Ukraine

Ivan Maryniuk, Head of Tax Law Practice at Ilyashev & Partners Law Firm  As Ukraine adapts its tax system in the context of war and economic recovery, foreign businesses are facing a growing number of tax-related legal disputes. The establishment of the Economic Security Bureau, new digital reporting obligations, and wartime fiscal pressures have transformed the state’s approach to tax enforcement. In this environment, multinational companies and cross-border groups operating in Ukraine increasingly encounter unexpected VAT adjustments, corporate profit tax claims, and withholding tax (WHT) assessments – even during routine operations. These developments demand proactive tax risk assessment and the implementation of a robust legal defense strategy. Tax Control Authorities and Powers When it comes to taxation in Ukraine, business primarily interacts with two key government agencies: the State Tax Service of Ukraine (STS) and the Economic Security Bureau of Ukraine (ESB). The STS is the main tax control authority in Ukraine. It is responsible for administering taxes, conducting tax audits, requesting information about counterparties, primary documents, and invoices, as well as blocking tax invoices and initiating audits if there are signs of fictitious transactions aimed at minimizing the tax burden. The ESB has become an equally important part of the tax control system, especially in criminal cases. It can initiate proceedings for tax evasion, conduct searches, interrogations, and initiate the seizure of documents or the freezing of accounts. The interaction between these agencies creates the practical reality of tax control, for which any business operating in Ukraine must be prepared. Common Dispute Triggers for Multinationals In practice, international companies operating in Ukraine directly or through local subsidiaries face several recurring tax issues. Some of these relate to standard audits and administration, while others relate to the specific interpretation of tax legislation or new approaches by the regulatory authorities. This section briefly reviews the most common issues that give rise to tax disputes or risks for multinational businesses. “Non-Existent Transactions” in Tax Disputes: A Common but Contested Risk One of the most frequent grounds for challenging VAT credit and expense deductions by the State Tax Service (STS) is the alleged fictitious nature of transactions. The tax authorities claim that a transaction is formal if there is no evidence of the actual movement of goods, performance of work, or provision of services. These conclusions are often based on the supplier’s so-called ‘analytical profile’: insufficient staff, lack of transport, premises, or technical resources. This argument is particularly common in areas where it is difficult to trace the material component of a transaction or to compile a complete set of supporting documents. This applies to agribusiness, logistics, trading and IT, where the physical movement of goods or the provision of services is difficult to trace through documentation. In such cases, the tax authorities tend to refer to a ‘lack of economic substance’, which often becomes the basis for additional income tax and VAT charges and, in some cases, the initiation of criminal proceedings. At the same time, case law in such disputes varies, and the outcome in favour of the taxpayer largely depends on proper preparation for tax audits and the documentation of business transactions. Transfer Pricing in Ukraine: Key Risks and Practical Guidance For multinational companies operating in Ukraine, transfer pricing (TP) remains one of the most sensitive areas of tax compliance. Tax authorities are becoming increasingly rigorous in verifying whether controlled transactions adhere to the arm’s length principle. The most common grounds for tax adjustments are discrepancies between declared prices and market prices or prices in comparable transactions, as well as the lack of proper functional analysis. The focus is on: supplies of raw materials or finished products between related parties, engineering or marketing services, and license payments. The tax authorities often interpret price deviation as an attempt to transfer profits abroad, resulting in additional income tax, penalties, and interest. The situation is complicated if the taxpayer cannot provide proper documentation or justification, especially in cases of transactions with counterparties from low-tax jurisdictions. Proper preparation of TP documentation, timely reporting, and consulting with experts before an audit are critical to avoiding risks and protecting the company’s position. Permanent Establishment (PE) Risk: What Foreign Companies Must Know One of the current areas of tax control is identifying signs of foreign companies operating in Ukraine without proper registration of a permanent establishment (PE). This refers to situations where a business conducts economic activities in Ukraine through establishments (non-commercial), agents, local partners, or staff, but does not declare its presence to avoid taxation of profits. Such a hidden presence can have significant consequences. The tax service is initiating more and more audits in such cases and proving in court that a foreign company has a PE, even without its official registration, or that an existing non-commercial establishment is carrying out activities of a commercial nature. If such status is proven, the tax authorities recalculate the income, determine the notional profit of the PE, and impose additional income tax and penalties. Court practice on this issue is rapidly developing and often not in favour of the taxpayer. For international business, this means that it is necessary to carefully analyze the existence of an ‘economic presence’ in Ukraine. Particular attention should be paid to employment and agency contracts, local operational activity, and public communication. Withholding Tax in Ukraine: New Standards and Court Practice Cross-border payments of passive income (dividends, interest, royalties) to non-residents are often made with the expectation of applying reduced withholding tax (WHT) rates under Double Tax Treaties. However, Ukrainian tax authorities have recently taken a more restrictive and sophisticated approach to such transactions. The main tool for challenging treaty benefits is a strict interpretation of “beneficial ownership”. Even if the recipient company formally meets treaty requirements (e.g., provides a certificate of tax residence), the tax authority may: Deny the reduced WHT rate, Claim that the company is not the actual beneficiary, Treat the payment as subject to the full 15% repatriation tax. This scrutiny is especially common in multi-tiered corporate structures, where: The income recipient has no operational substance, The entity is merely a conduit or intermediary. In a landmark ruling of April 17, 2025 (Case No. 160/18691/23), the Supreme Court upheld the tax authority’s refusal to apply the reduced treaty rate. The court ruled that: The non-resident failed to prove its beneficial ownership status, Formal documents were not sufficient – the court examined the actual corporate and financial relationships behind the structure. This decision has set a new judicial standard in treaty benefit disputes and significantly raised the bar for compliance. How to Challenge Tax Notices in Ukraine: Key Steps and Strategic Insights Most tax audits in Ukraine end with tax notices imposing additional charges and penalties. However, in our experience at Ilyashev & Partners, a significant portion of such notices can be successfully challenged – either cancelled or reduced – if the taxpayer is well-prepared. Two Ways to Appeal Tax Notices Administrative Appeal (before the State Tax Service) This step is optional but often strategic. It allows companies to: Understand the legal position of the tax authority; Delay the enforcement of the charges; Build stronger arguments for a future court case. Deadline: Must be submitted within 10 working days from receipt of the tax notice. If not filed in time, the tax liability becomes agreed upon, and the company is considered to have tax debt. Judicial Appeal If the administrative appeal is unsuccessful (or skipped), the company may file a claim with: District administrative court → Administrative Court of Appeal → Supreme Court (Cassation instance). Deadline: 30 days after the decision on the administrative appeal, or 6 months from the date of the tax notice (if the administrative route was skipped). Burden of Proof and Strategy Although the formal burden of proof lies with the tax authority, in practice, the taxpayer must prove: The reality of transactions, The validity of expenses, The existence of proper documentation, The economic substance of the operations, The grounds for applying reduced WHT rates under international tax treaties. A successful defense starts before the notice is issued – during the audit or even earlier. It involves: Strategic legal positioning, Comprehensive documentation, Skilled procedural support in court. Case Snapshot Ilyashev & Partners Law Firm successfully represented a Ukrainian hotel chain in a legal dispute with the State Tax Service of Ukraine and secured the cancellation of tax assessment notices. As part of its operations, the hotel chain holds wholesale and retail licenses for the sale of alcoholic beverages, stored in retail outlets and registered storage facilities. Among the charges brought against the hotel chain were storage in areas not intended for alcoholic beverages, production without a license, false reporting of their sale and purchase volumes, and storing without excise tax stamps. Ilyashev & Partners’ team collected evidence that the tax assessment notices were unlawful, the tax inspection results were biased, and were based solely on the assumptions made by the tax authority representatives. The appellate court agreed with the decision of the first-instance court and sided with the Ilyashev & Partners’ client. Trends in Tax Litigation and Judicial Focus in Ukraine Recent case experience of Ilyashev & Partners demonstrates a clear shift in Ukraine’s tax policy towards a risk-based approach. Tax authorities increasingly concentrate resources on cases with high fiscal impact, including: Structures involving non-resident entities, Transactional chains with potential signs of fictitiousness, High-volume import/export operations, Intra-group service arrangements. Stronger Arguments and Analytical Tools Tax audits and subsequent litigation have become more sophisticated and evidence-based. Authorities are applying analytical methods more systematically — especially in areas such as transfer pricing and tax risk profiling. We observe growing