Author: admin_fedoryshyn

Author: Viktoriia Staryk, lawyer at F&P

Trademark is any unique sign that allows you to distinguish your goods or services from competitors and protect intellectual property. It can be registered by individuals as well as legal entities. A trademark can take different forms: verbal (name), graphic (logo), combined, or even sound. Its registration offers a range of advantages:

1. Protection from copying. Once registered, third parties will not be able to use your mark without your permission. A trademark certificate is official confirmation of your rights and simplifies the procedure of protecting them in legal disputes both in Ukraine and abroad.
2. Increased trust. A registered brand inspires more respect and confidence among customers and partners, enabling the creation of a unique image for your business.
3. Investment in the future. A trademark is an intangible asset that can increase the value of your business when selling or attracting investors.

Trademark registration is quite a comprehensive and lengthy process that requires following certain steps.

1. Checking the uniqueness of the mark and preparing necessary documents. Before submitting your application, it is important to ensure that your mark is original and unique. To do this, you should search the database of registered trademarks, which will help avoid potential disputes with competitors. To check information about an already existing trademark, use this link. If you plan to enter the international market, it is recommended to check for similar trademarks in international databases such as TMview and DesignView.

You should prepare a complete set of documents, including a description of the trademark, a list of goods and services it will represent, an application for registration, filled out according to the approved form, a document confirming the payment of the state fee, and a power of attorney (if the application is submitted by a representative). The fee amount depends on the number of Nice Classification (NCL) classes for which you are registering the trademark and the chosen method of submitting the application (online/mail/in person).

2. Preparing the application. At this stage, it is necessary to define the elements of your mark (name, logo, colors) and select the classes of goods and services according to the International Classification (NCL). It is important to clearly formulate the description to ensure that the mark aligns with your goals.

International Classification of Goods and Services also known as the Nice Classification is a universal system that divides all goods and services into 45 classes: 34 for goods and 11 for services. Each class covers a specific category of goods or services grouped by common characteristics. This system is widely used in the process of trademark registration in most countries around the world, including Ukraine.

Why NCL is key for trademark registration?

• Providing legal protection

When you register a trademark, it is only protected for the goods and services listed in your application. If you do not include all relevant classes for your activity, your brand will remain unprotected for those goods or services.

• Preventing conflicts with other brands

Proper classification helps avoid conflicts with trademarks that are already registered for similar goods or services. This reduces the risk of rejection due to the presence of identical or similar marks.

• Optimizing the registration process

Defining the class of goods or services according to the NCL helps you correctly prepare the application, reduce preparation time, and avoid potential mistakes. This is especially relevant if you plan to register in several countries, as NCL is used internationally.

3. Submitting the application to the Ukrainian Intellectual Property Institute (UKRIP). The application for registration and the document package can be submitted through the official website of the Ukrainian Intellectual Property Institute, by mail, or directly to their office. It is important to include all necessary data and documents, including evidence of the uniqueness of your mark.
4. Examination. UKRIP conducts two types of examination: formal and substantive. Each of these has its own terms, which can vary depending on the workload of UKRIP and the complexity of your application, but it is the examination that determines whether your mark will be registered.

Formal examination: usually takes about 1-2 months from the date of submission of the application. At this stage, the correctness of the document’s design and the presence of all necessary details are checked.

Substantive examination: this is the longest stage, which can last from 17 to 20 months. At this stage, UKRIP experts conduct a thorough analysis of your trademark for compliance with legal requirements and uniqueness.

5. Receiving the certificate. In the case of a successful examination and after state registration, information about your trademark is published in the official UKRIP bulletin. After publication, a three-month period opens for third parties to file objections. If there are no objections, UKRIP issues a trademark certificate. This stage usually takes about 1-2 months.

Note! A trademark certificate is issued for 10 years and can be extended for the next 10 years upon your request.

