RESTRICTED
WORLD TRADE WT/ACC/UKR/6
10October 1995
ORGANIZATION(95-2974)
Original: English
ACCESSION OFUKRAINE
Questions andReplies
TheGovernmental Commission onUkraine 'sAccession totheWTO hasprovided thereplies
reproduced hereunder tothequestions submitted bySwitzerland. Theletter"n"afterthenumber denotes
questions submitted aftertheWorking Party meeting heldon27-28 February 1995.
_______________
TABLE OFCONTENTS
Questions
II. ECONOMY WIDE MEASURES
Privatization 2n-4n
TheBanking System 5n-6n
TRIPS 8n-10n
IV. OTHER POLICIES
Services 1n&7nWT/ACC/UKR/6
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SERVICES
State Sector (Reply toQuestion no.147)
Question 1n.
Pleaseprovidemoreaccuratedata(estimates)respectingtheproportionofgrossnationalproduct,
which isstillproduced bythestatesector, inparticular, intheareaofservices?
Reply 1n.
No,thesedatacannot beprovided asthestatistics system hasnotforeseen suchadifferentiation
andclassification oftheabove-mentioned information.
Privatization (pages 10-11 oftheEnglish version oftheMemorandum)
Question 2n.
Istherighttoacquire shares innewly privatized (formerly State) companies granted onlyto
citizens ofUkraine, orareforeigners alsoallowed totakepartinthefirststage ofprivatization?
Reply 2n.
Inaccordance withtheDecree ofCabinet ofMinisters ofUkraine "OntheState Program of
Privatization oftheProperty ofState Enterprises" dated 7July1995 theconditions ofparticipation
offoreign investors inprivatization aredetermined inthefollowing way.
Buyers-foreign investors takepartinprivatization ofallobjects ofprivatization accounted for
those which cannot beprivatised inaccordance withthelawsofUkraine;
Cabinet ofMinisters ofUkraine proceeding fromthebranch analysis confirms thelistofthe
objects, privatization ofwhich isconsidered tobereasonable withtheattraction offoreign investments.
Thelistofsuchobjects (enterprises) isaninherent partoftheStateProgram ofPromotion ofForeign
Investments inUkraine;
Foreign investors mayfeelfreewithout anyadditional permission toparticipate inpurchasing
theproperty oftheenterprises, which arestate- orcommunity-owned, inallcases ifprivatization is
carried outontheterms ofacontest oranauction. Thecostoftheproperty ispaidinhardcurrency.
Recalculation ofthecostoftheobjects which areprivatised intohardcurrency ismade according to
themarket rateoftheNational Bank ofUkraine. Along withthesaleprice oftheobject increases by
thecoefficient which issetupbytheStateProperty Fund ofUkraine. Theabove-mentioned coefficient
isuniversal forallenterprises (objects ofprivatization) anditcannot bedetermined forenterprises
individually.
Inthose cases when thesaleofastateenterprise iscarried outwithout acontest oranauction,
aspecial evaluation ofthecostoftheproperty ismade inhardcurrency.
Theevaluation oftheproperty inthesecases canbemade incooperation withforeign auditing,
legalandconsulting firms aswellasinvestment banks.
Theorder ofpayment forthepurchased objects inaccordance withthePartThree ofthe
Article 21oftheLawofUkraine "OnPrivatization ofProperty ofStateEnterprises" alsogoverns theWT/ACC/UKR/6
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activities ofthelegalentities, which hadbeensetupontheterritory ofUkraine byforeign investors
andbytheenterprises withforeign investments.
Question 3n.
TheOperation ofPrivatization through Certificates:
Areforeign financial institutions (including those which have100percentownership inthe
companies) allowed tobeinvolved inprivatization through certificates? Howmany ofthe32licences,
granted bytheStateProperty Fund totrustcompanies (which gives therighttodeal inprivatization
certificates) were granted inpartorfullytoforeign companies? Please describe theprocedures or
criteria foracquiring licences, which allow dealing inprivatization certificates?
Reply 3n.
Inaccordance withtheDecree ofCabinet ofMinisters ofUkraine "OntheState Program of
Privatization oftheProperty ofState Enterprises" dated 7July1995 inorder toprovide functioning
anetwork ofholding entities, investments funds, trusts andother non-state financial intermediaries
certain conditions aretobeprovided.
Financial intermediaries aresupposed toserve theturnover oftheprivatization means of
Ukrainiancitizens,toprovideformationoftheinitialmarketofbondsanditsfurtherserviceanddecrease
oftheriskofbuyers 'investments intheobjects ofprivatization.