emphasis on the economic substance of transactions and the genuine business purpose behind corporate structures or individual deals. Formal compliance is no longer sufficient without demonstrating a logical and commercially driven rationale. International Standards Guiding Local Practice Although Ukraine is not an OECD member and has only partially implemented BEPS recommendations, both the State Tax Service and Ukrainian courts increasingly refer to OECD and BEPS guidelines in tax disputes. These standards now inform judicial reasoning, particularly in cross-border and intra-group cases. Implications for Cross-Border Businesses Given this evolving environment, companies must: Reassess tax structuring strategies, Strengthen documentary evidence supporting each transaction, Involve experienced legal and tax advisors from the earliest stages of planning. This is especially important for non-standard contracts, intercompany transactions, or cross-border deals that may attract regulatory scrutiny. Practical Tax Recommendations for Multinational Businesses Operating in Ukraine Drawing on the experience of Ilyashev & Partners and current practices of the Ukrainian tax authorities, we advise cross-border businesses to follow these key principles to minimize tax risks and avoid disputes: Assess Your Business Partners and Operational Structure Conduct thorough due diligence on your counterparties and supply chains. This helps detect vulnerabilities such as: Suspicious or unverified suppliers; Non-transparent transactions; Lack of economic substance or questionable business models. Identifying these risks early helps prevent tax reclassifications and accusations of fictitious operations. Use Transparent and Coherent Contractual Terms Ensure that contracts are clearly drafted and consistent with the actual business operations. Logical and well-structured agreements reduce the risk of misinterpretation during tax audits. Prepare Transfer Pricing Documentation in Advance Even without a formal request, companies should prepare transfer pricing documentation to justify their intra-group transactions. This documentation is not only legally required, but also serves as a powerful defense during audits. Having it ready enables rapid and confident responses to tax authorities. Monitor PE and Beneficial Ownership Risk Regularly assess the risk of being classified as a permanent establishment (PE) or beneficial owner in Ukraine. This is critical for groups that: Operate through local agents or teams, Engage in frequent transactions with Ukrainian counterparties, Use holding or intermediary entities. Identifying potential PE or BO risks early helps avoid unexpected tax liabilities. Proactive Compliance: A Strategic Priority The Ukrainian tax authorities increasingly focus on economic substance and genuine business purpose behind transactions. Multinational groups must be prepared for deep-dive audits and formal inquiries. To protect operations and ensure readiness: Conduct regular internal tax risk assessments, Review and update key contracts, Engage local legal counsel as soon as any tax inquiry arises. A proactive, consistent, and well-documented approach is the most effective way to safeguard your business in Ukraine’s evolving tax landscape. Ilyashev & Partners is one of the most experienced law firms in Ukraine in tax litigation, international tax structuring, and dispute resolution. Our team regularly advises multinational companies and financial institutions on complex tax audits, administrative and judicial appeals, and cross-border compliance strategies. To learn more, please visit the Ilyashev & Partners Law Firm website or contact Ivan Maryniuk directly.  

Ivan Maryniuk, Head of Tax Law Practice at Ilyashev & Partners Law Firm In the context of war and the influx of international aid, tax and regulatory compliance has become a critically important element for the successful implementation of humanitarian and development projects in Ukraine. It is not only a legal requirement but also a key tool for ensuring transparency, accountability, and the efficient use of funds. Tax and regulatory legislation is evolving dynamically in response to the challenges faced by the state and its citizens during armed aggression. Rules for applying tax benefits and exemptions for the supply/import of humanitarian and infrastructure-critical goods often change, as do registration procedures and financial monitoring rules. Control over the targeted use of assistance within humanitarian projects has been strengthened. Under such conditions, the role of a local legal advisor becomes strategic. They assist donors and implementers not only in complying with the law but also in planning operations to avoid delays, minimize tax liabilities, and ensure the uninterrupted delivery of aid. This enables projects to achieve their humanitarian goals faster, more safely, and with maximum impact. Tax Challenges for International Organizations VAT Exemption under ITA Projects International Technical Assistance (ITA) is one of the main tools for mobilizing resources to support and rebuild Ukraine. For donors and implementers, it offers the possibility to operate under tax benefits, directly impacting the scale of project implementation. Under Ukrainian tax law and international treaties, the supply/import of goods and services within ITA projects is exempt from VAT and customs duties. This special tax regime may be used by international organizations and donor institutions financing registered ITA projects, by implementers working under such projects and using goods and services exclusively for their implementation, and by suppliers of goods and services if their products are supplied directly for the needs of the project and financed from ITA funds. A key prerequisite for exercising the right to tax benefits is proper registration of the project with the Secretariat of the Cabinet of Ministers of Ukraine (CMU Secretariat) and the inclusion of project details in the ITA Projects (Programs) Register. All transactions must be supported by the project’s registration card and relevant agreements clearly specifying the source of funding and the intended use of expenditures. Even minor formal inaccuracies in documentation can result in denial of benefits or additional tax assessments. For example, the absence or delay in obtaining the registration card automatically leads to the loss of VAT exemption, while incorrect or incomplete information in contracts and reporting documents may cause customs or tax authorities to treat the supply as a standard commercial transaction. Losing the right to tax benefits means not only additional expenses for the project budget but also possible reductions in aid volumes or delivery delays. Other Tax Benefits In addition to ITA-related exemptions, Ukrainian legislation provides for several tax reliefs and special regimes for organizations implementing humanitarian and charitable initiatives. Charitable and humanitarian organizations recognized as humanitarian aid recipients may import equipment, vehicles, construction materials, medical equipment, and other goods without paying import duty and VAT. As a general rule, for this to apply: The shipment must be officially recognized as humanitarian aid under the Law of Ukraine “On Humanitarian Aid.” The list of goods and their intended use must match the declared purpose and the decision of the competent authority. Customs clearance must be carried out with a customs broker, with the mandatory indication of the decision number recognizing the cargo as humanitarian aid. During martial law, the Cabinet of Ministers of Ukraine has introduced a simplified, declarative procedure for recognizing aid as humanitarian. When working with local charitable and non-profit organizations and providing them with targeted funding, donations, or grants for charitable and humanitarian purposes, such assistance is exempt from corporate income tax if these organizations are listed in the Register of Non-Profit Institutions and Organizations and comply with non-profit requirements. These requirements include: using funds exclusively for statutory purposes, having all expenses documented, and avoiding transactions that qualify as profit distribution among founders or related parties. Failure to meet these requirements can result in the loss of non-profit status and taxation of the received funds. The most common mistakes in humanitarian and charitable operations include non-compliance with the rules for targeted use of funds and errors in primary and reporting documents. Regulatory Support and Public Law. Registration of ITA Projects The registration process for ITA projects can be divided into the following stages: Preparatory Stage – At this stage, an agreement (memorandum, technical specification, activity plan, etc.) is signed to confirm the agreed objectives, tasks, and activities between the donor and the recipient (beneficiary), as well as a contract between the donor and the implementer for project execution (the main document during implementation). The donor and implementer agree on the procurement plan for goods and services funded by ITA, as well as designate subcontractors/suppliers. The implementer and the ITA recipient prepare an application for state registration of the ITA project and attach documents supporting the information provided. The beneficiary (a public authority or other state body) prepares a letter expressing support and interest in the project’s results and granting consent to carry out the activities specified in the contract between the donor and the implementer. All documents submitted to the CMU Secretariat must be in Ukrainian, with copies duly certified. In its practice, Ilyashev & Partners Law Firm applies a comprehensive approach, acting as a coordinator among all ITA project participants (donor, implementer, beneficiary, and recipient) during registration, ensuring that the necessary document package is prepared and the process accelerated. Approval Stage – This involves reviewing documents for compliance with legislation and Ukraine’s strategic priorities, verifying alignment with state and sectoral programs, and preparing the project’s registration card. The CMU Secretariat reviews the documents and issues a decision within 10 working days. Registration Stage – If the documents meet all requirements, the project is officially registered, confirmed by the project’s registration card, and entered into the ITA Projects Register. The procurement plan is a key document in the registration process for applying tax and customs benefits. Changes to the list or value of goods and services after registration may require re-approval or amendments. Discrepancies between the procurement plan