Trademark registration is a complex legal process that requires an understanding of the legislation. Incorrectly filled applications, wrong selection of classes, or underestimating potential conflicts with other brands may lead to rejection or limited legal protection. Our lawyers, specializing in intellectual property, will help avoid these risks, ensure proper document preparation, and provide effective protection for your brand at every stage of registration both in Ukraine and abroad.

Author: Ulyana Luchkevych, lawyer at F&P

Relevance of disputes between investors and developers in Ukraine

Every year, the number of disputes between investors and developers in Ukraine increases, which can be attributed to the instability of the legal framework for attracting funds for new construction. Investing in real estate involves the use of specific legal instruments that may contain various risks and peculiarities. A thorough risk analysis and checking of the developer before signing agreements increase the chances of successfully obtaining ownership of the new property but do not provide absolute protection. In cases where investors do not receive the proper property and negotiations with developers do not yield results, they are forced to go to court. Judicial practice shows positive trends for investors, although the outcomes of court cases can vary depending on the circumstances and specific case.

Methods of attracting funds for construction and judicial practice

1. Investment through a Construction Financing Fund (CFF)

One of the main mechanisms for attracting funds for construction in Ukraine is participation in a Construction Financing Fund. Within this mechanism, the developer (the construction customer), the fund manager (a bank or another financial institution with a license), and the investor (the trustor) sign relevant agreements. The manager supervises the construction, and after the facility is put into operation, the investor registers ownership rights. In case of a breach of the contract terms, for example, failure to complete construction on time, the investor has the right to go to court to recover funds. Judicial practice generally supports investors in such cases if they have fulfilled all obligations and provided the necessary confirmations. For example, the decision of the Grand Chamber of the Supreme Court dated January 23, 2019, in case No. 712/21651/12 confirms this. Judicial practice also supports investors when they go to court to recognize ownership rights for objects that have already been built, but the developer has not submitted documents to state authorities for registration. This can be seen in case No. 487/7152/21, where the Supreme Court ordered the developer to transfer ownership rights to the investor.

2. Investment through a Housing Construction Cooperative (HCC)

Another way to attract funds for construction is investment through a Housing Construction Cooperative. In this case, an agreement on participation in the cooperative is signed between the buyer and the cooperative, and ownership of the housing is initially registered to the cooperative, and then to the buyer. If the developer breaches the terms of the agreement, the courts generally side with buyers, recognizing their rights to the property, as seen in the Supreme Court’s ruling dated December 21, 2022, in case No. 569/5399/20.

3. Attracting funds through a preliminary sales contract

A preliminary sales contract is another way to attract investments for construction. In this case, the parties agree to conclude the main contract in the future. If the developer breaches the terms of the preliminary contract, courts often rule in favor of the buyers, ordering the return of funds that were unjustifiably received. However, negative rulings may result from mistakes in the execution of such contracts, such as the absence of notarization or unclear timelines.

Preventive measures to protect the interests of investors

Investors involved in construction should take steps to minimize risks:

1. Due diligence: Before entering into an agreement, it is important to thoroughly check information about the developer, their project documents, permits, and the status of the land where construction is taking place. This includes checking court registers for possible ongoing legal disputes.
2. Contract review: Carefully study the contract drafts before signing and ensure their compliance with the legislation.
3. Verification of signatories’ authority: It is important to ensure that individuals signing agreements on behalf of the developer have the necessary authority.
4. Payment control: It is crucial to verify the developer’s bank account details and match them with the agreement terms to avoid potential financial violations.
5. Document retention: Keep all documents, including contracts, receipts, and applications, until the property ownership rights are obtained, and at least three years after that.
6. Monitoring construction progress: Regularly monitor the construction progress and news that may affect the investment, and seek legal assistance if necessary.

Of course, none of these measures provide a 100% guarantee, but they significantly increase the chances of successfully protecting the investor’s rights.

