at the constructed generation facilities will have the right to follow the Green Tariff rules valid at the date the generation facilities were put into use, even in case of further change to the Green Tariff rules. In such a case, however, the companies may decide to follow new Green Tariff rules.

The Green Tariff Law also introduces other changes into the Law of Ukraine "On Energy Industry" that are technical in nature and thus not described in this Alert. If you have questions about the Green Tariff Law or any of the provisions, please contact your principal Squire Sanders lawyer or one of the lawyers listed in this Alert.

NOTE: The contents of this update are not intended to serve as legal advice related to individual situations or as legal opinions concerning such situations. Counsel should be consulted for legal planning and advice. Founded in 1890, Squire, Sanders & Dempsey L.L.P. has lawyers in 32 offices and 15 countries around the world. With one of the strongest integrated global platforms and our longstanding one-firm philosophy, Squire Sanders provides seamless legal counsel worldwide.

Squire, Sanders & Dempsey L.L.P. is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

CONTACTS: Peter Z. Teluk, +380.44.220.1414; Vladyslav Smelik, +380.44.220.1403; Volodymyr Smelik, +380.44.220.1413; Dmytro Sakharuk
+380.44.220.1407. Valentina I. Prikhodko, CSR, vprikhodko@ssd.com, Direct: +380.44.220.1408, Fax: +380.44.220.1411, Squire, Sanders & Dempsey L.L.P., Leonardo Business Center, 16th Floor, 19-21 Bohdan Khmelnytsky St., Kyiv 01030, Ukraine.
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8. DLA PIPER ADVISED UNITED COAL COMPANY (UCC), A U.S.
COMPANY, ON SALE OF 100% OF SHARES TO METINVEST GROUP

DLA Piper Ukraine LLC, Kyiv, Ukraine, May 2009

KYIV - DLA Piper in cooperation with Venable LLP and Howrey LPP law firms advised United Coal Company, LLC, an American producer of metallurgical and steam coal headquartered in Teays Valley, West Virginia, USA (“UCC”) on the sale of 100% of shares to Metinvest Group. Metinvest was represented in the transaction by Hammonds and Metinvest’s legal department.

The key rationale for the acquisition of UCC was its significant reserves of high quality metallurgical coal, which will help Metinvest’s coke facilities produce a better quality feedstock.

As a consequence, the Group’s steel works will be provided with a higher quality coke, reducing iron production costs and improving quality characteristics. The Group will thereafter be more competitive in current and prospective sales markets.

The DLA Piper team advised UCC generally on obtaining the approval of Ukraine's Antimonopoly Committee and assisted to UCC, Venable LLP and Howrey LPP in dealing with regulatory issues.

In particular the legal team advised and supported the client in negotiations with the AMCU through the in-depth analysis of the Ukrainian coal market, analysis of the appropriateness of the contemplated acquisition and of its subsequent influence at the market.

With the help of DLA Piper the round table meeting of the top representatives of the deal sides as well as AMCU was held (such events being exceptionally rare at the market, which emphasizes the importance of the transaction).

Arthur Kotenko, partner of the Corporate and Tax practice in Kyiv, led the team advising UCC. He was supported by senior associate Natalia Pakhomovska and associate Elina Vavryshchuk.

ABOUT DLA PIPER UKRAINE
DLA Piper Ukraine LLC is part of DLA Piper, the largest global legal services organization in the world. The Kyiv team comprises more than 40 lawyers and is headed by Managing Partner Margarita Karpenko. In 2008 DLA Piper Ukraine LLC was named International Law Firm of the Year in Ukraine at the Legal Awards 2008, organised by Yuridicheskaya Practika Publishing.

DLA Piper is the largest global legal services organization in the world with over 3,700 lawyers across 66 offices and 28 countries. From its offices across Asia, Europe, the Middle East and the United States, legal and business advisers provide a range of services to local, regional and international businesses. DLA Piper is relationship driven and committed to meeting the ongoing legal needs of its clients.

DLA Piper Ukraine LLC is a member of the U.S.-Ukraine Business Council (USUBC), www.usubc.org.

CONTACT: For further information contact Nataliya Tkachenko, Marketing Manager, DLA Piper Ukraine LLC, Tel: +380 44 490 9579 or e-mail nataliya.tkachenko@dlapiper.com. Please visit our website: www.dlapiper.com/ukraine.
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9. UKRAINE: NEW APPROACHES TO DIVESTING ARE REQUIRED
TO SECURE VALUE DURING A TIME OF UNPRECEDENTED
ECONOMIC VOLATILITY

Ernst & Young LLC, Kyiv, Ukraine, Tuesday, March 17, 2009

LONDON, KYIV - Unprecedented economic volatility means that the ‘accepted’ divestment norms no longer apply, according to a new Ernst & Young report. Companies now need to think more creatively, prepare more carefully, act more decisively and with greater flexibility to ensure their deals are successful – and all within a timeframe over which they have little control.

Divesting in turbulent times: Achieving value in a buyer’s market, is the first global survey of its kind, conducted with 360 c-suite level executives at companies across the world, with an annual turnover of $1bn+.

The survey reveals that more than half of deal doers (53%) confirm they are more likely to consider divestments due to current economic events.
Respondents expect deals to be more sophisticated in process and structure, with increasingly complex demands.

While the survey finds a sizeable minority (23%) looking for cash – to bolster the balance sheet, fund acquisitions or pay down debt – almost half (48%) are more likely to consider a range of innovative structures at a time when divesting 100% of their businesses for cash may be difficult to achieve.

Pip McCrostie, Global Vice Chair, Transactions Advisory Services at Ernst & Young, says: “In the pre-crunch years, 100% sales for cash at closing have been the norm but this is no longer the case. While a higher percentage of companies are considering divestments, frozen debt markets give them little option but to welcome alternatives to cash sales and more innovative deal structures.

“Sellers are also finding they need to pursue multiple divestment options, simultaneously, in order to have the greatest chance of achieving their objectives. Overall, corporates will need to increasingly deploy portfolio management techniques long practiced by private equity to secure the most value.”

Who’s buying?
We are firmly in a buyers’ market and the range of buyers has expanded to include companies in emerging markets, sovereign wealth funds and governments. Their needs have become more varied, adding further complex demands. “Buyers with cash have a rare opportunity to acquire businesses that would not normally be sold at current valuations,” continues McCrostie.

“Companies with strong balance sheets are likely to strike attractive deals. For deals to succeed buyers and sellers will have to work much more closely together to close transactions. Buyers have the stronger hand, so sellers must focus on the different requirements of buyers in order to convince their skeptical investors about the merits of a deal, customizing the ‘for sale’ offering for each prospective bidder.”

Preparation drives value
Only about one-third (36%) believed their recent divestments had met expectations. 62% cited ‘lack of time’ to prepare for divestments as the biggest obstacle to successful divestment. Historically, almost two-thirds considered at least six months necessary to successfully execute a deal – a timeframe that might not always be available in today’s economic climate. Companies in exceptional circumstances may have little option but to sell quickly, possibly at reduced valuations.

“Taking time to prepare a business for sale is more important than ever today, however, the economic environment is forcing many companies to undertake an accelerated divestment. Companies must maintain a heightened state of readiness right across their portfolios and be prepared to exit all or parts of their business at very short notice. Vulnerable companies may need to prepare themselves to be ready to execute in as little as 10 days in some cases – any additional time available will be a welcome luxury,” says McCrostie.

“Whether you are a buyer or a seller, proactive portfolio management based on comprehensive information will give added flexibility. Divestments will not yield the value they once did, but the best defense against that shift is preparation.”

“In Ukraine, we clearly see a shift in the M&A market from sellers to buyers. Worsening economic conditions and financial market volatility have resulted in many distressed companies, as evidenced by deteriorating financial performance and a reduced ability to meet debt servicing obligations. The number of potential buyers in the market has significantly decreased and the few existing buyers are increasingly imposing more complex and stringent requirements on sellers.

"Under these circumstances, the quality and transparency of information about the seller’s historical financial performance and projected future results are more important than ever,” says Aaron Johnson, Head of Transaction Advisory Services with Ernst & Young Ukraine.

Other key findings
       (1) In financial services, 61% of respondents reported that market conditions make them more likely to consider divestments and 55% report they are
             more likely to consider multiple divestment options in today’s environment – both more than the survey average. With transaction sizes for financial
             services companies often extremely large, cash deals are especially difficult to finance.
       (2) 23% of respondents anticipate emerging market buyers will be their main acquirers of assets in the next two years, against just 11% saying they
             were their main acquirers in the past two.
       (3) While only 2% of respondents said sovereign wealth funds had been their main buyers in the past two years, 7% expect them to be in the next two.
              By contrast, 12% expect private equity to be their buyers in the next two years, compared to 16% as buyers two years ago.

About the report
Ernst & Young’s global divestment survey 2009 is based on both a quantitative survey of senior executives of large companies and a series of face-to-face interviews. The survey was conducted in November and December 2008. The Economist Intelligence Unit conducted the quantitative survey, contacting a total of 360 senior vice presidents and C-suite executives at companies with revenues of more than $1 billion. There was a broad sector representation (financial services accounted for 33% of respondents, which has been allowed for in the findings).

About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 135,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve potential.

In Ukraine Ernst & Young established its practice in 1991. Ernst & Young Ukraine now employs more than 570 professionals providing a full range of services to a number of multinational corporations and Ukrainian enterprises. For more information, please visit www.ey.com/ukraine.

Ernst & Young Ukraine is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

CONTACT: Natalia Partach, Senior PR Specialist, Marketing and Business Development, Ernst & Young LLC, Khreschatyk Street 19A, 01001 Kyiv, Ukraine, Phone: +380 (44) 490 3000 ext 8714 | Mobile: +380 (67) 659 0388, E-Mail: Natalia.Partach@ua.ey.com; Website: www.ey.com/ukraine.

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10. UKRAINE: VASIL KISIL SENIOR ASSOCIATE TOUCHES UPON THE ISSUE OF ASSETS EXCHANGE AMIDST LIQUIDITY CRISIS

Vasil Kisil & Partners, Kyiv, Ukraine, Wednesday, April 15, 2009

KYIV - On April 15, 2009 the “Setting up Transactions that Involve the Purchase of Problem Assets” conference sponsored by The Financial Analysts’ Service was held in Kyiv.

Event participants identified particular industries that are attractive for investments in the period of economic turmoil along with the core problems faced by investors in Ukraine. They also shared their opinion on how Ukrainian companies can overcome the crisis and discussed potential sources of financing problem assets.

A separate set of issues was dedicated to the specifics of problem assets transactions: conducting due diligence, evaluating problem assets, accounting of target’s debts, and the nuances of structuring such transactions.

Mr. Ivan Yurchenko, senior associate with Vasil Kisil & Partners, covered legal aspects of exchanging assets/shares as one of the trends on the M&A market amidst liquidity crisis.

“Exchange of assets in one industry enables to increase a market share of the business and gain competitive advantages. In order to have the most effective results possible from an assets exchange, partners should have common points where their business interests meet and conduct a careful analysis of how they view their joint activities in order to achieve clear understanding of all the nuances of this future cooperation,” - Mr. Yurchenko pointed out in his speech.

Ivan especially emphasized a number of issues related to structuring asset exchange transactions and the specifics of entering into asset co-management agreements. Moreover, he also addressed such issues as antimonopoly regulation, mandatory due diligence and expert evaluation of assets and protections of foreign investments.

ABOUT VASIL KISIL & PARTNERS: Vasil Kisil & Partners is one of the leading and long-established law firms in Ukraine that has impeccable reputation, unique expertise and is providing top quality services to its clients. Founded in 1992, the firm has assembled a talented team of 65 experienced and skilled lawyers dedicated to the highest level of service adhering to internationally accepted professional and ethical standards.

