GOLAW

GOLAW lawyers secured the cancellation of seizures of property worth over UAH 100 million

As part of criminal proceedings, the court seized the property of nine companies providing international bus transportation services to Poland, the Czech Republic, Germany, Italy, and other EU countries. The seizure paralyzed the holding company's operations: the companies were unable to use their vehicle fleet, attract investments or obtain loans, which created serious financial risks. After analyzing the grounds for the seizure, the GOLAW team identified and proved gross violations of the Criminal Procedure Code. The court agreed with the lawyers' arguments and lifted the seizure of: corporate rights worth over UAH 105 million; over 50 vehicles; real estate with a total area of over 2,000 m². As a result, the holding's companies regained control over their assets, continued international transportation, and maintained partnerships with European companies. The case was handled by GOLAW's Criminal Law practice team: Partner Igor Glushko, Counsel Kristina Kolchynska, Associate Anastasiia Shapoval and Partner Angelika Moiseeva. The victory of GOLAW's team proves that we always protect our clients' interests and help them not only preserve but also develop their businesses.

"Criminal Liability" of a Legal Entity without a Suspect: Key Business Risks

Recovery of expenses for professional legal aid: practice, problems and prospects

Every year, millions of cases are filed with the courts. Last year their number was over 5 million, which indicates a large number of people who are forced to defend their rights in court. In such cases, seeking professional legal assistance from lawyers is a common practice. At the same time, the parties to the dispute have a natural question: “Why should I have to pay for legal assistance if I am not the one violating rights and interests?” This is a logical question, and that is why the law provides for the possibility of reimbursement of such expenses in case of a favorable resolution of the case for the party. However, in practice, the procedure for expenses reimbursement often conceals a number of problems, as courts usually only partially reimburse expenses. Why is it not always possible to reimburse the costs of legal assistance? Courts may refuse or reduce the amount of reimbursement based on various factors: unreasonableness of expenses and lack of evidence: if a party fails to properly prove the connection between the expenses incurred and the litigation, the court may decide that the expenses were not directly related to the case; disproportionality of the legal fees: in the court's opinion, the claimed amount of legal fees may not correspond to the complexity of the case, the time spent by the lawyer on the case or the value of the case for the parties involved; partial satisfaction of the claim: if the claim is only partially upheld, the legal costs are reimbursed proportionally to the successful part of the claim; Improper conduct by f the party: if the court believes that the party delayed the process, abused its rights, filed excessive or unreasonable motions, it may reduce the amount of compensation; court discretion : the court independently assess whether the claimed expenses are necessary and reasonable. As a result, even in very similar cases, the amount of costs to be recovered may vary greatly. Given the above, most lawyers before taking on a case inform their clients about the risks of the court refusing or reducing the claimed amount of expenses for professional legal assistance. However, practice shows that proper substantiation of the claimed expenses increases the chances of receiving compensation. Criteria to be considered by the court when deciding on reimbursement When determining the reasonableness of expenses, the court takes into account: whether the costs were directly related to the consideration of the case; whether the costs correspond to the complexity of the case and the value of the claim; whether the expenses are proportionate to the amount of work performed by the attorney and the importance of the case for the party. Not all expenses will be recognized by the court as necessary. For example, the current case law shows that courts do not recognize as legal assistance the meetings of an attorney with a client, coordination of procedural documents, the time spent by an attorney for travelling to court, the preparation of an application for recovery of expenses for professional legal assistance, etc. In other words, the court may deduct the specified scope of work and services of a lawyer from the amount of legal fees claimed by a party. How to avoid a reduction in compensation? In order to avoid a reduction in the compensation amount , it is necessary to: provide a detailed report on all incurred expenses (contracts, acts and descriptions of work performed, invoices, payment instructions); prove that the expenses are related to the litigation; justify the amount of expenses in accordance with the complexity of the case; show that the expenses were reasonable and unavoidable. The court pays particular attention to the behavior of the parties during the proceedings. If one party has delayed the proceedings, filed unfounded motions or deliberately complicated the process, this may affect the decision on the compensation of costs. The Supreme Court has repeatedly emphasized that reimbursement of legal assistance costs is not automatic. Even if the court rules in favor of a party, it may partially or completely refuse to reimburse costs. The European Court of Human Rights also stresses that when determining the amount of compensation, the court must proceed from the following criteria: the reality of the attorney's fees, the reasonableness of their amount, based on the specific circumstances of the case and the financial situation of the parties. This opinion is illustrated, in particular, in the ECHR judgment on the case of East/west Alliance Limited v. Ukraine. What the amounts for legal assistance are typically awarded by the court? As a rule, the courts are reluctant to award amounts exceeding UAH 30,000, although there are always exceptions to the “rules”. For example, in case No. 910/4881/18, the Supreme Court upheld the decisions of the previous instances and ordered the defendant to reimburse the plaintiff UAH 337,665.08 of legal assistance costs. In case No. 910/9668/23, the Commercial Court of Kyiv awarded the party the compensation of UAH 100,000.00 out of the UAH 316,000.00 claimed . The decision was upheld on appeal. By an additional Ruling of the South-Western Commercial Court of Appeal in case No. 916/1618/20, the court awarded UAH 200,000.00 of legal costs in favor of the applicant. In case No. 924/866/21, the court of first instance recovered UAH 464,290.85 of professional legal assistance costs in favor of the plaintiff. However, when reviewing such a decision, the North-Western Commercial Court of Appeal reduced this amount to UAH 176,088.48, which remained unchanged after the cassation review. GOLAW attorneys also received a number of favorable decisions for their clients. In particular, in case No. 910/11809/24, the court decided to compensate the plaintiff UAH 50,000, and in case No. 910/11813/24, the court ordered the defendant to pay UAH 230,850 of professional legal assistance costs. Conclusions It is entirely possible to impose the costs of legal assistance to the opposing party but full reimbursement is not guaranteed. The court assesses the justification, proportionality and actual necessity of the claimed expenses and determines the amount to be recovered based on its own discretion. Proper documentation and justification significantly increase the chances of a favorable decision. Case law shows that reimbursements exceeding UAH 30,000 are achievable. Overall, while courts tend to limit compensation amounts, a careful approach to collecting evidence, properly substantiating expenses and maintaining a consistent legal strategy can significantly increase the amount of compensation. Author: Anastasiia Klian, Counsel of Litigation and Dispute Resolution practice at GOLAW, Attorney at Law

