In the field of business inspections, the next news. Now we have a new law on state control
over compliance with legislation on food products, feed, animal by-products, animal health
and welfare.
First, the law defines the list of market operators. These are food service operators, feed
operators of the market, capacity operators and market operators in the field of handling of
by-products with animal origin. That is, all enterprises engaged in food production, sale and
circulation, including restaurants.
Among the measures are audits and inspections, sampling, laboratory testing, documentary
check, conformity check, etc.
Inspections will be carried out without notice, except of audit and other situations where the
notice is necessary to ensure efficiency. At the same time, a risk-oriented approach was
established. Moreover, one of the principle is the presumption legality of the actions of the
entity in case of ambiguous interpretation of the law.
The reason for the planned measures is, of course, the plan, for unplanned – information
about the discrepancy (from any sources) or a reasonable suspicion of the discrepancy.
What the reasonable suspicion means is not clear yet.
Such forms of control as inspection and audit are carried out in accordance with an act
containing the list of issues (subject to verification). If there are no specific issues in the act
– it is forbidden to inspect them.
There is a difference between audit and inspection. The audit concerns ongoing procedures
and includes verification of documentation, processes, systems of internal control,
qualifications of employees, as well as actions taken after the analysis. The audit results
further affect the risk degree of the activity. One inspector can not conduct two audits of one
entity in a row.
Inspections concern to hygiene, safety incidents, action plan for violations, and includes
verification of premises, territories, equipment, raw materials, etc.
Sampling includes getting two identical samples. One sample is provided to the laboratory
for the main study, the other one – keeps for arbitration. The procedure of sampling is fixed
in the act.
For alternative tests, a larger number of samples can be selected.
The arbitration is conducted in case of disagreement with the results of the basic tests.
Particular attention deserves the inspector`s right of free entrance to the facilities without
notice, but only during their work.
The law sets new fines from 11,169.00 UAH to 186,150.00 UAH. The fine depends on the
type of business – individual entrepreneur or legal entity.
The biggest fine is set for failure to comply with the decision to stop production.
Under the new law, business expect new inspections and new fines. Audits without notice
and bigger fines in many areas indicates an increase in pressure on business. At the same
time, the government has promised the risk-oriented approach. You always must remember
about your rights during inspections and prevent any violations by the control authorities. In
case of illegal decisions, appeal it.
For detailed consultation or support of conducting the inspection, as well as, if necessary,
appeal their results, contact us.]]>

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A new law on virtual assets: the picture is formed, but without details. On September 8, 2021, the Verkhovna Rada has finally adopted the long-awaited law "On Virtual Assets", which clarified many ambiguous points. This is especially true for the status of cryptocurrency and the rules of its circulation in the country. Let`s take a closer look at novelties. An ambiguous term Let's start with what the legislator actually means by "virtual assets". There are the following features:  they are an intangible good (cannot be represented on tangible media)  fall under the list of objects of civil rights (that is, they can be owned and be disposed of)  represent an electronic form of a set of data (essentially, they are blocks of information put in order);  the existence and circulation of assets are due to software tools (specific electronic environment). From these features we can draw the following conclusion: virtual assets are not limited to cryptocurrency. Digital currency is part of the concept, but other instruments, such as tokens, NFTs, or even in-game items, fall under the definition. Actually, the actual existence of most digital products, having a certain value, is due to the software environment (ecosystem), either it is blockchain technology, a trading platform, or an online game server. It should be noted that the attempt to define virtual assets was already made in the adopted Law of Ukraine in counteracting money laundering. In this act, they understand it as digital means of payment, which goes against the new definition. As a result, there are now two different explanations for virtual assets, which causes significant confusion not only in regulation but also in interpretation. It is definitely necessary to expect clarifications from competent state bodies. Let's return to the new law. Its application covers legal relations in which the "Ukrainian element" is present:  provider or recipient of services represented in Ukraine;  an agreement according to which the turnover of virtual assets is carried out in accordance with Ukrainian legislation;  the acquirer of assets (or both counterparties) is a resident(s) of Ukraine. The law also introduces an interesting division of all virtual assets into two groups: secured and unsecured. Here again, there is a problem of interpretation. The first category includes products exchanged for (state) currency, the second category includes instruments that can be exchanged only for other digital assets. There is an alternative opinion: that the turnover of secured assets is supported by real goods (money or other property), while unsecured ones are not supported by anything. The latter interpretation is the most credible, as the new law stipulates that virtual assets are NOT means of payment. Moreover, they cannot be exchanged for real goods, be they property, services or money. This significantly narrows the potential for the use of virtual assets not only for commercial but also for civilian purposes. About obligatory licensing The new law states that in some cases, the use of virtual assets will require licensing. The 4 types of activity are mentioned:  storage and management of virtual assets (or its` keys)  servicing of exchange operations with virtual assets (both for other analogues and for real goods);  translation of digital assets;  any intermediary services. A list is quite impressive, but there are some important exclusions:  if your service works with cryptocurrency wallet (it means users can dispose of accumulations into cryptocurrency independently);  If your service works on smart contracts or decentralized protocol, based on which internal transfers are performed. As to intermediary services, everything is more compicated. Actually, any mediation is based on the public share offering. That is why it is subject to licensing. How to get a license? A company that wishes on legal grounds to engage in virtual assets must satisfy legislative requirements. The key role is played by the minimum amount of the statutory capital, which equals 1,19 million hryvnyas (for non-residents it is 5,95 million hryvnyas) in case of storage and administration. For other types of activity (trading, translation and mediation services) the minimum size of the statutory capital amounts to 595 thousand hryvnyas (for non-residents is 2,98 million hryvnyas). The order of the registration of license:  to compose an application and prepare documents.  to pay state fee (68-136 thousand hryvnyas for residents and 340-680 thousand hryvnyas is for non-residents).  to pend review of the request (30 days).  to get a license. The duration of the license is 1 year. No norms about the continuation of legal force of permission are set (we are expecting amendments or explanations from the Ministry of Digital transformation of Ukraine). Notably that non-residents must pay a far greater sum, than domestic companies. The Ukrainian legislator obviously encourages an internal market, getting rid of a strong foreign presence (that, in fact, coincide with modern politics of the state on the whole). Together with an application, the following documents must be prepared: The access code to the copy of the Statute of the company (or the foundation agreement) kept in an electronic file in the database of the Unified State Register of Enterprises and Organizations (USREO);  Funding sources of the statutory capital (where the money are taken from);  confirmation of the actual injection of money;  information about beneficiaries (special attention must be paid to business reputation);  the information about the director and founders;  the check about payment of state fee;  the internal regulations, in accordance with which ones, the privacy policy rules are regulated. In the terms of volume of necessary documentation of licensing is very alike with complete registration of legal entity. It is understood that the state wants the severe adjusting of activity of organizations that will engage in virtual assets. Is it already possible to get a license? The adoption of the law by the parliament is a significant step forward in adjusting and legal market of virtual assets creation in Ukraine. However, the new rules haven`t come into effect yet - their term of introduction depends on making amendments in the Internal Revenue Code. It is yet unknown, when a legislator will decide to enter the renewed system of taxation for such assets. Being "IT-hub" and territory, where cryptocurrency enjoys large popularity, the question of taxes must be decided maximally safely. Despite the presence of obvious gaps in interpretation, a new law on virtual assets gives the official narrative of what takes place and that, how the legal relationships related to cryptocurrency will be regulated. It is to be hoped that in the nearest time the Ministry of digital information will give out the detailed explanations concerning debatable norms.

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