and project documentation can cause customs delays. Proper registration that accounts for all logistical and financial plans ensures not only preferential treatment but also uninterrupted project implementation. Contracts and Commercial Law In international humanitarian and development projects, contracts with contractors are not only tools for regulating mutual obligations but also essential elements of tax security. The clarity with which tax provisions and applicable law are set out in the contract directly affects project stability. To avoid unforeseen tax charges and penalties, contracts should expressly state: The source of funding for the work or services (e.g., ITA funds or a humanitarian program). The tax status of the transaction with reference to the Tax Code or international agreements. The allocation of tax obligations between the parties (who is responsible for withholding and paying taxes, especially when dealing with non-residents). Such provisions reduce the risk of shifting the tax burden from the contractor to the project and help preserve the budget. Resolving Tax and Customs Disputes Even with careful planning and proper documentation, humanitarian and development projects may face tax and customs disputes. Causes include differing interpretations of the law, legislative changes, or formal errors in documents. Typical disputes involve denial of tax benefits or additional VAT assessments. Tax or customs authorities may refuse exemptions, citing missing documents, non-compliance of goods with the declared purpose, or re-characterizing transactions as ineligible for benefits. Disputes also arise over customs classification, customs value, country of origin, or whether cargo qualifies as humanitarian aid. Such disputes may be resolved through: Administrative procedures – preliminary consultations, filing objections to inspection reports, appealing decisions to higher authorities of the State Tax Service or State Customs Service of Ukraine. Judicial remedies – court proceedings to protect rights and benefits. Strategies for International Donors and Contractors in Ukraine International humanitarian and development projects in Ukraine require not only funding and organization but also professional management of tax and regulatory risks. Observing several key principles at the planning stage significantly increases the chances of successful, uninterrupted implementation. Preliminary Tax Due Diligence – Before launch, conduct a comprehensive risk assessment: verify the applicability of benefits to specific transactions, align customs procedures with a broker, and identify potential “bottlenecks” in logistics and contracts. Engagement of Local Advisors at the Planning Stage – One of the most common mistakes is seeking legal assistance only after problems arise. Local experts engaged early can help adapt procurement and logistics plans to Ukrainian requirements, minimize risks of benefit denial or customs delays. Proper Documentation – A complete and properly executed set of documents is key to applying tax benefits. All agreements should clearly reference funding sources and legal grounds for exemptions, and any changes to project documentation should be promptly registered. Maximizing Impact Through Legal Expertise in Tax and Regulatory Matters A systematic approach to compliance in humanitarian and development projects enables donors and other participants to avoid unnecessary time and cost losses, maintain a reputation as a reliable partner, and focus on the core goal – achieving humanitarian and development objectives. Engaging experienced local advisors at the planning stage allows optimal use of tax and customs benefits, building a contract and documentation framework that meets legal requirements and donor conditions, and ensuring quick, effective responses to any disputes with tax or customs authorities. Ilyashev & Partners Law Firm is open to cooperation with international organizations and donors implementing or planning humanitarian and other development programs in Ukraine. The firm’s expertise in supporting humanitarian and charitable projects, as well as institutions and organizations, across tax, corporate, labor, and regulatory law ensures transparency, legality, and maximum efficiency in the use of resources to support Ukraine. Ilyashev & Partners Law Firm provides full legal support for international technical assistance (ITA) projects, humanitarian aid operations, and development programs in Ukraine. Our expertise includes securing VAT and customs duty exemptions, project registration, contract structuring, and tax dispute resolution. We help donors, implementing partners, and NGOs achieve full compliance with Ukrainian tax and regulatory requirements, ensuring smooth logistics, legal certainty, and efficient use of resources. With a proven track record in tax law, public law, and customs compliance, we are your trusted legal partner for impactful projects in Ukraine. To learn more, please visit the Ilyashev & Partners Law Firm website or contact Ivan Maryniuk directly.

Kostiantyn Kryvenko, Counsel, Head of Criminal Law Practice at Ilyashev & Partners Law Firm As Ukraine intensifies its anti-corruption efforts and strengthens the rule of law in the context of EU accession and post-war recovery, legal mechanisms for asset tracing, recovery, and corporate investigations are becoming increasingly sophisticated and effective. International companies, creditors, investors and compliance professionals involved in Ukraine-related disputes or enforcement actions must understand the multifaceted tools available for protecting their interests. These include civil litigation, criminal proceedings, interim measures, cross-border cooperation, and forensic investigations. This guide outlines core strategies and instruments available to pursue asset recovery and conduct corporate investigations in Ukraine, highlighting practical issues, procedural mechanisms, and emerging risks. Challenges Faced by International Businesses in Ukraine Foreign companies operating in Ukraine or participating in local tenders may encounter a range of legal and operational risks – especially when it comes to asset recovery, fraud detection, or internal investigations. Key challenges include: Concealed asset withdrawal: Sophisticated schemes involving offshore jurisdictions, shell entities, and fictitious transactions can obscure the trail of misappropriated assets, making detection and recovery difficult. Internal fraud and embezzlement: Dishonest employees or executives may exploit weak internal controls, causing significant losses that remain undiscovered for extended periods. Corruption risks: Although Ukraine has advanced its anti-corruption reforms, risks of bribery or undue influence persist. Investigations must therefore be discreet, well-documented, and legally sound. Complex legal environment: Navigating Ukrainian law enforcement, asset recovery, and evidentiary procedures often requires expert local counsel with knowledge of judicial and regulatory nuances. Cross-border asset tracing: Many schemes involve international components, requiring coordination with foreign authorities, compliance with mutual legal assistance treaties, and recognition of judgments across jurisdictions. Reputational exposure: Investigations involving allegations of fraud or corruption carry reputational risks that must be managed carefully, especially for listed or regulated companies. Legal Mechanisms for Asset Recovery and Loss Prevention At Ilyashev & Partners, we have developed a multifaceted approach that allows us to effectively protect the interests of our clients and achieve their goals. Strategic Corporate Investigations. We conduct confidential and in-depth internal investigations of any instances of misconduct, including: Forensic audit: detecting financial abuse, transaction analysis, tracing hidden cash flows. Fraud and embezzlement investigations: establishing facts, collecting evidence, and identifying responsible parties. Corruption and compliance investigations: detecting bribery, conflicts of interest, and other illegal actions. Electronic data analysis (e-discovery) and cyber investigations: recovering and analyzing digital evidence. Asset tracing & freezing. International asset tracing. Use of a wide network of contacts and international mechanisms to trace assets transferred abroad. Use of national interim measures. Initiation of litigation to seize assets (property, corporate rights, funds) in Ukraine and abroad to prevent their further withdrawal. Effective ligation and legal representation: Representation of the client’s interests in courts of all instances to recover illegally withdrawn assets or seek to compensate for losses. Strategic cooperation with Ukrainian law enforcement agencies in criminal proceedings related to the loss of assets to secure seizure and confiscation of criminal proceeds. Representing clients in international arbitrations and foreign courts in asset recovery cases, as well as ensuring the enforcement of foreign judgments in Ukraine. Preventive measures and risk management: Development of internal policies. Creation and implementation of reliable corporate governance systems, anti-corruption, and anti-fraud policies. Due diligence. An in-depth examination of potential partners, investment objects, and transactions to identify hidden risks. Staff training. Training employees to identify and report suspicious activities. Cooperation with international partners. We act as a trusted partner for foreign law firms and consultants needing detailed expertise in Ukrainian law and enforcement for cross-border investigations and asset recovery projects. Information Sources and Mechanisms for Effective Investigations The success of asset recovery and corporate investigations largely depends on the ability of lawyers to systematically collect, analyze, and use relevant information. Despite certain challenges, Ukraine offers a broad array of information tools and sources for building a convincing evidence base. The approach of Ilyashev & Partners’ team is based on a combination of open sources, specialized databases, and classical methods of evidence collection. Open state registers and databases. Ukraine has made major strides towards transparency by opening access to key registers. This provides invaluable opportunities for the initial stage of investigations: The Unified State Register of Legal Entities, Private Entrepreneurs, and Public Organizations (USR). It allows the identification of the ultimate beneficial owners (UBOs), the ownership structure of companies, their directors, and the history of registration changes. State Register of Real Property Rights. Provides information on real estate