PECULIARITIES OF CLOUD SERVICE OPERATIONS IN UKRAINE: NEW LEGAL LANDSCAPE AND OPPORTUNITIES FOR GLOBAL PROVIDERS

Legal side of M&A in the Ukrainian energy sector: stages, risks and key aspects

Despite the war, energy remains one of the most attractive industries for investors: in 2024 it provided 21% of the total income of the economy. This stimulates activity in the M&A market, where complex transactions require comprehensive legal support. 1. General stages Given the complexity of M&A transactions in the energy sector, legal support should cover all key stages: from structuring the transaction to its integration and protecting the interests of the parties. Structuring involves determining the optimal form of the transaction: the purchase of shares or assets, merger or accession, taking into account legal, tax, financial and regulatory aspects. The main goal at this stage is to minimise risks and ensure the achievement of the strategic goals of the parties. Financial structuring includes analysis of sources of financing (own funds, credit resources, attracted investments) and preparation of relevant documentation, in particular credit agreements, pledge agreements, suretyships, and bank guarantees. Tax structuring involves developing an efficient tax model in compliance with domestic laws and international standards, aimed at minimising tax liabilities and avoiding adverse fiscal risks for the parties. Where appropriate, a special purpose vehicle (SPV) is incorporated to execute the transaction. This approach may isolate risks, streamline financing, and optimise the tax burden. At this stage, legal support includes SPV incorporation, drafting and negotiating constitutional documents, ownership structure, etc. Legal counsel facilitates negotiations between the parties, protecting the client’s interests and securing favourable terms, particularly with regard to financing, guarantees and warranties, asset transfer, and risk allocation. Typically, the negotiation process begins with the signing of a Letter of Intent or Term Sheet between the parties, which defines the main terms of the potential transaction and the steps to be taken by each of the parties in preparation for the sale. A fundamental stage of the process is legal due diligence, a comprehensive review of the target’s legal standing, encumbrances, ongoing litigation, licensing, land, environmental and technical risks, among others. The findings of the due diligence are critical for the final decision on the transaction. In parallel, pre-sale restructuring may take place — optimisation of the corporate structure, debt restructuring, spin-offs or business consolidations, dispute resolution, and other risk mitigation measures — all aimed at enhancing the attractiveness of the target. Taking into account the chosen structure and the results of the legal due diligence, an appropriate package of legal documentation is prepared, including sale and purchase agreements, shareholders agreements, security agreements, as well as supporting documents. The accuracy of the documentation and its legal “cleanliness” are crucial for the safety of the transaction. Regulatory interaction includes obtaining merger clearance from the Antimonopoly Committee, licenses for relevant activities, grid connection specifications, construction permits, and other approvals. Due to sector-specific regulatory requirements, engagement with state authorities is often decisive for a successful deal. The final stage is the execution of the transaction — signing of all documents based on agreed commercial, legal and financial terms, and completion of pre-closing obligations (closing). In case of disputes or conflicts arising post-closing, the legal team ensures protection of the client’s interests, provides legal support in negotiations, represents the client in court proceedings, and implements measures to minimise potential losses. 2. Key risks The process of concluding M&A transactions in the energy sector involves a number of risks that can significantly affect the success and implementation of the deal. One of the key challenges is strategic risk, which arises from misaligned deal objectives or the lack of a clear vision for future integration. Parties often overestimate the potential value of the business without having a realistic plan for merging operational activities, which complicates the realization of expected synergies after the transaction is closed. Regulatory risk poses a major threat. The energy sector is one of the most highly regulated industries; legislative changes, licensing complexity, or misinterpretation of regulatory requirements may delay or even block the transaction. Breaches of licensing, antitrust or environmental rules may result in administrative penalties and reputational damage. Financial risks are also critical. Inaccurate valuation of assets and obligations may lead to substantial losses. Often, after the conclusion of the transaction, previously unaccounted debts or infrastructure modernisation costs are revealed, which increases the total cost of investment and changes the financial model of the project. In addition, in order to successfully raise financing, the project must demonstrate the ability in the long term to generate a stable income sufficient to cover both operating expenses and loan servicing. Tax risks are a serious concern. Given the complexity and variability of tax laws, inefficient structuring of M&A transactions may cause significant tax obligations or claims from regulatory authorities. In the case of cross-border agreements, tax problems may increase due to the lack of harmonization of tax regimes of different jurisdictions. Environmental and technical risks form a separate category, especially regarding compliance with Environmental Impact Assessment (EIA) procedures. Energy projects — such as construction or refurbishment of power plants, oil and gas pipelines — may require EIA processing. Non-compliance may result in construction permit revocation, project suspension, or even administrative or criminal liability. Title risks regarding real estate and land use are also critical. Violations in land acquisition or zoning regulations may lead to loss of ownership or use rights, making project implementation impossible. Lastly, organisational risk cannot be overlooked. Lack of transparent ownership, shareholder conflicts, or flawed corporate governance may not only hinder deal execution but also endanger post-deal operations. 3. Additional Considerations Legal support for energy M&A goes beyond classic stages such as structuring, due diligence, and contract drafting. Sector specifics require thorough analysis of additional aspects critical to post-deal integration, governance, and asset value preservation. One such aspect is intellectual property. In modern energy business — especially renewables, digital solutions, and smart grid technologies — IP rights are vital. Legal audit of patents, trademarks, proprietary technology, licence agreements, and know-how helps identify potential risks of IP loss or infringement. Proper IP transfer arrangements, confidentiality safeguards, and protection against information leakage are indispensable. Cybersecurity has also become an issue. With growing reliance on digital infrastructure, cyberattacks, data breaches, or IT failures may cause severe disruption. Legal due diligence should include an IT infrastructure audit and compliance with data protection laws (e.g., GDPR or local regulations). Amid today’s challenges, political and social risks demand special attention. Government policies, tariff regulation, access to state support — or conversely, new restrictions — may determine the transaction’s viability. Under martial law, where regulation evolves rapidly, long-term projections are highly uncertain. Accounting for these factors during structuring and evaluation helps adapt the deal model and improve resilience. Legal support in energy M&A extends far beyond conventional legal tasks. It spans economic, technical, regulatory, and organisational domains, requiring deep cross-disciplinary expertise and strategic insight. This comprehensive approach not only mitigates risks but also delivers real added value for all parties involved. Author: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A Practice at GOLAW, Attorney at Law

TYPICAL MISTAKES EMPLOYERS MAKE WHEN RESERVING EMPLOYEES

Over the past year, the employee reservation procedure in Ukraine has changed several times, which has added new challenges for businesses. However, recent trends in the regulation of the procedure indicate a course towards its simplification and automation. One of the most progressive innovations has been the introduction of the employee reservation service through the Diia portal. This digital service has significantly streamlined the process of reserving employees, as the entire process is done online and in a few clicks. Nevertheless, even with the updated procedures, businesses may still face difficulties when reserving their employees. In this publication, we focus on the key mistakes employers make during the employee reservation process, as well as important nuances that should be considered. 1. Inaccessibility of the reservation service via the Diia portal Often, enterprises that are recognized as critical to the functioning of the economy and essential services during martial law encounter difficulties accessing the employee reservation service via the Diia portal. This is due to the fact that such enterprises are not included in the Unified List of state authorities, other state bodies, local self-government bodies, enterprises, institutions and organizations to reserve persons liable for military service (hereinafter also referred to as the Unified List). To resolve this problem, the company should apply to the authority that recognized it as a critical enterprise with a request to add its data to the Unified List. 2. Common errors in selecting employees for military reservation One of the most common mistakes employers make is to try to reserve employees who do not meet the requirements set out in the Procedure for Reserving Persons Liable for Military Service for the Period of Mobilization and Wartime No. 76 (hereinafter also referred to as the Procedure). In particular, in accordance with the Procedure, a person liable for military service may be successfully booked if he or she: - is duly registered with the military service registry; - is in an employment relationship with a state body, critical enterprise, or critical institution; - has clarified the personal data specified in paragraph 2 of Section II “Final and Transitional Provisions” of the Law of Ukraine No. 3633-IX dated April 11, 2024 “On Amendments to Certain Legislative Acts of Ukraine on Certain Issues of Military Service, Mobilization and Military Registration”; - is not listed as wanted by law enforcement. . Failure to meet these requirements will result in a denial of the employee's reservation.. Moreover, under current practice, the following factors may also prevent an employee from being reserved: - full or partial absence of up-to-date information about the employee in the Unified State Register of Conscripts, Persons Liable for Military Service and Reservists (hereinafter also referred to as the Register); - the presence in the Register (the “Reserve+” application) of a mark on the employee's violation of the rules of military registration; - if an employee who is liable for military service has a deferral from military service during mobilization on other grounds; - an employee has a reservation with another company, institution or organization. 3. Non-compliance with the salary criterion One of the main changes in the reservation procedure starting in December 2024 was the introduction of a salary criterion for employee reservations. From now on, the employees of critical enterprises and institutions included in the lists (except for the exceptions provided for in the Procedure) must be paid a monthly salary for the entire period for which the reservation is granted, no less than 2.5 times the national minimum wage (currently, this amount is UAH 20 thousand). It is important to note that non-compliance with the above salary criterion will result in the cancellation of the reservation for the employee. 4. Incorrect display of the number of employees liable for military service Employers also often face the problem that the Diia portal contains an incorrect number of employees liable for military service, or displays dismissed employees, or newly hired employees are not displayed. . In this regard, we note that information on the number of employees liable for military service comes from the Register and the Pension Fund of Ukraine (hereinafter also referred to as the Pension Fund). To update employee information, you should use the Pension Fund's e-services portal, in particular, to submit information on hiring, dismissal, reinstatement, temporary termination/renewal of an employment contract, etc. After completing these steps, updated information about employees will appear on the Diia portal. In view of the above, the updated Procedure streamlines the employee reservation mechanism, yet still demands a diligent approach from employers and a clear understanding of the applicable rules. Following the above instructions will help to avoid mistakes and ensure predictable and stable operation of businesses. Authors: Kateryna Manoylenko, Partner, Head of Litigation and Dispute Resolution practice at GOLAW, Attorney at law; Kateryna Tsvetkova, Partner of Litigation and Dispute Resolution practice at GOLAW, Attorney at law; Ilona Rudnyk, Associate at Litigation and Dispute Resolution practice at GOLAW, Attorney at law.