We provide legal support to both Ukrainian companies operating abroad as well as foreign and international corporations doing business in Ukraine.
We specialize in matters that require diligently tailored solutions, extensive experience, and direct personal attention of partners working with a team of recognized professionals. According to Chambers Europe 2008: General Business Law Vasil Kisil & Partners “is one of Ukraine’s longest established firms, renowned for its provision of “comprehensive support and a balanced service.”

Vasil Kisil & Partners is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

LINK: http://www.kisilandpartners.com/publications/news/312/
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U.S.-Ukraine Business Council (USUBC) www.usubc.org.
Promoting U.S.-Ukraine business & investment relations since 1995.
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11. ASTERS MANAGING PARTNER SPEAKS AT MEMBERSHIP
MEETING OF THE NEWLY ESTABLISHED NORWEGIAN-
UKRAINIAN CHAMBER OF COMMERCE IN OSLO

Asters, Attorneys at Law, Kyiv, Ukraine, Friday, April 3, 2009

KYIV - Asters' managing partner Oleksiy Didkovskiy spoke at a special event of the newly established Norwegian-Ukrainian Chamber of Commerce (NUCC) held in Oslo, Norway on March 26, 2009. The purpose of the meeting was to examine and discuss the state of the investment climate in Ukraine for purposes of properly determining strategic and tactical plans for the Chamber to operate.

The meeting brought together about 30 participants, mainly Norwegian business representatives and state officials. The Ambassadors of Norway and Ukraine also attested to the international significance of the Chamber's establishment by their participation in the forum, during which such issues were highlighted as political and legislative realities, as well as risks and possible business solutions under the conditions of the current situation in Ukraine.

The speakers devoted particular attention to the new Law of Ukraine “On Joint-Stock Companies” and on working conditions in the energy sector in Ukraine.

INVESTING IN UKRAINE 2009
In his presentation entitled "Investing in Ukraine 2009: Planning in Turbulent Economic Environment" Oleksiy Didkovskiy revealed the progressive and inconsistent aspects of the newly adopted Law “On Joint-Stock Companies”, the particularities of legislative regulation and current trends in the oil & gas sector, as well as the alternative energy sector in Ukraine.

Emphasizing the importance of the establishment of the Chamber, Mr. Didkovskiy said, "I'm proud that business relations between Norway and Ukraine have reached such a level where both businesspeople and governmental officials concur that they are prospective and full of much promise.

"International practice shows that chambers of commerce become irreplaceable guides and defenders in the labyrinth of legal regulation of foreign investment. I am sure that the newly-born Norwegian-Ukrainian Chamber of Commerce will no different. And Asters will definitely assist it in this process".

ABOUT THE NORWEGIAN-UKRAINIAN CHAMBER OF COMMERCE (NUCC)
The Norwegian-Ukrainian Chamber of Commerce (NUCC) was established in November 2008 in Oslo, Norway. According to the Chamber's Charter, the organisation’s mission is to increase the level of business cooperation between Ukraine and Norway.

The Chamber must, on a commercial basis, offer such services as recommendation and information support with respect to the economic conditions in Norway and Ukraine, conduct such events as seminars and conferences, and present analytical reviews of import, export and investment opportunities in both countries.

Members can be legal entities, as well as individuals, and also any organisations interested in business relations between Norway and Ukraine. Mr. Thor A. Halvorsen, Senior Vice President of Telenor, was elected Chairman of NUCC.

Ukraine Law Alert, Squire, Sanders & Dempsey L.L.C., Kyiv, Ukraine, Wed, Mar 18, 2009

KYIV - On 13 March 2009 the president of Ukraine announced his signing of the law "On Amendments of Several Laws of Ukraine Relating to Preventing the World Financial Crisis From Having a Negative Effect on the Farming Industry" (the Farming Anti-Crisis Law). The Farming Anti-Crisis Law will be effective on the date that it is officially published.

Laws Amended
The Farming Anti-Crisis Law amends the following laws of Ukraine: "On State Support of the Farm Industry in Ukraine," "On High Priority Measures to Prevent the World Financial Crisis From Having a Negative Effect and Amendment of Some Laws of Ukraine," "On the Cabinet of Ministers of Ukraine" and "On Value-Added Tax."

Liquidity Support by the National Bank of Ukraine
The Farming Anti-Crisis Law requires the National Bank of Ukraine (NBU) to support the liquidity of banks that have extended loans to farmers (agricultural commodity producers) through a variety of refinancing tools including stabilization credits granted by NBU to participating banks.

The Farming Anti-Crisis Law requires the repayment terms in existing loan agreements between such banks and farmers to be extended (for periods of not less than one year) and prohibits such banks from increasing interest rates or including additional fees, commissions or penalties.

Payments to Milk and Meat Farmers
The Farming Anti-Crisis Law also requires that the value-added tax (VAT) paid by processing enterprises to the State budget be directed to meat farmers and milk producers. While it is unclear how this mechanism will work, it appears to be an attempt to earmark certain VAT payments to support milk producers and meat farmers.

Agricultural Land Moratorium Extended
Significantly, the Farming Anti-Crisis Law extends the moratorium on the sale of agricultural land until 1 January 2010. This potentially contradicts the Land Code of Ukraine, which requires the moratorium to be lifted after the laws on land cadastres and land markets are adopted.

The contents of this update are not intended to serve as legal advice related to individual situations or as legal opinions concerning such situations. Counsel should be consulted for legal planning and advice.

ABOUT SQUIRE, SANDERS & DEMPSEY
Founded in 1890, Squire, Sanders & Dempsey L.L.P. has lawyers in 32 offices and 15 countries around the world. With one of the strongest integrated global platforms and our longstanding one-firm philosophy, Squire Sanders provides seamless legal counsel worldwide.

Squire, Sanders & Dempsey, L.L.C. is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

CONTACTS: Helen Z. Kryshtalowych, +380.44.594.1400; Oleksiy Povolotskiy, +380.44.220.1409; Peter Z. Teluk, +380.44.594.1400. Valentina I. Prikhodko, CSR, vprikhodko@ssd.com, Direct: +380.44.220.1408, Fax: +380.44.220.1411. Squire, Sanders & Dempsey L.L.P., Leonardo Business Center, 16th Floor, 19-21 Bohdan Khmelnytsky St. Kyiv 01030, Ukraine, www.ssd.com.
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13. SALANS KYIV TAX NEWSLETTER - APRIL 2009

Salans Kyiv Tax Newsletter, Kyiv, Ukraine, Friday, April 10, 2009
KYIV - Salans has just issued their April 2009 Tax Newsletter. IN THIS ISSUE:

1.  Ukrainian Parliament Imposes Temporary Additional Import Duty
2.  Ukrainian Government Allows Purchase of Grain at the Expense of VAT Refund
3.  Taxation of Funds Received by a Representative Office from its Head Office
4.  Ukrainian Parliament Imposes State Duty on Registration of Securities
5.  Inclusion of Royalties in the Customs Value of Imported Goods – Ukrainian Practice is Set to Change
6.  Increase in Excise Duty on Tobacco Products
7.  Decrease in Vehicle Tax Rates

1. Ukrainian Parliament Imposes Temporary Additional Import Duty
The Ukrainian parliament passed the law “On Amending Certain Legislative Acts with a view to Improving the Ukrainian Payment Balance in Connection with the World Financial Crisis”. The law became effective on 7 March 2009.

The aim of the law is to restore the Ukrainian payment balance. For this purpose, the law imposes a temporary additional import duty of 13% for certain categories of goods (e.g. cars, meat, wine and ethyl spirit). According to the law, the duty will be effective for a 6 month period.

The imposition of the additional import duty appears to be questionable vis-à-vis Ukraine’s WTO obligations. The law has also raised concerns in the Ukrainian business environment. In view of this, on 18 March 2009 the Ukrainian Cabinet of Ministers passed a resolution to cancel the 13% additional import duty for all categories of goods, except for cars and refrigerators.
2. Ukrainian Government Allows Purchase of Grain at the Expense of VAT Refund
On 4 February 2009, the Ukrainian Cabinet of Ministers passed the resolution “On Approving the Procedure for Purchasing Grain from the State Food Reserve by Grain Exporters in 2009”. The resolution provides for a mechanism of purchasing grain by grain exporters from the state food reserve in exchange for a forfeiture of their VAT refund.

3. Taxation of Funds Received by a Representative Office from its Head Office
In letter No. 326/7/16-1517 dated 12.01.2009 the State Tax Administration of Ukraine confirmed its previous position regarding the taxation of funds received by a representative office (being a permanent establishment) in Ukraine from its head office. Specifically, such funds must be treated as taxable income for the representative office for corporate profit tax purposes.

4. Ukrainian Parliament Imposes State Duty on Registration of Securities
On 19 March 2009, the Ukrainian parliament passed the law “On Amending the Decree of the Ukrainian Cabinet of Ministers ‘On State Duty’ regarding Transactions involving Securities”.

The law introduces a state duty of 0.1% (but no more than 5 times the minimum wage as of 1 January of the current year [UAH3025]) for the registration of securities (except for state and local bonds) and a state duty of 50 times the tax-free allowance (currently – UAH850) for the registration of derivatives.
The law has not been signed by the Ukrainian president and, accordingly, has not yet become effective.

5. Inclusion of Royalties in the Customs Value of Imported Goods – Ukrainian Practice is Set to Change
On 25 December 2008, the Ukrainian State Customs Service issued explanatory letter No. 11/2-16/14148-ЕП regarding the inclusion of royalties (payments for the use of IP rights) in the customs value of imported goods for the purposes of paying customs import duties and VAT.

The Ukrainian State Customs Service explained that a Ukrainian importer (buyer) must include royalties in the customs value of imported goods provided that: (1) such royalties relate to the imported goods; and (2) the importer is obliged to pay the royalties directly or indirectly as a precondition to sale of the imported goods by the foreign supplier.

In its explanatory letter the Ukrainian State Customs Service emphasizes that customs authorities may, in particular, refuse to admit imported goods into Ukraine if the importer pays royalties, but has failed to add such royalties to the customs value of the imported goods.

It is worth mentioning that the requirement for royalties to be included in the customs value of imported goods was introduced in Ukraine from 1 January 2004 by adopting the new customs code. However, until recently the Ukrainian customs authorities have been “shutting their eyes” regarding the respective provisions of the Ukrainian Customs Code. The issuing of this letter appears to signal that the customs authorities have started paying attention to this issue.

6. Increase in Excise Duty on Tobacco Products
On 31 March 2009, the Ukrainian parliament passed the law “On Amending Certain Legislative Acts of Ukraine relating to Excise Duty Issues”. The law provides for an increase in excise duty rates on tobacco products.

In particular, the excise duty on filter cigarettes will be increased from UAH37.50 to UAH60 per 1000 items and from 16% to 20% of the product turnover.
The law will become effective from 1 May 2009 if signed by the Ukrainian president.

7. Decrease in Vehicle Tax Rates
On 5 March 2009, the Ukrainian parliament passed the law “On Amending the Law of Ukraine on Vehicles Owners Tax regarding Tax Rates”. The law provides for a substantial decrease in certain vehicle tax rates.
In particular, the vehicle tax rates on cars with an engine capacity of 2500 cubic centimetres and over which are subject to registration, re-registration and technical inspection have decreased from UAH75-120 to UAH25-40 per 100 cubic centimetres. The rates for new cars with an engine capacity of 2500 cubic centimetres and over which are subject to first registration in Ukraine have decreased from UAH75-120 to UAH25-40 per 100 cubic centimetres.