ownership, encumbrances, and arrests. State Registerof Movable Property Encumbrance. Allows you to check for pledges and other encumbrances on vehicles, equipment, etc. Unified State Register of Court Decisions. Contains millions of court decisions from all instances, allowing you to study precedents, see the history of litigation of companies or individuals, analyze their relationships, and identify potential risks. The Unified State Register of Persons Who Have Committed Corruption or Corruption-Related Offenses (the Register of Offenders). State Register of Sanctions. Specialized and commercial databases. Beyond government registers, we utilize specialized commercial databases and analytical platforms. They often aggregate information from various sources, analyze it, and provide intelligence on financial ties, political influence (PEP), sanctions lists, news mentions, and other critical information that may not be available through state registers alone. Classical methods of evidence collection. Despite digitalization, traditional methods remain the foundation of any investigation: Obtaining witness statements. Conducting interviews with persons who may have relevant information, documenting their testimony. Working with documents. Systematization and analysis of financial documents, contracts, internal correspondence, bank statements, and other material evidence. Obtaining information at the lawyer’s request. Ukrainian legislation gives lawyers the right to receive information from government agencies, enterprises, institutions, and organizations, which is a powerful tool for collecting the necessary data. Conducting expert research. Involvement of forensic experts (economic, handwriting, technical) to analyze documents, data, and other materials. Interaction with law enforcement agencies. In cases where signs of a criminal offense are detected, we initiate the relevant criminal proceedings, within which we file a request for the necessary procedural actions to collect and record evidence (searches, seizures, interrogations). It is important to note that evidence collected in Ukraine can play a decisive role in winning a case in another jurisdiction, provided that it is properly documented and legalized. Ukraine is a party to several international conventions governing legal assistance and the recognition of documents. Our lawyers are experienced in handling international requests for legal assistance, drafting documents for use abroad, and coordinating evidence collection processes with foreign partners. This ensures that all the information collected is not only relevant and convincing but also legally valid and admissible in international litigation and arbitration proceedings, as well as in international investigations. Thus, a well-collected evidence base in Ukraine becomes a solid foundation for protecting the client’s interests in any global jurisdiction. Criminal Instruments in Corporate Disputes Criminal proceedings in Ukraine often serve as a key instrument for protecting the rights and interests of businesses in complex corporate disputes. In cases where there are signs of misconduct – from falsification of documents and abuse of power to corporate raids, asset fraud, or misappropriation of corporate rights the use of criminal proceedings can be crucial. Initiation and support of criminal proceedings. We thoroughly analyze the situation and, if there are legal grounds, draft substantiated statements of crime based on facts that have signs of criminal offenses (for example, under Article 190 “Fraud”, Article 191 “Misappropriation, embezzlement or seizure of property through abuse of office”, Article 205-1 “Forgery of documents submitted for state registration of a legal entity and individual entrepreneur”, Article 206 “Counteraction to legitimate economic activity”, Article 364-1 “Abuse of authority by an official of a legal entity of private law regardless of organizational and legal form”, Article 366 “Official forgery” of the Criminal Code of Ukraine), describing the proper qualification of actions and effective procedural support at all stages of investigation and trial. Application of interim measures. One of the main advantages of criminal proceedings is the ability to promptly apply interim measures, including the arrest of property, corporate rights, shares, or other assets involved in a corporate dispute or used in a criminal scheme. This allows us to effectively block the further alienation or concealment of disputed assets by order of an investigating judge or court, creating a powerful lever to protect the client’s interests. Use of investigative tools to collect evidence. In criminal proceedings, law enforcement agencies have broader powers to collect information that may not be available in civil or commercial cases. This includes interrogations of interested parties, operational arrests of documents, and temporary access to bank transactions, constituent documents of companies, registry data, as well as forensic economic, accounting, computer, and other examinations to identify facts of abuse and confirm criminal conduct. Creating legal pressure and strategic leverage. The existence of criminal proceedings against opponents in a corporate dispute creates significant legal pressure, prompting them to negotiate and find compromise solutions. It can also become a powerful lever for strengthening the client’s position in parallel civil or commercial proceedings. Protection against unlawful criminal pressure. We also defend our clients in cases where criminal proceedings are unlawfully initiated against them or their officials to exert pressure in a corporate conflict. Our strategy includes actively challenging illegal actions of law enforcement agencies and fully protecting the client’s rights. It is important to emphasize that all our interactions with law enforcement are conducted exclusively within the bounds of the law. When signs of a criminal offense are identified, we initiate appropriate procedural actions and effectively interact with law enforcement agencies, ensuring that they use their legal tools to collect and record evidence. This comprehensive approach demands deep knowledge of the Criminal Procedure Code of Ukraine, experience in interacting with law enforcement agencies, and the ability to effectively coordinate actions at all stages, which is one of our key strengths. Civil Asset Tracing and Freezing Orders In addition to criminal law tools, effective “asset recovery” of assets lost as a result of misconduct or contractual breaches relies heavily on civil and commercial litigation tools. Our firm actively uses these mechanisms to trace, protect, and recover assets that have been illegally diverted or concealed, acting both in Ukraine and coordinating actions internationally. The civil asset tracing process begins with an in-depth analysis of financial flows, property registers, and corporate structures. We use all available legitimate sources of information, including public registers (as discussed earlier), specialized analytical databases, and data obtained in the course of our investigation. The purpose of this stage is not only to identify the current location of the assets, but also to disclose the schemes for their withdrawal and identify the persons involved in their concealment. Following successful tracing, a critical step is to immediately ensure the safety of the identified assets. This is where interim measures (similar to freezing orders) imposed by a court in a civil or commercial proceeding come in handy. These measures may include: Seizure of funds in bank accounts; Seizure of property (land plots, buildings, vehicles, equipment) Prohibition on alienation of corporate rights (shares in the authorized capital, shares); Prohibition of certain actions that may lead to further withdrawal of assets or change of their legal status. An important advantage of civil interim measures is their speed and the possibility of applying them at the stage when the main court proceedings have not yet begun or are ongoing. This helps to prevent further withdrawal of assets and ensure the actual enforcement of a future court decision on their return to the rightful owner. Our lawyers have extensive experience in preparing and successfully supporting motions for interim relief, justifying the need for immediate action to protect the client's interests. Further recovery of assets is carried out through filing and supporting claims for damages, invalidation of transactions, reclamation of property from someone else’s illegal possession, or other relevant civil claims. In case of a positive court decision, we provide full support in the process of its enforcement. On the international level, we work closely with a network of trusted partners to trace assets located outside Ukraine and initiate appropriate interim measures in foreign jurisdictions. Our firm’s expertise in understanding Ukrainian law and international norms makes us a reliable partner in complex cross-border asset recovery cases. Case Snapshot Ilyashev & Partners’ team has successfully implemented a project on the arrest of twelve An-124-100 Ruslan transport aircraft of the Russian airline Volga-Dnepr in several jurisdictions, including Germany and Canada, within the framework of criminal proceedings initiated at the request of the State Enterprise Antonov. The seizure was imposed to ensure the preservation of material evidence and further compensation for damage. The total value of the aircraft is over UAH 24 billion. Investigating Corporate Ownership and Shell Structure Effective identification of actual owners and controllers of companies is a cornerstone of any investigation, especially in the context of asset recovery or corporate dispute resolution. In Ukraine, this process relies on a combination of legal tools and in-depth analysis. Key sources and methods include: The Unified State Register of Legal Entities, Private Entrepreneurs, and Public Organizations (USR). This is the primary public source of information on the ultimate beneficial owners (UBOs) of Ukrainian companies, which is the starting point for assessing the transparency of the ownership structure. Tax information. Available through legal requests or court/criminal proceedings, revealing indirect control or financial ties. Out-of-court investigations (Forensic, Whistleblower Data). In-depth out-of-court investigations, including forensic audits, play a key role. This is a detailed analysis of financial transactions, documentation, and email correspondence to identify hidden schemes. Whistleblower data can also provide valuable insights. International legal assistance. In cases where the beneficiaries or their assets are hidden outside Ukraine, we actively use