LABOR DISPUTES: TOP 10 COURT DECISIONS OF 2024

Conditions for electricity import for businesses in Ukraine

In 2024, Ukraine significantly increased its electricity imports, raising the volume by 5.5 times compared to the previous year, reaching 4.4 million MWh. According to monitoring data from ExPro Electricity, the largest electricity supplier was Hungary, accounting for 39% of total imports. Other suppliers included Slovakia (23%), Romania (18%), Poland (14%), and Moldova (5%). The largest importers were the following companies: D.TRADING LLC, LLC DE TRADING, JSC “ECU”, DNEPROSTEEL-ENERGO LLC, LLC AXPO UKRAINE, and EUROMIN ENERGY, LLC. As of December 1, 2024, the maximum volume of electricity imports from Europe to Ukraine was increased from 1.7 GW to 2.1 GW. 1. How did this become possible? A major achievement for Ukraine was its connection to the unified continental European power system, ENTSO-E, and notably, this occurred one year ahead of the originally planned schedule. The timeline of Ukraine’s synchronization with ENTSO-E is as follows: ● February 24, 2022 – The Ukrainian power system began operating in isolation due to russia’s full-scale invasion of Ukraine; ● February 28, 2022 – European energy ministers approved Ukraine’s connection to ENTSO-E; ● March 16, 2022 – The Ukrainian power system was synchronized with ENTSO-E; ● April 26, 2022 – Ukrenergo was granted observer member status in ENTSO-E; ● November 28, 2023 – ENTSO-E confirmed that Ukrenergo had fulfilled the requirements of the Technical Measures Catalogue; ● December 14, 2023 – The ENTSO-E Assembly, the highest governing body, granted Ukrenergo full membership status in ENTSO-E. 2. Types and Conditions of Participation in Auctions In accordance with the legislation of Ukraine and the European Union, granting access to cross-border transmission capacity for electricity through interconnections to market participants via auctions is one of the responsibilities of the Transmission System Operator (hereinafter referred to as the “TSO”). The sole TSO in Ukraine is NPC "Ukrenergo". Auctions are conducted in compliance with Ukrainian legislation regarding electronic documents and identification. Each auction allocates not only the available transmission capacity planned for that specific auction but also any capacity that was not distributed in previous auctions or was returned to the auction office. Only electricity market participants are eligible to take part in the auctions. According to the Market Rules, electricity market participants include: aggregators, producers, electricity suppliers, traders, small distribution system operators, the Transmission System Operator (TSO), distribution system operators, the market operator, energy storage system operators, the guaranteed buyer, and consumers (including active consumers). All auction participants have equal opportunities to obtain transmission rights for electricity. Since 2023, both unilateral and joint auctions have been introduced for the allocation of cross-border interconnection transmission capacity. Unilateral allocation for the Ukraine-Poland interconnection (Dobrotvir-Zamość) and joint allocation for the Ukraine-Romania and Ukraine-Moldova interconnections are conducted via the TSO’s auction platform. Participation in the auction requires the prior conclusion of an access agreement, obtaining access to the auction platform, and providing the necessary financial security. To conclude the access agreement, the applicant must submit a request and the required set of documents to the TSO. The auction office verifies all submitted information, after which a decision is made regarding registration or refusal. Registered auction participants are required to provide financial security to guarantee payment based on the auction results. This security may take the form of a bank guarantee or a monetary deposit, which will be used by the auction office to confirm participation in the auction. Transmission capacity is allocated among participants who offer the highest price, in accordance with the principle of priority allocation of requests. Joint coordinated allocation of cross-border transmission capacity for the Ukraine-Poland, Ukraine-Hungary, and Ukraine-Slovakia borders has been implemented on the European allocation platform JAO. To participate in joint auctions conducted by JAO, participants must complete several registration steps: 1. register on the support service platform to manage requests; 2. submit the required set of documents no later than 9 business days before the auction date. After registration, a user account is created for participation on the JAO trading platform. According to the Market Rules, auction winners must provide the TSO with an import schedule for each cross-border interconnection, taking into account the results of the daily auctions, by gate closure time for the nomination physical transmission rights, as specified on the relevant platform. 3. Who can benefit from electricity imports? As of now, electricity import capacity is utilized at less than half of its potential, primarily due to high prices in Europe. According to data from JSC "Market Operator", on March 12, the day-ahead market base load index in Ukraine was €106.00/MWh, while in Poland it was €124.31/MWh, in Slovakia €124.03/MWh, and in Romania €123.42/MWh. However, the situation was different in the summer of 2024: on July 3, Ukraine’s base load index stood at €144.83/MWh, while in Poland it was €114.85/MWh, in Slovakia €94.49/MWh, and in Romania €116.95/MWh. This was partly due to frequent outages and extreme heat. Nonetheless, similar market conditions are expected in the upcoming summer, suggesting that electricity imports could once again become economically advantageous. On November 26, 2024, the Government of Ukraine updated the rules for electricity imports during martial law by adopting Resolution No. 1342. Under the new provisions, during periods of scheduled hourly power outages, companies that import at least 60% of their hourly electricity consumption will not be subject to electricity restrictions. This measure helps reduce the load on the domestic electricity market. Previously, the required import share for exemption was set at 30%, 50%, and 80%. These changes create favorable conditions for businesses, especially energy-intensive enterprises, by ensuring a stable electricity supply and reducing economic risks amid unpredictable energy restrictions. An important issue is the guarantee of origin for electricity. It is worth noting that recognition in Ukraine and international trade in guarantees of origin issued in Europe — and vice versa — will only become possible once Ukraine’s National Energy and Utilities Regulatory Commission (NEURC) obtains membership in the Association of Issuing Bodies (AIB). On May 30, 2024, by decision of the AIB General Assembly, Ukraine, represented by NEURC, officially acquired membership status in the Association. NEURC anticipates that full integration into the AIB will be completed by the end of 2025. Guarantees of origin for Ukrainian businesses provide an opportunity to ensure the competitiveness of Ukrainian products in EU markets, alleviate the impact of the Carbon Border Adjustment Mechanism (CBAM), and more. In summary, Ukraine is actively developing mechanisms for electricity import, which enables the expansion of energy capacity and offers strong opportunities for business growth. The coordinated use of cross-border auctions, along with ongoing legislative updates, supports Ukraine’s integration into the European energy network and strengthens its energy independence. Authors: Oleksandr Melnyk, Partner at GOLAW, Head of Corporate Law and M&A practice, Attorney at law; Khrystyna Zimenko, Associate of Corporate Law and M&A practice at GOLAW

Company actions during a tax audit

How depository accounting of shares improves business security and opens up new opportunities for digitalising corporate governance

