Changes in business activities during the quarantine
In the light of the Cabinet of Ministers` of Ukraine introducing emergency across the territory of Ukraine and extending quarantine until April 24, 2020, restrictions that were introduced for business for this period remain effective.
The Parliament of Ukraine has adopted Draft Law #3220, which partially optimizes tax system for the period from March 1, 2020, to April 30, 2020. More details on this issue.
Yet now, Draft Law #3263 has been submitted to the Parliament which proposes to bring the land fee and real estate tax back for the period from March 1, 2020, to April 30, 2020, with an option of interest-free grace period until June 30, 2020. Such proposal to bring back taxes during the quarantine is explained by the fact that local budgets will lose significant amounts that will not be reimbursed by the state.
With regard to the protection of rights in court, Draft Law #3261 proposes to extend limitation period stipulated in the civil, commercial, labor and family legislation. Please note, that the lawmaker proposes to amend only general provisions on such period. Applying special limitation periods that are set out by other regulations require the use of regulations in effect. The same Draft Law suggests extending procedural periods for the time of quarantine for selected actions in court, for instance, changing claims, submitting evidence, appealing court decisions.
Case consideration periods are extended as well which may affect how fast the filed cases are defended and reopened, in particular when the possibility to execute court decision depends on the time of case consideration. At the same time, such legislative initiative does not apply to the issues of court decision execution, and this gives us grounds to draw a conclusion that agencies that execute such decisions should comply with terms set out in current legislation.
That being said, to protect consumers from price speculations submitted to the Parliament Draft Law #3253 proposes opposing such malpractices. Thus, it is suggested to introduce restrictions on exceeding ceiling prices and tariffs for some types of goods, works and services the list of which is developed and established by the Cabinet of Ministers for emergency, martial law or quarantine period. Currently, it is foreseen that such list should include essential goods, however, it can be extended by the Cabinet of Ministers of Ukraine at any time as needed.
Administrative liability in the form of 8500 UAH fine is foreseen for the violation of ceiling pricing requirements. And for repeated unreasonable price raise, in particular if it occurs more than twice in six months, criminal liability may be applied in the form of 51000 UAH fine, and if price was increased in collision of several entities — 119 000 UAH. The above administrative and criminal sanctions are imposed for each product, work or service.
The Draft Law does not identify liable parties and does not take into account the fact that prices may be raised at the level of distributors that distribute respective goods among retailers. This will lead to the latter to opt out from procurement of respective goods due to their unprofitability and the risk of fines. This may lead to the deficit of goods.
To protect population Draft Law #3255 proposes to limit housing rent payments by up to 50% from the amount set out in Rent Agreement. It is foreseen, that such measures will apply to residential premises rent only, and business entities, small and medium, in particular, will not be eligible for such benefits.
We hope that a similar draft law on real estate rent for business activities will be submitted to the Parliament in the nearest future.
Legal Alliance will keep track of legislative initiatives to optimize business activities during the quarantine and inform you about their adoption.