international legal assistance mechanisms, cooperating with foreign jurisdictions through official requests for information. In Ukrainian court practice, the technique of "piercing the corporate veil" is increasingly used, which allows courts to ignore the formal independence of a company and hold its actual controllers liable for the company's obligations. This is possible when a company is used for fraud, abuse of law, or concealment of beneficiaries. Although there is no direct legal provision, courts are guided by the principles of good faith and fairness. The key in these proceedings is the definition of “control” without formal ownership of shares in the authorized capital. The courts may recognize a person as exercising actual control based on a combination of evidence that demonstrates the influence on key decisions of the company. Such evidence includes family ties, regular participation in management decisions without an official position, financing of activities, third-party evidence of actual influence, and the identification of hidden schemes. Thus, in complex corporate disputes and asset recovery efforts, our strategy is not only to identify the formal owners but also to identify the persons who exercise real influence and control, to bring them to justice. Cross-Border Recovery and Recognition Issues In today’s world, where assets can be quickly moved across national borders, effective recovery of lost funds and property often requires going beyond the borders of one jurisdiction. Ilyashev & Partners Law Firm has extensive experience developing and implementing cross-border asset recovery strategies, understanding the complexity of interaction between different legal systems. The key tool in such cases is the recognition and enforcement of foreign judgments and arbitral awards in Ukraine. Ukraine is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and has a number of bilateral international treaties on legal assistance, which greatly simplify this process. Once recognized, a foreign judgment acquires the status of a Ukrainian judgment and can be enforced in Ukraine, which is a powerful additional tool for recovering assets located here. Equally important in cross-border investigations is coordination with foreign investigative authorities to freeze assets abroad. In cases involving white-collar crime, fraud, or money laundering, where assets have been transferred abroad, we actively use international legal assistance tools in criminal matters. This allows us to initiate official enquiries to foreign law enforcement agencies to conduct investigative actions, obtain information about accounts and property, and most importantly, to seize assets in the relevant jurisdiction. Such parallel work, covering several countries at the same time, is extremely effective in preventing further movement or alienation of illegally obtained property. Success in the most complex asset recovery cases often depends on the application of multimodal strategies that combine different legal instruments. A civil case, criminal proceeding, or administrative mechanism alone can rarely lead to full restitution. An effective strategy involves the synchronized use of several components, including civil, criminal, and administrative legal mechanisms. Our experts can not only apply these tools separately but also skillfully integrate them into a single, powerful strategy. This allows us to create synergies, where information obtained in one type of proceeding strengthens positions in another, maximizing the chances of successful asset recovery and protecting the client’s interests. Red Flags and Common Obstacles Even the most thorough investigations and asset recovery strategies in Ukraine can encounter significant challenges and obstacles. Understanding these “red flags” and common barriers is critical for foreign investors and businesses, as it enables them to proactively develop effective legal defenses in advance. Criminals often use shell companies (“fronts”) and loan agreements to conceal the true owners of assets or to illegally withdraw them. Suspiciously complex corporate structures with numerous intermediate links, the use of offshore jurisdictions, and atypical loan agreements (e.g., with unreasonably high interest rates, between related parties without an economic purpose) may indicate an attempt to create the illusion of legitimate transactions. Our countermeasures include in-depth due diligence, invalidation of such agreements in court, and initiation of criminal proceedings, which allows us to “pierce the corporate veil” and identify the real beneficiaries. Another common obstacle is fictitious bankruptcies or liquidations of companies. A sudden declaration of insolvency, hasty withdrawal of assets before bankruptcy proceedings, or initiation of bankruptcy by “friendly” creditors are all warning signs. The purpose of such actions is to avoid liability, write off debts, and transfer assets to new, controlled entities. To protect the interests of our clients, we ensure active participation in bankruptcy proceedings, challenge questionable transactions, and, if signs of a crime are detected, initiate criminal investigations into fraudulent bankruptcy. Despite the progress in reforms, bureaucracy in state registries and delays in case processing remain real challenges. Unreasonable delays in making changes to the registers, lengthy court proceedings, or delays in issuing documents may allow unscrupulous parties to hide assets or change their legal status. Our response is to continuously monitor, use all procedural opportunities to expedite the proceedings, file formal complaints against the inaction of officials, and, if necessary, initiate legal actions to challenge such delays or inaction. A particularly acute problem may be potential corruption in the executive service, which may impede the enforcement of court decisions. Unjustified delays, selective enforcement, pressure on state enforcement officers, or questionable valuation of seized property are red flags. To protect our clients from such actions, we use a multi-level approach: thorough legal control over the bailiff’s actions; filing formal complaints with the senior management of the Enforcement Service and the Ministry of Justice; challenging unlawful actions or inaction of bailiffs in court; and, if there are sufficient grounds, applying to anti-corruption authorities such as the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAP). This comprehensive approach, based exclusively on legal mechanisms, allows us to counteract attempts to sabotage the asset recovery process and ensure that the client’s rights are restored. Recommendations for International Firms and Investors Effective protection of interests and successful asset recovery in Ukraine requires not only a deep understanding of the local legal landscape but also the development of proactive and multi-vector strategies. Based on our experience, we offer the following key recommendations for international firms and investors operating or planning to operate in Ukraine. Work with local lawyers at the Pre-Litigation Asset Mapping stage. Don’t wait until a dispute arises or assets are lost. Engaging experienced Ukrainian legal advisors to conduct pre-litigation asset mapping is a critical preventive measure. It allows identifying potential assets, their owners, possible risks of withdrawal or encumbrance, and developing a rapid response strategy even before possible litigation. Understanding the ownership structure, affiliates, and potential weaknesses of your opponents before the conflict begins is a significant advantage and increases the chances of successful asset recovery. Do not rely solely on civil proceedings – use multi-channel approaches. Although civil and commercial proceedings are the basis for resolving many disputes, they are often insufficient in complex asset recovery cases or corporate conflicts. As we have already mentioned, an effective strategy requires a multi-channel (multi-modal) approach that combines different legal instruments. Negotiate jurisdictional and arbitration clauses in contracts indicating the application of Ukrainian law to assets. It is crucial to clearly define dispute resolution mechanisms at the stage of concluding contracts and structuring investments. The inclusion of arbitration clauses (e.g., applying the rules of reputable international arbitration institutions) can provide a more neutral and efficient environment for dispute resolution. However, it is equally important to specify the application of Ukrainian substantive law to assets located in Ukraine. This will help to avoid difficulties with conflicts of law and ensure that Ukrainian courts and law enforcement agencies apply the rules they are familiar with when dealing with issues directly related to the assets. In addition, the correct formulation of jurisdictional provisions can greatly simplify the subsequent enforcement of foreign judgments in Ukraine. Adherence to these recommendations and working closely with experienced local counsel significantly increases the chances of successful asset recovery and minimizes the risks for international businesses in the Ukrainian legal environment. Our team’s experience shows that even in a difficult environment, Ukraine has an effective system for recovering assets lost as a result of misconduct. However, its successful use requires not only legal literacy but also exceptionally correct and qualified legal support. This system, although multifaceted and sometimes bureaucratized, still provides powerful tools to protect the interests of international business. The key to success lies in a systematic and integrated approach based on deep local expertise and a strategic combination of different tools. This includes not only careful asset tracing and the use of both commercial and criminal proceedings, but also an understanding of the actual practices of applying the law. A reliable partner in Ukraine that is able to navigate all the nuances of the legal field and effectively interact with all parties involved – from state registries to law enforcement agencies – is not just desirable, but essential for the successful restoration of violated rights and protection of investments. Ilyashev & Partners is one of the most reputable and experienced law firms in Ukraine, with recognized expertise in complex litigation, white-collar crime, and international asset recovery. Our team advises international clients, corporations, financial institutions, and state bodies on high-profile investigations, fraud claims, cross-border enforcement, and crisis legal strategies. To learn more, please visit the Ilyashev & Partners Law Firm website or contact Kostiantyn Kryvenko directly.