TheLegislation ofUkraine determines theorder ofsetting upandfunctioning offinancial
intermediaries, theiruseoftheprivatization finances ofcitizens andthatoflegalentities aswellas
theorder ofissuing licences ofsuchactivities.
Basically,inaccordancewiththeArticle6oftheLawofUkraine"OnPrivatizationofEnterprises
withState Property" theparticipants ofprivatization process are:
-stateprivatization institutions;
-buyers;
-representatives;
-intermediaries.
Intermediaries, aspertheregulations, bothofUkrainian orforeign origin, inorder tocarry
outtheiractivities havetomeetthefollowing demands:
- intermediary activities canbecarried outonlywiththelicence tobeissued inaccordance with
therequirements oftheFund ofState Property ofUkraine;
- intermediaryactivitieswithprivatizationbondscanbecarriedoutbyindividualsandlegalentities
having notmore than25percentoftheirproperty belonging tostate.
- theseactivities canbealsocarried outifacontract withacommercial bankonproviding services
fortheoperations withprivatization bonds hasbeenconcluded.
Along withitshould bementioned thatforeign participants ofprivatization process haveequal
rights ascompared toUkrainian ones, i.e.theygetthelicence intheorder andontheconditions
determined byexisting regulations attheFund ofStateproperty ofUkraine andonlyafterhaving met
alltherequirements fortheprocedure. Once alegalentity application foralicence isconsidered itWT/ACC/UKR/6
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must beregistered incorresponding stateinstitutions andinaccordance withUkrainian Lawasalegal
participant inbusiness activities ontheterritory ofUkraine. Thisequally relates totheentities ofboth
Ukrainian orforeign origin (100percentofforeign capital) enterprises aswellastojointventures.
Itshould beadded thatintermediary activities isrecognized bytheUkrainian Lawasakindofbusiness
activity andthere arenolimitations foritsforeign participants ascompared totheUkrainian ones.
Holding companies intheirname andattheirexpense willbuythecontrolling share ofthe
enterprises which areprivatised taking intoaccount therules oftheantimonopoly regulation system
oflaws.
Privatization property certificates, finances allocated onprivatization deposit accounts andon
special privatization accounts, oncetheyarementioned together arehereandaftercalled privatization
means ofcitizens.
Trusts intheirname andonbehalf aswellasattheexpense oftheowners orprivatization
bonds aresupposed tomaintain representative activities concerning theprivatization bonds.
Question 4n.
DoesUkraine allow foreign participation during thesecond stageofprivatization (forexample,
canforeign financial institutions -banks -obtain access totradeinstocks andbonds ofnewly-privatized
corporations)?
Reply 4n.
Yes,theycanoncetheymeetthedemands mentioned inReply 3n.
TheBanking System
Question 5n.
What isthepresent sizeofthecommercial banking sector inUkraine? What conditions exist
(whatarethelicensingprocedures,whoauthorizespermission,whatcriteriaareapplied)intheacquisition
ofabanking licence? Arethereanylimits totheinput offoreign capital innational commercial banks?
Istheestablishment oftotally foreign-owned banks permitted? Istheestablishment oftotally foreign-
owned branches permitted?
N.B.: Thislistofquestions alsopertains toother financial institutions, suchasinsurance and
investment companies.
Reply 5n.
TheNational BankofUkraine carries outtheactivities onextension ofthesystem ofthefinancial
services, banks withforeign capital inUkraine aswellasUkrainian financial institutions abroad. To
fulfiltheArticle 49oftheLawofUkraine “OnBanks AndBanking Activities ”theEnactment ofthe
Board oftheNational Bank ofUkraine of7February 1994 ¹24approved “TheRegulations Onthe
Procedure OfGrant OfLicences OnEstablishment OfCommercial Banks With theParticipation Of
Foreign Natural AndLegal Persons ”,which determined theprocedure ofregistration ofcommercial
banks withtheparticipation offoreign capital andtheconditions offoreign investors ’participation
intheactivities oftheUkrainian bankinstitutions.WT/ACC/UKR/6
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Twelve commercial banks withtheparticipation offoreign commercial structures andleading
banks hadbeen established andarefunctioning inUkraine now. Thegeneral amount offoreign
investments tothebanking system ofUkraine is10,1millions ofUSD.
Theactivities ofsuchbanks isfavourable forattraction ofadvanced technologies inthecrediting
sector inthebanksystem ofUkraine, currency operations, financial support ofpriority stateprogrammes
andinvestment projects. During 1995theNational BankofUkraine received highamount ofproposals
from leading foreign banks andworld known financial groups about thepossibility ofestablishment
ofjointandassociated banks ontheterritory ofUkraine.
