Category: Ukraine

Effective April 2024, former LCF Law Group Partner and Head of International Arbitration Yuliya Atamanova has joined JSC CB PrivatBank as a Legal Counsel and the head of the bank’s International Arbitration and Cross-Border Litigation Department.

Atamanova spent over eight years with the LCF Law Group, the last four of which as a Partner. She had initially joined the firm back in 2016, as a Counsel. Before that, she spent ten years with Yaroslav Mudriy National Law University’s Research Institute of Legal Innovation and 12 years with the same university as commercial law professor, between 2003 and 2015. Earlier, she spent three years with Kibenko Onika and Partners and six more in-house with a Kharkiv-based gas producer.

PrivatBank describes itself as the largest Ukrainian bank in terms of assets and the leader of the Ukrainian retail banking market.

“We want to express our gratitude to Yuliya for her fruitful cooperation and management of LCF Law Group’s arbitration practice,” the firm announced. “Over the years of working together, we have completed many large-scale projects and built a professional team. We wish Yuliya success, achievements, and inspiration in her new position!”

Originally reported by CEE In-House Matters.

Former CMS Partner Anna Pogrebna has joined Integrites as a Partner to focus on real estate, construction, and infrastructure, while Mykola Nychyporuk has joined the firm as a Counsel and the Head of its White-Collar Crime practice.

According to Integrites, Pogrebna “brings to the firm more than 25 years of practicing law, 20 of which in international and local law firms, advising multinational and domestic clients on large transactions and deals with financing, M&A, and tax aspects involved.”

Before the move, Pogrebna spent 12 years with CMS. Earlier, she spent over eight years with Arzinger and, earlier still, five and a half years with Raiffeisen Hauptgenossenschaft Ukraine.

According to Integrites, “with 10 years of experience in law, Mykola Nychyporuk will guide individual and corporate clients through criminal proceedings and internal investigations. He will advise on all matters of commercial criminal law and represent clients in courts and law enforcement bodies.”

Nychyporuk, who already spent a year and a half with Integrites between 2017 and 2019, has re-joined the firm after more than two years as a sole practitioner. After initially parting ways with Integrites, he spent three years with Arzinger, between 2019 and 2022.

Avellum has advised Ukraine’s Ministry of Finance on a CAD 2 billion ten-year concessional loan from Canada. Sayenko Kharenko advised the Government of Canada.

The funds were provided through the Administrated Account of the International Monetary Fund mechanism and will be directed towards Ukraine’s priority social and economic needs. The loan brings Canada’s total direct loan assistance to the Ukrainian budget to CAD 6.85 billion since February 2022.

“Canada remains a trusted partner of Ukraine and this transaction was made possible due to the smooth and efficient cooperation with the Canadian side,” Senior Partner Glib Bondar commented. “This financing continues a series of similar transactions successfully accomplished in 2022 and 2023. We appreciate the vital support from Ukraine’s international partners in North America and Europe, which is key to stabilizing Ukraine’s macroeconomic situation and maintaining the financial system’s stability during these challenging war years.”

Avellum and Sayenko Kharenko also advised on a CAD 2.4 billion concessional loan from Canada a year ago (as reported by CEE Legal Matters on May 12, 2023).

Bondar led the Avellum team which included Associates Yaroslav Pavliuk, Andrii Kroshko, and Olha Harhola.

Sayenko Kharenko’s team included Partner Igor Lozenko and Senior Associate Oles Trachuk.

On April 8, 2024, Integrites announced it had been selected, alongside Latham & Watkins, to advise the Ukrainian Finance Housing Company on a bridge financing to be granted by international financial institutions and the subsequent securitization of mortgage loans.

According to Integrites, the bridge financing is expected to “help the UFHC to resume affordable mortgage lending, build up a robust portfolio of home loans, and, as soon as international capital markets become accessible, issue mortgage-backed international securities to raise additional liquidity from foreign investors.” The UFHC has already entered into a strategic collaboration with JP Morgan and Alvarez & Marsal “to enhance mortgage lending and bring institutional and private investors to Ukraine.”

The UFHC is a Ukrainian state-owned financial institution created to implement an affordable home mortgage lending program, eOselya, “designed to provide support for servicemen, veterans, combatants, healthcare professionals, scientists, teachers, displaced persons, and other low and middle-income Ukrainians willing to buy homes or improve their living conditions,” the firm reported.

“The social and developmental impact of this project is huge as millions of Ukrainians, who lost homes due to ongoing war, desperately need affordable house loans to rebuild and buy new homes,” Partner Igor Krasovskiy, who leads the Integrites team, commented. “We are very much looking forward to advising the UFHC on such a challenging high-impact project.”