Oleksandr Fefelov, Partner, Head of Antitrust and Competition Practice at Ilyashev & Partners Law Firm Alina Borovets, Attorney at Law at Ilyashev & Partners Law Firm As Ukraine rebuilds in the face of war and drives forward its EU accession agenda, public procurement stands at the intersection of transparency, accountability, and opportunity. With billions of euros in reconstruction funding at stake, Ukraine’s open and digitalized procurement system is designed to ensure competitive access for international suppliers – while demanding strict adherence to local rules and wartime adaptations. The combination of the Prozorro system, IFI-backed procedures, and evolving legal reforms offers significant prospects for foreign companies seeking to do business with Ukrainian state and municipal buyers. At the same time, complex requirements, language barriers, and risks of procedural misconduct require a strategic and legally informed approach. This guide provides international bidders with a clear roadmap for entering Ukraine’s public procurement market: from understanding key procedures and documentation rules to identifying red flags and mitigating legal exposure. Ukrainian Procurement System: Legal Framework and Wartime Adjustments Ukraine’s public procurement system is shaped by a dynamic legal framework that blends international standards with urgent wartime realities. For international suppliers, understanding this structure is essential to successfully navigating opportunities in one of Europe’s largest reconstruction efforts. The foundational act is the Law of Ukraine “On Public Procurement” (the “Law”), which governs the procurement of goods, works, and services financed by state and local budgets, as well as by public enterprises subject to procurement regulation. It ensures procurement is based on principles of fairness, competition, transparency, and efficiency – principles that remain central even under martial law. A turning point came in 2016, when Ukraine replaced outdated paper-based procedures with the Prozorro electronic system, marking the start of a fully digital and transparent procurement environment. Further improvements followed in 2020, when a new version of the Law introduced significant enhancements: the right to correct errors in bids within 24 hours, mechanisms to prevent dumping (e.g., abnormally low price rule), and more flexible procedures. These reforms reflected Ukraine’s commitment to EU-aligned, fair, and competitive procurement processes. However, following the full-scale Russian invasion in February 2022, the procurement system had to rapidly adapt to ensure uninterrupted support for defense and recovery efforts. On 12 October 2022, the Cabinet of Ministers adopted Resolution No. 1178, approving the Peculiarities of Public Procurement – a set of temporary rules designed for the duration of martial law and the 90 days following its termination. These Peculiarities empower contracting authorities – such as the Armed Forces of Ukraine, hospitals, municipalities, and critical infrastructure operators – to use expedited and flexible procedures, ensuring swift access to vital goods and services. In practice, this means reduced timelines, broader use of direct contracting or negotiated procedures, and streamlined documentation. Although these temporary rules ease bureaucratic burdens, they demand greater discipline, vigilance, and legal awareness from both buyers and suppliers. The risks of non-compliance or procedural flaws are real – especially under heightened public and regulatory scrutiny. Importantly, even under martial law, Ukraine maintains its commitment to transparency and accountability, supported by digital infrastructure and legal safeguards. The current system is a unique legal hybrid: combining core EU standards, the structural integrity of Prozorro, and flexible wartime rules. For foreign suppliers, this creates both opportunity and responsibility – access to billions in public spending, but also the need for careful legal and strategic planning. Key Takeaway: Ukraine’s procurement law continues to evolve. For international suppliers, success requires understanding how permanent legal norms interact with temporary wartime exceptions  – and using that knowledge to build compliant, competitive bids. The Prozorro System Explained At the heart of Ukraine’s public procurement framework lies Prozorro – an award-winning digital system built on the principles of transparency, accountability, and fairness. Its name, derived from the Ukrainian word for “transparent,” reflects its founding philosophy: “everyone sees everything.” For foreign suppliers, understanding Prozorro is essential for navigating the procurement process confidently and effectively. Prozorro ensures that all procurement-related information – announcements, submitted bids, decisions of procuring entities, concluded contracts, appeals, and clarifications – is available in the public domain. It minimizes corruption risks, ensures oversight by civil society, and provides a level playing field for both domestic and international bidders. Participation in Prozorro auctions is entirely online, conducted via authorized electronic platforms connected to the central Prozorro database. This system allows foreign companies to participate remotely without physical presence or local registration, removing one of the key barriers to entry into the Ukrainian market. Key Features of Prozorro: Full transparency and public access to all procurement data Equal access to tender documents and bid submission Online registration and auction participation from anywhere in the world Integration with the e-appeal system for complaints and monitoring Available Procurement Procedures: Ukraine’s procurement law provides for a range of procedures adapted to the contract value, market conditions, and complexity of the procurement. These include: Open bidding The most common procedure for procurements over UAH 200,000 (goods/services) or UAH 1,500,000 (works). Requires at least two valid bids and includes a bid submission period of at least 15 calendar days. Open bidding with English publication Applies where the expected value exceeds EUR 133,000 (goods/services) or EUR 5,150,000 (works). Tender documents and announcements are published in both Ukrainian and English. The submission period is at least 30 days. The key difference from standard open bidding: tender compliance is assessed before the electronic auction begins. Negotiation procedure Used only in exceptional cases listed in Article 40 of the Law. These include: Two failed open biddings Urgent/emergency needs (e.g., wartime, humanitarian aid) Procurement from a single supplier for technical or IP reasons Additional procurement from the original supplier (up to 50% of the initial contract value within three years) Procurement under debt restructuring or legal proceedings The procuring entity negotiates directly with one or more suppliers and signs a contract without an auction. Competitive dialogue / Restricted bidding Suitable for innovative or complex procurements where technical solutions cannot be clearly defined upfront. Conducted in two stages: pre-qualification and submission of proposals. Particularly useful for infrastructure, IT, or energy-related projects. Simplified procurement Intended for lower-value contracts (between UAH 50,000 and the thresholds for open bidding). Offers shorter timelines and a streamlined process. Temporarily suspended during martial law, except where authorized by specific regulations. Direct contracts with reporting For procurements under UAH 50,000, procuring entities can enter into direct contracts without competitive procedures, but must publish a report on the concluded contract in Prozorro. Wartime Adaptations: In response to the full-scale war, the Ukrainian Government adopted Resolution No. 1178, which temporarily modifies procurement procedures: Enables broader use of negotiation procedures Reduces documentation requirements Allows faster conclusion of contracts without compromising transparency These changes do not limit the participation of foreign companies—in fact, they often facilitate it. Language and Translation Requirements: All tender documents must be prepared in Ukrainian. Procuring entities may choose to provide translations, especially in high-value or IFI-funded tenders, but the Ukrainian version is legally binding. Bids may be submitted in another language only if permitted in the tender documentation. The law does not prescribe a specific form of translation authentication, but the procuring entity may require notarization, apostille, or other forms of validation. Foreign suppliers should check these requirements carefully in each case. Takeaway: Prozorro provides a robust, fully digital environment for conducting public procurement. Foreign suppliers benefit from transparency, remote access, and legal protections—provided they understand the specific procedures and adhere to the applicable formalities. Using Prozorro Market: Electronic Catalog Procurement In the context of martial law and the urgency of meeting public needs, Ukraine has significantly expanded the use of Prozorro Market – a centralized electronic catalog designed to simplify procurement for government institutions. For international suppliers, this system offers a fast-track entry point into Ukraine’s public procurement ecosystem, bypassing many bureaucratic complexities of traditional open bidding. Prozorro Market enables direct purchases from pre-qualified suppliers based on standardized product listings and specifications. Unlike open tenders, procurement through the e-catalog avoids a formal appeals stage, reducing risks of delays and enabling rapid delivery of goods — especially crucial in emergency or low-value procurement contexts. This mechanism is governed by the Law on Public Procurement and Resolution No. 822 of the Cabinet of Ministers of Ukraine (14 September 2020). While originally intended for low-value purchases (under UAH 200,000), martial law amendments allow unrestricted use of Prozorro Market, regardless of the contract value. Key features include: Pre-qualification of suppliers through designated centralized procurement organizations (CPOs) Category-based product listings structured under CPV codes (DK 021:2015) Standardized specifications and delivery terms Real-time pricing and availability updates from suppliers There are three procurement options depending on the value: Up to UAH 50,000 – direct purchase from catalog without prior request UAH 50,000 – 500,000 – request for quotations within a product category Above UAH 500,000 – full tender procedure or centralized procurement by a CPO To be listed, suppliers must undergo a qualification process administered by a designated CPO. Once approved, suppliers submit product information, technical specifications, pricing, and delivery terms. All entries are subject to moderation for compliance with Prozorro Market standards. Procuring entities must be registered in the Prozorro system, use qualified electronic signatures, and follow non-discrimination and equal treatment principles when selecting suppliers from the catalog. Centralized procurement organizations currently operating include: SI "Professional Procurement" – procurement