Simplifying of contracting procedures for services exporters

From January
2017 the procedure of agreement conclusion will be simplified for services
exporters.

January 3, 2017
the Law of Ukraine «On Amendments to Legislative Acts of Ukraine on elimination
of administrative barriers to the service export» will come into force. This
law provides amendments to the Law of Ukraine «On Foreign Economic Activity»,
Law of Ukraine «On the order of payment in foreign currency», the Law of
Ukraine «On Accounting and Financial Reporting in Ukraine» and the Law of
Ukraine «On International Private Law».

The adoption of
the Law serves a double purpose:

•                    
Bureaucracy reduction during foreign trade agreements
(contracts) conclusion, to simplify the procedures of foreign exchange proceeds
enrollment, accounting and financial reporting;

•                    
To make services exports legal and increase foreign exchange
proceeds.

Key
changes to services exporters

From 3 January
2017 the exporters should consider the following changes.

Foreign trade
agreements conclusion will be possible not only in writing but also in
electronic form, as well as through the public offer, e-mail communication or
by invoice (also in electronic form) for works performed, services rendered.

Banks will not
be allowed to request translation of the documents into Ukrainian, if they are
made in English. This should intensify the agreements conclusion by residents,
because commercial banks have more sources to provide documents translation
than small and medium businesses do.

Invoice
will be recognized as the primary document

Another
important change is that the invoice will be recognized as the primary
document. This should simplify the procedures of accounting and financial
reporting.

The amendments
to Article 1 of the Law of Ukraine «On Accounting and Financial Reporting in
Ukraine» will clarify the concept of «primary document», provided that invoice
authorizes the implementation of business transaction or confirms its
implementation.

Under the changes
the invoice can be signed by means of a personal signature, electronic
signature or electronic digital signature in accordance with the Law of Ukraine
«On electronic digital signature», a disposable electronic signature symbol. In
this case, only the signature of the exporter is required.

The
invoice will contain all necessary requisites. The payment of invoice by a non-resident
will indicate acceptance of the works performed and will replace the signature
and seal. The advantages of invoice introduction for services (works) exports
are that it will confirm consent of a non-resident counterparty with a price
and other terms of a contract.

Bank
requirements

Under the
current law, in order to remove the export transaction (services export) on exchange
control the bank has to require a services exporter to represent a foreign
trade agreement, work acceptance certificate, documents translation into
Ukrainian, all signed and sealed.

At the same
time, foreign trade agreement will verify contractual relations between resident
and non-resident to bank, however, foreign trade agreements often do not exist
as such (exchange of e-mails, etc.). An acceptance certificate confirms
legality of the currency, allows to control return of foreign exchange and to
identify the payment. At the same time, as a rule, there is no seal and
original documents of counterparty non-resident, as the parties exchange
documents in electronic form.

Amendments to
Article 9 of the Law of Ukraine «On Accounting and Financial Reporting in
Ukraine» provide that the primary and summary records can be made in writing or
in electronic form.

To sum up, the
changes in the legislation are fairly progressive and promote the development
of foreign trade relations, because businesses can become more dynamic, getting
rid of bureaucratic burdens and banks will be able to carry out identification
of foreign currency earnings derived from services exports.