The problem of improper interference with the ownership structure of limited liability companies (LLCs) has been a persistent issue in Ukraine for many years. Businesses have repeatedly faced situations where shares in the charter capital have unreasonably “disappeared” from the Unified State Register (USR), and control over the company has been unauthorized transferred to third parties. This often occurs with the participation of dishonest state registrars who make changes to the USR on the basis of improperly executed or forged documents. More than 1200 notaries in Kyiv alone have access to the relevant registration actions, which significantly increases the risk of abuse. In many cases, by the time the rightful owner learns of a change in the participants or management, the company`s assets may have already been withdrawn or transferred to third parties. Challenging such actions requires significant time and resources and often involves complex administrative or judicial procedures with unpredictable outcome. In response to these challenges, and with the aim to enhancing the transparency of corporate governance, Ukraine has introduced a new approach to the accounting of LLC shares through the depository system. This mechanism became operational in March 2024, with the launch of a specialised share accounting system by the National Depository of Ukraine (NDU). Such accounting allows companies to transfer data on participants from the Unified State Register to the NDU system, preventing unauthorised changes and creating a new standard for digital security of corporate rights. What is the essence of the mechanism and what are the key advantages of registering LLC shares with a depository institution? The participant’s share in the LLC legally remains legally theirs, but the information about it is no longer stored and displayed in the USR. Instead, it is accounted for in the secure infrastructure of the depository institution in the same way as shares in joint-stock companies are accounted for. This approach ensures a higher level of confidentiality, protection of ownership rights and significantly reduces the risks of unlawful interference by excluding possible corporate changes of registrars and abuse by unscrupulous persons from the process. Only its owner and the selected depository institution have access to the custody account. State registrars do not have the technical ability to make any changes regarding shares. This is a key advantage of the system, ensuring real protection for shares from unauthorised interference. However, the transition to depository shares accounting not only provides a new level of legal protection but also opens up a range of modern digital services that greatly simplify the management of corporate processes for LLCs: accounting of all ownership rights in one place, quick transfer of ownership rights, guaranteed mechanisms for the execution of transactions, electronic meetings of shareholders (including through preliminary electronic registration of participants, remote voting and automatic recording of meeting results), payment of dividends, and sending of participant notifications. This is especially convenient for companies with multiple participants located in different cities or countries. Participation is possible without the need to issue powers of attorney or personal attendance, which significantly reduces administrative costs. In addition, the electronic form eliminates the risk of administrative or judicial appeals against the meeting due to violations of formal procedures. Another advantage of the system is the ability to effectively encumber shares. When information about the pledge is entered into the accounting system, the NDU blocks any dispositive actions with the share without the pledgee's consent. This completely eliminates the loss of collateral without the lender's knowledge. Unlike traditional shares pledges, where the debtor often blocks their sale, the NDU system allows for foreclosure without the pledger’s involvement, similar to the mechanism for shares. Thus, the pledge of shares in an LLC becomes more accessible to creditors, allowing them to raise financing on more favorable terms. The share accounting system provides for the possibility of using escrow accounts during share purchase and sale transactions in an LLC. Such an account is opened based on an agreement under which the NDU commits to credit the shares to the account and make changes to the share accounting system only upon the occurrence of the conditions agreed upon by the parties. This feature is particularly relevant for M&A deals where both parties are interested in transparency, legal guarantees and protection of their interests. Moreover, the escrow account operates in a secure mode: transactions are restricted, and the enforcement or imposition of a lien on shares held in such an account is not allowed. The integration of an LLC into the NDU system also provides a convenient mechanism for paying dividends. The LLC transfers funds to a special account with the NDU. The NDU then distributes the dividends to the participants directly or through depository institutions. This mechanism ensures automated and transparent accounting of payments, reduces the risk of errors or fraud, and provides participants with the confidence in the timely receipt of their income. One of the key advantages of the transition to the NDU accounting system is the increased level of confidentiality and data protection. This is especially important in the context of the ongoing hybrid war, when digital threats have become part of the reality. The events of late 2024 clearly demonstrated the vulnerability of state information systems when Ukraine suffered one of the largest cyberattacks. As a result, the majority of state electronic resources, including the Ministry of Justice’s registers, were temporarily shut down. The operation of the USR and other critical systems was halted, and although the authorities officially assured that no data breach occurred, the situation itself was a strong signal of the need for alternative, more secure systems for managing sensitive information. Against this backdrop, the share accounting system maintained by the NDU looks like a strategically safer solution for businesses. Information about the shares of LLC participants is not stored in the state register, but in a separate, specialised infrastructure that is not connected to the systems of the Ministry of Justice. This means that even if a large-scale cyberattack occurs again, state-related risks will not affect corporate rights if the registration is handled by the NSDU. An additional advantage is that the accounting system operates on cloud-based solutions with a high degree of redundancy and protection. It is accessible only to depository institutions, whose activities are strictly regulated. Unlike the USR, where changes can be made by a notary without a thorough verification of the underlying grounds, unauthorised interference is virtually impossible in the NSDU system. Furthermore, the system's architecture ensures the data integrity and immutability, while its technical isolation from government systems reduces the likelihood of external interference. How to transfer the accounting of shares in an LLC to a depository institution? First of all, the LLC charter shall include a provision stating that the accounting of shares in the LLC's charter capital is carried out in the accounting system of shares of the NDU. This is a critical condition because without the relevant provision in the charter, the NDU will not be able to accept documents and the state registrar will not be able to make changes to the USR. Additionally, the general meeting of LLC participants shall unanimously decide to transfer all shares to the accounting system. The next step is to conclude an agreement with the NDU and undergo the state registration. After updating the charter and adopting the resolution, the company submits a package of documents to the NDU, including an application for joining the public contract, constituent documents, ownership structure chart, a letter of no relation to the aggressor states, and the account registration form. After verifying the documents, the NDU applies to the Ministry of Justice with a request to enter the information into the USR. This date is considered to be the official start of the registration of the LLC's shares in the NDU system. It is also confirmed by an extract from the register, which is subsequently used to open accounts. The last step is the opening of accounts and the commencement of servicing. After the changes are made to the USR, the NDU opens the depositary accounts for the LLC and its participants. The participant can choose where their account will be serviced: directly by the NDU or by any of the depositary institutions that provide such services (e.g., a bank). The transition to the NDU share accounting system is not just a technical update, but a step towards strengthening corporate security, transparency and trust in business. This approach minimises the risks of unauthorised interference, provides access to modern digital services and complies with international corporate governance standards. For companies seeking stability, investment attractiveness and modern corporate tools, this is a forward-thinking solution. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law Oles Riabchuk, Senior Associate at Corporate Law and M&A practice at GOLAW, Attorney at Law