ABOUT SALANS: Salans is ranked among the top 50 law firms in the world by PLC WhichLawyer?. In 2007 and 2008 Salans was shortlisted to win “The International Law Firm of the Year” from The Lawyer. Salans is ranked as a top tier law firm in Ukraine and globally by the leading international legal directory Chambers Global.

Salans is a full service international law firm. Salans has its offices in Almaty, Baku, Barcelona, Beijing, Berlin, Bratislava, Bucharest, Budapest,
Frankfurt, Hong Kong, Istanbul, Kyiv, London, Madrid, Moscow, New York, Paris, Prague, Shanghai, St. Petersburg and Warsaw.

Salans is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

CONTACT: For further information regarding Salans Kyiv Tax practice, please contact: Oleg V. Batyuk, Managing Partner, Tel: +380 44 494 4774, E-mail: obatyuk@salans.com; Igor Davydenko, Partner, Head of Tax Practice, Kyiv, Tel: +380 44 494 4774, E-mail: idavidenko@salans.com; Sergiy Melnyk
Associate, Tel: +380 44 494 4774; E-mail: smelnyk@salans.com. SALANS, 49-A, Volodymyrska Street, 2nd floor, 01034 Kyiv, Ukraine, Tel: +380 44 494 4774, Fax: +380 44 494 1991, Website: www.salans.com, E-mail: kyiv@salans.com.
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14. UKRAINE: NEW DEVELOPMENT IN PRACTICE OF ANTIMONOPOLY
COMMITTEE WITH RESPECT TO NON-COMPETE ARRANGEMENTS

Legal Alert, Baker & McKenzie - CIS Limited, Kyiv, Ukraine, Mon, May 25, 2009

KYIV - The Antimonopoly Committee of Ukraine (the "AMC") has recently opened an investigation against Kyivstar, Ukrainian mobile operator, and its shareholders - Telenor and Storm, to assess whether they have included non-compete arrangement in their shareholder agreement in violation of the Competition Law of Ukraine.

The parties included non-participation clause whereby they agreed not to invest more than 5% into the competing business without the consent of the other parties.

If as a result of this investigation, the AMC comes to the conclusion that a non-compete arrangement among the parties has been included in the shareholder agreement not in compliance with the Competition Law, then the AMC may impose penalties on all of the parties in the amount of up to 10% of the global annual turnover of each party and all other entities related to it by control.

There are many types of non-compete arrangements, which are currently part of a wide market practice, and, which are generally included in shareholder agreements, joint venture agreements, share purchase agreements, and many other types of agreements.

Before this case, there has been no consistent practice of the AMC in this respect; in fact the AMC has been silent on whether non-compete arrangements are subject to AMC approval.

Nonetheless, a close analysis of the applicable legislation suggests that such arrangements may constitute anti-competitive concerted actions under the Competition Law, and, thus, parties are required to obtain separate AMC approval, unless they fall under limited exemptions provided by the law.

Earlier this year the AMC issued a new regulation, which provided additional exemptions for non-compete arrangements, provided that the parties to such arrangements meet specific criteria.

In view of this recent development in the practice of the AMC in this respect, all concerned market players, which are or which plan to be parties to a shareholder agreement or other types of agreements containing non-compete arrangements, should assess whether they may benefit from the exemptions provided by the applicable Competition Law or whether they should obtain the preliminary conclusion of the AMC on whether the particular non-compete arrangement requires AMC approval.

Likewise, if they do not satisfy the exemptions criteria, they should seek AMC's approvals (including also retrospective approvals) for such types of arrangements.

Please note that agreements containing non-compete arrangements do not need to be governed by Ukrainian law in order to be subject to Competition Law of Ukraine. It is sufficient that they have or may have an effect on the competition in Ukraine.

CONTACT: For More Information: Antonina Yaholnyk, Counsel, +380 44 590 0101, antonina.yaholnyk@bakernetcom. Baker & McKenzie - CIS, Limited Renaissance Business Center, 24 Vorovskoho St., Kyiv 01054, Ukraine, Tel: +380 44 5900101, Fax: +380 44 5900110.

Baker & McKenzie is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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15. SALANS' BANKING AND FINANCE LEGAL NEWSLETTER

Salans Kyiv, Ukraine - Legal Market News, Banking and Financial Sector
March 2009, Kyiv, Ukraine, Tuesday, April 14, 2009

KYIV: The latest Salans' Banking and Finance Legal Newsletter was issued today. IN THIS ISSUE:

1. Documents certifying title to a land plot and orders for division or merger of land plots
2. Changes to Regulation on the procedure for regulating banking activities in Ukraine
3. Setting open foreign currency position limits for banks
4. Recent publicly announced Banking and Finance deals in Ukraine handled by Salans’ Kyiv office

1. Documents certifying title to a land plot and orders for division or merger of land plots

Law of Ukraine No. 1066-VI of 05.03.2009 “On amendments to some Ukrainian legislative acts regarding documents certifying title to a land plot and orders for division or merger of land plots”

In Ukrainian law No. 1066-VI of 05.03.2009 “On amendments to some Ukrainian legislative acts regarding documents certifying title to a land plot and orders for division or merger of land plots” changes were introduced to the Land Code of Ukraine, the laws of Ukraine “On Land Management” and “On State Registration of Proprietary Interests in Real Estate and the Limitations Thereof”, in particular:

v division or merger of land plots shall not release such land plots from restrictions or encumbrances except if a restriction (encumbrance) is in existence
    over a part of a land plot which has not been included in a newly formed land plot;
v title to a land plot, as well as rights of permanent use of a land plot and lease rights, arise from the date of state registration of such rights;
v  title to a land plot (permanent use right) is confirmed not only by state act but also by civil-law agreements.

The law comes into force on 02.05.2009.

2.  Changes to Regulation on the procedure for regulating banking activities in Ukraine

Resolution No. 51 of 06.02.2009 of the board of the National Bank of Ukraine «On Amendments to the Regulation on the procedure for regulating banking activities in Ukraine”

Resolution No. 51 of 06.02.2009 of the board of the National Bank of Ukraine introduced amendments to the “Regulation on the procedure for regulating banking activities in Ukraine”, in particular as to setting the regulatory capital requirements; the procedure for reporting on funds attracted and accounting submissions; and the calculation of most economic standards pertaining to banking.

For central and parent cooperative banks, economic standard N3 (“Н3”) (correlation between regulatory capital and total capital) has been set. It is calculated on the basis of consolidated financial accounts.

The resolution came into force on 13.03.2009.

3.  Setting open foreign currency position limits for banks

Resolution No. 107 of 28.02.2009 of the board of the National Bank of Ukraine «On amendments to some legislative acts of the National Bank of Ukraine and setting open foreign currency position limits for banks”

Resolution No. 107 of 28.02.2009 of the board of the National Bank of Ukraine introduced amendments to:

v  Regulation on the procedure for regulating banking activities in Ukraine No. 368 of 28.08.2001 (Regulation No. 368);
v  Regulations on the application of sanctions by the National Bank of Ukraine for violation of banking law No. 369 of 28.08.2001 (Regulation No. 369)
v  Regulation No. 325 of 06.08.2003 on executing transactions involving “banking metals” by authorized banks;
v  Resolution No. 290 of 12.08.2005 of the board of the National bank of Ukraine “On the introduction of changes to some legislative acts of the National
    Bank of Ukraine and setting the open foreign currency position limit for banks” (Resolution No. 290); and
v  Regulation No. 290 of 12.08.2005 on the setting, by the National Bank of Ukraine, of open foreign currency positions for banks, in non-cash and cash
    forms and supervision of regulatory compliance by authorized banks.

In particular:
v  the risk standard for open (long/short term) foreign currency position N13 (Н13) was excluded from Regulation No. 368;
v  the 15% long term open exchange currency position limit for freely convertible currency L14-1 (Л 14-1); 5% long term (short term) open exchange
    currency position limit for non-convertible currency L15-1, L15-2 (Л15-1б Л15-2) and “banking metals” L16-1, L16-2 (Л16-1 і Л16-2) and 10% long
   and short term position limits for forward transactions L17-1, L17-2 (Л16-1, Л16-2), set by Resolution No. 290, were cancelled;
v  the list of cases appropriate for the restriction, suspension or cessation of certain types of banking operation, set by Regulation No. 369, was expanded
    and amended;
v  the penalties for banks’ violation of general (long/short term) foreign exchange position limits L13, L13-1, L13-2 (Л13, JI13-1, Л13-2) were amended;.
v  banks should change the amount of their foreign exchange positions in accordance with the new standards within 60 days of the date on which the
    regulation came into force.

The regulation comes into force on 23.04.2009, except for the changes to Regulation No. 369, which come into force within 90 days of its state registration in the Ministry of Justice of Ukraine.

4. Recent publicly announced Banking and Finance deals in Ukraine handled by Salans’ Kyiv office

International law firm Salans acted as legal advisor to Ukrainian insurance CJSC "Dovira ta Garantiya", a member of the Russkiy Standart Group, regarding the increase of its statutory fund by an additional issue of shares in Ukraine.

Salans provided legal support on the whole range of legal issues concerning the increase of the statutory fund of the CJSC “Dovira ta Garantiya”, including: drafting corporate documentation; conducting relations with the Securities and Stock Market State Commission of Ukraine, the National Depository of Ukraine, the Securities, Excise Stamps, Strictly Accountable Documents and Holographic Protective Elements Production Control Department (Derzhznak of Ukraine) as well as giving legal advice on related issues.

Lawyers from Salans’ banking and finance group in Ukraine have also advised CJSC "Dovira ta Garantiya" with regard to the development of standard insurance documentation as well as with regard to general corporate law matters in Ukraine.

Lawyers from Salans’ banking and finance group: Natalia Selyakova and Olesya Zhmak acted as legal advisors on this transaction.

ABOUT SALANS: Salans is a full service international law firm. Salans has its offices in Almaty, Baku, Barcelona, Beijing, Berlin, Bratislava, Bucharest, Budapest, Frankfurt, Hong Kong, Istanbul, Kyiv, London, Madrid, Moscow, New York, Paris, Prague, Shanghai, St. Petersburg and Warsaw.
Salans is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

CONTACT: For further information, please contact: Oleg Batyuk, Managing Partner, Kyiv, E-mail: obatyuk@salans.com, Natalia Selyakova, Head of Banking and Finance Group in Ukraine, E-mail: nselyakova@salans.com. SALANS, 49-A, Volodymyrska Street, 2nd floor, 01034 Kyiv, Ukraine, Tel: +380 44 494 4774, Fax: +380 44 494 1991, Website: www.salans.com, E-mail: kyiv@salans.com.
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16. UKRAINE: CHANGES IN LEASES OF RETAIL PREMISES
AND LEASES OF STATE PROPERTY
Government allows local authorities to fix price caps for the lease of,
and for services provided at retail premises

Legal Alert, Baker & McKenzie - CIS Limited, Kyiv, Ukraine, Thu, May 7, 2009

KYIV - The Cabinet of Ministers of Ukraine, by its Resolution No. 278 of 5 March 2009, which came into effect on 2 April 2009, extended the authorities of the state administrations of the Regions of Ukraine, the Council of Ministers of the Autonomous Republic of Crimea, and the state administrations of the Cities of Kyiv and Sevastopol with respect to the regulation (fixing) of price caps for the lease of, and for services provided at retail premises.

These local administrations are now permitted to fix price caps for the services provided at retail outlets and at food and non-food markets; as well as to fix price caps and margin limits (at not more than 20 per cent) for leases of retail premises, shop equipment, and refrigeration equipment at retail outlets and at food and non-food markets.

