Review of Transportation Law: in the Heart of Europe
Viktor MOROZ
Managing Partner, Suprema Lex
Valerii PRYSIAZHNYI
Senior Partner, Suprema Lex
PROfile
Suprema Lex
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Suprema Lex is a multi-disciplinary, industry-focused Ukrainian law firm made up of highly-qualified lawyers who work proactively to help their clients reach their business goals and generate commercial advantages. The firm provides a full range of legal services to national and international companies that do business in Ukraine and abroad as well as to private people.
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Highly-qualified lawyers and attorneys work at Suprema Lex, who have high-quality legal educations and excellent experience in various branches of law.
Suprema Lex offers a full range of legal services and maintains a high reputation for its expertise in a wide array of practices, such as transport law (including aviation law and maritime law), corporate law, taxation, competition & antitrust, M&A, insolvency, dispute resolution, banking & finance law, land and real estate law, construction law, intellectual property, branding, licensing, domain disputes, media law, sport law, family law, labor & employment, medical & pharmaceutical law, criminal law, etc.
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One of the main industry-specific experience of Suprema Lex is legal support of aviation. The firm’s attorneys provide preparation of legislation, getting licenses, certificates, etc, preparation of contracts and agreements, including international, customs & tax issues, intellectual property law, litigation.The experience in this area has a background in a special education in the aviation law of Viktor Moroz, managing partner of the firm, and his experience of work in the United Nations and international aviation companies.
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Ukraine is situated in the middle of Europe and lies between the Black Sea and the Carpathian Mountains. Ukraine borders on Romania, Moldavia, Belarus, Russia, Poland, Slovakia and Hungary. So, the transport infrastructure of Ukraine, together with its airports, seaports, railroads and roads is the key to the country’s competitiveness and its integration into European and world transport networks and the global economy. European integration processes, including harmonization of Ukrainian legislation with European standards, are Ukraine’s current priority. Moreover, Ukraine is also taking part in the global “New Silk Road” project that will connect China with the European Union by rail and will lie through Ukraine.
The Basis of Ukrainian Transportation Law
As the transport system of Ukraine consists of several kinds of transport, each of which has certain characteristics, then the legislation on transport is quite significant in scope and diverse in content.
Relations associated with transport activities are regulated by the Constitution of Ukraine, Civil and Commercial Codes, On Transport Act of Ukraine of 10 Novem- ber 1994, On Pipeline Transport Act of Ukraine of 15 May 1996, On Railway Transport Act of Ukraine of 4 July 1996, On the Transit of Goods Act of Ukraine of 20 October 1999, On the Automobile Transport Act of Ukraine of 5 April 2001, On the Functioning of the Single Transport System in the Special Period Act of Ukraine of 20 October 1998, On the Freight Forwarding Activities Act of Ukraine of 1 July 2004.
A significant range of transport relations is governed by transport codes and charters on certain types of transport: Air Code of Ukraine of 19 May 2011, Maritime Code of Ukraine of 23 May, 1995, Charter of Inland Water Transport of USSR of 15 October 1955, Charter of Road Transport of Ukrainian URSR of 27 June 1969, the Charter of Railways of Ukraine of 6 April 1998. Among other acts of Ukrainian transport legislation that are important are the rules for transporting goods, acting for various types of transport and all sorts of goods.
To Be Done
Taking into account the fact that a considerable number of types of transport exist in Ukraine, let’s focus on each of them separately.
Railway transport
Analysis of the current state and trends of the railway transport in Ukraine shows that despite its stable work, there are several significant problems that need to be solved. This applies in particular at the undetermined legal status of Ukrainian Railways as the regulatory body of railway transport; contravention between legal and actual status of railways as the companies and branches of Ukrainian Railways; distinction between commercial and government control functions in rail transport; imperfections of the financial and economic mechanisms ensure the depletion of assets in part due to lack of innovation and adaptability to specific operating conditions of transport.
The urgency of solving these problems determines the need to reform the railways, which has become a decisive factor in realizing the strategic objectives of industry.
The main goals and directions of railway reform are the creation of favorable conditions for attracting investment for the industry to update the industrial and technological base of industry, bringing Ukrainian Railways to a higher technical and technological level and integration of the Railway Transport of Ukraine into the European and world transport systems, creating organizational and legal, economic, technical and technological conditions for the next transition to functioning in line with the principles of European industry transport policy.