Regarding therequests oftheNational Bank ofUkraine astotheprocedure ofregistration
andactivity ofthebanks withtheparticipation offoreign capital, theyaregrounded on”ThePrinciples
OfControl Over theForeign Branch Banks ”,worked outin1992 bytheBazel committee onbank
control (Switzerland) andstipulate thefollowing conditions:
- fulltransparency offoreign investors- legalandnatural persons, from thepoint ofviewof
theirfinancial reliability, business reputation andprevention oflaundering of“dirtymoney ”
inUkraine;
- availability ofnotification oftheauthority ofcentral bankofforeign country orofitsauthorized
organ about thecarrying outofenough control overtheactivity oftheircommercial banks -
founders, promoters oftheUkrainian bankwiththeparticipation offoreign capital.
Thelimit ofparticipation offoreign capital inbanking system ofUkraine must notexceed
15percentfrom thecombined sizeoftheauthorized capitals ofthecommercial banks.
According tothearticle 5OftheDecree oftheCabinet ofMinisters ofUkraine of
19February 1993 ¹15-93 “OntheSystem OfCurrency Regulation AndControl ”single currency
operations oftheresidents ofUkraine (including carrying outofinvestments beyond theborders of
Ukraine) arethesubject tolicensing bytheNational Bank ofUkraine.
Theprocedure ofgrant ofindividual licences oncarrying outbytheUkrainian residents the
investments beyond theborders ofUkraine isdetermined bytheinstructive letters oftheNational Bank
ofUkraine of24December 1993¹19019/3027 “OntheProcedure OfIndividual Licences OnCarrying
OutOfInvestments Beyond theBorders OfUkraine ”andof5January 1994¹19019/44 “OnConditions
OfGrant OftheNational Bank OfUkraine theIndividual Licences OnCarrying OutOfInvestments
Beyond theBorders OfUkraine ”.
Inthefirstquarter of1995 thegeneral amount ofinvestments fromUkraine totheeconomy
ofothers countries oftheworld totals 15,1millions ofUSD. Among theinstitutions, which regulate
thedevelopment oftheservices inthissector, itisnecessary tomention theCabinet ofMinisters Of
Ukraine, theMinistry ofForeign Economic Relations andTrade ofUkraine, theNational Bank of
Ukraine, theAgency onCoordination ofInternational Technical Assistance.
Thelistofcurrent legislative actsinUkraine, which regulate thesystem ofbankservices.
1. TheLawofUkraine “OnBanks AndBanking Activity ”,373.XII of20March 1991.
2. TheDecree oftheCabinet ofMinisters ofUkraine “OntheSystem OfCurrency Regulation
AndControl ”¹17-93, of20May1993.WT/ACC/UKR/6
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3. TheDecree oftheCabinet ofMinisters ofUkraine “OntheRegime OfForeign
Investment ”¹55-93, of20May1993.
4. TheDecree ofthePresident ofUkraine “OnImprovement OfCurrency Regulation ”¹457/94
of22August 1994.
5. TheDecreeofthePresidentofUkraine“OnAdditionalMeasuresRegardingtheOnImprovement
OfCurrency Regulation ”¹502/93, of2November 1993.
6. TheDecree oftheCabinet ofMinisters ofUkraine “OnAmendments TotheLawOfUkraine
“OnBanks AndBanking Activity ”¹98/93, of28April 1991.
7. TheLawofUkraine “OnAmendments TotheArticle 16OftheDecree oftheCabinet of
Ministers ofUkraine “OntheSystem OfCurrency Regulation AndControl ”of5February 1991.
8. TheDecree ofthePresident ofUkraine “OnUrgent Measures Regarding theReturn ToUkraine
OftheCurrency Values, Illegally Situated Abroad ”¹319/94 of15September 1994.
Ukraine takes anactive partinthework ofinternational financial organizations, suchasthe
International Financial Corporation, theInternational Currency Fund, theWorld Bank, theBlack Sea
Bank ofDevelopment andTrade. Interbank agreements between theNational bankofUkraine and
central banks ofcountries oftheformer Soviet Union areelaborated orarebeing elaborating, they
regulate thepayments between theabove mentioned countries. Suchagreements weresigned between
theNational bankofUkraine andcentral banks ofMoldova, Armenia, Kazakhstan, Kyrgystan, Latvia,
Georgia, Lithuania, Estonia, Tadjikistan, Azerbaijan, Belarus, Turkmenistan. Preparations arecarried
outtosignthesimilar agreement withRussia.
According tothesigned agreements themutual payments between thecountries oftheformer
Soviet Union arepaidinthenational currencies. Butdebtobligations ofthese countries canbepaid
inthecurrencies ofthethirdcountries.