Government reduces rent rates regarding leases of state property
The Cabinet of Ministers of Ukraine, by its Resolution No. 316 "On Certain Matters Related to the Leasing of Leased State Property" of 25 March 2009, which came into effect on 14 April 2009, reduced the rent rates applicable to leases of state property.

From 14 April 2009 until 1 January 2010, rent rates under leases of state property will be reduced by 55%. Thus, they will be charged at 45% of the current rent rates indicated in Appendix 2 to the "Methodology for the Calculation and Application of Rent for State Property", approved by Resolution No. 786 of the Cabinet of Ministers of Ukraine of 4 October 1995.

These reduced rent rates will not apply to the rent rates payable under leases of state property if such property is used by the lessee for the location of the following businesses:

     (1) casinos, other gambling businesses and gambling machines;
     (2) outlets selling lottery tickets and currency exchange outlets;
     (3) financial institutions, pawnshops, exchanges, broker, dealer, agent or realtor offices, and automatic teller machines (ATM);
     (4) restaurants open during night hours;
     (5) retail shops selling jewelry, items made of precious metals or gem stones, antiques and arms; and
     (6) telecommunications operators providing mobile communication services, as well as telecommunications operators and providers of Internet
            access.

Government approves new procedure for the issuance of approvals
of leases of integral property complexes of state companies
The Cabinet of Ministers of Ukraine, by its Resolution No. 317 of 8 April 2009, which came into effect on 14 April 2009, approved the Procedure for the Issuance by the Cabinet of Ministers of Ukraine of the Approval of the Lease of an Integral Property Complex of a State Company. The Resolution establishes the rules for the approval of the lease of an integral property complex of a state company by the relevant state authorities.

Before being approved by the Cabinet of Ministers of Ukraine, proposals for the approval of leases of property complexes also first require the support of the Ministry of Economy, the Ministry of Finance, and the State Property Fund. Also, the possibility of a lease must be confirmed by an opinion issued by the Antimonopoly Committee of Ukraine.

FOR MORE INFORMATION: Lina Nemchenko, Partner, +380 44 590 0101, lina.nemchenko@bakernet.com; Yuliya Kuchma, Associate,
+380 44 590 0101, yuliya.kuchma@bakernet.com. Baker & McKenzie - CIS, Limited, Renaissance Business Center, 24 Vorovskoho St., Kyiv 01054, Ukraine, Tel: +380 44 5900101, Fax: +380 44 5900110, www.bakernet.com.

NOTE: Baker & McKenzie is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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17. FRAUD RISK ON INCREASE ACROSS EUROPE AS RECESSION BITES
Ernst & Young Fraud survey reveals alarmingly high tolerance of unethical business behaviour

Ernst & Young LLC, Kyiv, Ukraine, Wednesday, May 20, 2009

LONDON - The Ernst & Young European Fraud Survey released today reveals that as the recession in Europe deepens there are worrying trends in what company employees believe is acceptable business behaviour.

The responses of over 2,200 individuals in major companies in 22 countries across Europe vary by jurisdiction but there are some consistent themes. Half of those surveyed thought that one or more types of unethical business behaviour was acceptable including 25% who thought it fine to give a cash bribe to win work. By country this latter figure rose as high as 38% in Spain, 43% in the Czech Republic and 53% in Turkey.

There was even a significant minority – 13% of senior managers - who felt that distorting their company’s financial performance was justifiable to survive
today’s turbulent economic climate.

David Stulb, Ernst & Young’s Global Fraud Investigation & Dispute Services Leader says: “The findings of this survey show there is a disappointing tolerance of unethical behaviour amongst employees in companies across Europe. Making cash payments to win business, and even deliberately misstating financial performance to mask disappointing results were supported by alarmingly large numbers of respondents.”

A bad problem that is getting worse
Not only does any downturn expose more fraud as the masking effect of economic growth is withdrawn, but as the pressure intensifies on management to maintain income and earnings, the incentive to commit fraud increases.

Stulb comments: “In the current climate, management are under incredible pressure to stabilise their businesses and meet financial targets – both at a personal and organizational level.”

A frequently shifting organizational structure and blurred reporting responsibilities provide opportunities for fraudulent behaviour in good economic times. This is intensified in a recessionary environment where such issues become more widespread.

As Stulb explains: “When companies are making redundancies or they are undergoing changes in ownership gaps can appear in financial controls.” 36% of the respondents to the survey believe that normal policies and procedures are likely to be overlooked as staff redundancies are made and almost half believe that the differing standards of behaviour that are typically held by two merging companies poses a major challenge to anti-fraud efforts.

Kostiantyn Neviadomskyi, Business Advisory Partner with Ernst & Young Ukraine, comments: “Ukrainian respondents pointed out new risks emerging in times of the economic crisis. Need to adequately assess risks of corporate fraud and mitigate them in the current situation is a priority for those companies, which aim to successfully overcome aftereffects of the economic recession.”

Consistent pessimism across Europe
Over half of those individuals surveyed expected corporate fraud to increase over the next few years, with 54% of respondents from Western Europe and 55% from Central and Eastern Europe sharing the same negative outlook. Only 8% of respondents thought that corporate fraud would decline.

Stulb comments: “Geographic location or relative economic wealth makes little difference to expectations of increased fraud across Europe. This is a global recession and fraud is a global problem.”

Management are seen as part of the problem
The respondents to the survey believe that far from setting a leading example, the senior management of companies are in fact part of the problem. Some 69% of respondents had cause to doubt the integrity of their company’s management. Only 12% of individuals surveyed in France and Italy believed their management always operated with a high level of personal integrity.

As a result of this mistrust of management the research suggests that employees expect regulators and other authorities to do more to protect them and to ensure their bosses are compelled to intensify their efforts to defend companies from fraud.

As Stulb explains they were right to be concerned as, “worryingly, the senior management of the population that we surveyed are more likely to condone bribery and financial statement fraud than those of junior rank. Indeed our interaction with regulators suggests that they are very conscious of the shortcomings in corporate governance and are positioning themselves for much more aggressive enforcement action.”

A wake up call?
As Stulb concludes, there is a silver lining with fraud now so high on the corporate agenda. “The good news is that the current period of adversity can present opportunities to drive change more rapidly and effectively than in more prosperous times. Now is the moment for management to act urgently and emphatically to reinforce the importance of ethical business conduct.”
ends

About the Ernst & Young European Fraud Survey
In February 2009 our researchers conducted a total of 2,246 interviews with employees in 22 European countries either by telephone or online. Participants were employed by listed and/or multinational companies with over 1,000 employees. 48% worked for companies with over 5,000 employees, 92% over 500 employees.

About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 135,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve potential.

In Ukraine Ernst & Young established its practice in 1991. Ernst & Young Ukraine now employs more than 530 professionals providing a full range of services to a number of multinational corporations and Ukrainian enterprises. For more information, please visit www.ey.com/ukraine.

Ernst & Young is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

CONTACT: Natalia Partach, Senior PR Specialist, Marketing and Business Development, Ernst & Young LLC, Khreschatyk Street 19A, 01001 Kyiv, | Ukraine; Phone: +380 (44) 490 3000 ext 8714 | Mobile: +380 (67) 659 0388; E-Mail: Natalia.Partach@ua.ey.com; Website: www.ey.com/ukraine
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18. UKRAINE: TOTAL OF 16 DEFAULTS REGISTERED IN 1ST QUARTER OF 2009

Vasil Kisil & Partners, Kyiv, Ukraine, April 2, 2009

KYIV - On April 2, 2009 in Kyiv a press conference entitled “Possible defaults in various sectors of Ukrainian economy and ways of avoiding them” was held jointly by the leading Ukrainian law firm Vasil Kisil & Partners Law Firm and Credit-Rating rating agency.

In his opening remarks, VKP’s Partner and Head of Real Estate & Construction Practice Oleg Alyoshin explained that the main purpose of this event was to provide a comprehensive review of how the growing number of defaults by special-purpose bond issuers is affecting the perspective of the Ukrainian bond market development.

‘We decided to gather mass media representatives, companies that are issuers of special purpose bonds, asset management companies and investors to showcase main legal mechanisms of preventing defaults in the area of construction finance and get the view of a rating agency on how the restructuring affects credit rating of the Ukrainian issuers”, - Mr. Alyoshin said.

As stated by the general director of this rating agency Stanislav Dubko n the period of January-March of 2009 Credit-Rating (Kiev) registered nine bond defaults in the area of construction finance. According to his data in 2008 there were 22 defaults registered in Ukraine, out of which 17 defaults took place in the fourth quarter (10 from the corporate sector and 7 from the sector of construction finance).
Mr. Dubko noted that only 11% of all construction companies who issued bonds are going to be able to fulfill their obligations and not miss deadlines. According to his words, the number of bond defaults grows steadily and more than likely it is going to stay this way in the nearest future.

In the mean time, as specified by the senior associate of Vasil Kisil & Partners Natalia Dotsenko-Belous the situation when bond issuers can not fulfill its obligations is not always considered an actual default, since in many cases the issuer can successfully overcome it.
Mrs. Dotsenko-Belous review the five existing models of who the issuers can legally deal with the impending default. The first model presumes an exchange of a bond liability for another type of liability. The second mechanism of default prevention executes the retirement of bonds through the transfer of the right to apartment ownership. This is done when both parties sign an act of acceptance of property (apartment) with a contingency clause.

The third model can be implemented even before the life of the bond is over and presumes that the issuing of the bond itself is invalidated and considered void. The forth model is based on paying off bonds with monetary funds. Moreover, the fifth model allows for bonds that reached their maturity date but were not claimed to be redeemed at par.

Natalia Dotsenko-Belous also noted that the unique thing about the default as a special legal phenomenon is the fact that legally there are no consequences for the issuer, no criminal, administrative, or financial liability. However, by law, the issuer can be found liable for damages caused by his actions and Natalia encouraged investors to use legal council and seek a resolution in court.

About Vasil Kisil & Partners Law Firm
Vasil Kisil & Partners law firm is a recognized market leader and one of the long-established law firms in Ukraine with an impeccable reputation and a unique expertise in providing top quality services to its clients. For more than 20 years, it maintained a reputation for cutting-edge advocacy by working closely with Ukrainian regulatory agencies, litigating in courts across the country, and negotiating business transactions around the world.

Firm’s team includes leading experts with strong ties to national decision makers, as well as top-flight litigators and individuals with a keen understanding of business and finance.

Vasil Kisil & Partners law firm is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

For more information, please, visit VKP web site at www.kisilandpartners.com, or contact PR at +38 044 581-7777 or pr@vkp.kiev.ua

About Credit-Rating
Founded in 2001 Credit-Rating is the first rating agency in Ukraine committed to assessment of issuer's solvency and to assignment of credit ratings pursuant to the National rating scale. Since 2003 the agency's rating estimations have been officially recognized by Ministry of Finance of Ukraine. Since 2004 Credit-Rating has been an authorized agency of State Commission for Securities and Stock Market for
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19. KPMG SELECTS LVIV, UKRAINE, AMONG OTHER 'LOCATIONS TO WATCH' FOR NEXT I.T. OUTSOURCING BOOM

KPMG Ukraine, Kyiv, Ukraine, March 2009

KYIV - The credit crisis seems set to prompt a new rush for outsourcing services across the I.T. sector, with a number of new locations worldwide
emerging as viable Business Process Outsourcing (BPO) hubs, according to KPMG's Advisory practice. Ukrainian city of Lviv has been identified as one
of them.

Launching their Exploring Global Frontiers report at a recent NASSCOM outsourcing event in India, KPMG claims to have identified 31 cities which are rapidly emerging as leading pretenders to the BPO crown held by the traditional powerhouses such as Bangalore, Chennai or Shanghai.