The Minerals Agreement: new opportunities for American investors

Recently, the Agreement between the Government of Ukraine and the Government of the United States of America on the Establishment of a United States-Ukraine Reconstruction Investment Fund (hereinafter the “Agreement”) has come into force for Ukraine. The Agreement provides for the establishment of a limited partnership between the states (hereinafter the “Partnership”), the purpose of which is, inter alia, to encourage transparent, accountable and future-oriented investments in critical sectors of Ukraine's economy to support Ukraine's recovery strategy. For American investors, this Agreement grants access to perspective Ukrainian projects on special terms, with tax benefits, legal protection, and a stable investment environment. Investment opportunities Pursuant to the Agreement, Ukrainian state authorities will be required to include in all special permits for subsoil use or licenses a provision obliging the recipient of such permit/license, if they wish to raise capital, to provide the Partnership with relevant investment information on the terms of participation in a project. If the Partnership is officially interested in cooperation, the permit holder will have to engage in good faith negotiations with the Partnership and not offer any third party significantly more favorable financial terms for a similar project. It is assumed that the same provisions will be included in public-private partnership contracts, concessions, and agreements for the construction or operation of significant infrastructure relevant assets. In addition, all special permits for subsoil use or licenses should include provisions granting the United States partner (the International Development Finance Corporation) or its authorized representative the right to negotiate for offtake rights on market-based terms during the validity period of such permit or license. Moreover, the permits and licenses will also include provisions on refraining the permit holder from offering third parties significantly more favorable financial/economic terms for offtake of substantially similar quality or quantity of product. It should be noted that the Agreement covers a significant number of natural resources. It is expected that such provisions will create a real opportunity for American investors to participate in promising mining and infrastructure projects on favorable terms and with the support of the International Development Finance Corporation. Exemption from taxation and tariffs Given that the economic activities related to the Partnership will take place in Ukraine, the Government of Ukraine will guarantee that any income of the Partnership, contributions and other payments to the Partnership related to revenues and earnings/other payments under the Agreement will not be subject to any taxes, levies or withholdings by the Ukrainian state authorities. Meanwhile, the United States expects that it will not impose tariffs on the natural resources acquired under the Agreement. Currency convertibility and funds transfer Ukraine will provide free convertibility of hryvnia into U.S. dollars, as well as the ability to transfer funds to Partnership accounts, both in Ukraine and abroad, without any fees, conditions or delays. In the event of a deterioration in the balance of payments or a reduction in the level of gold and foreign exchange reserves, the Government of Ukraine, after consultation with the United States Department of the Treasury, may temporarily impose restrictions on the exchange of hryvnia into U.S. dollars and the transfer of funds to the Partnership's accounts. However, in such event, Ukraine shall be obligated to reimburse all costs and expenses incurred in connection with the imposition of payment, conditions or delays with respect to such payments (regardless of the reason for the establishment of the restrictions). Stability, perpetuity and priority of the Agreement Government of Ukraine ensures the following: regardless of the adoption of new regulations or amendments to existing legislation, to provide the Partnership and its partners with no less favorable conditions than those set forth in the Agreement; in case of inconsistencies between the provisions of Ukrainian legislation and the terms of the Agreement, to recognize the priority of the latter; not to refer to the norms of national legislation as a reason for failure to fulfill its obligations under the Agreement. It is worth noting that the Agreement is open-ended and will remain in force until the states agree to terminate it. Conclusions It should be noted that the Agreement has a framework nature. In particular, as envisaged by its provisions, the detailed mechanisms, procedures and conditions for the implementation of certain of the above-mentioned clauses were specified in the Limited Partnership Agreement, the official text of which is currently not available in publicly available sources due to its confidentiality. Nevertheless, even at this stage, the Agreement establishes the foundation for systematic cooperation between the states, enabling the United States side to participate in Ukraine's recovery by investing on favorable, stable and predictable terms. Authors: Viktoriia Bublichenko, Partner, Head of Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law Tetiana Fedorenko, Senior Associate at Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law Anna Kostsova, Paralegal at Tax, Restructuring, Claims and Recoveries practice at GOLAW

Current approaches of court practice regarding the recognition of a non-resident’s representative office in Ukraine as a permanent establishment

STARTUP INVESTMENT PECULIARITIES: LEGAL ADVICE

Funding early-stage companies with the goal of earning profits after their intensive growth phase has always been a popular financial tool – backing both the wealthiest and, paradoxically, the poorest individuals on the planet. What investment mechanisms are used in practice? There are three primary investment mechanisms. Equity Investment The investor acquires corporate rights in the company. This mechanism provides the investor with the highest level of control over the company's operations, as they become a shareholder in the startup and can directly influence decision-making. This form of investment gives the investor significant powers, the strongest level of protection and control, and allows them to strengthen their position through a shareholders' agreement or by incorporating specific rights and guarantees into the startup’s charter. Convertible Loans This tool allows funds to be raised without immediately valuing the company, which is especially useful in conditions of uncertainty. The investor provides a loan that can later be converted into a share in the startup—usually during the next funding round or once a certain valuation is reached. A typical structure includes an interest rate, a discount for share purchase, and a conversion trigger (the amount of investment or company valuation that activates the conversion). For example, an investor provides a convertible loan of $100,000 for one year at 10% annual interest. The agreement provides for a 20% discount on conversion. After one year, a new funding round takes place, valuing the company at $1,000,000. With interest, the debt to be converted is $110,000. With a 20% discount, the effective valuation for this investor is $800,000. Thus, upon conversion: $110,000 ÷ $800,000 = 13.75% ownership in the company. This method avoids difficult early-stage valuation negotiations by deferring them until more certainty and external valuation exists. However, a drawback is the lack of direct investor involvement in the startup, making it harder to influence internal decision-making. SAFE (Simple Agreement for Future Equity) A contract where the investor receives rights to a share in the startup after a future funding round valuation. SAFE is not a debt instrument – it has no repayment terms or interest. Instead, it may include a valuation cap (the investor pays no more than a set value regardless of the startup’s eventual valuation), a discount on share purchase, an MFN clause (Most Favored Nation), which guarantees the investor the best deal terms offered to future investors. SAFE is gaining popularity in Ukraine and is widely used in the U.S. (notably by Y Combinator) as a simpler alternative to convertible loans, especially at the pre-seed and seed stages. Beyond these mechanisms, there are quasi-investment tools and venture debt, but they remain extremely rare in Ukraine and are essentially modified forms of convertible loans. Stock option plans (e.g., for employees) also exist, granting the right to buy shares at a fixed price. However, options are not true investment tools—they are designed to attract human capital and reduce the startup’s burn rate in early stages. Key Risks For Investors Investors face various risks when funding startups, which should be evaluated and mitigated wherever possible. All risks can be grouped into basic and additional. Basic Risks – these are inherent to startup investments and cannot be eliminated due to the nature of early-stage ventures. They include failure to develop the core product or technology, lack of market interest, illiquidity or loss of product liquidity. In short, basic risks are the risk of startup failure. They are unavoidable and explain why early-stage investments offer high potential returns. Once a company has a product and a market share, it's no longer considered a startup. Additional risks are factors that can be eliminated or minimised by the investor through a series of actions or the use of special legal instruments. Additional Risks & How to Avoid Them Equity Dilution Investor shares may be diluted in subsequent funding rounds, either voluntarily, by agreement with the founders to raise more capital, or involuntarily, when founders disregard the investor’s interests. This problem is very common. A similar incident happened to Eduardo Saverin, one of the co-founders of Facebook, whose stake was diluted from 34.4% to 0.03%. In order to avoid such issues anti-dilution clauses (provisions that protect investors from dilution in the event of new rounds of financing) must be included in the investment or corporate agreement. Such provisions may also be included in the charter, depending on the chosen investment structure. Ineffective Management & Misuse of Funds By ineffective management, we refer to either the conscious or unconscious withdrawal of investor funds from the company in ways that do not help the startup become a profitable business capable of generating returns for the investor. Unconscious withdrawal of funds typically happens when investment is misused, often due to a lack of experience, insufficient knowledge, inadequate qualifications of the founders, and the absence of strategic planning. Conscious withdrawal of funds, however, presents a more concerning scenario. Essentially, these are types of startups created with the intention of "burning out" after securing funding. The goal of such ventures is not to execute an idea but to secure financing for its development and then drain the funds by increasing the company's burn rate. This can involve inflating salaries, hiring friends and family for key positions, or engaging contractors for services (such as marketing and consulting) with no standardized pricing. To prevent ineffective management, it is recommended to conduct a thorough legal and financial audit of the startup to assess current expenses and growth plans. The corporate agreement, charter, or investment contract should also include mechanisms that establish clear rules for the use of invested funds and grant investors the ability to block unjustified decisions. Deadlocks Due to Founder Conflicts A frequent issue is the blocking of company activities by one or more founders due to a conflict with an investor or another founder. This can arise from a desire to repurpose the work for another project or from an internal disagreement about the company's strategic direction. To minimize such risks, it is essential to develop a joint business strategy during the investment stage. This plan will help determine if the co-founders and investor share the same goals. Despite the most detailed development strategy, disputes can still arise. To mitigate this risk, corporate documents should include procedures for mediation and arbitration in case of conflicts between founders and/or the investor, exit strategies for the investment, and out-of-court dispute resolution mechanisms. These processes must be swift and effective, as even a brief blockage of decision-making in a startup can lead to its downfall. Loss of Intellectual Property, Technology, Brand, Patents Startups often prioritize developing the founders' idea while bypassing legal procedures and protections due to limited funds and a focus on product development rather than safeguarding it. While this approach is understandable, it introduces additional risks for both the startup and the investor. Failure to protect the company’s key assets, whether it be its brand, technology, patents, or other intellectual property, puts those assets at risk of being lost. The loss of such assets will inevitably result in a significant decrease in the company's value, if not the potential closure of the startup. To prevent such risks, a comprehensive due diligence process should be conducted. This will involve (1) identifying the company’s key assets (such as software code, art objects, technology, etc.); (2) verifying the origin of these assets and reviewing the original documentation regarding their development (contracts, intellectual property transfer agreements, etc.); (3) developing a framework to document work results and implement mechanisms for protecting key assets, followed by registering the relevant rights. Overvaluation or Undefined Valuation at Time of Investment Startup valuations during the pre-seed stage are often based on subjective factors or, in some cases, there is no valuation at all. This creates a risk of investors overpaying for a stake in the company during the early stages of funding. To protect the investor’s interests, a SAFE (Simple Agreement for Future Equity) agreement can be used, which sets a cap on the company's valuation for early investors. This means that regardless of the company's actual valuation, the amount used for calculating the investment offer cannot exceed a predetermined threshold. It’s important to note that while this tool offers protection, it introduces other risks. Since the investor does not acquire equity in the company, they have no direct influence on the company’s decisions. This is why equity investment remains the most popular form of investment around the globe. Insufficient Funding to Reach Profitability or Attract Further Investment A common issue arises when founders create overly optimistic forecasts regarding the resources needed to develop a product or achieve profitability after its launch. Unquestioningly accepting the founders’ projections, as outlined in their pitch deck, can lead to a situation where the investor becomes a hostage of the startup – where the product hasn’t been created yet, but the investment has already been spent. In such situations, trying to reclaim the investment is futile, as the startup no longer has the funds. The investor faces a difficult choice: provide additional funding from their own pocket, or attempt to bring in another investor and hope to recover their initial investment later. While it’s impossible to entirely eliminate this risk, conducting an independent evaluation of the company’s product, calculating the company's burn rate, assessing the product's profitability, and analyzing market conditions, alongside a comprehensive financial and legal audit of the startup, can help minimize this risk. Conclusions A proper approach to conducting due diligence, evaluating a startup’s profitability, and structuring the investment transaction does not guarantee the return of the invested funds, but it significantly reduces the risk of losing the investment. By applying the provided advices and taking a comprehensive approach to investing, most additional risks can be eliminated, and the basic risks can be reduced, thereby protecting the investor from losing their funds. In conclusion, it’s important to remember that fortune favors the bold, but luck favors the prepared. Authors: 1. Oleksandr Melnyk, Partner, Head of Corporate Law and M&A Practice at GOLAW, Attorney at Law 2. Nazarii Zeliak, Corporate Law and M&A Practice Associate at GOLAW