Sayenko Kharenko has helped CMA CGM obtain merger clearance from the Antimonopoly Committee of Ukraine for the acquisition of two Spanish port terminals – in Valencia and Bilbao – through the purchase of a 49% stake in Cosco Shipping Ports Holding.

The CMA CGM Group operates in shipping and logistics. With a presence in 160 countries through 400 offices, 750 warehouses, 155,000 employees, and a wide fleet of 620 vessels, CMA CGM serves 420 of the world’s 521 commercial ports and operates 257 shipping lines.

According to Sayenko Kharenko, “a respective stake in Cosco will allow CMA CGM to expand its container terminal footprint in Europe and the Mediterranean and to support its end-to-end shipping and logistics inland solutions by the acquisition of two Spanish terminals – in Valencia and Bilbao.”

The Sayenko Kharenko team included Partner Volodymyr Sayenko, Counsel Julia Kuyda, Associate Snizhanna Sheshliuk, and Junior Associate Svitlana Derkach.

Avellum has advised the European Bank for Reconstruction and Development on a senior secured loan of up to EUR 2.5 million for the Polish campus of the Kyiv Medical University, a private higher educational establishment in Ukraine.

KMU is a private medical university in Ukraine offering programs in general medicine, dentistry, and pharmacy.

According to Avellum, the “funds from the EBRD loan will be utilized to complete the establishment of a new campus for KMU’s students in Poland. The project involves the refurbishment of the two recently acquired buildings in Poland and the acquisition of new equipment. Upon completion, the Polish campus will have the capacity to host over 2,000 Ukrainian and international students and provide more than 200 work placements.”

Avellum previously advised the EBRD on an up-to EUR 50 million loan to Kyivskiy Metropolitan (as reported by CEE Legal Matters on April 9, 2021), on a long-term secured loan of up to EUR 52.5 million to Novi Biznes Poglyady (as reported by CEE Legal Matters on March 31, 2020), and on a senior secured loan of up to EUR 1.3 million to the Kyiv Medical University (as reported by CEE Legal Matters on December 3, 2018).

The Avellum team included Senior Partner Glib Bondar, Senior Associate Mariana Veremchuk, Associate Yaroslav Pavliuk, and Junior Associates Andrii Kroshko and Olha Harhola.

On April 2, 2024, the LCF Law Group announced that Ivan Bondarchuk had been promoted to the firm’s Partner ranks and will now lead its Energy and Projects practice in Kyiv.

Bondarchuk has ten years of professional experience in energy law, focusing on infrastructure, investment, transactional, alternative energy, and regulatory matters. He joined the LCF Law Group back in 2020. Before that, he spent half a year as the Head of Energy at an undisclosed Ukrainian law firm. Earlier, he spent six and half years with the ILF Law Firm, between 2013 and 2019, departing as a Senior Associate.

“Ivan is a lawyer with an extremely high expertise in a very complex industry,” LCF Law Group Managing Partner Anna Ogrenchuk commented. “Today, when our country’s energy sector is undergoing constant destruction, and some of its facilities are located in the occupied territories, his knowledge is critically important.”

“We congratulate Ivan on his well-deserved promotion,” Senior Partner Artem Stoyanov added. “This was preceded by years of hard work and the successful implementation of many projects. And I am sure that Ivan’s most important, brightest achievements, victories, and recognition are still ahead – currently as a partner of the LCF Law Group.”

On 8 March 2024, Law of Ukraine No. 3587-IX (“Law”) came into force, intending to bring Ukrainian laws on the governance of state-owned enterprises (state unitary enterprises and business entities where the state holds more than 50% of shares) (“SOEs”) in line with the OECD Guidelines on Corporate Governance of State-Owned Enterprises.

This Law will increase the transparency of their operations and create a more favourable environment for attracting private investment.

Key provisions

• Supervisory boards
  Every SOE must introduce a two-tier management structure with a supervisory board if that SOE meets the criteria yet to be approved by the Government of Ukraine. The Law sets out the rules for the supervisory board operations and supervisory board member responsibilities, including (a) the composition of the supervisory board (with a majority of independent members), (b) fiduciary duties of the members to act for the benefit of SOE and all its owners (shareholders), and (c) an exhaustive list of grounds for early termination of powers of a supervisory board member. The Law also sets out broad powers of supervisory boards, including the authority to appoint and dismiss CEOs and to approve SOE’s strategic development plans, investment, and financial plans, as well as monitor their implementation.
• State Ownership Policy and the owner’s letters of expectations
  Under the Law, the Government of Ukraine must approve the State Ownership Policy, which will (a) define the objectives and purpose for SOEs, (b) classify strategic enterprises and set criteria for privatisation or retention in state ownership, and (c) set out the remuneration policy for SOEs’ executives and the state dividend policy. Based on the State Ownership Policy, the general meeting or the competent governing body of SOEs annually approves the owner’s letter of expectations, with due regard to which SOEs develop financial, investment, and strategic plans.
• Internal control of SOE and performance evaluation of SOE’s supervisory board
  SOE must establish an internal control system encompassing compliance, risk management, and internal audit. The system must be tailored to its activities and overseen by the supervisory board. Every three years, the Government of Ukraine determines the assessment procedure for the supervisory board’s performance, including criteria for involving an independent consultant and his selection procedures, evaluation criteria, and decision-making processes.

