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In 2021, an Information Security Strategy was introduced in Ukraine, endorsed by the Presidential Decree No. 685/2021, and the Center for Countering Disinformation was established under the National Security and Defense Council of Ukraine (NSDC).
These steps were a response to unprecedented hybrid threats, in particular information attacks accompanying military aggression. In the context of a full-scale war with an aggressor state, information security and sanctions has become an integral part of Ukraine’s national security.
As a result, the sanctions policy not only protects the national interests of the state, but has also become one of the key factors in international trade, banking, and M&A.
Ukrainian Sanctions Framework: Key Features
The Law of Ukraine “On Sanctions” defines special economic and other restrictive measures as a mechanism for protecting sovereignty, territorial integrity, national security, and the rights of citizens.
Decisions on sanctions are taken by the NSDC and are enacted by the Decree of the President of Ukraine. Claims for the recognition of the illegality of the Decree of the President of Ukraine imposing sanctions against a specific person may be filed directly with the Supreme Court. An exception is the special procedure for applying the sanction of asset recovery to the state revenue, which is carried out through the High Anti-Corruption Court.
Sanctions may be applied to protect the national interests, national security, sovereignty and territorial integrity of Ukraine, counter terrorist activities, as well as to prevent violations, restore violated rights, freedoms and legitimate interests of citizens of Ukraine, society and the state.
The list of sanctions that may be imposed in Ukraine is quite broad, ranging from freezing assets and suspension of trade operations to confiscation of assets in favor of the state, and in practice sanctions are imposed for years or even decades. Currently, Ukrainian legislation defines 31 sanctions that can be imposed on a person, and the key point is that the mechanism for removing a person from the sanctions list is not implemented in practice.
At the same time, it should be noted that the sanctions mechanism in Ukraine operates in a mode adapted to extraordinary circumstances. To date, no subordinate legislation has been adopted detailing the procedure for applying sanctions, in particular concerning the assessment of evidence or communication with the person against whom the NSDC intends to apply preventive measures in the form of sanctions.
Different listing criteria, legal standards, or duration
For comparison, it is worth referring to the European Union’s sanctions policy. In this case, restrictive measures are imposed by the Council of the European Union and may be reviewed by the Court of Justice of the European Union if a person believes their rights have been violated. The decisive factor is respect for human rights to an effective remedy, as well as the requirements of transparency, reasonableness, and sufficiency of the evidence base.
The Court of Justice of the European Union has a long-standing practice of imposing on EU institutions the obligation to prove the existence of specific facts justifying the inclusion of a person on a sanctions list. This was highlighted in its recent judgment dated 4 June 2025 in the case of Boguslayev v. Council of the European Union (сase T-161/23), where the Court of Justice of the European Union overturned the EU Council’s decision to extend the sanctions imposed on Ukrainian citizen Vyacheslav Boguslayev.
The judgment in case T‑161/23 (Boguslayev v. Council) is indicative in the context of approaches to the application of sanctions, since in this case the Court explicitly stated that the Council of the European Union had not provided any new evidence or assessment of Boguslayev’s conduct during the period justifying the extension of the sanctions, and had not carried out a proper reassessment of the circumstances. The Court emphasized that decisions on restrictive measures must be based on evidence existing at the time of their adoption, and not just on general references to the situation in Ukraine or in the media. The Court stressed that the decision must be based on facts, not on general assertions or media reports. This approach demonstrates the priority of the presumption of innocence, the right to be heard, and legal certainty.
The application of sanctions against a person with reference to circumstances from media sources, i.e., articles, publication authors’ opinions, etc., the reliability of which should be subject to objective skepticism, is quite controversial.
In Ukraine the Supreme Court, as a court of first instance in cases challenging sanction, usually rejects claims, emphasizing preventive nature of sanctions in the context of the political situation in Ukraine and the need to protect the national interests of the state during martial law. Thus, a number of decisions of the Cassation Administrative Court within the Supreme Court state that the Decrees of the President of Ukraine on sanctions are not subject to evaluation on the merits of establishing the grounds, circumstances for imposing sanctions, or the evidence, and the review is limited only to formal compliance with the procedure (e.g., the presence of proposals from the Security Service of Ukraine or the Cabinet of Ministers of Ukraine).
Insight: “A party removed from the EU list may remain subject to sanctions in Ukraine for years.”
Despite the challenges facing Ukraine, there are still attempts to improve standards of proof. On 20 February 2025, the Cassation Administrative Court within the Supreme Court for the first time upheld a claim regarding personal sanctions in case No. 990/176/23 (Louis-Michel Duray), recognizing Presidential Decree No. 82/2023 as unlawful. The Supreme Court noted that the defendants had not proven the actual participation of the individual in actions threatening national security. The Supreme Court’s decision has not yet entered into force, and the Grand Chamber of the Supreme Court has accepted for consideration the appeal of the President of Ukraine against the decision of the Cassation Administrative Court within the Supreme Court dated 10 February 2025 in case No. 990/176/23.
In general, Ukrainian procedural law does not provide for a cassation review of court decisions on sanction cases; therefore, further only the European Court of Human Rights can determine whether the Ukrainian court respects the human right to effective and fair judicial protection in this category of cases, or not.
Compliance Strategy for International Firms
As of June 2025, the Unified State Register of Court Decisions contains approximately 460 claims challenging sanctions imposed during martial law in Ukraine.
In practice, a person subject to sanctions in Ukraine is not notified of the grounds for imposing sanctions, and no regulatory act of Ukraine provides for the right to familiarize oneself with such grounds. At the same time, the sanctions register is publicly available, and any person may check whether a counterparty is on the sanctions list and what sanctions have been imposed on it before deciding on future cooperation.
Ilyashev & Partners Law Firm provides professional legal advice on sanctions compliance in Ukraine and strongly recommends that international companies carefully verify Ukrainian counterparties through the national sanctions list to mitigate sanctions-related legal risks. Furthermore, the legislator plans to introduce criminal liability for violating sanctions (special economic and other restrictive measures).
Working with Ukrainian Partners or Subsidiaries
It should be admitted that Ukraine’s sanctions policy is being implemented in conditions of full-scale aggression, constant threats to state independence, and numerous manifestations of internal collaboration. This requires flexible and sometimes rapid management decisions that cannot always be implemented in compliance with all peacetime procedures. Ukraine’s sanctions policy is a response to a deep security crisis and an example of how the state uses public law instruments to counter external and internal threats.
In summary, sanctions are not only a political instrument but also a legal reality with direct consequences for contracts, banking operations, and judicial processes. Therefore, Ilyashev & Partners Law Firm recommends that international and Ukrainian clients:
- Carefully check counterparties in the public sanctions register, avoiding transactions with persons subject to restrictive measures.
- Use sanctions clauses in contracts – the right to terminate or suspend obligations.
- Take into account the risk of reverse sanctions: cooperation with persons subject to sanctions in other jurisdictions (in particular, the Russian Federation) may be grounds for the application of Ukrainian sanctions.
- Expect the criminalization of sanctions regime violations, which is currently under consideration by the legislator.
Author: Valeriia Gudiy, Partner at Ilyashev & Partners Law Firm
Ilyashev & Partners Law Firm is a leading provider of legal services in Ukraine with a proven track record in sanctions compliance, challenging sanctions, and advising international companies on regulatory risks in Ukraine.
To learn more, please visit the Ilyashev & Partners Law Firm website or contact the author directly: Valeriia Gudiy.