Polygraph in criminal proceedings in Ukraine: an effective means of proof or a dubious tool?

Lie detector in domestic legal realities What do a lie detector and criminal procedure in Ukraine have in common? While pop culture and American television series often portray the polygraph, or so-called "lie detector," as an indisputable tool for exposing lies, in reality, its use in Ukrainian criminal procedure remains a little-noticed and controversial topic. Although the current Criminal Procedure Code of Ukraine does not explicitly permit the use of a polygraph, it also does not explicitly prohibit it. Such regulatory uncertainty has led to a situation where polygraphs are actively used in internal personnel procedures of law enforcement agencies, but their evidentiary value in criminal proceedings remains limited. Recent years have seen the approval of guidelines on the use of polygraphs in the structures of the Ministry of Internal Affairs, the Ministry of Defence, the Security Service of Ukraine, the National Guard, and prosecutor's offices, among others. In particular, according to the Ministry of Internal Affairs' Order No. 920 of November 13, 2017, a polygraph is defined as a specialised psychophysiological device that registers at least five indicators of physiological response to psychological stimuli without harming the person. Is a polygraph, as a means of proof, an innovation or "inappropriate creativity"? The use of a polygraph at the stage of pre-trial investigation, particularly during interrogation, is a manifestation of the introduction of innovative technologies not only in the forensic component of modern science but also in procedural law. However, the effectiveness of such use largely depends on the professionalism of the polygraph examiner and the correctness of the interpretation of the results. After all, physiological indicators themselves are only indicative, not absolute, data, meaning that the information obtained during the test is probabilistic and indicative, and does not establish facts with legal certainty. To lend the study's results evidentiary value, a polygraph must be used as part of a forensic psychophysiological examination, based on a relevant resolution by the investigator, prosecutor, or a ruling by the investigating judge or court, depending on the stage of the proceedings. The expert's opinion based on the results of such an examination is a procedural source of evidence. Technical component of the process Today, the standard for equipment is DSTU 8692:2016. The only polygraph that meets this standard is the RUBICON model, which is actively used by the Kyiv Scientific Research Institute of Forensic Expertise, the State Bureau of Investigation, the National Police, and other organisations. A professional polygraph examination consists of three main stages: a pre-test interview, the examination itself, which involves registering indicators, and the analytical processing of polygraph results based on the examination's findings. Modern devices record heart rate, blood pressure, respiration, skin conductivity, and other vital parameters in real-time. Based on a comparison of responses to control and relevant questions, the polygraph examiner concludes the truthfulness of the answers. Unfortunately, polygraph results depend on the subjective interpretation of the polygraph examiner, which reduces their objectivity. Stress susceptibility, physiological characteristics, or chronic illnesses can distort the results, even if the person is being truthful. This creates a significant risk of drawing false conclusions that may impact the course of the pre-trial investigation. It is essential to adhere to the principle of voluntariness. According to Article 28 of the Constitution of Ukraine, no person may be subjected to research without his or her written consent. A polygraph examination cannot be equated with an investigative action, such as interrogation, so any arguments by law enforcement officers regarding the mandatory nature of the examination should be viewed critically. That is why the presence of a lawyer during the interrogation of a person, even if they are a witness, can help avoid such manipulations by the pre-trial investigation body. What does the court practice say about this? Court practice shows a "cautious" attitude towards the polygraph. For instance, some court decisions demonstrate a gradual recognition of the significance of polygraph examination results. In case No. 301/943/19, the Irshava District Court of Zakarpattia Region recognised the conclusion of a forensic psychological examination with a polygraph as a valid source of evidence. However, in case No. 676/7835/19, the Khmelnytsky Court of Appeal emphasised the absence of direct authorisation for the use of a polygraph in criminal proceedings and rejected its results as evidence. In its decision, the Appeals Chamber of the High Anti-Corruption Court in case No. 757/13635/17-k stated that "polygraph indicators are only probable and indicative." A similar position can be seen in the rulings of the Supreme Court, particularly in cases No. 621/1308/18 and No. 234/4850/17. In other words, a polygraph can only be used as an auxiliary tool to supplement other evidence. Its results have limited evidentiary value, as the opposing party can always appeal to the hypothetical nature of the conclusions of such a study. International experience of using a "lie detector" International practice is also ambiguous. In more than 70 countries, polygraphs are used as an auxiliary tool, but the United States is the leader. There, its use is regulated at both the federal and state levels, for example, under California Law No. 351.1 of 1983. In some states, the polygraph is explicitly provided for in the procedural law in the investigation of various "sensitive" categories of criminal offences, such as sex crimes. However, even though polygraphs are more widely used at the state level, their results are often not recognised as evidence in court, but are used solely for preliminary truthfulness assessments. Conclusions Thus, although the use of a polygraph appears quite impressive and innovative on screens, it cannot be considered a sufficiently effective procedural tool in criminal proceedings under the current CPC of Ukraine. Its legal uncertainty and the probabilistic nature of the results make it impossible to use them as evidence. Authors: Kristina Kolchynska, Counsel at Criminal Law practice at GOLAW, Attorney at Law Marko Kotiv, Paralegal at Criminal Law practice at GOLAW

