Foreign trade: economics, finance, law

Gatekeepersʼ obligations vested in the Digital Markets Act

Nataliia MAZARAKI — 2024-11-18

The misuse of economic power by digital giants has highlighted the problem of distortion of competition in the online services market and the ineffectiveness of traditional competition law. This was the impetus for the adoption of the Digital Markets Act, which aims to specifically regulate the digital sector by establishing rules that ensure competitiveness and fairness in the EU internal market. The research hypothesis is to confirm the benefits of the ex ante obligations imposed by the DMA on online platforms with gatekeeper status in terms of strengthening fairness and competition, as well as ensuring the rights of business users and consumers in the digital sector of the economy. The purpose of the study is the functional description of the obligations of online platforms with gatekeeper status and the determination of prospects for their implementation. To achieve this goal, the method of doctrinal analysis was used, which helped to reveal the legal nature and peculiarities of the Digital Markets Act in general, as well as the gatekeeper obligations in particular. Ex ante obligations, as behavioral means of legal protection of the EU market against negative business practices, are aimed at preventing potentially undesirable behavior of gatekeepers, and also promote and protect intra- and cross-platform competition. It has been proven that the asymmetry of ex ante regulation, the competitiveness and fairness of digital markets as the goal of regulation, and the self-executing nature of obligations testify to the novelty of the regulatory regime introduced by the Digital Markets Act. Granting the European Commission a wide range of powers to monitor the compliance of online platforms with their obligations adds flexibility to the regulatory instrument, which, at the same time, requires further development in order to be significantly different from traditional competition law.

Legal regulation of the use of artificial intelligence in medical procurement

Dmitrii TELELEKOV — 2024-12-15

The use of artificial intelligence in medical procurement has become commonplace, as technologies help make decisions quickly and accurately; automate routine tasks; process large amounts of data and reduce human errors, reduce corruption risks; transparently assess the most operations thanks to open access; save money and to some extent human resources. Back in 2021, the WHO issued guidelines on the ethics and management of artificial intelligence in healthcare, which identified the advantages and disadvantages of artificial intelligence. The hypothesis of the study is to prove the effectiveness of using AI in public procurement, identify gaps and shortcomings, study the experience of foreign countries in order to borrow best practices and provide proposals for legal regulation of the use of AI. The purpose of this study is a comprehensive analysis of legal acts on the use of AI in medical procurement. The artificial intelligence technologies that can be used in medical procurement are analysed: machine learning (Machine Learning, ML), natural language processing (Natural Language Processing, NLP), AI checklist for submitting a tender proposal, robotic process automation (Robotic Process Automation, RPA), fraud and anomaly detection, supplier selection system, chatbots in the field of public procurement, electronic system for accounting and management of stocks of medicines and medical devices "e-Stock". It was noted that this list is not exhaustive. A comparative analysis of the legislation of different countries and Ukraine on the regulation of artificial intelligence and medical procurement was conducted. It was emphasized that countries should be cautious when adopting such acts, because no one can fully predict the limits of progress of artificial intelligence and, accordingly, the consequences that may occur if a person loses control over artificial intelligence.

The concept of national security and public order in the screening of foreign direct investments

Serhii KUCHERIAVENKO — 2024-12-15

A comprehensive study of the content of national security and public order as key components of the foreign direct investment screening procedure has been carried out. The research interest in this topic is due to the fact that the degree of detail and, in general, the approaches to defining the concepts of national security and public order in legislative acts demonstrate not only a reflection of geopolitical considerations, but also a balance found between the public interest – the effectiveness of screening – and the private interest – the freedom of investment and entrepreneurial activity. The hypothesis of this study is that the concepts of national security and public order in the context of FDI screening are dynamic, and their legislative definitions should be detailed enough to ensure the effectiveness of the FDI screening mechanism. To test the hypothesis, the author outlines the caveats for national security and public order reasons, as well as the principles of their application in international law, highlights the doctrinal approaches to the classification of threats to national security and public order, analyses the approaches of the USA and China, and the EU regulatory framework for FDI screening. The conclusions provide a conceptual vision of the dynamics of defining the content of national security and public order in relation to FDI screening, and proposes approaches to defining the criteria for FDI screening in future Ukrainian legislation.