Thenegotiations regarding thesigning ofinterbank agreements withBulgaria, Slovak Republic
andYugoslavia arebeing carrying out.Thedraftagreements provide thepayments inhardcurrency
aswellasinnational currency.
Policy Respecting Foreign Investments
Question 6n.
DoesUkraine apply restrictions astotheamount offoreign stock(minimum ormaximum limits)
inthecreation ofjoint-venture enterprises.
Reply 6n.
Foreign Investment Policy
Inaccordance withthecurrent legislation ofUkraine anewly-established jointventure should
havenotlessthan10percentofforeigninvestmentsinstock.Themaximumshareoftheforeigninvestor
participation could beupto100percent.WT/ACC/UKR/6
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Preferential Trade Agreements inServices
Question 7n.
Dothepreferential trade agreements, thatUkraine hassigned with Russia (Free Trade
Agreement), Belarus (Free Trade Agreement), Lithuania andtheCISnations, encompass services?
Reply 7n.
TheAgreements onFreeTrade withRussia, Lithuania andother CIScountries donotcover
theaspects pertaining toservices. These Agreements cover goods only.
TheAgreement onFreeTrade withBelarus isnotyetratified bytheSupreme RadaofUkraine.
TRIPS
Question 8n.
Reply 86:Thenecessary licences should besubject totheregulations setoutinArticle 31
oftheTRIPS Agreement? HowdotheUkrainian competent bodies intend toensure compliance with
Article 31ofTRIPS, which doesnotpermit alternative terms under corresponding legislation. (See
Reply 86)
Reply 8n.
Thecurrent Ukrainian patent legislation isbased ontheModel Patent Law,which wasdeveloped
bytheWorld Intellectual Property Organization. It,asawhole, complies withtheconditions ofTrade-
Related Aspects Agreement. TheLawcontains anarticle oninternational agreements, according to
which iftherules, established byaninternational agreement ofUkraine differ fromtherules, established
byUkrainian legislation, thentheinternationally agreed rules areapplied (Article 3).
Opportunities forjudicial review ofpatent revocation arestated inArticles 28and30ofthe
Law: Article 28."Patent revocation.
1. Apatent mayberevoked fullyorpartially inacaseof:
disparity between patented invention (useful model) andconditions forpatentability, defined
bythisLaw;
presence offeatures ininvention (useful model) claims, which wereabsent intheapplication
filed;
infringement ofclause 2,article 32ofthisLaw.
2. Anyperson iseligible tosubmit objection against apatent totheAppeal Council during six
months afterpatent grant notice publication date. Itmustbeexamined intheAppeal Council during
sixmonths afterthedateitwasreceived. Apatent owner mustbeacquainted withtheobjection. The
Appeal Council examines theobjection intheframes ofreasons stated init.Theperson, which submitted
anobjection, aswellasthepatent owner mayparticipate initsexamination. TheAppeal Council verdict
maybeappealed judicially.WT/ACC/UKR/6
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Ifobjection against patent granting wasnotreceived intheAppeal Council during theterm
stated, thepatent mayberevoked judicially only.
Thepatent oritspart,which arerevoked, areconsidered asvoidfromthepatent grant notice
publication date".
"Article 30.Disputes settled judicially.
1. Thedisputes, related toapplication ofthisLaw, aresettled byacourt, oracourt ofarbitration
asitisestablished byUkrainian legislation.
2. Courts,accordingtotheirjurisdiction,examinethedisputesconcerning:authorshiptoinvention
(useful model); determination ofpatent owner; infringement ofpatent owner 'sproperty rights; entering
andexecution oflicence agreements; rightforprevious use;inventor remuneration; recompenses.
Courts examine alsoother disputes, related toprotection ofrights, given bythisLaw".
Question 9n.
Reply 111: Howarelayout designs protected atpresent, inanticipation oftheimplementation
ofspecific legislation therefor. When willthespecific legislation enter intoforce?
Reply 9n.
Thecurrent legislation ofUkraine does notpresently provide forprotection oflayout
designs/topography ofintegrated circuits. Butinaccordance withArticle 65,Paragraph 3oftheTRIPs
Agreement, Ukraine, asacountry withtransitional economy, hastheright toavail itself ofan
implementation period of4years forbringing legislation onintellectual property intoconformity with
TRIPS provisions. Weintend thatduring thisperiod, thelegislative actontheprotection oflayout
designs/topography ofintegrated circuits inUkraine willbedeveloped andimplemented.
Question 10n.
Reply 112:Reply 86deals withgeneral (obligatory) licensing, without protection. Reply 90
pertains totheelimination ofpatents. Please provide amore adequate reply toquestion 112regarding
righttointellectual property.
