Welcome to the U.S.-Ukraine Business Council

Salans News Banking and Finance Ukraine
March 2010

In this issue:

  1. Amendments to the Provision on  the Functioning of Domestic and International Payment Systems in Ukraine

  2. Registration of Corporeal Rights over Immovable Property
  1. Amendments to the Provision on the Functioning of Domestic and International Payment Systems in Ukraine 

Resolution No. 6 of the board of the National bank of Ukraine dated 5 January 2010, “Amendments to the Provision on the Functioning of Domestic and International Payment Systems in Ukraine” (“Resolution No. 6”).

Resolution No. 6 introduced amendments to the Provision on the functioning of domestic and international payment systems in Ukraine (the “Provision”).  In particular, according to the amendments, the Provision now also regulates the activity of legal entities planning to conduct clearing and payment transactions.
 
The NBU also stated that, if a payment organisation fails to transfer money for a period of one year from the date of NBU permission (for such money transfer transactions) being obtained, the NBU shall withdraw such permission.  If a legal entity fails to provide international payment system services for a period of one year from the date of the NBU registration certificate (permitting participation in such system) being obtained, such registration certificate may be cancelled.

Resolution No. 6 took effect on 15 February 2010.

  1. Registration of Corporeal Rights over Immovable Property

The law of Ukraine, “On amendments to the law of Ukraine ‘On state registration of corporeal rights over immovable property and restrictions on corporeal rights’ ” (the “Law”);

Decree No. 324/5 of the Ministry of Justice dated 17 February 2010, “On the regulation of state registration of property rights over immovable property” (the “Decree”).

On 11 February 2010 the Verkhovna Rada adopted the Law, pursuant to which the law of Ukraine “On state registration of corporeal rights over immovable property and restrictions on corporeal rights” was amended and restated as a new version. The new version contains certain changes, in particular: 

  • the controller of the state registry of rights shall be a specially authorized central executive body dealing with the issues of state registration of rights, namely the  Ministry of Justice of Ukraine (previously it was the State Committee for Land Resources), and the administrator of the state registry shall be a state company which falls under the management of the Ministry of Justice of Ukraine;

  • the list of corporeal rights which must be state registered was expanded, in particular the following  rights must be state registered: right of economic management, right of operational management, right of permanent exploitation and right of lease of a land plot, right of exploitation (lease, rent) of a building or other construction or part thereof, mortgage, property trust; and

  • state registration of rights over immovable property, as stipulated by the Law, shall commence on 1 January 2012.

The Law shall take effect on the date of publishing, except for Provision 4 and sub-items 2 and 4 of Provision 5 of Part V “Transitional Provisions” of the Law, which shall take effect on 1 January 2012.

In connection with the adoption of a new version of the Law, the Ministry of Justice amended the Temporary provision on the state registration of property rights over immovable property (the “Temporary Provision”) with the Decree which amends the procedure for state registration of rights over immovable property. In particular: 

  • property rights over unfinished constructions shall be registered in the BTI (the Technical Inventory Bureau) in future transactions;

  • mortgage agreements containing provisions of a mortgagor’s claim settlement entered into or amended after the law of Ukraine “On limiting the influence of the global financial crisis on the development of the building sector” took effect, became one of the title documents. Thus, the provision of the law of Ukraine “On mortgages”, according to which enforcement of an outstanding mortgage debt against mortgaged property can be fulfilled on the basis of the mortgage agreement, was realized in practice in the Decree;

  • the list of additional documents to be provided for registration of property rights over immovable property on the basis of mortgage agreements which contain the provisions of a mortgagor’s claim settlement (entered into after the above-mentioned law took effect) was provided; and

  • the form of the certificate of ownership for immovable property was amended.

The Decree took effect on 05.03.2010, except for sub-items 8.2 and 8.3 of Provision 8, sub-items 11.2 and 11.3 of Provision 11 and Provisions 12 and 13 of the Temporary Provision, which take effect 3 months after state registration of the Decree.

This newsletter does not constitute legal advice with respect to any matter or set of facts and may not be relied upon for such purposes. Readers are advised to seek appropriate legal advice before entering into any transaction, making any determination or taking any action related to matters discussed herein. No part of this newsletter may be copied or quoted without the prior written consent of Salans.

LINK EN: http://www.usubc.org/reports/Salans_Banking_and_ Finance_Newsletter_March_2010_Eng.pdf
LINK UA: http://www.usubc.org/reports/Salans_Banking_and_ Finance_Newsletter_March_2010_Ukr.pdf