Ukraine

Recently, the Ministry of Defense of Ukraine announced the possibility of paying fines for violations of military registration rules via the “Reserv+" system. But does this service work for all types of violations and can it be used for remote fine payments? In April 2025 the President of Ukraine signed Law No. 12093, which introduced a new Article 279-9 to the Code of Ukraine on Administrative Offenses. This article allows for consideration of cases regarding military registration violations without the individual’s presence, if they agree to it. The law came into force on April 17. However, despite appearing to be a progressive mechanism, its practical implementation remains problematic. 1. What Does the New Procedure Entail? Article 279-9 of the Code of Administrative Offenses allows individuals who have violated military registration rules or mobilization legislation (Articles 210 or 210-1) to submit a request and agree to a fine without personal attendance. This is possible if the individual: acknowledges the offense; agrees to the imposition of a fine without personal presence; submits a written or electronic application to the TCR (Territorial Center of Recruitment and Social Support), the Security Service of Ukraine or the Foreign Intelligence Service (depending on where they are registered). This application may be submitted: in person in writing, or via the electronic portal, i.e., through the “Reserv+" system. After receiving the application, an authorized official must issue a resolution and impose the minimum fine within three days. If the application was submitted through the electronic portal, the resolution may also be sent electronically. 2. Why the Mechanism Does Not Work Properly? Despite the presence of this mechanism, its full implementation is currently not possible. The Electronic Portal Does Not Allow Submissions for All Violations Although the law explicitly allows submission of the application via “Reserv+”, this feature currently works only for certain violations. Currently, users can pay fines for failure to update their information before July 16, 2024. When it comes to submitting applications or agreeing to fines for other violations, such as failure to appear upon summons, this option is still being tested. TCRs Do Not Accept Mailed Applications Another method of submitting the application is in written form by mail. However, in practice, TCRs refuse to process such mailed applications and demand in-person attendance. Yet the law clearly states that the procedure should work without the individual’s physical presence. As a result, a mechanism that was supposed to simplify case review and ease the administrative burden is currently not fully operational. It depends entirely on when the required technical capabilities become available and whether the authorities are truly prepared to implement it. 3. Case Law: Can Remote Applications Be Rejected? In this context, the legal position of the Seventh Administrative Court of Appeal is noteworthy. In its ruling dated July 4, 2024, in case No. 120/476/24, the court clearly stated: “the obligation to 'personally inform' is not the same as the obligation to 'personally appear’”. This is an important stance, as it means TCRs cannot force conscripts to appear in person when the law permits remote submission in written or electronic form. 4. Additional Requirements for Fine Resolutions Particular attention should be paid to Part 5 of Article 283 of the Code of Administrative Offenses, which adds further requirements to the resolution on fine imposition. In addition to the mandatory data, the resolution must include: the date and method of application submission; its content; payment details; information on how the resolution is to be executed: at least 50% of the amount must be paid within 10 days after the resolution enters into force. 5. Conclusion Despite the progressive idea of simplifying minor case reviews, the mechanism is not yet fully functional. To make it work effectively, the following are necessary: an update of “Reserv+” to enable submission of applications for any violation of military registration or mobilization laws; clarification from the Ministry of Defense and other responsible bodies regarding the acceptability of applications sent by mail or electronically; a change in the enforcement practices of TCRs to align with the court’s position on the right to submit applications and pay fines remotely. Only under these conditions can the new mechanism become an effective and functional tool. Author: Natalia Matviichuk, Senior Associate at Litigation and Dispute Resolution practice, Attorney at law  

The introduction of martial law in Ukraine has significantly changed both the labor landscape of the country and labor legislation: while during wartime, employees' rights are restricted, employers, on the contrary, are granted broader powers. However, any restrictions do not eliminate the importance and necessity of complying with existing legal norms and the principle of the rule of law. One example of law enforcement practice in the field of labor law concerns the payment of financial assistance for health recovery to employees of the joint-stock company “Ukrzaliznytsia”. According to the provisions of the Sectoral Agreement, employees of the railway transport industry are guaranteed the payment of financial assistance for health recovery in amounts defined by collective agreements, but not less than 30% of the tariff rate (official salary). The specific amount of such assistance for employees is determined by the respective collective agreements concluded between the subdivisions of Ukrzaliznytsia and the trade union organizations of these subdivisions. On March 14, 2022, shortly after the start of the full-scale hostilities, the management board of JSC “Ukrzaliznytsia” decided to suspend the payments provided for by the Sectoral Agreement and collective agreements. However, the provision of Article 11 of the Law of Ukraine "On the Organization of Labor Relations under Martial Law", which allows for the temporary suspension of certain provisions of collective agreements, entered into force only on March 24, 2022. Thus, the decision of JSC “Ukrzaliznytsia” dated March 14, 2022, was adopted without proper legal grounds. This position was confirmed by the Supreme Court in case № 211/7338/23, which recognized such a decision as unlawful. Although this case concerned only one employee of Ukrzaliznytsia, the ruling represents an important step toward establishing the illegality of the employer's actions. In June 2024, JSC “Ukrzaliznytsia” unilaterally adopted a new decision, which, in fact, once again suspended the provisions of collective agreements regarding the payment of wellness assistance. At the same time, a "uniform minimum amount" of such aid was set at 30% of the base salary. This approach raises serious legal concerns, since the Sectoral Agreement sets only the minimum guaranteed level of assistance. The majority of collective agreements at JSC “Ukrzaliznytsia” provide for significantly higher payment amounts, which have now been unjustifiably reduced. Moreover, the legislative possibility of temporarily suspending certain provisions of collective agreements, as provided for by Article 11 of the Law mentioned above, requires the existence of objective grounds, in particular, the employer's inability to fulfill the corresponding obligations. At the same time, at the moment the decision was adopted, JSC “Ukrzaliznytsia” continued to generate income, which calls into question the causal link between martial law and the alleged impossibility of fulfilling the terms of collective agreements. It is worth noting that the current legislation does not provide for the possibility of unilateral changes to the terms of a collective agreement by the employer. Any amendments to such provisions must take place only with the consent of, or at the very least following prior consultations with, trade union bodies. In this regard, in September 2024, the Trade Union of Railway and Transport Construction Workers of Ukraine filed a corresponding lawsuit against JSC “Ukrzaliznytsia." Notably, in December 2024, after a change in the management of JSC “Ukrzaliznytsia", a separate decision was adopted to partially resume the payment of wellness assistance for 2022. However, according to available information, these payments covered only 24% of employees who were working during the relevant period. As of August 2025, the issue of payments for the period starting from 2023 and subsequent years remains unresolved. Moreover, it is noteworthy that after the aforementioned lawsuit was filed, JSC “Ukrzaliznytsia” began taking actions that bear signs of procedural abuse. Thus, the company submitted a number of procedural documents that are similar in both content and reasoning. In particular, a motion and petition to leave the statement of claim without further action, submitted two separate motions to close the proceedings, as well as written explanations that once again included a request to terminate the case. The repeated submission of such essentially identical documents clearly does not contribute to the efficient handling of the case—instead, it complicates the proceedings. At the time some of these procedural documents were submitted, the court had already reviewed and reasonably dismissed several of them as unsubstantiated. Despite this, JSC "Ukrzaliznytsia" continues to actively use procedural tools not so much to defend its position on the merits of the dispute, but rather to delay the case's consideration. As a result of these groundless motions, the preparatory proceedings in the case have already lasted for nearly a year. Such conduct contradicts the principle of good faith in civil proceedings and indicates an attempt to postpone the issuance of a fair court decision. Nevertheless, the court proceedings are ongoing. The lawyers of the GOLAW law firm, representing the trade union’s interests in court, remain confident that justice will be restored and the rule of law will prevail. Authors: Kateryna Manoylenko, Partner at GOLAW, Head of Litigation and Dispute Resolution practice, Attorney at law Kateryna Tsvetkova, Partner at GOLAW, Litigation and Dispute Resolution practice, Attorney at law Anastasiia Klian, Counsel at Litigation and Dispute Resolution practice at GOLAW, Attorney at Law Natalia Matviichuk, Senior Associate at Litigation and Dispute Resolution practice at GOLAW, Attorney at law

On 30 April 2025, the governments of Ukraine and the United States of America signed an agreement establishing the U.S.-Ukraine Reconstruction Investment Fund (the “Agreement” and the “Fund”, respectively), which Ukraine ratified on 8 May 2025. Also, on 23 May 2025, 2 other documents relating to the Fund were entered into, the text of which is not currently publicly available (the “Fund Documents”): agreement on the establishment of LLC “DFC Ukraine Subsoil”; and limited partnership agreement. The information in this article is based on the analysis of the text of the Agreement and information on the terms of the partnership published by the Ministry of Economy of Ukraine. What does the agreement cover? The Agreement sets out the basic terms and conditions for the establishment and operation of the Fund, which was created with the participation of the U.S. partner, the U.S. International Development Finance Corporation (the “DFC”), and the Ukrainian partner, the Public-Private Partnerships Agency (the “PPP Agency”). The Agreement sets out, among other things, the taxation of the parties, requirements for currency convertibility and cross-border transfers, contributions to the partnership, investment opportunity rights, and market-based offtake rights. What do we know about the Fund? Structure and contributions The Fund is a limited partnership organised and existing under the laws of the State of Delaware, USA. This means that the Fund’s jurisdiction remains more predictable for the United States. At the same time, in case of disputes, the parties will settle them in arbitration in London. The Fund’s structure includes limited partners and a general partner. The limited partners are the PPP Agency and DFC. The general partner is LLC “DFC Ukraine Subsoil” (the “General Partner”), which is registered in the State of Delaware. The Limited Partners will initially receive 100 Class B shares each. Ukraine makes a contribution in consideration of the 100 Class B shares in the form of an irrevocable right to receive 50% of all royalties (rents), licence fees and amounts payable under production sharing agreements. In recognition of the US financial and material support since the full-scale invasion of russia, the US received 100 Class B shares. In other words, the Agreement and the Fund Documents do not provide for any debt obligations of Ukraine to the United States in connection with the previously provided assistance. Consequently, as of the Fund’s establishment date, despite the receipt of Class B shares by the parties involved, the Fund is currently devoid of any actual funds. It is anticipated that the United States will provide the initial funding, in