To implement these goals amendments have to be made to the On Transport Act of Ukraine and the Charter of railways of Ukraine and legislation introduced on the corporatization of railway transport, tariff regulation and European technical standards of engineering, building and exploitation of high-speed railways.
Automobile Transport
The automobile transport industry in Ukraine has an extensive legal framework, but there are a number of important areas that require legal regulation. Particularly there is much tension around the issue of financing highways and attracting foreign investment. The technical standards of Ukrainian roads do not meet EU standards nor the quality and the weight loads, so Ukraine need to bring its legislation into line with EU standards. So, have to be made amendments to the On the Public-Private Partnership Act of Ukraine, On Concessions Act of Ukraine. At the end of 2015 amendments were passed to the On Concessions for the Building and Exploitation of Roads Act of Ukraine.
For the further development of international transportation of goods and passengers by leased automobile transport regulations have to be harmonized with European standards on duty free importation of cars.
The current Rules of Hazardous Materials Transportation, Safety Rules and Rules of Freight within Loading Gage Transportation have to be harmonized with European standards.
Sea and Inland Water Transport
Sea and inland water transport also are very popular in Ukraine and play a significant part in transporting goods and passengers. An important step in the approach of the transport industry to European standards is interventions to develop regulations system quoting the part of export goods for domestic cargo fleet. To carry out this goal it is important to establish national freight exchanges and develop a system of financing national shipbuilding companies and, taking into account the importance of improving the quality of agency services, to implement minimum requirements for ship agents, based on recommendations developed by UNCTAD.
Ukraine is a participant of the European Agreement on Main Inland Waterways of International Importance (AGN), the European Agreement concerning the International Carriage of Dangerous Goods by Inland Waterways and has introduced the On the Seaports Act of Ukraine that allows Ukraine to be an equal participant of international projects in the area of sea and inland water transportation.
Aviation Transport
Ukrainian legislation on aviation law was developed in accordance with international standards, but to some extent it reflects only the beginning of market reforms in Ukraine. The main feature of aviation law in Ukraine is that legislative acts are in the main not directly applicable, but based on subordinate legislation. However, due to the basis of Ukrainian aviation legislation in international principles and acts it does, in the main, meet EU requirements. The main goals of Ukrainian aviation transport industry today are to build modern airports on the basis of old airports in Ukraine’s regions, create an effective air transportation market and develop air manufacturing.
Ukraine is a participant of the Convention on International Civil Aviation (Chicago Convention), Montreal Convention (the Convention for the Unification of the Certain Rules for International Carriage by Air) and other international acts as well as inter-governmental agreements as Air transport agreement between the government of Ukraine and the government of the United States of America.
The Ukrainian government has introduced the Concept of State target program of airports development that is aimed at involving private investments under state guarantees to make reconstruction of aerodromes and terminal complexes of regional airports in Ukraine.
The Ukrainian government is also working on the establishment of collaborative airspace with the EU, based on the free access to the market of air carriage, equal competitive conditions and collaborative rules, especially at the areas of aviation safety, air traffic management, environmental protection and industrial social norms, development of cooperation between air manufacturing complexes of EU and Ukraine.
For the moment the issue of the airlines exploitation licensing that have to be regulated by the State aviation service of Ukraine is unregulated.
Instead of a Conclusion
So, to have a comfortable transport business in Ukraine a foreign investor has to acknowledge that Ukrainian transport legislation is now developing but does not fully correspond with EU standards. Considering the quality of the Ukrainian court system and imperfections of national legislation for protecting the interest of foreign investors, reform of investment legislation that regulates activities on the Ukrainian transport market is needed. Transport law in Ukraine, due to its complexity, is closely connected with intellectual property law, M&A, corporate law, banking & finance law, labour law, litigation. The serious drawback of Ukrainian legislation in the transport sphere is the lack of a unified approach in questions related to transport activity. Ukrainian transport law consists of different laws and subordinate acts that regulate certain, specific transport relations. The legal framework in this respect is imperfect. Ukraine should refuse to regulate transport activities via subordinate acts and instead base it mainly on international conventions and traditions. There is a strong need to systemize legal provisions regulating transport activity. If Ukraine is positioning the transport industry as one of the main Ukrainian economic areas then it should follow global trends and harmonize laws with EU standards. There is the hope that in the near future Ukraine will be known as the heart of the Europe not only in terms of its location but also as the one of the largest transport arteries in the world.