Conclusion

The legal framework for attracting funds for new constructions in Ukraine currently requires improvement. However, with proper adherence to all legal recommendations and careful attention from investors, the likelihood of successfully protecting property rights significantly increases. Gradually implemented regulations, such as the Law of Ukraine “On Guaranteeing Property Rights to Real Estate Objects,” may become an important step toward reducing risks for investors in the future.

Author: Olena Andriyko, lawyer at F&P

Since May 18, 2024, new laws regarding military registration of citizens have come into force in Ukraine, significantly expanding the obligations for both individuals and businesses. These changes not only affect citizens but also impose new requirements on enterprises, compliance with which is mandatory. In case of violation of the legislation, company officials may be subject to administrative responsibility.

Changes from July 16, 2024: new obligations for businesses

July 16, 2024, marked the entry into force of new rules for military registration and mobilization, which greatly expand the scope of obligations for companies. From now on, all citizens aged 16 to 60 are required to be registered in the military registration system, and businesses are obligated to ensure compliance with these requirements.

Business obligations under the new rules

Previously, enterprises already had certain obligations regarding the military registration of their employees, but with the new changes, their role has become even more important. Now, companies must maintain records of employees based on up-to-date military registration documents, participate in notifying employees, and report violations of registration to territorial recruitment centers (TRCs).

Enterprises must designate responsible persons to oversee the fulfillment of their employees’ military obligations, medical examinations, training, and readiness for mobilization.

Administrative responsibility for violations

Changes to the Code of Ukraine on Administrative Offenses introduce stricter sanctions for companies that violate military registration rules. Specifically, the following fines are provided for violations:

• For the first violation: from 17,000 to 25,500 UAH.
• For a second violation: from 25,500 to 34,000 UAH.
• During the war period: from 34,000 to 59,500 UAH.

During martial law, violations are automatically classified under the most severe scale, increasing responsibility for businesses.

Procedure for imposing fines

The new law introduces changes to the procedure for bringing companies to responsibility. In particular, during martial law, TRC employees do not draw up a protocol but immediately issue a decision to impose responsibility. An important innovation is that even in the absence of a responsible person from the company at the TRC call, a fine can be imposed in absentia.

Reputational risks for businesses

Although the law does not provide for criminal liability for enterprises, reputational risks for businesses can have much more serious consequences. Violations of mobilization legislation can lead to:

• Loss of trust from government agencies, resulting in additional inspections and oversight.
• Loss of the right to reserve employees, even if the company has critical infrastructure status.
• Loss of partners and clients, as most companies prefer to cooperate with those who comply with the law.
• Financial losses and possible bankruptcy due to contract termination.

Conclusions

The introduction of new requirements for mobilization registration increases the role of business in the country’s defense capability system. It is important for enterprises to diligently fulfill their obligations to avoid not only fines but also serious reputational and financial risks. Compliance with mobilization legislation is not only a legal obligation but also a contribution to ensuring the country’s security and stability.

Author: Oleksandr Fedoryshyn, managing partner at F&P

Taxes, as a crucial element of economic policy, are a subject of ongoing debate in many countries, and Ukraine is no exception. The draft law №11416-d, which has already passed its first reading, proposes a number of changes aimed at increasing tax rates. This includes raising the military levy, increasing taxes for individual entrepreneurs (FOPs), as well as for banks and financial institutions. It is expected that these changes will result in a significant increase in state budget revenues in the short term, but certain provisions raise serious concerns regarding their impact on the economy in the long term.

Key provisions of the draft law

According to the text of the draft law, the following proposals are included:

1. Increase of the military levy from 1.5% to 5%.
2. Establishment of a 1% military levy on income for single tax payers of Group III.
3. Increase of taxes for FOPs of the first and second groups.
4. Advance payments for fuel stations (AZS).
5. Increase in the profit tax rate for banks to 50% for 2024.
6. Profit tax rate for non-bank financial institutions (excluding insurers) set at 25%.

It is anticipated that these changes will bring 58 billion UAH to the state budget in 2024 and 137 billion UAH in 2025. Considering the budget deficit, this tax increase seems necessary, but it is important to bear in mind the risks that may arise from potential negative economic consequences.