As those locations rapidly approach saturation point, there is a sizable opportunity for these new and emerging locations to swallow up a large proportion of the new outsourcing work which the credit crisis is apparently creating.

The 31 locations are an eclectic mix, ranging from well-known cities in developed countries to lesser-known places in the emerging markets, well off the tourist track. Lviv, Winnipeg and Belfast feature for example, alongside Queretaro, Davao City and Cluj-Napoca. Despite the difference in size, they all are emerging as important future outsourcing centers, with the latter rapidly developing an international reputation as a disaster recovery center.

Speaking at the report’s launch, Edge Zarrella, Global Head of IT Advisory at KPMG, said: “Traditional sourcing locations, which have been at the forefront of the outsourcing boom, were always going to reach saturation point. Corporates now need to know which locations to consider next for their outsourcing activities.

"There are many locations around the world which are able to supply a credible outsourcing capability. However, there are subtle nuances in terms of labor skills, niche specialisms and government incentives which have led us to highlight these 31 locations as stars of the future.”

“The need to develop new, cost effective, viable outsourcing locations has been highlighted by the economic events of the past few months. Companies
are focused on reducing their cost base, both for short-term and long-term gain. As a result, more organizations are considering savings obtained through outsourcing parts of their operations.

"Most importantly, they should be convinced that by doing so, they are not sacrificing performance for the sake of cutting costs. Our location study aims to highlight the benefits brought by the different city choices available to them.”

The full list of highlighted destinations includes 10 locations in the Americas (Buenos Aires, Campinas, Curitiba, Calgary, Winnipeg, Santiago, Guadalajara, Queretaro, Boise, Indianapolis); 10 in Asia-Pacific (Brisbane, Changsha, Hangzhou, Ahmedabad, Jaipur, Nagpur, Penang, Davao City, Iloilo City, Ho Chi Minh City); and 11 in Europe, the Middle East and Africa (Sofia, Zagreb, Cairo, Port Louis, Belfast, Gdansk, Cluj-Napoca, Rostov-on-Don, Belgrade, Tunis and Lviv).

The reasons for these locations making it on to the final KPMG list are varied but cities in the Americas should typically benefit from large labor pools, scalability, a more mature service offering, proximity to the major client base and multiple language skills.

AsPac benefits from lower costs, younger populations, plenty of government incentives and the lessons learned from the numerous outsourcing centers which already dot the region. The Europe, Middle East and Africa region offers great diversity, excellent infrastructure and numerous niche specialisms.

Zarrella concluded: “These are fascinating times to be choosing a new outsourcing provider or location as there is simply so much choice. New cities are emerging as outsourcing contenders all the time, each boasting a different set of characteristics. Just within our 31 for example, there are specific specialisms on offer — such as accounting, R&D or even animation — driven by an apparent skills bias within the pool of locally available graduates.

"As a word of warning though, these locations are still ‘emerging’ and, as such, can still carry a degree of risk; an element of venturing into the unknown. This is why all outsourcing location decisions should be carefully thought through on a case-by-case basis; there is no ‘one size fits all’ approach to outsourcing.”

NOTE: To see the KPMG IT report about Lviv, Ukraine go to http://hightechhire.com/reports/Ukraine_IT_Outsourcing_report.pdf.

KPMG Ukraine is a member of the U.S.-Ukraine Business Council (USUBC), www.usubc.org.

ABOUT KPMG: KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We have over 123,000 outstanding professionals working together to deliver value in 145 countries across the world. KPMG in Ukraine, 11 Mykhailivska St., 01001, Kyiv, Ukraine. Tel. +38(044) 490 5507, Fax. +38(044) 490 5508, e-mail: info@kpmg.ua; 2a Pushkina blvd, 83001, Donetsk, Ukraine, Tel. +38 (062) 341 4680,
Fax +38(062) 341 4681, e-mail: donetsk@kpmg.ua.
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20. CHADBOURNE & PARKE LLP SUPPORTED WORLD JURIST ASSOCIATION'S 23RD BIENNIAL CONGRESS ON THE LAW OF THE WORLD HELD IN KYIV

Chadbourne & Parke LLP, Kyiv, Ukraine, Wed, May 20, 2009

KYIV - The international law firm Chadbourne & Parke LLP announced that one of its attorneys addressed the World Jurist Association's Twenty-Third Biennial Congress on the Law of the World, which was held in Kyiv.

Senior attorney John Dakin was commended by the Board of Governors of the WJA in their post-Congress report. Mr. Dakin spoke to the international audience on the need for legal education to ensure the rule of law while identifying the current standing and role of the legal profession in Ukraine.

He also highlighted some of the necessary elements in the provision of legal training in order to ensure that the legal profession can successfully foster the development of the rule of law in Ukraine.

About Chadbourne & Parke LLP
Chadbourne & Parke, headquartered in New York City, is a full-service, international law firm with 12 offices worldwide, including in Kyiv. Top locally qualified attorneys in the Kyiv office advise clients on corporate matters, project finance, corporate finance, securities, real estate, domestic and international tax, insurance, intellectual property, antitrust, energy, bankruptcy and financial restructuring as well as employment and government contract matters. More information about the firm can be found at www.chadbourne.com.

Chadbourne & Parke LLP is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

For further information, please contact: Anna Grytsyk, Marketing Assistant, Chadbourne & Parke LLP, +38 044 461 7575, agrytsyk@chadbourne.com.
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21. SALANS' BANKING AND FINANCE LEGAL NEWSLETTER

Salans Kyiv, Ukraine - Legal Market News, Banking and Financial Sector
May 2009, Kyiv, Ukraine, Wednesday, May 13, 2009

KYIV: The latest Salans' Banking and Finance Legal Newsletter was issued today. IN THIS ISSUE:

1. Regulation of foreign currency use by banks
2. Raising and recording deposits
3. Amendments to the Decree of the Cabinet of Ministers of Ukraine “State duty” regarding banking operations involving securities

1.  Regulation of foreign currency use by banks ----------

Resolution of the board of the National Bank of Ukraine (‘NBU’) dated 28.02.2009 No. 108 “Amendments to particular legislative acts of the National Bank of Ukraine”

The resolution of the board of the NBU dated 28.02.2009 No. 108 amended the following legislative acts of the NBU:

       v Clause 1 of resolution No. 1 dated 29.01.2003 No. 36, "Conduct of transactions involving Ukrainian issuers’ securities" was deemed null and void.
          The clause permitted banks and non-banking financial institutions to conduct sale transactions on the interbank currency market under agreements for
          the sale and purchase of Ukrainian issuers’ securities concluded between residents and non-residents under individual NBU licenses;
       v The provision on procedures for obtaining credit (loans) in a foreign currency by residents from non-residents and the provision of credit (loans) in a
            foreign currency by residents to non-residents, where it addresses the possibility of granting foreign currency loans to non-residents, stipulates that
            authorized banks possessing a written permit from the NBU for transactions involving the raising and placement of foreign currency on international
            markets and authorized financial institutions possessing a general license to conduct currency transactions may provide foreign currency credits
            (loans) only to non-resident banks;
       v The provision on procedures for foreign investment activity in Ukraine provides that for the purpose of portfolio investment in Ukraine, a foreign
           investor is entitled to sell foreign currency from his own investment account; credit to his own investment account hryvnia funds obtained from the
           sale of the foreign currency; and transfer these funds to the seller. The requirement for a 30-day term for settlement by the foreign investor in respect
           of the investment has also been excluded from the provision;
       v The provision on procedures and terms for the sale of foreign currency envisages that authorized banks may conduct transactions for the purchase of
           foreign currency for hryvnias within the established limitations of the currency’s position, subject to the maturation of currency liabilities, as
           prescribed by law;
       v Clause 1.12 of Section 1 has been removed from the provision on procedures for issuing individual licenses to residents (legal entities and
           individuals) to place currency assets on accounts outside Ukraine. The clause provided that the owner of the license could buy foreign currency for
           hryvnias on the interbank currency market of Ukraine in order to ensure conduct of the transactions stipulated by the license.

The NBU also prohibited market entities from conducting transactions for the sale and purchase of foreign currency for hryvnias on the interbank currency market of Ukraine on “spot” conditions and residents (including authorized banks) from conducting currency transactions for the sale and purchase of foreign currency and/or precious metals on “forward” conditions till January 1, 2010.

The resolution came into force on 19.04.2009.

2. Raising and recording deposits ----------

Resolution of the board of the National Bank of Ukraine dated 23.03.2009 No. 159 “Approval of amendments to particular legislative acts of the National Bank of Ukraine with regard to raising and recording deposits”

The resolution of the board of the NBU dated 23.03.2009 No. 159 introduced the following amendments to the provision on procedures for the conduct of deposit transactions by the banks of Ukraine with legal entities or individuals ratified by resolution of the board of the National Bank of Ukraine dated 03.12.2003 No. 516 and to the instructions on accounting for credit and deposit transactions and the formation and use of reserves for credit risks in banks of Ukraine ratified by resolution of the board of the National Bank of Ukraine dated 27.12.2007 No. 481, in particular:

       v The distinctive features of entering into bank deposit agreements are specified, in particular, it is emphasized that deposit on demand is made based
           on the terms of the deposit payment on first demand, and the term deposit shall be paid upon expiration of the term stipulated by the agreement;
       v  It is stated that one sample of the agreement shall remain with the bank, and the second shall be delivered to the client for signing. It is also stated that
           no issuing of a permit by the main bank of the division shall be required by a separate division in order to enter into a bank account agreement and a
           bank deposit agreement;
       v  It is provided that banks must record deposits which include an option to make regular withdrawals as deposits returnable on demand;
       v  Banks are prohibited from unilaterally changing the terms of concluded bank deposit agreements and bank account agreements, this includes: they may
          not change the amount of interest under bank deposit agreements, except as regards deposits returnable on demand;
       v  It is provided that if a bank does not satisfy an individual’s deposit return request, the bank must accept the request by registering and recording it on
           the respective off-balance sheet accounts.

The resolution came into force on 27.04.2009.

3.  Amendments to the Decree of the Cabinet of Ministers of Ukraine “State duty” regarding banking operations involving securities ----------

Law of Ukraine No. 1161-VI dated 19.03.2009, “Amendments to the decree of the Cabinet of Ministers of Ukraine, “State duty” regarding banking transactions involving securities”

The Supreme Council of Ukraine amended the decree of the Cabinet of Ministers of Ukraine No. 7-93, “State duty” dated 21.01.1993 by law No. 1161-VI dated 19.03.2009.

Subject to the amendments mentioned above, banking operations involving the issue of mortgage securities (mortgage certificates and mortgage bonds) and certificates of real estate funds shall not be subject to state duty, from 01.01.2010 State duty shall become payable on the registration of derivatives.

The amendments mentioned above also change the duty rates for particular activities, i.e., a rate is established in the amount of 0,1% of the nominal value of the issue of securities. However, such rate must not exceed the amount of five times the minimum salary as established on January 1st of the current year.

The rate applies to registration of the issue of securities, except for state bonds and local loans. The rate for registration of derivatives shall be the equivalent of 50 personal exemptions.

The resolution shall come into force on 01.01.2010.

ABOUT SALANS: Chambers Europe Award for Excellence 2009 for Central and Eastern Europe:
Salans has been recognised as the leading law firm in Central and Eastern Europe at the annual Chambers Europe Awards ceremony, held in London.
Based on client and peer research by leading independent publisher Chambers and Partners, the award was collected on behalf of the firm by Oleg Batyuk, Managing Partner of the Kyiv office. The firm’s Ukraine presence was also singled out for honour in the evening’s individual jurisdiction categories.

