Brief on investment, intellectual property and foreign economic activity
- Author: Marina Losenko
- Practice areas: Corporate law
Drafting of international trade contracts in Ukraine: firm’s service
- Standardized procedures: Legal advice
- Date of publication: 06/01/12
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.