Analysis of the draft law and negative economic consequences

1. Increase in the military levy: One of the most controversial aspects is the increase in the military levy. A 3.5% increase could have a destructive impact on the economy, particularly on the wage fund. According to OECD estimates, such taxes are among the most harmful for economic growth, as they encourage businesses to move to the shadow sector. In Ukraine, there are already about 3 million people working unofficially, and another 2 million receive part of their salary “in envelopes.” The increase in the military levy could exacerbate these trends.
2. Increase in taxes for small and medium-sized businesses: Such steps may increase the tax burden on the already vulnerable small business sector, which is extremely sensitive in the context of the crisis and war. As a result, this could reduce demand and the incentive for the development of new businesses, potentially slowing down economic growth.
3. Increase in taxes for banks: The proposal to raise the profit tax rate for banks to 50% has its justification in the need to cover the budget deficit but may lead to capital problems in state-owned banks. This will require additional expenditures for recapitalization, which may eventually neutralize the additional revenues from the increased taxes.
4. Need for de-shadowing the economy: One of the key points is the lack of proper de-shadowing of the economy before increasing taxes. The absence of real control over the shadow sector makes such changes ineffective in the long term.

Alternatives and possible solutions

1. Increase in VAT as an alternative to raising the military levy: One possible option for securing additional revenues is to increase the VAT rate. A 1% increase in VAT could bring 45.6 billion UAH to the budget, which is significantly more than the expected revenue from the increase in the military levy. This approach allows for a more even distribution of the tax burden among all taxpayers, which would be less harmful to the economy than increasing the levy on the wage fund.
2. Taxation of crypto-assets: Another alternative is the development of the cryptocurrency market, which is gaining popularity in Ukraine. According to data, 12.7% of the population owns cryptocurrency, which is a significant number. Given this fact, legislative changes aimed at taxing cryptocurrencies could become an additional source of income for the budget.
3. Launching small business support programs: In addition to tax changes, it would be advisable to introduce programs to support small and medium-sized businesses to offset the increased tax burden. This could include tax reductions or providing favorable conditions for entrepreneurs in critical sectors.

Recommendations

Before the second reading of the draft law, a compromise should be reached between the state and businesses, taking into account the opinions of international partners and experts. Special attention should be paid to issues of de-shadowing the economy and mechanisms for controlling compliance with tax legislation to avoid undesirable consequences for the economy in the long term.

Instead of increasing the military levy and adding pressure on businesses, alternative mechanisms for filling the budget should be considered, which will not lead to significant economic losses and will contribute to the development of the national economy.

Author: Maryna Pokotylo, Partner at F&P

Starting in 2025, Ukraine plans significant updates to the functioning of the Unified State Register of Seized Assets (USRSA). This decision is part of a comprehensive reform aimed at combating corruption and ensuring transparency in the management of assets seized within criminal cases. The register’s update, initiated by the Anti-Corruption Bureau of Ukraine (ARMA), aims to make this tool more effective and accessible to all stakeholders, including state authorities, businesses, and citizens.

What is the Unified State Register of Seized Assets?

The Unified State Register of Seized Assets (USRSA) is a system containing information about assets seized within criminal proceedings and controlled by law enforcement, particularly in relation to suspected crimes or illegal possession of property. This register helps track the movement of such assets, ensuring their confiscation or removal in accordance with court decisions.

Currently, the register is a vital tool in the fight against corruption and the illegal circulation of property, aiding law enforcement in managing assets and ensuring their transfer to state ownership or confiscation.