Salans is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

CONTACT: For further information, please contact: Oleg Batyuk, Managing Partner, Kyiv, E-mail: obatyuk@salans.com, Natalia Selyakova, Head of Banking and Finance Group in Ukraine, E-mail: nselyakova@salans.com. SALANS, 49-A, Volodymyrska Street, 2nd floor, 01034 Kyiv, Ukraine, Tel: +380 44 494 4774, Fax: +380 44 494 1991, Website: www.salans.com, E-mail: kyiv@salans.com.
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22. NEW LEGAL REGULATION ON CONSTRUCTION IN UKRAINE

Salans Kyiv Real Estate & Construction Legal Newsletter, Kyiv, Ukraine, Friday, May 15, 2009

KYIV - The latest Salans Kyiv Real Estate & Construction Legal Newsletter was issued today. IN THIS ISSUE:

1. The main “innovations” in legislation at the pre-project works stage are in respect of the procedures and documents required for performance of such
works
2. Changes in legal regulation regarding the issuance of technical specifications (the term for submission of such technical specifications has been assigned)
3. Changes in legal regulation on the issuance of initial data for project planning
4. Changes in procedures for pre-construction works
5. Changes in the conduct of construction
6. New procedures of commissioning of new properties
7. It is also important that liability be established regarding violation of the terms of issuance of technical conditions on the engineering of an architecturally
significant property and regarding unauthorized conduct of pre-construction works

NEW LEGAL REGULATION ON CONSTRUCTION IN UKRAINE
The law of Ukraine “Amendments to some legislative acts of Ukraine on the promotion of construction” dated September 16, 2008, the law of Ukraine on “Mitigation of the effects of the global financial crisis on the construction industry and residential construction” dated December 25, 2008 and the Resolution of the Cabinet of Ministers of Ukraine on “Procedures for the commissioning of completed construction projects” dated October 8, 2008 have significantly changed legal regulations on construction. The changes have affected all main aspects of construction – from obtaining permits to commissioning procedures for property.

The law of Ukraine “Amendments to some legislative acts of Ukraine on the promotion of construction” dated September 16, 2008 entered into force on April 15, 2009, as concerns the part addressing city planning legislation.

The law of Ukraine on “Mitigation of the effects of the global financial crisis on the construction industry and residential construction” dated December 25, 2008 took effect on January 14, 2009.

At first sight all of the above changes are intended to facilitate and improve legal regulations on construction. However, this first view is deceptive. In practice, the realization of legal standards in the Ukrainian legal sphere is complicated by its “peculiarities”.

References to the pending resolutions of the Cabinet of Ministers may be considered to be the main drawback of the adopted regulations. Consequently, some provisions of the legislation shall be simply “postponed” until the necessary sub-regulations (resolutions of the Cabinet of Ministers of Ukraine) have been adopted.

Under to the applicable legislation, every developer must pass the following stages prior to obtaining the desired Real Estate Title Certificate:
       v Execute their ownership right to land ;
       v Perform pre-project works;
       v Perform project works;
       v Complete construction;
       v Commission the building.

The changes in legislation affect all the above stages. For a more detailed description of the latest changes in legislation, please see below.

1. The main “innovations” in legislation at the pre-project works stage are in respect of the procedures and documents required for performance of such works.

At present, project development of architecturally significant property can only be undertaken subject to basic conditions for project planning, including:
       v  City planning conditions and limitations on development of the respective land plot
       v  Technical conditions regarding engineering requirements;
       v   Technical design assignment for architecturally significant property.

2. Changes in legal regulation regarding the issuance of technical requirements (the term for submission of such technical requirements has been assigned)

Upon obtaining city planning conditions and limitations on construction of a land plot, legal entities that own the respective elements of the engineering infrastructure or operate them must submit technical specifications regarding the engineering of the city-planning property within 15-days of the registration date of the application made by the customer or his authorized representative.

The list of persons who must submit technical specifications regarding the engineering of city-planning property is dictated by city planning conditions and limitations on land plots development.

When submitting technical data, it is taken into account that the connection point of the customer’s engineering networks to the main or other engineering networks is on the border of the customer’s land plot or, upon his consent on the territory of the land plot in question.

If technical conditions provide for the necessity of building engineering networks or properties by the customer outside his land plot, the amount of the customer’s participation share (contribution) to the construction and development of the engineering transport and social infrastructure of the local community shall be reduced by the costs incurred in this connection. The engineering networks and\or properties built by the customer are transferred to the respective enterprises that maintain them.

3.  Changes in legal regulation on the issuance of initial data for project planning
Basic data on city-planning projects are valid until completion of the project and at least for two years but not if this takes longer than five years.

The customer may apply to the respective executive body or local self-regulatory body, and also to the persons who provided the technical requirements to request an extension of validity for the basic data. The decision on the extension of validity for the basic data is made based on the substantiated opinion of a specific authorized body on architecture and city planning

4.  Changes in procedures for pre-construction works.
In particular, the notion of a permit for pre-construction works has been introduced. This is a document proving a right to the customer and contractor to perform the following works prior to construction of the property:
      v  Preparation of the land plot,
    v  Fencing in of the construction site and demolition of buildings and structures,
       v  Improvements to the land plot allocated for development,
       v  Construction of temporary production and service structures, required for the organization and maintenance of construction,
       v  Conduct of temporary engineering networks,
       v  Setting up of access roads,
       v  Storage of building materials.

The permit for pre-construction works is issued by the State Architectural and Construction Inspectorate of Ukraine and its territorial bodies (herein referred to as “Inspectorate/s of State Architectural and Construction Control”).

In order to obtain a permit for pre-construction works, the customer or a person authorized by him shall submit to the Inspectorate of State Architectural and Construction Control a written application with the following documents attached:

       v  A certificate proving right of ownership or right of use of a land plot or a “superficies agreement”;
       v  City planning conditions and limitations on development of the respective land plot obtained as prescribed by law;
       v  Schedule of pre-construction works agreed and approved as required by state construction standards;
       v  Document regarding the appointment of responsible contractors for the pre-construction works.

The Inspectorate of State Architectural and Construction Control shall consider the application; grant a permit for pre-construction works or refuse to issue it; and issue and register the permit for pre-construction works within ten business days of the day of registering the application therefore.

A refusal to issue a permit for pre-construction works may be based on the following reasons:
       v  Failure to submit the documents required for decision making on the granting of such permit;
       v  Non-compliance of the documents submitted with the legislative requirements;
       v  Detection of inaccurate information in the documents submitted.

The issuance of a permit for pre-construction works must be performed free of charge.
A permit for pre-construction works must be issued for a period of not more than one year.

The Inspectorates of State Architectural and Construction Control shall inform the respective executive body or local self-regulatory body in writing about
the issued permits for pre-construction works simultaneously with their issuance.

A customer or contractor is allowed to commence pre-construction work no earlier than in seven calendar days after obtaining the permit for pre-construction works.

A permit for pre-construction works may be cancelled upon the decision of the Inspectorate of State Architectural and Construction Control if:
       v the customer obtains a permit for construction works;
       v the termination of a legal entity or termination of entrepreneurial activity by an individual entrepreneur (customer, contractor) becomes known;
       v legislation in the sphere of construction and architecture is systematically violated during performance of the pre-construction works;
       v the project scheme of pre-construction works is violated;
       v officials of the Inspectorate of State Architectural and Construction Control are prevented from carrying out their duties.

The Inspectorates of State Architectural and Construction Control maintain a register of the issued (and cancelled) permits for pre-construction works and refusals to issue a permit for pre-construction works.

The Cabinet of Ministers of Ukraine shall approve an appropriate form of the permit for pre-construction works, an application form to be submitted to obtain the permit, and a form for the refusal to issue a permit, as well as the procedures for issuance and cancellation thereof and maintenance of the relevant
registry.

Unfortunately, as of this writing, the Cabinet of Ministers of Ukraine has not yet approved a form of the permit for pre-construction works, and the main point is that it is not known whether the state budget provides enough funds to develop and print such permits.

5. Changes in the conduct of construction
Changes have been made in order to permit the conduct of construction works and the list of documents required to be submitted to obtain the permit, as well as to conditions subject to which such permit is issued. Moreover, now a permit to conduct construction works shall also provide for the conduct of pre-project works.

The main innovation for foreign legal entities willing to conduct construction works is that, in order to obtain a permit to conduct construction works, they must submit documents proving that individuals and legal entities of Ukraine are involved in not less than 90% of the total volume of construction-assembly works and also that they use 50% national products and materials, in particular regarding construction structures. It is difficult to imagine what documents could prove such facts.

Furthermore, important is that, pursuant to the recent changes, in case of reconstruction or capital repairs of roads, railway tracks, electric lines, pipelines or linear communications, within the existing rights of way, a permit to conduct construction works may be issued without submitting any certificate proving right of ownership or right of use of a land plot.

At present, a permit to conduct construction works is a document that certifies the right of a customer and contractor to conduct pre-construction works (if the pre-construction works have not been performed beforehand under a permit for pre-construction works) and construction works, and to connect the property under construction to the relevant engineering networks and structures.

A permit to conduct construction works is issued by the Inspectorates of State Architectural and Construction Control.
In order to obtain a permit to conduct construction works, the customer and contractor shall submit to the Inspectorate of State Architectural and Construction
Control a written application with the following documents attached:

1) documents to be submitted by the construction’s owner:
       v  a certificate proving right of ownership or right of use of a land plot or a “superficies agreement”;
       v  project documentation for the construction, agreed and approved as required by legislation;
       v  information on field and technical supervision;
       v  a copy of the document proving right of ownership to a building or structure, or written consent of its owner to conduct the specified works (or, in the
          case of reconstruction, restoration or capital repairs, of the city-planning properties);
       v  financial statements prepared pursuant to article 11 of the law of Ukraine "Accounting and financial statements in Ukraine", and a copy of the license
           to perform financial services, certified as prescribed by law (in the case of conduct of construction, involving direct or indirect financing from
           individuals);

2) documents to be submitted by the construction contractor:
       v  copies of the constitutive documents and certificate of state registration;
       v  copy of a license to function as the general contractor for the property, certified as prescribed by law;
       v  contractor agreement (contract) for construction;
       v  document regarding the appointment of responsible contractors;
       v  information on the qualifications and work experience of the specialists involved in fulfilling the order;
       v  proposals regarding involvement of subcontractors.

The Inspectorate of State Architectural and Construction Control shall consider the application; grant a permit for construction works or refuse to issue it; and issue and register the permit for construction works within one month of the day of registering the application therefore.

A refusal to issue a permit to conduct construction works may be based on the following reasons:
       v Failure to submit the documents required for decision making on the granting of such permit;
       v Non-compliance of the documents submitted pursuant to legislative requirements;
       v Detection of untrue information in the documents submitted.

The issuance of a permit to conduct construction works must be performed free of charge.
A permit to conduct construction works shall be issued for the standard period of construction or for the period of validity of the construction agreement (contract).

A permit may be prolonged on the customer’s request for a period of not more than one year.

A permit to conduct construction works may be cancelled upon the decision of the Inspectorate of State Architectural and Construction Control if:
       v  The customer files an application to cancel the permit to conduct construction works;
       v   the permit to conduct construction works is issued or re-registered in contradiction of the legislative requirements;
       v   the termination of a legal entity or termination of entrepreneurial activity by an individual entrepreneur (customer, general designer, general
             contractor) becomes known;
       v   legislation in the sphere of construction and architecture is systematically violated during performance of the construction works;
       v   officials of the Inspectorate of State Architectural and Construction Control are prevented from carrying out their duties;
       v   the construction works have not been started within three months of the issuance of a permit to conduct construction works.

If the right to construct a city-planning property is transferred to another customer or a construction organization (general contractor) is changed, the permit to conduct construction works shall be subject to re-registration.

