Brief on investment, intellectual property and foreign economic activity

IInvestment is comprised of practical actions of citizens, legal persons, and states aimed at investing assets (funds)  into companies or organizations in order to make profit or achieve other benefits. Assets which can be a subject of investment include cash assets, securities, movable and immovable property, intellectual property rights, property, corporate rights etc.

Foreign  investments  are  the  assets,  invested  by  foreign  investors  into the objects of  investment activity within Ukraine  in order  to make a profit. Foreign  investments  can  be  conducted  in  the  form  of  partial  participation in  companies  jointly  established with Ukrainian  legal  and  natural  persons, or  by  establishing  companies  fully  owned  by  foreign  investors  in  the  form of branches and other separate divisions of foreign  legal entities. Investment activity  can be, moreover,  embodied  in  the  form of purchasing movable or immovable property, not forbidden by the  laws of Ukraine, purchasing  land usage rights, use of natural resources etc.

There  is an established procedure  for  foreign  investment registration  in Ukraine, which is not obligatory, but which offers a range of state guaranties to  foreign  investors. The  legislation declares  that  foreign  investments which pass  foreign  investment registration procedure  in Ukraine cannot be subject to nationalization. Foreign investors are granted a right of damages, including loss of profits and moral damages, which they incurred as a result of actions, inactivity or improper discharge of duties by the state authorities of Ukraine or their officers in respect to a foreign investor or foreign investment company. Moreover, in the case of termination of investment activity, a foreign investor is  guaranteed  a  right  of  investment  payment  in  kind  or  in  a  currency  of investment in the amount of actual contribution.

The legislation of Ukraine defines intellectual property rights as, provided by  the  law,  rights  for  the  results  of  intellectual  activity  in manufacturing, science,  the  arts,  production  and  other  fields.  The  object  of  intellectual property includes acquired knowledge and information; art and literary work; invention;  important process  or product development;  all  of which  are  the results of  artistic  research  and  inventive  activity. Thus,  intellectual property cannot include information or knowledge which does not belong to the results of artistic or scientific activity, but was acquired by other means. This includes general information which possesses features of news, information for general use, or concepts of common knowledge.

The  objects  of  intellectual  property  rights  comprise  of  copyrights (literary works, computer programs, data bases, maps, photographic works), neighboring rights, industrial property rights, trade (commercial) names, plant kinds, commercial secret etc.

Ukraine  acceded  to  the  1994  Agreement  on Trade-Related  Aspects  of Intellectual Property Rights, which sets out to diminish differences in the rules for  intellectual  property  rights  protection  around  the world  and  introduce unified international standards in this field.

Foreign economic activity is an activity of economic entities of Ukraine and of foreign economic entities, established on the basis of mutual relations between  them,  which  is  conducted  both  on  the  territory  of  Ukraine  and abroad. The  forms  of  foreign  economic  activity  comprise mainly  of  trade (export, import), crediting, scientific and technical cooperation, establishment of joint companies, realization of projects on a compensatory basis, barter and rental transactions etc.

Pursuant  to  the  legislation of Ukraine, all  subjects of  foreign economic activity are equally entitled to conduct any kind of foreign economic activity, not directly prohibited by the laws of Ukraine, regardless of forms of ownership and other features. It shall be prohibited to conduct foreign economic activity which is connected with:

• exporting  from  the  territory  of  Ukraine,  objects  which  represent national, historical, archeological and cultural value of the Ukrainian nation;
• importing and transporting any goods which could harm social morality, health, or constitute a menace to a population, fauna or plants;
• importing goods and services which promote war, racism and ideas of racial discrimination;
• exporting  and  importing  goods,  conducted  with  infringements  of intellectual property rights;
• other kinds of activity prohibited pursuant to international agreements or the legislation of Ukraine.

Depending on the economic or political situation in Ukraine, economic  entities which conduct foreign economic activity may be subject to limitations in the form of imposed quotas or licenses on certain kinds of foreign economic activity.

Quotas are quantitative and a nontariff means of limiting the export and import of goods by  imposing a certain quantity or amount during a certain period of time. Export quotas are imposed either by international agreements, which determine a share of every country in the overall export of certain goods, or by a separate state for limiting export of deficit goods on a national market. Import quotas are imposed by the state in order to protect local commodity producers, maintain balance of  trade on  internal market, and, moreover,  in order to respond to discriminatory trade policies of other countries.

Licensing  regulates  foreign  economic  activity  by  prohibiting  export-import transactions in certain quantities for a certain period of time without obtaining  a  special  permit  (license). Licenses  for  conducting  export-import transactions are issued by the Ministry of Economic Development and Trade of Ukraine.