ARMA’s updates to the register

Starting in 2025, the following changes are planned according to the new legislation:

1. Expanded access to information: The updated register will be open to the public, allowing any citizen, business, or organization to check whether certain individuals or companies have seized assets. This will enhance control over the use of seized property and reduce the risks of its illegal circulation.
2. Modernization of technologies: The introduction of new information technologies and data management systems will significantly accelerate the process of entering and updating information about seized assets. All changes and updates in the register will be reflected in real time, ensuring quicker responses to changes in seizure situations.
3. Increased integration with other registers and systems: An important step is the integration of the USRSA with other state registers. This will allow the automatic tracking of seized assets in various areas (real estate, transport, corporate rights, etc.), creating a unified database to identify illegally acquired or improperly transferred assets.
4. Implementation of control mechanisms: The updated register will include stricter control mechanisms over the data entry process, as well as opportunities to verify the accuracy and authenticity of information. This will help minimize corruption risks and reduce the number of errors in asset registration.

Expected benefits from the updates

1. Reduction of corruption risks: Public access to the register will prevent manipulation of seized assets and reduce the opportunities for corruption among those managing such assets.
2. Enhanced trust in state institutions: Transparency regarding seized assets will foster increased public trust in law enforcement and the judiciary.
3. Combating illegal asset circulation: The new system will improve tracking of assets and prevent their illegal transfer, which is a key element in fighting economic crime.
4. Attracting investors: With the openness and transparency provided by the new system, investors will have more confidence in the Ukrainian market, knowing that assets with legal issues will be openly registered.

Challenges and risks

1. Technical difficulties: Implementing the new system may be associated with technical problems, such as adapting legacy data or ensuring stable operation of new information systems. This could lead to delays in the functioning of the register.
2. Privacy protection: Public access to data on seized assets may raise concerns about the privacy of the asset owners, especially in cases of wrongful seizures or errors in the system.
3. Abuse of the register: It is possible that criminals could exploit the register to search for assets subject to seizure or confiscation, manipulating or obstructing the process.

Conclusions

The update to the Unified State Register of Seized Assets is an important step toward ensuring transparency and efficiency in managing assets under seizure. The implementation of new technologies and expanded access to information has significant potential in combating corruption, illegal asset circulation, and increasing trust in state institutions. However, it is essential to ensure a balance between transparency and the protection of citizens’ private rights to prevent the new system from becoming an instrument for abuse or violations of human rights.

Author: Oleksandr Fedoryshyn, Managing Partner at F&P

Customs procedures are a crucial part of international trade, business, and personal travel. However, due to various requirements and documents, many individuals and companies face difficulties that can lead to delays and extra costs. As customs control is an essential stage in the movement of goods or people across borders, it is important to be properly prepared to avoid delays and issues at customs.

In this article, we provide legal tips on how to quickly and smoothly pass through customs and what to consider before traveling or shipping goods.

1. Prepare All Necessary Documents in Advance

One of the main reasons for delays at customs is the absence or incorrect preparation of required documents. To avoid problems, always ensure that you have all the necessary documents for customs clearance:

• Bills of lading (T1) – for importers and exporters.
• Waybills and other transport documents.
• Customs declarations – according to the goods or transport vehicle.
• Product passports – for goods subject to special requirements.
• Certificates of origin – if the goods qualify for specific customs exemptions.

For individuals, make sure to have documents such as your passport, tickets, visas, identification code (if necessary), and a declaration for any items exceeding allowed limits.

2. Know the Customs Restrictions and Rules for Your Goods

Each country has its own customs rules and restrictions for the import and export of goods. Several key points to keep in mind:

• Customs exemptions: In some cases, goods may be exempt from customs duties or taxes depending on their value, category, or country of origin.
• Quantitative limits: Customs authorities often limit the quantity or volume of goods that can be imported or exported without customs processing.
• Prohibited or restricted goods: Each country has a list of goods that cannot be imported or exported (e.g., drugs, weapons, certain medications). Before traveling or shipping goods, check whether any restrictions apply to your items.

Knowing customs restrictions and rules will help avoid conflicts with customs officials and speed up the customs clearance process.