NBU eases foreign exchange restrictions: what resolution No. 95 has changed for businesses and investors

On 5 August 2025, the National Bank of Ukraine adopted resolution No. 95, which significantly amends the rules on foreign exchange operations for corporate clients and foreign investors. Key changes in foreign exchange regulation Resolution of the NBU board No. 95 of 5 August 2025 marks another step is easing the wartime foreign exchange restrictions introduced by resolution No. 18 of 24 February 2022. The new rules are aimed at stimulating investment and increasing the foreign exchange flexibility of Ukrainian businesses, while maintaining the necessary control mechanisms. Dividend repatriation One of the most important innovations concerns the payment of dividends abroad. Residents will now be able to partially repatriate dividends for the period of activity starting from 1 January 2023. The monthly limit of EUR 1 million remains unchanged. According to the NBU, the current overall limit prevents a significant increase in demand for foreign currency, while allowing dividend repatriation will strengthen foreign investors’ confidence and stimulate the inflow of new capital into Ukraine. Funds transferred abroad in the form of dividends may also be used for other purposes, including repayment of debt obligations. New risk management instruments Resolution No. 95 considerably expands the possibilities for forward transactions. First, clients are now entitled to sell foreign currency to banks for hryvnia on forward terms without the need for physical delivery of the underlying asset. Second, residents are permitted to purchase foreign currency from a bank on a forward basis for the purpose of hedging exchange rate risks in import transactions. At the same time, restrictions have been set for banks: they may not increase their net long foreign currency position, so such forward transactions are possible only within the amount of currency the bank has itself purchased on a forward basis from its clients. These innovations provide corporate clients with more tools to manage currency risks but also require the establishment of internal accounting and control for forward contracts. Simplification of international settlements Following the amendments, residents and non-residents may return erroneously credited foreign currency funds within three working days of the bank receiving the relevant notice. This increases the confidence of foreign partners, as their funds will not be blocked without the possibility of return. The establishment of a three-day period for returning erroneously credited foreign currency significantly improves the predictability of foreign exchange operations and reduces reputational risks for banks. This change sends an important signal to foreign partners about the normalisation of foreign exchange regulation and alleviates concerns about the “freezing” of assets in the event of technical errors. Greater flexibility in servicing external credits The approach to servicing external borrowings has been substantially revised. Now, under loans from a pool of foreign creditors, enterprises may repay debt not only in favour of IFIs but also to other participants, namely first-tier banks with a rating of at least “A”. This change creates greater flexibility for Ukrainian enterprises in structuring external debt and may contribute to diversifying funding sources, potentially reducing the cost of borrowing through competition, and simplifying debt repayment procedures. At the same time, the imposition of strict rating requirements may limit the range of available banks, especially under martial law, when bank ratings may be downgraded due to war-related risks. Conclusions NBU resolution No. 95 is an important step in the liberalisation of foreign currency regulation, providing businesses with more management. The innovations are particularly beneficial for companies with foreign investors and those actively operating in international markets. However, successful use of the new opportunities requires careful planning, compliance with documentation requirements, and regular monitoring of regulatory changes. Companies should promptly adapt their internal processes to fully benefit from the liberalisation of foreign currency restrictions. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law; Oles Riabchuk, Senior Associate at Corporate Law and M&A practice at GOLAW, Attorney at law; Yaroslav Maltsev, Paralegal at Corporate Law and M&A practice at GOLAW.

Corporate PPAs: a modern alternative to “green” tariffs

Corporate PPAs (Power Purchase Agreements) are gaining popularity not only worldwide, but also in Ukraine. These are direct contracts under which electricity from renewable sources is sold not to the government, as was the case under the “green” tariff, but directly to private companies – end consumers. EU countries and the US have been moving away from government subsidies for renewable energy in favor of market mechanisms for a while now. According to BloombergNEF, 183 corporate PPAs were signed in the US in 2024 alone – nearly twice as many as the previous year. For Ukraine, this model is especially relevant given that the “green” tariff is only valid until 2030 and no longer applies to new industrial facilities (except in a few cases explicitly set out by law). It’s also becoming more attractive due to the ongoing financial instability in the energy sector. Benefits of PPAs in the Ukrainian Context Corporate PPAs primarily provide predictability and stability. These contracts are typically signed for 10 to 20 years and lock in the electricity price, helping businesses avoid market fluctuations. Beyond price stability, long-term PPAs also ensure a reliable power supply – a crucial factor given Ukraine’s recent energy challenges, especially after years of widespread blackouts. PPAs also serve as confirmation of a project’s financial viability, which is key for banks and investors when deciding on funding. For businesses committed to sustainability, PPAs help reduce CO₂ emissions, improve ESG ratings, and enhance corporate reputation. On top of that, they open the door to instruments like guarantees of origin and carbon credits – and that’s just the beginning. Regulatory framework: is it already working? Law No. 3220-IX has enabled renewable energy producers to enter into bilateral agreements without mandatory auctions. Regulatory restrictions on the term of such agreements have also been lifted, allowing long-term contracts to be signed even at the project development stage. Producers can leave the Guaranteed Buyer balancing group and operate on the open market, while retaining the right to return to the state model. Therefore, the legal landscape is already in place – all that remains is to use it effectively. ESG, guarantees of origin, carbon credits – how does this relate to PPAs? Guarantees of origin are electronic documents that officially confirm electricity was generated from renewable sources. This mechanism is already in place in Ukraine and is essential for access to EU markets. ESG principles refer to a business’s responsibility in environmental, social and governance matters. Investors and partners are increasingly demanding compliance with these standards – and purchasing electricity from renewable energy sources through PPAs is a concrete way to confirm your environmental friendliness. Carbon credits or emissions trading system – a system in which companies receive CO₂ emission limits: surpluses can be sold, shortages can be purchased. From 2025, Ukraine will reinstate the obligation to report emissions, and the launch of the emissions trading system itself is expected in 2028. Accordingly, entering into PPAs with renewable energy producers allows businesses to meet ESG requirements, obtain guarantees of origin, and prepare for new climate regulatory requirements. Practical aspects of concluding a PPA After considering the general principles of corporate PPAs, it is worth moving on to the the practicalities of putting them into action. First of all, this concerns the terms and conditions of the sale and purchase of electricity, which must be clearly regulated in the contract. If the electricity seller operates under the PPA model, it is important to stipulate in the contract the buyer's obligation to purchase the entire volume of electricity produced, except for that consumed for the station's own needs. The actual conclusion of the contract for a specific trading day is confirmed by the synchronous submission of identical daily volumes of electricity through the electronic platform of the transmission system operator – NPC Ukrenergo. In this regard, the contract must provide for an agreed procedure for coordinating the daily supply schedule, specifying the deadlines, responsible persons and methods of communication. Equally important is defining the moment when ownership of the electricity is transferred. In Ukrainian practice, this usually happens when the transmission system operator confirms the registration of the contract. From this moment, all risks associated with the ownership, use and disposal of electricity, as well as responsibility for compliance with market rules, are transferred to the buyer. Pricing within the PPA is one of the most sensitive issues. Usually, a model based on the day-ahead market is used, with simultaneous determination of price limits – minimum and maximum. This allows maintaining a balance between protecting the interests of the parties and flexibility in market conditions. The contract should also clearly outline the timing and procedure for payments, in line with tax law requirements. Given the long-term nature of PPAs, it is worth providing for the seller's right to temporarily suspend electricity supply in the event of a breach of payment discipline, failures in volume registration or default by the buyer. The conditions for such suspension must be clearly spelled out and agreed upon by the parties in advance. The contract separately regulates both planned and emergency maintenance – including notification procedures, shutdown schedules, and deadlines for resolving technical issues. This helps avoid disputes and interruptions at the energy facility. The parties must hold all licenses, agreements, and technical documents required under the Electricity Market Rules. It is also necessary to provide for the seller's right to suspend electricity supply in the event of disruptions in the transmission or distribution system, including during maintenance, without applying sanctions. Particular attention should be paid to regulating liability for imbalances – the financial consequences of deviations between the forecast and actual volume of electricity supply. Moreover, the issue of regulating imbalances is an essential condition of the contract. There are also specific points to consider around the contract duration. It all depends on the stage of project implementation. While the agreement is formally in force from the date of signing, actual electricity delivery usually begins only once the facility has been commissioned for commercial operation – that is, once all technical conditions have been met and supply can physically take place. Altogether, these provisions form the backbone of a well-functioning and predictable corporate PPA. Challenges and solutions Despite its benefits, the PPA market in Ukraine still faces a number of challenges. The biggest issue is the lack of a guaranteed long-term buyer (offtaker) willing to purchase large volumes of electricity. Green auctions have not been implemented at scale, and the private PPA market is developing slowly due to a shortage of creditworthy buyers. In particular, green auctions with state support do not enjoy investor confidence, due to both procedural imperfections and the risk of non-fulfilment of obligations on the part of the state. The current “contract for difference” model used in green auctions is unattractive to investors, as auction prices are often lower than market prices. The “contract for difference” mechanism provides that the state guarantees a fixed price to the producer, compensating for the difference in the event of a market decline. A transition to a “market premium” model is being discussed, where the producer sells the electricity itself and the state only pays extra when prices are low. Let us turn our attention to quotas. Investors working in Ukraine have much larger construction projects than the quotas currently offered in auctions. This significantly reduces the possibility for large projects to win. Conclusion Corporate PPAs are not just a trend, but a real tool for transitioning to a sustainable, competitive and energy-independent economy. They open up new opportunities for both energy producers and consumers, allowing them to combine economic efficiency with social and environmental responsibility. A well-structured agreement, supported by professional guidance, is the key to making the most of this instrument in the Ukrainian context. Authors: Oleksandr Melnyk, Partner at GOLAW, Head of Corporate Law and M&A practice, Attorney at law; Khrystyna Zimenko, Associate at Corporate Law and M&A practice at GOLAW; Vladyslava Zaichko, Paralegal at Corporate Law and M&A practice at GOLAW.