Re-registration of a permit to conduct construction works must be performed as is prescribed for the obtaining of a permit to conduct construction works.
Carrying out of construction works on city-planning properties without a due permit to conduct construction works or re-registration thereof, as well as conduct of construction works not stipulated by the permit shall be considered as unauthorized construction and entails legal liability in the form of an administrative penalty.

6. New procedures for the commissioning of new properties
New procedures for the commissioning of completed construction properties are regulated by the Resolution of the Cabinet of Ministers of Ukraine “Procedures for the commissioning of completed construction properties” dated October 8, 2008, which came into force on January 1, 2009.

Commissioning of completed construction properties is carried out by the committee formed by the State Architectural and Construction Inspectorate that issued the permit to conduct construction works, subject to a written application to be submitted by the customer of the construction property.

The form of such application shall be approved as prescribed by the Ministry of Regional Development and Construction of Ukraine (the form was approved by order of this ministry dated December 10, 2008, registered by the Ministry of Justice of Ukraine on January 20, 2009 under No. 38/16054).

The following documents must be attached to the application:
       v project documentation for the construction, agreed and approved, as required by legislation;
       v list of the construction and installation works, specifying the business entities that carried them out;
       v  information about the responsible engineering technicians;
       v a package of project documents for the construction and installation works, in accordance with the list stipulated by the regulatory documents;
       v  documents evidencing relevant compliance, as stipulated by the regulatory documents, of the materials, constructions, products and equipment used;
       v  research results on the quality of drinking water, ground and air depending on the particular conditions of construction;
       v  a document evidencing the filing of the project documentation with the insurance documentation fund, if such construction property is on the list of
            properties and structures of which the project documentation is to be filed with the insurance documentation fund as stipulated by the Ministry of
            Regional Development and Construction of Ukraine and the Ministry of Emergencies of Ukraine;
       v   conclusion of the official from the Inspectorate of State Architectural and Construction Control, who was supervising construction of the property, on
           the possibility of commissioning the property.

A report on mandatory scientific-technical maintenance must be submitted, together with all of the above for construction properties subject to such maintenance.

The Inspectorate of State Architectural and Construction Control shall consider the submitted materials and, in case of their compliance, shall form an acceptance committee within three business days.

If the documents submitted by the customer do not meet the above requirements, the application, with all the documents attached, shall be returned to the customer within three business days of the registration date thereof.

The customer may apply again to the Inspectorate of State Architectural and Construction Control, only after the defects have been eliminated.
The acceptance committee shall include representatives of:
       v  the customer,
       v  the general designer,
       v  the insurer,
       v  the general contractor,
       v  the Inspectorate of State Architectural and Construction Control,
       v  an executive body or a local self-regulatory body and operating entity (upon agreement).

The acceptance committee must commence inspection of the property’s readiness for operation within ten business days of the day of its formation.

Subject to the document evidencing readiness for operation of the property, the Inspectorate of State Architectural and Construction Control shall issue to the customer or his authorized person a certificate of compliance of the constructed property with the project documentation (herein – a “certificate”), requirements of state standards, construction norms and rules within two business days of its execution.

The form of the certificate was approved by order of the Ministry of Regional Development and Construction of Ukraine, dated December 10, 2008, registered with the Ministry of Justice of Ukraine on January 20, 2009 under No. 38/16054).

The commissioning date of the completed construction property shall be the date of issuance of the certificate registered by the Inspectorate of State Architectural and Construction Control.

The acceptance committee may not require the performance of additional types of works on the completed construction property, except for those prescribed by the project documentation and basic data.

The Inspectorates of State Architectural and Construction Control shall inform: a local self-regulatory body or local state administration, as to the location of the construction property; and the statistical body about the issuance of the certificate, within three business days of its issuance.

The certificate shall be a basis for: concluding agreements on the supply to the construction properties of resources required for their operation (i.e. water, gas, heat, electric power); entry of data about these construction properties into the statistical records; and registration of title to them.

7. It is also important that liability be established regarding violation of the terms of issuance of technical conditions on the engineering of an architecturally significant property and regarding unauthorized conduct of pre-construction works.
At present, the civil code of Ukraine on “Administrative violations” provides that violation of the terms of issuance of technical conditions on the engineering of an architecturally significant property prescribed by law shall entail penalties for officials concerned ranging from the sum of the equivalent of twenty to one hundred personal minimum wages (a statutory amount often indexed over time).

New legal provisions were adopted regarding liability for the conduct of pre-construction works either without a permit for pre-construction works or without a permit to conduct construction works.

Thus, under part 1 of article 1 of the law of Ukraine "Liability of enterprises, associations thereof, institutions and organizations for violations of city-planning requirements”, the conduct of pre-construction works without a permit for pre-construction works or a permit to conduct construction works or without approved project documentation shall incur a penalty in the amount of the equivalent of fifty personal minimum wages.

ABOUT SALANS: Chambers Europe Award for Excellence 2009
On April 23, 2009, as a gala award ceremony held in London, Salans was awarded the Central and Eastern Europe Award for Excellence for 2009 by the leading legal directory Chambers and Partners. On behalf of Salans the award was collected by Oleg Batyuk , Managing Partner for Ukraine, which also had its own nomination for excellence in its jurisdiction.

In 2008 Salans has been acknowledged as the Best Law Firm in Real Estate in Ukraine and has received the National Legal Award 2008 in this area.
Salans has won the Euromoney award for Best Legal Team in Real Estate in Emerging Europe for the second year in a row. The dynamic Emerging Europe region includes Poland, the Czech Republic, Hungary, Romania, Russia, Turkey and of course Ukraine.

Salans is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

Salans is a full service international law firm. Salans has its offices in Almaty, Baku, Barcelona, Beijing, Berlin, Bratislava, Bucharest, Budapest, Frankfurt, Hong Kong, Istanbul, Kyiv, London, Madrid, Moscow, New York, Paris, Prague, Shanghai, St. Petersburg and Warsaw.

CONTACT: For further information, please contact: Oleg V. Batyuk, Managing Partner, E-mail: obatyuk@salans.com; Myron Rabij, Partner, Head of Real Estate Group in Ukraine, E-mail: mrabij@salans.com; Anzhelika Shtukaturova, Associate, E-mail: ashtukaturova@salans.com. SALANS KYIV, 49-A, Volodymyrska Street, 2nd floor, 01034 Kyiv, Ukraine, Tel: +380 44 494 4774, Fax: +380 44 494 1991, Web-page: www.salans.com, E-mail: kyiv@salans.com.
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Promoting U.S.-Ukraine business investments since 1995.
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23. SALANS KYIV EMPLOYMENT NEWSLETTER, MAY 2008 ISSUE TWO

Salans Kyiv Employment Newsletter, Second Issue, Kyiv, Ukraine, May 2009

KYIV - IN THIS ISSUE: The scope of administrative and criminal responsibility of executives for untimely or partial payment of salaries has been increased.

Under the law of Ukraine “On Introducing Amendments to the Code of Ukraine on Administrative Violations and to the Criminal Code of Ukraine on the Increase of Responsibility for Untimely Payment or Unjustifiable Non-payment of Salaries, Scholarships, Pensions or other Payments Established by Law” No. 1027-VI of 19.02.2009, the administrative and criminal responsibilities of executives for: breach of the prescribed payment terms for salaries; non-payment of salaries; and breach of certain other provisions of Ukrainian labor laws were increased, in particular:
(і) Under article 41 of the Code of Ukraine on Administrative Violations, breach of the prescribed payment terms for salaries, partial payments thereof and other violations of the provisions of Ukrainian labor laws shall result in the imposition of a fine on officials of the respective enterprises, institutions or organizations, irrespective of the ownership form of such enterprises, institutions or organizations, and on individuals who are “subjects of private entrepreneurship” in the amount of 30 to 100 per cent of the non-taxable individual minimum wage, being UAH 510 – 1,700 (prior to the introduction of these changes the fine was UAH 255 – 850);

(іі) Under article 188-6 of the Code of Ukraine on Administrative Violations, failure to meet the legitimate requirements of the government bodies for the supervision of compliance with labor laws with respect to eliminating violations of labor and state social insurance laws or hampering the activities of such bodies shall result in the imposition of a fine on the respective officials in the amount of 50 to 100 per cent of the non-taxable individual minimum wage, being UAH 850 - 1,700 (prior to the introduction of these changes the fine was UAH 170 - 238);

(ііі) Under part 1, article 175 of the Criminal Code, unjustifiable, deliberate non-payment of salary for a period exceeding 1 month by an executive shall be punishable by a fine in the amount of 500 to 1,000 per cent of the non-taxable individual minimum wage, being UAH 8,500 - 17,000 (1,700 – 5,100) or by community service for a period of up to 2 years, or by imprisonment for a period of up to 2 years and a ban from being employed in certain positions or engaging in certain activities for a period of up to 3 years;

(іv) Under part 2, article 175 of the Criminal Code, unjustifiable, deliberate non-payment of salary for a period exceeding 1 month by an executive, due to use of the funds intended for payment of salaries for other purposes, shall be punishable by a fine in the amount of 1,000 to 1,500 per cent of the non-taxable individual minimum wage, being UAH 17,000 - 25,500 (prior to the introduction of these changes the fine was UAH 8,500 - 17,000) or by imprisonment for a period of up to 3 years, or by imprisonment for a period of up to 5 years and a ban from being employed in certain positions or engaging in certain activities for a period of up to 3 years.

ABOUT SALANS: Salans is a full service international law firm. Salans has its offices in Almaty, Baku, Barcelona, Beijing, Berlin, Bratislava, Bucharest, Budapest, Frankfurt, Hong Kong, Istanbul, Kyiv, London, Madrid, Moscow, New York, Paris, Prague, Shanghai, St. Petersburg and Warsaw.

Salans is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

For further information regarding our Kyiv employment practice, please contact: Oleg Batyuk, Managing Partner, Kyiv, Tel: +380 44 494 4774;
E-mail: obatyuk@salans.com or Volodymyr Monastyrskyy, Partner, Employment/Corporate/Real Estate, Tel: +380 44 494 4774; E-mail: vmonastyrskyy@salans.com; SALANS, 49-A, Volodymyrska Street, 2nd floor, 01034 Kyiv, Ukraine, Tel: +380 44 494 4774; Fax: +380 44 494 1991;
Web-page: www.salans.com; E-mail: kyiv@salans.com.
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24. UKRAINE'S PROTECTION OF MINORITY SHAREHOLDERS' RIGHTS
FALLS WELL SHORT OF STANDARDS ELSEWHERE IN EUROPE
Corporate Relations Research Center Publishes Study on Minority Shareholders' Rights

Corporate Relations Research Center, Kiev, Ukraine
PRNewswire, Kiev, Ukraine, Thursday, May 14, 2009

KIEV - Ukraine's Corporate Relations Research Center, a non-governmental public organization which unites Ukrainian political, economic, financial and media relations experts, today issued a study indicating that the nation's regulatory protection of minority shareholders' rights falls well short of standards elsewhere in Europe.

The study "Impairment of Minority Shareholders' Rights by Majority Shareholders in Domestic Companies" includes analysis of legislation in a number of European countries (Germany, France and Russia) concerning the regulation of relations between minority and majority shareholders. The study focuses on the following questions: Why minority shareholders' rights need protection and how this protection should be implemented?

The difficulty is connected with the method of decision-making in joint stock companies as the procedure is most often based on majority decisions. Therefore, in the absence of mitigating rules, a major shareholder can determine the most important steps of the company, and minority shareholders cannot influence them.