3. Ensure Proper Valuation of Goods and Payments

Incorrect valuation of goods can lead to customs sanctions or delays. In many cases, customs authorities require accurate information about the value of goods being imported or exported:

• Correct declaration of goods’ value: Providing false information about the value of goods is a serious violation. Always declare the actual value of goods and submit the appropriate payment documents.
• Consideration of customs payments: Calculating customs duties can be complex, especially if exemptions, discounts, or special tax regimes apply. Make sure that all necessary payments are made before clearing customs.

4. Prepare for Goods Inspection

Depending on the type of goods, customs authorities may require an inspection. For this, ensure that the goods are properly packed and preserved. If transporting hazardous or perishable goods, provide additional quality or safety certificates. Inspections may take additional time, so early preparation will help avoid issues.

5. Use the Services of a Customs Broker

If you find the customs clearance process too complicated, you can always use the services of a customs broker. Customs brokers are professionals who assist businesses and individuals in clearing customs faster and without problems. They are familiar with all the nuances of customs legislation and can prepare all documents for customs clearance, as well as resolve any issues that may arise during the process.

6. Don’t Forget Electronic Declaration

To make the customs process more convenient and faster, many countries (including Ukraine) have implemented electronic declaration systems. This allows:

• Faster submission of customs declarations.
• Minimization of errors when filling out documents.
• Reduced waiting time at customs.

To use this system, you need to register on the customs electronic platform and ensure the correct completion of declarations.

7. Engage with Customs Authorities

Be prepared for the fact that during customs clearance, questions or requests for additional documents may arise. Stay open to cooperation with customs officials and respond promptly to their requests. However, it is important to remember that you have the right to legal assistance if the situation becomes complicated. If your goods are delayed or there are violations of customs procedures, contact a lawyer specializing in customs matters.

Conclusion

Passing through customs may seem like a complex process, but with proper preparation and adherence to customs rules, it can be made much simpler and faster. The key factors for success are attention to documents, knowledge of customs restrictions, proper declaration of goods, and the option to consult professionals if needed. Reliable legal support will also minimize risks and reduce the time spent at customs.

Proper preparation for customs clearance not only helps avoid delays but also ensures the safety of business and personal interests.

Author: Anastasia Holovatyuk, Lawyer at F&P

On December 1, 2024, the Cabinet of Ministers of Ukraine’s resolution dated November 22, 2024, No. 1332, comes into effect, introducing significant changes to the procedure for reserving military personnel during mobilization and wartime.

Key Changes:

1. Military Exemptions (Deferments): All deferments granted prior to December 1, through the Ministry of Economy or the Diia portal, will remain valid until their expiration, but no later than February 28, 2025. However, these deferments may be annulled in the following cases:
   • Expiration of the deferment period.
   • Completion of the production of goods or provision of services for the Armed Forces of Ukraine (AFU).
   • Loss of status as a critical enterprise.
   • Liquidation of a government body or company.
   • Dismissal of a military serviceman from the enterprise, except in cases where the individual remains within the same body or enterprise in another role.
   • Annulment for other reasons defined by Article 23 of the Mobilization Law.
2. Extension of Deferment Periods for Critical Enterprises: For decisions regarding the recognition of enterprises, institutions, or organizations as critical, whose deferment period ends before November 30, 2024, the deferment is extended until December 31, 2024.
3. Reserving Military Personnel: Reserving military personnel will now be done through electronic lists on the Diia portal. This applies to employees of government bodies, critical enterprises and institutions, and military personnel working at enterprises recognized as critical to meeting the needs of the Armed Forces.
4. Duration of Deferments:
   • Government employees – Deferment lasts until the end of mobilization.
   • Employees of critical enterprises providing services or goods to the Armed Forces – Deferment lasts until the completion of the contract for delivery or service.
   • Employees of organizations critical to the economy and demining operators – Deferment lasts up to 12 months.
   • Employees of international and non-governmental organizations – Deferment lasts until the completion of the contract or appointment period.

These amendments aim to streamline the process of reserving military personnel and granting deferments, ensuring the uninterrupted operation of critical enterprises and organizations during wartime conditions.