Further steps

Within six months after the Law comes into force, the Government of Ukraine must adopt regulations necessary to implement the Law, including the State Ownership Policy and criteria for SOEs to introduce a two-tier management structure. In turn, SOEs are required to bring their operations into compliance with the Law (in particular, by updating their charters and by-laws accordingly) within one year of the Law’s entry into force.

By Mykola Stetsenko, Managing Partner, and Yuriy Nechayev, Partner, Avellum

Avellum has advised the Ministry of Finance of Ukraine on a defense loan guaranteed by UK Export Finance that will be used to finance the purchase, modernization, and maintenance of two Sandown-class mine countermeasure vessels for the Ministry of Defence of Ukraine. Sayenko Kharenko and, reportedly, Ashurst advised UK Export Finance.

According to Avellum, “the loan was provided under the UK-Ukraine Framework Agreement on Official Credit Support for the Development of the Capabilities of the Ukrainian Navy. This Agreement anticipates further cooperation between the two countries, including UK consultancy and technical support for the building of naval infrastructure for the Ukrainian Navy.”

The Avellum team included Senior Partner Glib Bondar and Associates Yaroslav Pavliuk, Andrii Kroshko, Olha Harhola, and Inna Hontaruk.

The Sayenko Kharenko team included Partner Anton Korobeynikov, Senior Associate Oles Trachuk, and Junior Associate Artem Medvetskyi.

On 27 February 2024, the Cabinet of Ministers of Ukraine adopted Resolution No. 227 “On Introduction of Guarantees of Origin of Electricity Produced from Renewable Energy Sources”  (“Resolution”) that came into force on 5 March 2024.

The Resolution sets rules for the operation of the renewable energy guarantees of origin (“GoO”) mechanism.

Background

The foundation of the GoO was laid down last year by Law of Ukraine No. 3220-IX “On Amendments to Certain Laws of Ukraine on Restoration and Green Transformation of the Energy System of Ukraine” (“Law”).

The GoO’s primary function is to show a final customer that a given share or quantity of energy was produced from renewable sources. It also serves as a proof that offered goods and services were produced using “green” energy making a smaller carbon footprint.

The GoO mechanism will allow Ukrainian businesses to (1) comply with the EU regulations regarding the climate goals of decarbonisation, (2) confirm corporate compliance with sustainable development goals, (3) avoid additional costs when exporting goods to the EU countries, and (4) attract green financing.

Resolution’s key points

The Resolution sets two main procedures: (1) the procedure for issuing, circulation, and cancellation of the GoO, and (2) the procedure for determining the environmental value of electricity produced from renewable sources.

In particular, the Resolution provides the following:

• the National Energy and Utilities Regulatory Commission (“NEURC”) will administer a digital register of the GoO (“Register”), which will feature at least two languages – Ukrainian and English;
• the NEURC will take necessary measures to implement the integration of the Register with the registers of the Energy Community, the European Union, and the Organization for Economic Cooperation and Development;
• to ensure compliance with applicable regulations, the capacities stated in the Register are subject to on-site inspections. As of now, only the procedure for inspecting the capacities of customers is in place. The NEURC will further adopt the inspection procedure for commercial producers;
• any use of the GoO must take place within 18 months from the date of production of the respective energy unit. However, any transfer of the GoO is limited up to 12 months from the date of the energy production;
• the GoO can be issued for electricity from energy storages provided that such storages are used at facilities producing electricity from renewable sources;
• the GoO cannot be issued for electricity produced by hydro-accumulating power plants;
• the environmental value of electricity is measured in kilograms of CO2 equivalent per 1 MWh of electricity. It determines the average greenhouse gas emissions from electricity producers that use thermal power plants to generate equivalent volumes of electricity from fossil fuels; and
• the Ministry of Energy calculates the environmental value using five years of publicly available data on annual greenhouse gas emissions from the energy sector and the electricity production volumes from fossil fuels.

By Glib Bondar, Senior Partner, and Maksym Maksymenko, Partner, Avellum