Legal nature of the mechanism of the EU regulation on foreign subsidies

Oleksii VOVCHENKO — 2024-12-15

EU Regulation 2022/2560 on foreign subsidies distorting the internal market is designed to downgrade the insufficient effectiveness of international trade and economic law instruments in protecting economic competition in the internal market. In particular, distortion of economic competition occurs when participating in public procurement or in concentrations of economic entities that have received foreign subsidies, while strict state aid rules are applied in the EU. That is why Regulation 2022/2560 applies approaches inherent in the regulation of state aid to economic entities, taking into account the specifics of foreign subsidies. The article is devoted to proving just this statement, which was made through a detailed comparative analysis of the key provisions of Regulation 2022/2560 and the EU acquis in the field of state aid. The analysis is strengthened by highlighting the relationship between the objectives pursued by the Regulation and state aid law. Particular attention was paid to the procedure and approaches of the European Commission for assessing the distortive effect of foreign investments and their positive impact on the development of a certain sector of the economy. The empirical basis is presented so far by the only published decision of the European Commission in the case of assessing the concentration of Emirates Telecommunications Group Company PJSC and PPF Telecom Group B.V. The study substantiates the conclusion about the complex legal nature of Regulation 2022/2560, which combines the approaches of state aid law and foreign trade policy instruments. Despite certain parallels with state aid legislation, Regulation 2022/2560 demonstrates significant differences in its provisions, which complicate its consistency with competition law in force in the EU and create additional challenges for harmonizing control over foreign subsidies.

Ensuring the effectiveness of judicial control

Nataliia DOBRIANSKA — 2024-12-15

The theoretical, legal and applied aspects of the problem of ensuring the effectiveness of judicial control through the prism of the permissible limits of its implementation are considered. The relevance of this study is due to the fact that in the context of the growing role of administrative justice in the aspect of the formation of the democratic foundations of society, there is a need to increase the effectiveness of protecting the rights, freedoms and interests of the individual in public-legal relations with subjects of power. The indicator of such efficiency is of crucial importance for the formation of public trust in the institutions of public authority and confidence in the possibility of obtaining full and comprehensive protection of rights and interests in court in the event of a dispute with a subject of authority. The basis of this study is the hypothesis that the criteria for the effectiveness of judicial control in administrative proceedings are the restoration of the violated rights of a person, if such restoration is possible, or the provision of compensation for the damage caused by such a violation, as well as the prevention or minimization of the possibility of violating the same rights and interests of persons by a subject of government authority in the future. The author also suggested that the main indicator of the effectiveness of administrative proceedings is a high level of trust in the judiciary in particular and the state as a whole, since a feature of administrative proceedings is that it is administrative courts that are called upon to protect the rights and freedoms of a subject of private law in public – legal disputes or to protect socially significant interests. In order to verify and confirm the proposed hypothesis, the author applied a number of methods of a general legal and special legal nature. With the help of such methods as epistemological, analytical, deduction and induction, formal-legal, etc., the approaches of scientists in this field were investigated and summarized. Using the comparative legal method, the theoretical results and procedural legal mechanisms for achieving the effectiveness of judicial control were compared. Based on this comparison, the hypothesis put forward at the beginning of the study was confirmed.

Legal aspects of asset recovery of sanctioned persons

Ruslan MELNYCHENKO — 2024-12-15

The russiaʼs full-scale invasion of Ukraine has resulted in the introduction of sanctions against the aggressor by numerous countries worldwide. In particular, the application of sanctions has affected both individual and legal entities associated with the aggressor. These sanctions include the freezing of assets belonging to such individuals and companies, and Ukraine, as a state that has suffered significant destruction and human losses due to russian aggression, has legitimate grounds for foreclosing and further managing these assets. The legal regulation of managing foreclosed assets of sanctioned persons in Ukraine is new and dynamically evolving. At the same time, there are significant gaps in the legislation that lead to the risks of illegal seizure, inefficient use, and embezzlement of these assets. The purpose of this study is to comprehensively analyze the legal regulation of recovery, foreclosing and seizure of assets of sanctioned persons and assets belonging to the russian federation, as well as to identify problematic issues and develop recommendations for their resolution. The research used such methods as the analysis of current Ukrainian legislation and international experience in managing foreclosed assets of sanctioned persons, systematization and generalization of judicial practice, and comparative legal analysis. The scientific novelty of the research lies in a comprehensive and systematic approach to analyzing the legal aspects of managing foreclosed assets of sanctioned persons by Ukraine, as well as in developing practical recommendations for improving the legal regulation of this sphere. According to the study, the main problems in the management of foreclosed assets of sanctioned persons in Ukraine are the imperfection of legislative regulation (lack of a clear definition of the legal status of foreclosed assets, shortcomings in the procedures for recovery and confiscation of assets that may lead to their appeal in the future, insufficiently regulated mechanism for protecting the property rights of legal entities whose property is confiscated). Other significant problems in the management of foreclosed assets of sanctioned persons are: the lack of transparent and effective procedures for managing foreclosed assets, gaps in cooperation with other countries on issues of seizure and asset management, potential risks of appealing foreclosing decisions in international courts due to non-compliance of the deadlines for submitting reviews and appeals with international standards. Based on the problems identified in the study, the following practical recommendations can be offered to improve the legal regulation of the management of foreclosed assets of sanctioned persons in Ukraine. It is worth codifying the legislation in this area – adopting a separate law that would comprehensively and systematically regulate the issues of foreclosing, legal status and management of assets of sanctioned persons; clearly defining in the legislation the legal status of foreclosed assets, the procedure for their accounting, storage and disposal; developing and legally enshrining transparent procedures for managing foreclosed assets at all stages – from decision-making to the sale of property; introducing mandatory public reporting by management entities on the use of foreclosed assets; creating a unified automated database of foreclosed assets, indicating their status, size, owners, etc.; establishing international cooperation and exchange of experience with other countries on the management of foreclosed assets.; ensuring transparency in the use of funds from the sale of foreclosed assets, in particular for the purposes of restoring Ukraine and compensating for war losses. The research results can be used to improve Ukrainian legislation on managing foreclosed assets of sanctioned persons, develop transparent and accountable mechanisms for managing these assets, as well as ensure cooperation between state bodies and civil society in this field, foreign countries, etc.

