Banking & Financial Services Committee Meeting with the Representatives of the Ministry of Agrarian Policy and Food of Ukraine
On August 3, the Chamber Banking & Financial Services Committee meeting took place with the agenda focused on the following issues:
- Discussion of the Draft amendments to the Law on Peculiarities of Agricultural Insurance.
The overview of the Proposals on Agricultural Insurance, Main differences between the IFC’s and Insurers’ draft laws was delivered by Ms. Iryna Golovko, Associate Operations Officer, Agricultural Insurance, Finance & Markets, IFC.
Presentation on Agricultural Insurance was made by Mr. Olexander Zavada, Member of the Presidium of the Ukrainian Insurance Federation.
Crucial aspects and complications of the state guaranteed insurance were emphasized by special quests: Mr. Volodymyr Lapa, Deputy Minister of Agrarian Policy and Food of Ukraine andMs. Inna Grebenyuk, Director of Legal Department of the Ministry of Agrarian Policy and Food of Ukraine.
Action: As a result of the discussion, the participants agreed on the need to create new insurance pool, which will function as the first level of self-regulated organization, but without solider responsibility and non-obligatory membership. According to the presented vision, the Pool has to unite reliable insurance companies, which will provide agriculture insurance products, standardized and subsidized by the Ministry of Agrarian Policy and Food of Ukraine. The Committee Leadership agreed to support the Draft Law with amendments proposed by insurers and with the points emphasized during the meeting.
- Overview Draft Law #0958 “On Insurance Guarantee Fund for Life Insurance Contracts”, by Ms. Galyna Tretyakova, General Director, Ukrainian Insurance Federation.
Action: The need for existence of the Insurance Guarantee Fund is a matter of discussion as it doesn’t exist in 60% of developed countries. But the idea is generally supported by the Ukrainian insurers. The consensus of the Committee Members was about to review Draft Law #0958 closer to its practical adoption after clean-up of the insurance market, rebuild of institutional capacity of the Regulator and its reunion with the NBU, furthermore adoption of the Draft Law “On Insurance” and implementation of the second level of compulsory pension insurance in Ukraine.
- Discussion of the criteria for banks to be added to the list of banks obtaining financial guarantees of which automatically entitles taxpayers for budget VAT refund, according to the Resolution of the Cabinet of Ministers of Ukraine, by Mr. Mykola Khomenko, Tax Manager, Cargill.
Action: Committee Leadership decided to address Minister of Finance regarding faster creation of the criteria by which bank can be added to the respective list of banks obtaining financial guarantees of which automatically entitles taxpayers for budget VAT refund. Among alternative proposals to be given to Ministry of Finance the Chamber will offer independent criteria to be created or recognition of the FITCH Rating, Guaranty Fund banks list, refinancing eligibility as the criteria itself.
- Revision of the Position on Liberalization of the Currency Control and Regulation and Capital Controls Questionnaire answers review, by Ms. Maria Repko, Deputy Executive Director, Center for Economic Strategy.
Action: Chamber Banking & Financial Committee supports the idea of the Center for Economic Strategy to create the roadmap of liberalization and list of the NBU FX restrictions, which can be cancelled without harm to economy. It was agreed to collect more data on the issue of currency control liberalization and we would like to encourage all interested Chamber Members to fill in the Capital Controls Questionnaire (Ukrainian & English version).
Chamber Banking & Financial Committee agreed to make the revision of the Chamber Position Paper and Comparative Table which was sent to the NBU last year on this matter. Some of the restrictions were cancelled as a result of the Chamber lobbying activities, but the remaining part of proposals can be incorporated to the Center for Economic Strategy roadmap and presented for final approval and support of the Chamber at the upcoming Committee meetings.
- Revision of the Position Paper on decrease of cash in circulation in regard to the Draft NBU Resolution "On Amendments to NBU Resolution #210 dated June 6, 2013", by Mr. Taras Kyrychenko, CEO, Pravex-Bank, Committee Co-Chair.
Action: Chamber Banking & Financial Committee supports the Draft NBU Resolution on decrease of the threshold cash transactions between individuals from 150 000 to 50 000 UAH that ensure limitation on use of cash and as a result, will contribute to reduction of the shadow economy in Ukraine, as well as stability of cash flow into the banking system, its circulation and development of non-cash segment.
The Chamber will address NBU with proposal to approve Draft NBU Resolution with introduction of gradual decrease of cash in circulation by 20 000 UAH by 2017.
- Chamber Draft Law, Comparative Table and Position Paper on protection of creditors’/ investors’ rights, by Mr. Serhiy Mykhaylyk, Attorney, Baker & McKenzie.
Action: The Chamber collets further feedback regarding on the Chamber Draft Law and will address NABU to clarify on the way how the proposed Chamber amendments can be incorporated, merged into the NABU Draft Law “On Amendments to Certain Legislative Acts of Ukraine on Restoring Confidence Between Borrowers and Lenders” registered to the VRU on July 7, 2015.