exchange for which they are expected to receive Class A shares. The parties will be able to receive Class A shares in the event of new financial contributions. The US will also receive Class A shares in case of new military assistance to Ukraine. The number of Class A shares is to be determined by agreement between the PPP Agency and DFC. If no agreement can be reached, the General Partner will evaluate the military assistance at its own discretion. Class A and B shares determine the priority of profit distribution. First, the Class A shareholders receive profits until all contributions have been repaid, and then the profits are shared with the Class B shareholders without restriction on a 50/50 basis. Such distribution will be made only from the proceeds of completed investment projects and not earlier than 10 years after the Fund’s launch. The Fund will invest in priority areas in Ukraine, including mining, energy, logistics and critical infrastructure. Profits will also be reinvested in Ukraine. The Fund is expected to operate without any time limit. Once every ten years, the US and Ukrainian partners will review the Fund’s achievements and the feasibility of terminating its operation. At the same time, there is currently no information on whether the contributions will be returned to the partners in the event of the Fund’s termination, what the mechanism of their return is, and, most importantly, what the value of each partner’s contribution is. Management The management function of the partnership is performed by the General Partner, which is controlled exclusively by the Management Board (the “Management Board”). The Management Board consists of three managers from Ukraine and the United States, appointed by DFC and the PPP Agency. The Management Board performs a supervisory function and delegates powers to 4 committees – Investment, Administrative, Audit and Project Search Committees. In the administrative and audit committees, the parties have an equal number of votes. In the investment committee, the majority belongs to DFC representatives – three against two from the PPP Agency. In the project search committee, the majority belongs to the representatives of the PPP Agency – three against two from DFC. At the same time, all critical decisions are made only unanimously. Such decisions include, among others, amendments to the founding documents of the partnership and the general partner, amendments to the regulations on the Board Committee, investment decisions on more than 25% of the funds available for investment, material changes to the investment protocols, and acceptance of additional limited partners. Rights of the Fund The Fund has exclusive rights – the investment opportunity rights and the market-based offtake rights. The investment opportunity rights provide the Fund with the right to be the first to receive information on capital raising from a permit holder developing a critical minerals or oil and gas project. If the Fund is interested in the project, the holder must negotiate with the Fund. The market-based offtake rights mean that the company that extracts the raw materials must first start negotiations on the purchase of production with the DFC or its authorised representative. In both cases, the permit holder may simultaneously offer cooperation to third parties, but the financial or economic conditions cannot be significantly more favourable than the offer of the Fund/DFC. What conclusions can we draw? To the best of our knowledge, the following conclusions can be drawn in connection with the Agreement and the establishment of the Fund: Ukraine will make contributions to the value of the Class B shares throughout the life of the Fund through the Fund’s irrevocable right to receive 50% of all royalties (rents), licence fees, and amounts payable under production sharing agreements, with no limitations on the total amount of the contribution; The Agreement and the Fund Documents do not provide for any debt obligations of Ukraine in connection with the US assistance, and the Fund will operate without a time limit until both partners decide to terminate its operation; Ukraine receives a source of funding for projects in the field of critical minerals, oil and gas extraction and related infrastructure, but, according to the information provided, the Fund requires a “seed money” contribution from the United States; in parallel to making offers to the Fund, the permit holder is not restricted from making the same offer to anyone else in the market, i.e. if the market is willing to invest on better terms/buy production on better terms, this will theoretically affect the offer to Fund/DFC and it will be market-based; and exclusive rights, in the presence of additional incentives from the Fund/DFC, may lead to greater interest of the permit holders in attracting investments from the Fund or selling production to DFC (or its authorised representative), even if other market participants have identical conditions for cooperation. The signing of the Agreement and the Fund’s Documents will lead to some changes in the regulatory acts to bring them in line with the terms of the documents. Thus, on 4 June 2025, the Law of Ukraine “On Amendments to the Budget Code of Ukraine on the Implementation of the Agreement between the Government of Ukraine and the Government of the United States of America on the Establishment of the American-Ukrainian Reconstruction Investment Fund” was adopted, introducing changes to the distribution of funds received from the use of subsoil between local and state budgets. Authors: Oleksandr Melnyk, Partner, Head of the Corporate and M&A practice at GOLAW, Attorney at law; Yevhenii Ahashkov, Senior Associate at Corporate and M&A practice at GOLAW; Yaroslav Maltsev, Paralegal at Corporate and M&A practice at GOLAW.

Koziakov & Partners advised the respondent, the construction company, in commercial litigation against a state authority, who acted as the claimant. The claim concerned an unreasonable delay in completing the project, resulting in a substantial fine under the contract. The legal strategy, arguments and evidence introduced by our legal team were of great assistance to the client during the litigation. Following consideration of the dispute by the court of first instance and the appeal court, the penalty for the delay initially claimed by the claimant was substantially reduced, saving the client more than UAH 10 million. Our team advises various construction companies on infrastructure project implementation, contractual procedures, and post-contractual disputes.