Evolution of international legal cooperation between states in the field of tax information exchange

Dmytro SYRKO — 2024-12-15

The evolution of international legal cooperation between states in the field of tax information exchange is studied. It is shown that such cooperation has qualitative progress, as it occurs by complicating the forms of such cooperation: initially on a bilateral basis, fragmentarily between individual countries of the world, to complex interaction between many countries in a multilateral format, automatically. The highest form of such interaction today is the Common Reporting Standard and Due Diligence for Financial Account Information. The research hypothesis that the international legal cooperation between states in the field of tax information exchange is one of the most effective tools for combating the erosion of tax bases and tax evasion, achieving an appropriate level of tax transparency and accountability of taxpayers has been proven. Interstate cooperation in this area makes it possible to improve the quality of control over the completeness and timeliness of tax payments, to eliminate the asymmetry of information regarding the financial status of taxpayers, the presence and ownership of various taxation objects in various tax jurisdictions, including offshore ones.

Regulation of online platforms in Chinese law

Hennadii SHCHERBAK — 2024-12-15

Regulation of online platforms has become an obvious trend in the last decade, which is associated with the significant impact of their functioning on millions of users. At the same time, approaches to such regulation are different and distinguish three main approaches – American, European and Chinese. The approach to regulating online platforms in the Peopleʼs Republic of China (PRC) is analysed. The uniqueness of the Chinese approach is due to: on the one hand, the involvement of authoritarian methods of management and regulation to control the population, and on the other hand, the successful promotion of innovation and technological progress development in this area, which allowed the creation in the PRC of one of the largest digital markets in the world in almost 30 years, where online platforms play a key role in social, economic and political processes. The hypothesis of the study posits that the regulation of online platforms in the PRC relies on an authoritarian management model, enabling swift response to challenges while providing support for domestic policy, as well as successfully supports the development of innovations in the digital sphere. The analysis of scientific sources provided an understanding of the regulation of online platforms from the point of view of public and private interest balance, as well as clarification of the peculiarities of Chinese state policy. In turn, the highlighting of the peculiarities of the Chinese approach was achieved through a consistent teleological interpretation of Chinese regulatory acts, the subject of which is the regulation of access to the Internet and its use, and directly online platforms. The study identifies key features of the Chinaʼs approach to regulation: the implementation of political censorship, user de-anonymization, the creation of institutional platform oversight, and limiting the influence of foreign IT companies. The main results are the identification of the the dual nature of regulation: on the one hand, it is aimed at protecting users from platform abuses, and on the other hand, it ensures state control over information flows. Thus, the Chinese model of online platform regulation demonstrates a unique approach combining technocratic control with political objectives.

Remoteness of causation in tort law

Bohdan KARNAUKH — 2024-12-15

The search for a functional criterion was carried out that would allow assessing the remoteness of causation. The study of a legally significant (proximate) cause has a fundamentally different nature than the study of a factual cause. Factual causation determines whether an act belongs to the "chain" of causal connections which led to the harm; legal causation is a causal selection that consists in determining the responsible cause based on legal policy considerations. It is concluded that the main criterion for assessing the remoteness of causation should be the criterion of tortious risk. The essence of this criterion is that a personʼs liability for the consequences of his/her unlawful behavior should be limited only to the harm the risk of which made this behavior unlawful, since it is fair that the basis for liability (fault) should serve simultaneously as its limit. The study of tortious risks should be included in a comprehensive analysis of the tortious incident, and along with it, also the determination of whether the harm actually inflicted on the victim belongs to the category of harm the risk of which made the tortfeasorʼs conduct unlawful. In addition to this, other considerations, which can be broadly termed legal policy considerations, must also be taken into account in assessing the remoteness of causation. These considerations are based on the idea of what global socio-economic outcomes the law should achieve and how the resolution of a particular tort case will contribute to or impede the achievement of such outcomes. The doctrine of remoteness of causation (limits of liability) is the final frontier of a comprehensive study into the compensability of losses suffered by a person. Therefore, it is extremely important that, when applying it, courts provide the actual reasons for their judgment, including economic considerations and related legal policy considerations.