Reply 10n.
Main Principles
Ukrainian Government policy onIntellectual Property Rights (IPR) inUkraine isaimed atthe
establishment andimprovement ofthelegislatory, regulatory, andinstitutional framework forthelegal
protection ofcopyright andrelated rights, andindustrial property rights according totheinternational
agreements inforce andthemodel lawselaborated bytheWorld Intellectual Property Organization
(WIPO).
Ukraine hasanenormous scientific, technical, andcreative potential. Ofthetotalamount of
claims forinvention rights intheformer USSR, Ukraine 'sclaims were 23-24 percentofthetotal.
TheareaofIPRprotection hasbeeninfluenced mainly bythechange oftheinternational legal
status ofUkraine, namely, bythetransformation oftheUkrainian Soviet Socialist Republic, amemberWT/ACC/UKR/6
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Republic oftheformer USSR, intotheindependent Ukrainian state, aparticipant ininternational legal
relations.
Theestablishment anddevelopment ofthesystem ofIPRprotection inUkraine isanintegral
partofthestate-building process taking place inUkraine.
State Bodies ofExecutive Power
inIPRProtection
TheStatebodies ofExecutive power inthefieldofintellectual property protection aretheState
Patent Agency ofUkraine, established bytheDecree oftheCabinet ofMinisters ofUkraine on
27January 1992, No.29,andtheStateAgency ofUkraine onCopyright andRelated Rights, which
isfunctioning according totheResolution oftheCabinet ofMinisters ofUkraine of25March 1992,
No.154.
KeyLegislative ActsonIPRProtection
IPRprotection inUkraine isbased onthefollowing legislative acts:
TheLawofUkraine "OntheProtection ofRights toInventions andUtility Models" of
15December 1993, No.3687-XII introduced on1July1994bytheResolution oftheSupreme Rada
ofUkraine of20December 1993, No.3769 -XII.
TheLaw ofUkraine "OntheProtection ofIndustrial Samples" of15December 1993,
No.3788-XII, introduced on1July1994, bytheResolution oftheSupreme Rada ofUkraine of
23December 1993, No.3770-XII.
TheLawofUkraine "OntheProtection ofRights toMarks forGoods andServices" of
15December 1993, No.3689-XII, introduced on1July1994bytheResolution oftheSupreme Rada
ofUkraine on23December 1993, No.3771-XII.
TheLawofUkraine "OntheProtection ofRights toPlant Varieties" on21April 1993,
No.3116-XII introduced on1November 1993 bytheResolution oftheSupreme Rada ofUkraine
on21April 1993, No.3117-XII.
TheLawofUkraine "OnCopyright andRelated Rights" on23December 1993, No.3793-XII,
introduced bytheResolution oftheSupreme Rada ofUkraine on23December 1994, No.3794-XII.
Interim Provision ontheProtection ofIndustrial Property andRationalization Proposals in
Ukraine (Items 54,59,60,61,62,68and70),confirmed bytheDecree ofthePresident ofUkraine
on18September 1992, No.479/92.
Theprotection ofIPRinthemain legislative actsofUkraine:
TheCivil Code oftheUkrainian Soviet Socialist Republic;
TheCivil Procedural Code ofUkraine;
TheAdministrative Code ofUkraine;WT/ACC/UKR/6
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TheLabour Code ofUkraine;
TheCustoms Code ofUkraine;
TheLawofUkraine "OnProperty";
TheLawoftheUkrainian Soviet Socialist Republic "OnForeign Economic Activity";
TheLawofUkraine "OntheBasis ofState Policy inScience andScientific andTechnical
Activity";
TheLawofUkraine"OnRestrictingMonopoliesandPreventingUnfairCompetitioninBusiness
Activity";
TheLawofUkraine "OnEnterprises inUkraine".
Civil, Criminal, andAdministrative Procedures
ontheProtection ofIPR
Activities connected withtheprotection ofIPRareregulated bytheappropriate clauses ofthe
Criminal Code oftheUkrainian Soviet Socialist Republic, theCivil Procedural Code ofUkraine, the
Administrative Code ofUkraine, theLawofUkraine "OnRestricting Monopolies andPreventing Unfair
Competition inBusiness Activity", andtheCustoms Code ofUkraine.
Todate, there isnospecialised Patent Court inUkraine. According totheabove-mentioned
mainUkrainianlawsontheprotectionofintellectualproperty,disputesconnectedwiththeimplementation
oftheselawsaretoberesolved bytheCourt, orArbitration Court, according toprocedures established
bythelegislation ofUkraine.