The study contains retrospective and current analysis of a number of corporate conflicts involving Ukrainian joint stock companies where irregularities have been alleged. For instance, an additional share issue at Zaporozhstal CJSC conducted in 2006 in which minority shareholders lost initial stakes is among the cases reviewed, along with another involving the Borschagovskiy Chemical Factory.

The study also criticizes English law which applies where Ukrainian-owned companies are registered in the UK for trading through the London Stock Exchange. The authors focus specifically on an upcoming shareholder vote on a possible share buy-back by Ferrexpo Plc, a London-listed iron ore company whose controlling shareholder is Ukrainian.

The authors contend that such a buy-back could be blocked by minority shareholders in other jurisdictions, such as France, where the Commercial Code specifically prohibits majority shareholders from voting on matters where they have a personal interest.

The research confirms that owners of majority stakes in joint stock companies tend to act in their own interests to the detriment of other shareholders. The research includes a list of legal methods used by some European countries to moderate the rigid majority principle and to prevent majority shareholders from making decisions detrimental to the company.

Such methods as separate voting, stricter quorum requirements, establishment of the qualified majority principle and prohibitions on voting by personally interested persons are applied in various combinations in order to resolve issues potentially harmful to the interests of minority shareholders.

Among such issues are:

      [1] Increases and reductions in authorized capital;
      [2] Reorganization of a joint-stock company;
      [3] Transactions in which certain shareholders are personally interested;
      [4] The conduct of large transactions;
      [5] Protection of the rights of outside shareholders when the company is entering into a group of enterprises as a dependent or affiliated company;
      [6] The conduct of transactions connected with a change of control over the company

Alongside voting mechanisms examined in the research, the rights of minority shareholders are also protected by direct regulations or prohibitions regarding the conditions and special procedures for decision-making which reserve a significant role for minority shareholders.

In the sphere of corporate relations, Ukrainian issuers are characterized first of all by a large number of minority stockholders, having emerged in the course of the privatization process; this peculiarity makes Ukrainian corporate relations very different from those in developed countries (where such relations have a long history of development).

According to the authors of the study, in order to prevent abuse, regulators need to vest in shareholders the right to bring action against company management on behalf of the whole enterprise to repair any damage caused by the officials. The authors also state that regulations need to acknowledge the possibility of transactions in which some shareholders may have an excessive interest and exclude them from voting on such transactions.

NOTE: The study "Impairment of Minority Shareholders' Rights by Major Shareholders in Domestic Companies" is available in English at http://corporativ.info/en/?/expert/2903/.

CONTACTS: Corporate Relations Research Center, +380-44-4900412
Svetlana Goncharova, Project Director, sveta@corporativ.info
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25. UKRAINE: EXPERTS DISCUSS RISKS/OPPORTUNITIES OF M&A MARKET
Experts of Baker Tilly Ukraine and Baker & McKenzie conduct practical seminar

Baker Tilly Ukraine, Kyiv, Ukraine, Tuesday, April 14, 2009

KYIV - On April 9, 2009, the audit company, Baker Tilly Ukraine, and the international law firm, Baker & McKenzie – Kyiv, organized and conducted a practical seminar entitled “Achieving M&A Benefits through Complete Due Diligence Procedures”.

The uniqueness and main difference of this event from others of a similar format was that the two companies’ specialists in the legal, finance and tax spheres considered the practical aspects of structuring M&A transactions and described algorithms for the assessment of the tax, legal, and financial risks of business acquisitions.

As noted by Alexander Pochkun, the Managing Partner of Baker Tilly Ukraine: “It is crucial to consider the application of Due Diligence procedures in three areas: legal, tax, and financial. Such an approach will help companies to more clearly understand the nature and particularities of their specific M&A transactions”.”

The presenters put special emphasis on the issues of determining the quality of EBITDA and cash flows, analyzing working capital, and managing transaction costs by using the classical procedures of Due Diligence.

James Hitch, the Managing Partner and the Head of the Corporate/M&A Practice Group of the Kyiv Office of Baker & McKenzie, emphasized that: “It is of vital importance to consider all of the existing and hidden risks of the successful running of an M&A deal. Due Diligence is a very effective tool for detecting and mitigating those risks.”

Mykola Stetsenko and Viacheslav Yakymchuk, Partners of the Corporate/M&A Practice Group of the Kyiv Office of Baker&McKenzie, outlined the pros and cons of indirect sales of shares of Ukrainian companies, and spoke on the practical aspects of risk management in an M&A deal.

Partners of Baker Tilly in the UK, Paul Johnson and Stephen Mason, shared their experiences in conducting Due Diligence procedures, namely, the classical procedures of Due Diligence adopted in Western Europe.

The participants of the training, most of whom were representatives of Ukrainian businesses, had the opportunity to look at their businesses from the point of view of the foreign investor, as well as to understand what expectations foreign investors have with regard to their Ukrainian partners, M&A transactions and consultants.

Irina Chernova, Head of Due Diligence and M&A Services of Baker Tilly Ukraine, told about the specifics of Due Diligenceprocedures conduction in Ukraine and impact of particularities of Ukrainian financial and tax accounting on them.

More than 50 representatives of leading foreign and national companies visited the seminar. Many of them requested Baker Tilly Ukraine and Baker & McKenzie – Kyiv to conduct another similar seminar in the nearest future.

Baker Tilly Ukraine and Baker & McKenize are members of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.
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26. NEW AMENDMENTS TO UKRAINE'S LAND CODE

Squire, Sanders & Dempsey L.L.P., Legal Alert, Kyiv, Ukraine, Wed, May 6, 2009

KYIV - On May 2, 2009 simplified procedures for the registration of land ownership and land transfers went into effect in Ukraine. Previously, a state act was required to demonstrate title to a parcel of land. This meant that a notarized land purchase agreement was not sufficient evidence of ownership of title to land and any new purchaser of land had to obtain a duly registered state act with the state department of land resources.

The bureaucratic procedures for issuing state acts caused additional expenses and time for new landowners. With the adoption of the simplified procedures, described below, state acts will no longer be required.

Changes to the Laws of Ukraine
The simplified procedures are the result of the law "On Amendments to the Laws Certifying Ownership Rights to a Land Plot and to the Procedure of Division and Joining of Land Plots" No. 1066-VI dated 5 March 2009 (the amendments). The law amends (i) the Land Code of Ukraine, (ii) the law "On Land Tenure (zemleustriy)" and (iii) the law "On State Registration of Property Rights on Real Estate Objects and Their Encumbrances."

New List of Documents That Certify Ownership Rights to a Land Plot
The following documents will now certify ownership rights to a parcel of land: State act; or Civil-law title transfer agreement, duly notarized, or certificate of inheritance – provided that the land plot was previously privately owned and no borders or zoning was changed.
Leases
A right to lease a land plot, as it was in the past, is certified by a notarized land lease agreement that must be registered with the state department of land resources.

Land Plot Transfer of Title Procedure
In case of a transfer of title, a state act on a parcel of land that is being transferred should be attached to the civil-law title transfer agreement or certificate of inheritance.

The state act should contain notes of a notary and the state department of land resources (which registers ownership rights and restrictions on real property) about the title transfer of the parcel of land and identify the agreement or certificate on the basis of which the title transfer took place.

The state department of land resources must register the ownership rights within 14 calendar days from the date of submission of the document to the relevant state department.

In the event of a change of the co-owner or acquisition of the right of joint ownership to a parcel of land, the state department of land resources should make changes to the state act.

Transferring part of a parcel of land and separating it into a new parcel of land are possible only after the owner obtains a state act on the newly formed parcel of land.

Certification by Notary and State Registration of Ownership Rights to a Land Plot
Sales of land ownership rights must be certified by a notary and registered with the state department of land resources.

Ownership rights to a parcel of land and the right to use and rent a parcel of land are acquired only after the state registration of these rights.

Effect on Previous Agreements
This law also applies to cases for which a civil-law title transfer agreement or certificate of inheritance was obtained before the enactment of this law, but state acts were not issued.

If you have questions about the Land Code Amendments or any of its provisions, please contact your principal Squire Sanders lawyer or one of the lawyers listed in this Alert.

The contents of this update are not intended to serve as legal advice related to individual situations or as legal opinions concerning such situations. Counsel should be consulted for legal planning and advice.

ABOUT SQUIRE, SANDERS & DEMPSEY L.L.P.
Founded in 1890, Squire, Sanders & Dempsey L.L.P. has lawyers in 32 offices and 15 countries around the world. With one of the strongest integrated global platforms and our longstanding one-firm philosophy, Squire Sanders provides seamless legal counsel worldwide.

Squire, Sanders & Dempsey L.L.P. is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.

Contacts: Peter Z. Teluk, +380.44.220.1414; Oleksiy Povolotskiy, +380.44.220.1409; Squire, Sanders & Dempsey L.L.P., Leonardo Business Center, 19-21 Bohdan Khmelnytsky St., 16th Floor, Kyiv 01030, Ukraine.
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U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
Washington, D.C., www.usubc.org

FOURTEEN MEMBER LAW FIRMS, LEGAL ASSOCIATIONS
AND ACCOUNTING FIRMS 2009

[1]    Aitken Berlin LLP/HSIA - Bruce Aitken, Partner, Wash, D.C.
[2]    Asters - Armen Khachaturyan, Senior Partner, Kyiv, Ukraine. Link: http://www.asterslaw.com/
[3]    Baker & McKenzie-CIS, Limited - James T. Hitch, Managing Partner, Kyiv, Ukraine. Link: http://www.bakernet.com.
[4]    Baker Tilly Ukraine, Alexander Pochkun, Managing Partners, Link: www.bakertillyukraine.com
[5] Bracewell & Giuliani, LLP - Martin Hunt, Partner, London; Paul Nathanson, Principal, Wash, D.C.. Link: http://www.bracewellgiuliani.com/
[6] Chadbourne & Parke LLP – Jaroslawa Johnson, Managing Partner, Kyiv, Ukraine. Link: http://www.chadbourne.com
[7] DLA Piper Ukraine, LLC - Margarita Karpenko, Managing Partner, Kyiv, Ukraine. Link: http://www.dlapiper.com/Ukraine/
[8]    Ernst & Young Ukraine - Alexei Kredisov, Managing Partners, Link: www.ey.com/ukraine
[9] Heller & Rosenblatt – Jack I. Heller, Partner, Washington, D.C.
[10] KPMG Ukraine - Mason Tokarz, Managing Partner, Link: www.kpmg.ua
[11] Marks, Sokolov & Burd LLC – Gene Burd, Attorney, Philadelphia, PA/Kyiv, Ukraine. Link: http://www.marks-sokolov.com/
[12] RULG - Ukrainian Legal Group, PA – Irina Paliashvili, President & Sr Counsel, Wash, D.C./Kyiv, Ukraine. Link: http://www.rulg.com/
[13] Salans - Markian B. Silecky, Counsel, SALANS, New York, NY/Kyiv, Ukraine. Link: http://www.salans.com
[14] Squire, Sanders & Dempsey, L.L.P. - Sarah C. Carey, Partner, Wash, D.C./ Peter Teluk, Partner, Kyiv, Ukraine. Link: http://www.ssd.com/
[15] Ukrainian American Bar Association (UABA) - Andrew A. Pidgirsky, Chairman of the Board, Houston, TX. Link: http://www.uaba.org/
[16] Vasil Kisil & Partners - Oleg A. Makarov, Managing Partner, Kyiv, Ukraine. Link: http://www.kisilandpartners.com/
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Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation
Emerging Markets Private Equity Investment Group;
President, U.S.-Ukraine Business Council (USUBC)
Trustee, "Holodomor: Through The Eyes of Ukrainian Artists"
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707; Fax 202 223 1224
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
mwilliams@usubc.org; www.usubc.org
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