for state institutions and enterprises; State Enterprise "Medical Procurement of Ukraine" – pharmaceuticals and medical equipment; State Enterprise "Ukrainian Special Systems" – specialized equipment and cybersecurity. Strategic Insight: For international suppliers seeking a low-barrier entry to the Ukrainian procurement market, Prozorro Market offers an excellent starting point. It avoids many procedural risks, does not require appeals navigation, and enables quick access to repeat contracts with state buyers. However, suppliers must ensure timely qualification through the relevant CPO and maintain accurate, up-to-date catalog entries. Foreign Supplier Participation: Key Considerations Ukraine’s public procurement system is open to foreign companies and provides legal guarantees of non-discriminatory treatment and equal access to tenders – with the exception of entities registered in the Russian Federation, Belarus, and Iran. This access is underpinned by principles enshrined in the Public Procurement Law: fair competition, efficiency, transparency, and impartiality in evaluating bids. International suppliers – regardless of their country of registration or ownership structure – are entitled to: participate in public tenders on equal terms with Ukrainian companies, receive full access to procurement documentation, submit bids electronically via the Prozorro system. Procuring entities are prohibited from imposing discriminatory conditions or restricting foreign participation without clear justification. International Treaties Take Priority The Law explicitly states that international treaties ratified by Ukraine prevail over national legislation if they establish different procurement procedures. This applies in particular to IFI-funded tenders (e.g., those financed by the World Bank, EBRD, EIB, IDA, etc.), which may be conducted in accordance with the rules of the funding institution. If such rules do not exist, Ukrainian law applies, subject to localization. Key Documentation Requirements for Non-Residents Foreign bidders must submit documentation in line with Ukrainian tender requirements, but with flexibility to accommodate legal systems outside Ukraine. In particular: Procuring entities may require apostilled or legalized documents, unless an applicable treaty provides otherwise. Documents prepared under foreign law are valid, provided they confirm compliance with the tender requirements. Rejecting a bid solely due to the format or origin of documents – if those documents prove compliance – is a violation of the non-discrimination principle. Examples of acceptable documentation for foreign bidders: Certificates of good standing, tax clearance, or no criminal record issued by authorities in the bidder’s home jurisdiction; Official letters confirming the absence of required documents under foreign law; International financial statements demonstrating solvency and capacity; Technical certificates or licenses issued in the country of registration. Qualification Criteria and Equal Recognition Under Article 16 of the Law, procuring entities may request proof of: relevant experience with similar contracts, technical capacity or material base, qualified personnel, financial soundness. Foreign bidders may demonstrate compliance using documents issued in their home jurisdiction, including audited financials and international certificates. Due to harmonization of accounting and reporting standards, these documents are generally accepted unless Ukrainian law specifically requires otherwise. Language and Format All documents must be uploaded via Prozorro, typically as scanned PDF files, and often accompanied by Ukrainian translations. For tenders above EUR 133,000 (goods/services) or EUR 5,150,000 (works), English-language publication is mandatory, further facilitating access for foreign bidders. Limitations on Exclusion Grounds Exclusion from procurement is allowed only under clearly defined grounds. Foreign suppliers must be treated equally – if a certain document (e.g., a certificate of no corruption offense) is not issued in the bidder’s country, an official explanation must be accepted. Strategic Recommendation While the Ukrainian procurement system offers broad access and legal protections, participation still requires meticulous preparation. Engagement with local legal and technical experts – from lawyers and compliance professionals to engineers and logisticians – can dramatically improve bid quality and alignment with legal norms. Focus on IFI-Funded Tenders As Ukraine accelerates its recovery and modernization, tenders financed by international financial institutions (IFIs) – such as the World Bank, the European Bank for Reconstruction and Development (EBRD), and the European Investment Bank (EIB) – have emerged as the gold standard for transparency and fair competition in public procurement. Participation in IFI-funded projects offers substantial advantages for international suppliers. These tenders operate under separate procurement frameworks established by the donor institutions themselves, which prioritize open access, equal treatment, and rigorous oversight. As a result, bidders benefit from predictable procedures, English-language documentation, and reduced risk of arbitrary disqualification. Key features of IFI tenders include: Use of international open bidding or competitive dialogue procedures. Transparent qualification criteria and scoring methodologies. Publication of tenders on IFI websites and global procurement platforms. Independent appeal mechanisms for dispute resolution. Application of donor rules with primacy over national legislation in case of conflict. The extensive funding provided by IFIs plays a critical role in rebuilding Ukraine’s infrastructure, housing, healthcare, transport, and energy sectors. Foreign suppliers that meet international compliance and technical standards can secure large-scale contracts in areas of strategic importance. However, participation in IFI-funded tenders also requires strict adherence to high operational standards, including: Financial transparency and anti-corruption compliance; Environmental and social safeguards; Technical and logistical capacity for implementation in complex environments; No history of sanctions, misconduct, or fraud. It is important to note that while IFI tenders are more accessible to foreign participants, they still require compliance with certain aspects of Ukrainian law, such as registration, taxation, and local certification (where applicable). As such, cooperation with experienced Ukrainian legal and technical advisors is recommended to bridge the gap between international frameworks and domestic procedures. For bona fide suppliers, IFI-funded procurement provides a level playing field, mitigates the risks of local favoritism or cartel conduct, and offers an effective channel for accessing high-value, development-driven projects in Ukraine. Requirements that Artificially Restrict Competition Despite the legal principles of fair competition and equal access, practice reveals widespread use of discriminatory tender requirements that restrict the pool of eligible participants. These conditions often serve to pre-select a winner – not based on merit, but on technicalities that only one or a few suppliers can satisfy. “Discriminatory conditions” typically involve unjustified restrictions that lack a clear link to the subject matter of procurement. Examples include: Requiring confirmation of prior contracts only in a specific geographic region; Demanding physical offices or branches in every oblast of Ukraine; Setting unusually narrow definitions of “similar contracts” that match only one bidder’s portfolio; Imposing technical standards that far exceed the project’s real needs without proper justification. Such conditions not only violate the principle of openness – they distort the entire purpose of public procurement. Instead of selecting the most competitive offer, procuring entities end up awarding contracts based on artificially constructed filters. This can lead to inflated pricing, subpar quality, and inefficient use of public funds. The underlying cause is often collusion between the procuring entity and a predetermined supplier, a hidden form of anticompetitive behavior known as shadow tendering. In such cases, the tender documentation is drafted to exclude all but the intended winner. These tactics are particularly dangerous in tenders involving strategic infrastructure, humanitarian supplies, or large-scale funding. Foreign suppliers should scrutinize tender terms for signs of bias and prepare to challenge them before the deadline for complaints. Under Ukrainian law, a participant may file an appeal with the Antimonopoly Committee of Ukraine (AMCU), which applies a presumption of illegality to any condition that cannot be objectively justified. If successful, the AMCU may order the procuring entity to amend or cancel the discriminatory requirement. Recent reforms have also empowered the AMCU, through court-authorized inspections under Law No. 3295-IX (2023), to seize documents, inspect premises, and access electronic records in cases of suspected collusion or abuse of discretion by procuring entities. Takeaway: If a tender condition seems unreasonably narrow, location-specific, or disproportionate – it likely is. Legal review and early objection are critical steps to prevent unfair exclusion and uphold competitive integrity. Collusion Between Bidders: How the AMCU Detects and Proves Violations Distortion of tender results through coordinated actions between participants is explicitly prohibited under Ukrainian competition law. The Antimonopoly Committee of Ukraine (AMCU) qualifies such collusion as anticompetitive concerted actions – a serious offense that may result in financial penalties and exclusion from future procurement. Uncovering these violations is complex. Most conspiracies are covert and lack direct evidence. Therefore, the AMCU applies a “mosaic” approach – building a case from a combination of indirect indicators, which together point to coordinated behavior. Common indicators of bidder collusion include: Shared founders, beneficiaries, or family/corporate ties between bidders Use of the same office space, equipment, or employees Submission of documents from the same IP address or device Identical formatting errors or templates in tender proposals Economic dependence of one bidder on another (e.g., subcontracting, shared funding) Lack of competition between these entities in other markets The AMCU also reviews broader patterns – such as repetitive joint participation without competitive behavior – and may rely on external evidence, including registry data, email metadata, and even corporate changes preceding a tender. Importantly, courts uphold that actual damage or harm does not need to be proven. It is sufficient to establish that bidders acted in a concerted manner and that such conduct could distort competition. Recent case law supports the AMCU’s methodology, confirming that a consistent set of indirect facts – such as shared infrastructure, overlapping personnel, or synchronized conduct – is enough to qualify behavior as unlawful collusion. In light of these risks, international suppliers must be cautious when working