On 16 June 2015, the Parliament of Ukraine adopted the Law of Ukraine On Amendments to Some Legislation of Ukraine on Securing Transparency in Extractive Industries No. 521-VIII (hereinafter – the "Law"). The Law was signed by the President of Ukraine and officially published on July 11, 2015 and came into force on July 12, 2015.
The Law was adopted in order to increase transparency in the extractive industries, implement international reporting standards, improve natural resource management systems, improve the investment climate in Ukraine, and to implement the standards of the Extractive Industries Transparency Initiative and the Government's Coalition Agreement as well as the Initiative "Partnership Open Government."
According to the website of the Extractive Industries Transparency Initiative (EITI) in Ukraine, "EITI is an independent standard of transparency, supported at the international level and implemented in 48 countries (2014). Governments disclose how much they receive from extractive companies operating in their country, and these companies disclose how much they pay. In September 2009, Ukraine committed to implement EITI, having approved the Decree of the Cabinet of Ministers No. 1098 "On Ukraine's Accession to the Extractive Industries Transparency Initiative." Later, these intentions were approved in agreements with the IMF and the EU.
On 10 October 2010, the Ministry of Energy and Coal Industry by its Order No. 785 created the EITI Multi-Stakeholder Group in Ukraine, which included representatives of government, companies and civil society. Ukraine was accepted as an EITI Candidate country on 17 October 2013. The application was considered by the EITI Board during the 25th EITI Board Meeting in Abidjan."
Key provisions and changes provided by this Law are as follows:
- The Cabinet of Ministers of Ukraine is authorized to publish and share information about national and local taxes and duties and other payments, including context information (general review) on extractive industries, to increase the transparency of extractive industries under a procedure to be approved by the Cabinet of Ministers of Ukraine (hereinafter – the "Procedure"). The Draft Procedure at the moment is being prepared by government officials and members of the EITI Multi-Stakeholder Group in Ukraine, and its final version has not been published yet. The official publishing of the draft is planned for the beginning of August 2015. It is expected that the Procedure will establish detailed requirements regarding filing of the mentioned information and will cover not just information about taxes and duties but also information about other investment payments (fees for bidding, total amount of investments, etc.). The Procedure will establish terms of filing this information and its publication.
- At the same time, in order to secure transparency in extractive
industries within the scope to be established by the Procedure:
- Authorities that perform State management of geological study, exploitation and protection of the subsoil, in particular State Geological and Mineral Resources Survey of Ukraine, will be obligated to provide and publish information about the condition of geological research, mineral resources exploitation and protection of the subsoil.
- Users of the subsoil will be obligated to provide and publish information about national and local taxes and duties, other payments and also about production (business) activities.
- According to the concluding provisions of the Law, the Procedure should be approved by September 12, 2015.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
