Using of Facsimile in Business Practice in Ukraine

Facsimile (from Latin fac simile – “make alike”) is a reproduction of any original graphic (manuscripts, drawings, designs, prints, signatures, monograms) transmitting it quite accurately, with all details. Using the facsimile in business practice is reasonable in those cases when you create a large number of primary documents, such as invoices, statements, specifications to the treaties etc., so it helps to save a lot of time for person who signs. In this article, we will consider the possibilities and features of using the facsimile in business practice with the residents of Ukraine.

The facsimile is a technical way of signing documents that reproduces the signature of empowered person; actually it confirms the validity of certain transactions or relationships. The current legislation of Ukraine does not define the term facsimile, but part 3 of the Article 207 of the Civil Code establishes that the use of facsimile reproduction of the signature for transactions by using mechanical or other copying, electronic digital signature or other analogue of a handwritten signature is allowed in cases established by the law, other acts of civil law or by written agreement of the parties which should include samples of the analogue of handwritten signatures. Such written treaty may be, for example, a clause in the contract, a protocol of intent, a preliminary contract. Also, a facsimile is referred to in paragraph 2.5. of Regulations on the provision of documentary records in the accounting, approved by the Ministry of Finance of Ukraine №88 from 05.24.1995, which allows the using of a facsimile reproduction of a signature during the stage of registration of primary documents in the manner prescribed by law, other acts of civil law. So it can be said that primary documents for execution of transactions can also be subscribed via the facsimile.

However, business practice of enterprises can create other documents that are neither primary nor the treaty, for example, tax, financial and statistical reports, documents in the field of labor relations (labor contracts, documents on their performance). In these cases, it is necessary to explore the rules of special legislation that regulate issues of preparation of these documents and impose mandatory restrictions on using of the facsimile in office management.

Based on the above, a list of primary documents that definitely can be signed by using a facsimile is provided below:
– letters of credit, if the other way is not indicated in the letter of credit;
– checks in foreign currency issued abroad and presented for payment on the territory of Ukraine, intended for the payment of pensions (transfer of pensions to residents of Ukraine from foreign countries), or in other cases stipulated by the legislation of the country of the drawer;
– cash documents supplied to maintenance into Ukrainian banks, except the signature of the recipient of cash;
– documents for accounting of goods and raw materials;
– documents for salary accounting, accounting of using of staff time;
– account invoices, certificates of acceptance and transfer of goods, the results of services (works) according to deals, if the parties have stipulated such opportunity.

The list of primary documents that cannot be signed by using a facsimile is considerably smaller and comprises the next documents:
– payment orders in foreign currency or precious metals, the application for the purchase or sale of foreign currency or precious metals;
– payment requests, payment orders, which shown in Ukrainian banks;
– cash checks;
– tax returns, other tax reporting documentation.

At the same time, there is quite extensive primary documents about which Ukrainian legislator has not imposed restrictions or has not given a clear permit to use a facsimile. This situation, unfortunately, is used by some state authorities, particularly by the tax office, which has a tendency to sue some of the primary documents of the enterprises, if such protest allows the institution to increase the size of the company tax. At the same time, in most cases courts tend to take side of the company rather than the tax service, but the company needs to understand the possibility of consequences and some subsequent difficulties such as necessity to defend their interests in court, in case of using a facsimile on the following documents:
– tax invoices;
– copies of documents submitted by a resident of Ukraine to the bank for payment or receipt of foreign trade transaction;
– power of attorney of the legal entity to receive the goods;
– cash warrants on cash receipts enterprises and issuance of money from the cash register (in the case where the company operates with cash).

If the company decides to use a facsimile in their business practices, we would note the following. First of all, business leaders need to issue an order about the possibility to use a facsimile as a signature, which must specify:
– officials, who may sign documents using the facsimile;
– a list of documents that may be signed with a facsimile signature;
– ways to keep facsimile, and access to it, as well as responsible person for the keeping of a facsimile;
– samples of corresponding analogues of officials’ handwritten signatures.

In addition, the order must specify that a facsimile can be used only by the official whose signature is reproduced in such case. This is due to the fact that Ukrainian companies often make the mistake and stipulate in orders the possibility of using a facsimile and putting signature of the person who is absent, for example, give such authority to someone from the staff in the absence of the head. Such actions are a violation of the requirements and document management in general, and the requirements for registration of primary documents. The purpose of using a facsimile is to replace the handwritten text, allowing the identification of a specific official. However, it is not possible to ignore the legal requirement that the document must be signed by a particular person, who is responsible for the authenticity of the signed document, either by his own, or with the use of this analogue. There are cases in the practice of law in Ukraine when the tax authorities of Ukraine proved the absence of an official in a specific period in the territory of Ukraine and thus demanded to invalidate the significant on the transactions. Yes, the company was able to defend itself in court, but a lack of understanding of the important principle that a facsimile certifies the will of a signatory person and not any third party, which takes a facsimile in the hands, can result in wasting time, efforts and money on legal support of business in court. The problem of signing documents in the absence of an official must be solved in another way, namely by giving appropriate powers to other officials, for example by issuing warrants, the inclusion of the relevant provisions of the constituent documents of a business entity by issuing formal orders / orders for the company.

We hope that this article allows to interested parties to clarify the question of using such a handy tool as a facsimile in business practice in Ukraine. In case of any doubt, appeal for help to the qualified lawyer will not be a superfluous.

Author: Kydalov Igor

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