with local partners. Even unintentional links to questionable entities can lead to investigation and reputational harm. Legal vetting of potential consortium members or subcontractors is a necessary step before participation. Discriminatory Practices and Anticompetitive Collusion Procurement rules in Ukraine prohibit practices that limit competition or create artificial barriers to participation. However, some procuring entities may still introduce discriminatory conditions aimed at favoring a specific supplier. The Antimonopoly Committee of Ukraine (AMCU) evaluates such conditions using a presumption of illegality unless a legitimate need is proven. A typical example includes requiring bidders to maintain regional offices throughout Ukraine, which may be unjustified for service contracts where mobile teams or subcontractors could suffice. Similarly, demands for "similar agreements" with overly narrow parameters can effectively eliminate competition. These tactics may signal hidden collusion between the procuring entity and a preferred bidder. Unlike open cartel agreements, such collusion is covert and difficult to prove, involving informal arrangements, past affiliations, or selective enforcement of requirements. Indicators of collusion include: Excessively specific or irrelevant qualification criteria Personal or corporate ties between procuring entity staff and the bidder Participation by shell companies designed to simulate competition Patterns of repeated contract awards to the same supplier In cases involving public funds or strategically important goods and services, these practices can escalate into criminal liability. Violations may be prosecuted under Article 191 of the Criminal Code of Ukraine for embezzlement or abuse of office. The AMCU, empowered under Law No. 3295-IX (adopted on 9 August 2023), can now conduct in-depth inspections. With a court order, it may enter premises, access electronic systems, seize documents, and request explanations, often involving law enforcement support. This enhances the state's capacity to detect and deter collusion. Foreign bidders should treat discriminatory conditions not just as procedural errors but as potential signs of deeper systemic issues. Legal advice and proactive complaint filing with the AMCU remain essential safeguards. Red Flags to Watch Unrealistically short deadlines that limit fair competition. Highly specific technical criteria that only one local bidder could meet. Frequent last-minute amendments to tender documentation. Inconsistencies between Ukrainian and English versions of tender materials. Repetition of the same winner in similar tenders from the same procuring entity. Absence of clear evaluation criteria or scoring methodology. Failure to publish English-language notices for IFI-funded tenders. Lack of transparency in supplier qualification decisions. AMCU Enforcement and Legal Liability Violations such as discriminatory tender conditions or anticompetitive collusion carry serious legal consequences for both bidders and procuring entities. Companies found guilty by the Antimonopoly Committee of Ukraine (AMCU) may face fines and a ban from public procurement for up to three years – a penalty that effectively excludes many businesses from the market. Fines are calculated under AMCU Order No. 22-rp (14 Dec 2023) and may be adjusted depending on mitigating factors such as voluntary cessation of violations, cooperation during investigation, or circumstances linked to martial law. For tenders below UAH 10 million, AMCU’s regional offices may issue fines of up to ~EUR 1,500, but reputational damage can be much greater. Since 2024, AMCU decisions imposing fines are enforceable without a court order. New rules also enable recovery from controlling persons if the sanctioned entity is liquidated or insolvent. At the same time, violators may challenge AMCU decisions in court, seek reconsideration, or engage in cooperation mechanisms. Ukraine’s antitrust system also offers leniency and settlement procedures. A company can reduce or avoid liability by reporting collusion first and assisting the investigation. Since 2024, settlement is also available, allowing violators to close proceedings early and obtain a 15% fine reduction. Understanding and leveraging these tools – with legal support – is essential for international suppliers navigating enforcement risks in Ukraine’s public procurement system. Legal and financial consequences of anticompetitive behavior. Overview of AMCU’s powers, fine calculation, enforcement changes post-2024, leniency and settlement procedures. Remedies and Appeals: Protecting Your Rights Foreign suppliers have access to multiple mechanisms to challenge unlawful actions by procuring entities. These include administrative appeals to the AMCU, judicial review, and oversight by government bodies such as the State Audit Service (SASU). The primary and most effective remedy is an appeal to the AMCU’s Complaints Commission, which issues binding decisions. Complaints are submitted electronically via Prozorro. Once filed, the procedure is suspended until resolution. The complaint may relate to tender terms, bid rejection, or winner selection. AMCU hearings are open, and foreign suppliers may participate via Ukrainian legal representatives. If the complaint is upheld, the Committee may require the procuring entity to correct discriminatory terms, reverse decisions, or cancel the procedure. Common grounds for appeal include discriminatory tender documentation, unjustified rejection of bids, selection of unqualified winners, or cancellation of the tender to avoid contracting with a foreign supplier. Prozorro statistics confirm that many such complaints are successful, making this a viable tool for protecting supplier rights. Case Snapshot The Antitrust and Competition Practice team at Ilyashev & Partners successfully defended a Ukrainian telecommunications provider in a tender dispute with a state-owned entity. The procuring entity rejected the client’s bid, citing unsubstantiated discrepancies. Ilyashev & Partners filed a complaint with the AMCU, arguing that: the notice of deficiencies lacked specific violations; the identified issues were minor and did not affect the bid’s substance; the bidder had submitted all required technical documentation. The AMCU upheld the complaint and ordered the procuring entity to reverse its decision, confirming the legality and competitiveness of the client’s offer. Final Stage: Signing the Contract and Performance Risks Winning the tender marks the beginning of the final, yet legally sensitive phase — contract conclusion and execution. Despite success in the auction, bidders must remain vigilant and ensure strict compliance with formalities to avoid setbacks. Under Article 32(2) of the Public Procurement Law, a 10-day standstill period follows publication of the notice of intent to sign the contract in Prozorro. During this time, competitors may file a complaint with the AMCU, automatically suspending the procedure. Contract signing before this period expires is prohibited and results in the contract being voided. If no complaint is filed, the procuring entity must sign the agreement within 20 calendar days of publishing the intent notice (Article 33(5)). The final contract must match the submitted bid and draft agreement in the tender documents. Essential terms cannot be altered, except as expressly permitted under Article 41. Key compliance points: Sign the contract no earlier than the 11th day after the intent notice. Include all annexes, specifications, and schedules consistent with the submitted proposal. Publish the contract report in Prozorro after signing. At the performance stage, the supplier must deliver goods or services according to agreed terms, with full documentation and interaction with the procuring entity. Public contracts are subject to oversight by SASU and potentially law enforcement. Triggers for scrutiny may include pricing discrepancies, non-compliant deliveries, or misuse of funds. Importantly, once the contract is signed, AMCU appeals are no longer possible. All objections must be resolved before finalizing the agreement. Key Recommendations for International Bidders As Ukraine modernizes its procurement framework and channels unprecedented reconstruction funding, foreign companies have a real opportunity to enter a market that values transparency, digital access, and fair competition. Yet success in this space depends not only on price or experience – but on the ability to anticipate legal nuances, manage wartime risks, and align with local procedures. While Prozorro and IFI-funded tenders offer a level playing field, challenges remain: discriminatory criteria, inconsistent documentation, and limited appeal windows can undermine even the strongest bids. Based on our practical experience supporting international suppliers, the Antitrust and Competition Practice at Ilyashev & Partners recommends a proactive and structured approach. Key Takeaways for International Suppliers: Conduct due diligence. Investigate the procuring entity’s history and tender behavior. Look for prior complaints, repeat winners, or vague requirements that may indicate manipulation. Review documentation requirements. Pay close attention to formatting, notarization, translation into Ukrainian, and form templates. Even minor inconsistencies can lead to automatic rejection. Avoid high-risk local partners. Do not engage with companies with prior AMCU sanctions, opaque ownership, or insider affiliations. Their conduct may compromise your reputation and eligibility. Engage local legal support. Work with counsel experienced in procurement law, Prozorro navigation, and AMCU appeals – especially important during martial law and post-war regulatory shifts. Prioritize IFI-funded tenders. Focus on EBRD, World Bank, or EU-funded projects for better transparency, clearer procedures, and frequent use of English documentation. Prepare for monitoring and post-award control. Plan for interaction with SASU and other regulators post-award. Maintain compliance records and delivery logs to manage audit risk. Despite the complexity, Ukraine’s public procurement system is open for international participation – and the government continues to implement reforms to make it more accessible and secure. With careful preparation, strong legal alignment, and strategic decision-making, foreign bidders can turn participation into long-term contracts, especially in sectors central to post-war reconstruction. Ilyashev & Partners is one of Ukraine’s leading full-service law firms with a strong track record in public procurement, competition law, and regulatory compliance. With deep expertise in representing international clients across a broad spectrum of industries, the firm advises on all aspects of tender participation, including bid structuring, legal risk assessment, appeals before the Antimonopoly Committee of Ukraine, and disputes involving procuring entities. The team has extensive experience supporting cross-border suppliers and contractors in navigating Ukraine’s evolving procurement landscape, including IFI-funded projects and wartime procurement procedures. To learn more, please visit the Ilyashev & Partners Law Firm website or contact Oleksandr Fefelov directly.