Quarantined. What “Coronavirus” Laws were Adopted by the Verkhovna Rada?

Streamlining procurement procedures, financial relief for businesses and individuals. Four new laws address the rules under which government agencies and businesses will operate during the pandemic.

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During the turbo-meeting of the Verkhovna Rada on March 17, 4 bills were adopted, namely 3219, 2538, 2539, 3220.

Bills 2538 and 2539 were submitted to Parliament on December 5, 2019. They aim to launch the Medical Procurements of Ukraine, a newly established state-owned enterprise that will gradually take over part the procurement of medical goods for state-level health care programs from international organizations. These are the programs for diagnosing and treatment of a number of serious illnesses (hepatitis and tuberculosis, HIV, diabetes, heart attacks, stroke, cancer and mental illnesses, conditions requiring dialysis, etc.), as well as providing blood donation and vaccination.

Thanks to these laws, the SOE Medical Procurements of Ukraine will be able to purchase medical goods directly from foreign manufacturers without having to pay import VAT. In addition, the new rules remove regulatory barriers for foreign pharma companies. They will facilitate entry of new pharm producers and dealers into the Ukrainian market to supply new and cheaper drugs and medical devices. International organizations will continue to procure some medicines until March 2022.

The other two bills deal directly with the coronavirus situation. Below is a summary of their content.

The procedure for purchasing medicines, medical devices, goods and works to combat the pandemic was streamlined:

  • Imported drugs, medical devices and equipment (the exact list to be approved by the CMU) are exempted from VAT and customs duties during quarantine; customs clearance of such goods will be carried out fast and without payment for customs formalities during non-working hours.
  • Until June 18 (for 3 months after the adoption of the Law on combating COVID-19), the Law on Public Procurement shall not apply to the procurement of goods, works or services necessary to combat coronavirus disease (the list of goods, works or services and the procurement procedure are to be approved by the Cabinet of Ministers). A 100% prepayment for such goods, works or services is possible. The results of such purchases will be published in Prozorro. 
  • Under the current legislation, the Cabinet will control the prices of medicines, medical supplies and socially significant products.

By March 25, the Cabinet must establish:

  • Bonuses in the amount of 200% of their salaries for health workers and staff working directly with coronavirus patients (till the epidemic is over);
  • Bonuses to certain categories of workers that provide services and works necessary for maintaining the everyday life of people

During quarantine and for another 30 days, some financial relief was introduced for businesses and individuals:

With regard to the internally displaced persons:

  • The deadline for identification to receive payments and obtain the IDP status was extended. The payments will not stop, nor will they be monitored.

With regard to individuals: 

  • No penalties and fines will be administered and charged for untimely payment of utility bills; the provision of services due to non-payment will not be terminated, and people will not be evicted because of debts.
  • Filing tax declarations for private individuals is delayed from May 1 to July 1
  • When self-isolated or staying in special health care facilities people may be paid temporary unemployment assistance amounting to 50% of their salary
  • Quarantine time does not count as vacation 
  • Consumer credit holders are exempt from liability (penalties, fines, rate hikes) for falling in arrears on their loans for the period from March 1 through April 30

With regard to foreigners and stateless persons

  • There is no administrative liability for breach of stay in the country. Documents during quarantine are obtained at the place of the applicant’s stay 
  • By March 25, the Cabinet should specify a list of locations for placement of foreigners and stateless persons with refugee status or in the process of receiving one, as well as foreigners and stateless persons illegally staying on the territory of Ukraine and with regard to whom there is a court decision on their temporary placement, if such locations are within the territory where quarantine has been declared.

With regard to civil servants:

The deadline for submitting e-declarations is delayed from April 1 to June 1.

With regard to businesses:

  • Quarantine declared by the Cabinet of Ministers is recognized as force majeure (with regard to contract execution).
  • Absence of penalties and non-application of sanctions for violating tax laws from March 1 through May 31, 2020, except for the sanctions for:
  1. violating the requirements regarding long-term life insurance or private pension insurance contracts, in particular supplementary pension insurance
  2. alienating property held in the tax lien without the consent of the controlling authority;
  3. violating the rules of accounting, production and circulation of fuel or alcohol in excise warehouses, applied on a general basis;
  4. violating accrual, declaration and payment of VAT, the excise tax, and the rent.
  • Until May 31, tax audits are canceled, except for unscheduled inspections relating to the wrongful VAT refunds. The new inspection schedule is due to be released on March 30.
  • From March 1 to April 30, land and non-residential property taxes are abolished (local budgets will suffer).
  • Private entrepreneurs, farmers and self-employed persons are exempted from the payment of the Single Social Contribution (SSC) for March and April, as well as from penalties and fines for non-payment of the SSC for these months. Until May 18, no monitoring is carried out and the ongoing monitoring is suspended. These two months are included in the track record (these individuals are considered to have paid the minimum SSC).
  • Introduction of the mandatory cashiers for the 2nd-4th groups of private entrepreneurs with the turnover of less than UAH 1 million is delayed for three months. For physicians registered as private entrepreneurs, the cashier introduction deadline is postponed until January 1, 2021.
  • The “5-7-9” subsidized loan program was slightly expanded: the maximum loan amount was increased from UAH 1.5 to 2 million (with regard to the production of medicines or medical products – up to UAH 3 million UAH); it is allowed to buy non-residential real estate and intellectual property, and use 25% of the investment project funds as working capital. In some cases, entrepreneurs can receive up to UAH 1 million for working capital.

By March 20, the Cabinet of Ministers had to draft bills for consideration by the Verkhovna Rada of Ukraine with regard to:

  • preventing housing subsidies from being suspended during quarantine;
  • allocating a housing subsidy for the next period to all households without exception that received a housing subsidy in the previous period, without the need to re-apply;
  • expanding the range of recipients of housing subsidies due to declaring quarantines;
  • registering job seekers as unemployed individuals from the first day after their filing of an application and providing unemployment benefits from the first day after their registration and unemployed;
  • suspending payments of a mortgage principal; moratorium on foreclosure during quarantine or coronavirus-related restrictive measures;
  • …as well as a comprehensive bill on economic and social protection of the population during quarantine, including administrative and criminal measures of influence.

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