LEGALISATION OF FOREIGN CITIZENS IN UKRAINE: KEY POINTS

Despite the full-scale war, recent years have seen a growing number of foreign citizens arriving in Ukraine for various purposes: from participating in volunteer, humanitarian, and educational projects to starting businesses and building partnerships with Ukrainian entrepreneurs. Their presence holds significant value from a humanitarian and economic perspective, as it fosters international support, attracts investment, and facilitates the exchange of valuable expertise. At the same time, despite the imposition of martial law, Ukraine’s migration legislation has not undergone significant changes. As a result, the rules governing the duration of stay and other migration-related matters remain standard legal issues that shall be addressed by those concerned. Foreign citizens entering Ukraine without a visa are generally permitted to stay for no more than 90 days within any 180-day period, unless otherwise stipulated by international treaties. For citizens of countries subject to a visa regime, the permitted duration of stay is determined by the conditions of the issued visa, which typically also allows for a stay of up to 90 days. After the permitted stay expires, foreign citizens shall leave the territory of Ukraine. Failure to comply may result in administrative liability in the form of a fine. However, the most severe consequence may be a ban on re-entry into Ukraine. A temporary residence permit is one of the main legal mechanisms for foreign citizens to remain in Ukraine. It allows them to stay legally in the country for at least one year, with the possibility of extension, and to travel freely in and out of Ukraine without obtaining a visa each time, which is a significant convenience. The law provides a relatively broad list of grounds for a foreign citizen to obtain a temporary residence permit in Ukraine. These include official employment, participation in volunteer activities, involvement in cultural, scientific, educational, or sports activities, employment in a representative office of a foreign company, participation in the activities of branches of foreign non-governmental organisations, and more. Employment is among the most common grounds for obtaining a temporary residence permit. To employ a foreign citizen officially, the employer shall obtain a permit to use foreign labour, issued by the relevant regional employment centre. This permit is a mandatory prerequisite for obtaining a long-term D-04 visa, allowing the applicant to submit documents for a temporary residence permit in Ukraine. The D-04 visa is issued by Ukrainian consular offices abroad, typically for 90 days. The visa fee is USD 65, but the amount may vary depending on the applicant’s citizenship and the applicable bilateral agreements. For instance, U.S. citizens are charged a visa fee of USD 182 based on reciprocity. Therefore, foreign citizens are advised to check current consular fees in advance to avoid unexpected expenses. It is important to remember that once a temporary residence permit is issued, foreign citizens shall register their place of residence at their address within 30 calendar days. Failure to fulfil this obligation is common in practice, particularly among individuals staying in Ukraine for short-term professional or humanitarian purposes. However, missing the registration deadline may result in an administrative fine and, in some cases, may even prevent the permit extension. It is worth noting that under martial law in Ukraine, the validity of temporary residence permits that expired after the introduction of martial law is automatically extended for the duration of martial law and 30 days after its termination or repeal. Nonetheless, even though such permits are automatically extended, we recommend renewing them on time, especially if the foreign citizen plans to travel abroad, submit documents to banks, or obtain permits and enter into contracts. At the same time, in response to legislative initiatives introduced by certain EU member states to regulate the legal status of Ukrainian citizens, Ukraine has implemented reciprocal mechanisms for simplified legalization. The most notable example is the Republic of Poland: under the Law of Ukraine No. 2471-IX dated 28 July 2022, Polish citizens are granted the right to reside in Ukraine for up to 18 months, with the possibility of extension. They may be employed without obtaining a work permit, register legal entities or operate as individual entrepreneurs, and access public healthcare, education, and other social services on terms comparable to those available to Ukrainian nationals. In this way, the Ukrainian legislator has established a special legal regime that significantly facilitates the integration of Polish citizens. In conclusion, Ukrainian legislation enables foreign citizens to live and work legally based on a temporary residence permit. The process is relatively quick and non-bureaucratic if the application package is prepared correctly. This is particularly important for attracting foreign managers and specialists who can effectively integrate into the Ukrainian business environment, contribute to economic development, and expand international cooperation. At the same time, it creates favourable conditions for foreign businesses to enter the Ukrainian market through the direct presence of their representatives, which is especially relevant in Ukraine’s post-war reconstruction. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law; Oles Riabchuk, Senior Associate of Corporate and M&A practice at GOLAW, Attorney at law; Oleksandr Shevchuk, Junior Associate of Corporate and M&A practice at GOLAW.

IS IT A MINERAL DEAL OR A DEAL ABOUT MORE THAN JUST MINERALS?

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.

Litigation regarding wellness payments to employees of JSC “Ukrzaliznytsia” is ongoing

Violation of Military Registration Rules: Does the "Reserv+" System Work for Paying Fines?

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

Foreclosure on mortgaged property: legal mechanisms and key changes due to the imposition of martial law

A mortgage is one of the most common mechanisms used to secure the performance of obligations. For creditors, securing their claims with a mortgage serves as a guarantee that the debt will be repaid. However, situations often arise in which debtors fail to fulfill their obligations for various reasons. In such cases, within the framework of mortgage-secured legal relations, the creditor has the right to foreclose on the mortgaged property, i.e., to satisfy their claims by selling the debtor’s pledged property. This article explores key aspects of the foreclosure procedure from the perspective of protecting creditor rights. Nature and legal characteristics of a mortgage A mortgage is a pledge of immovable property whereby the property remains in the possession of the mortgagor or a third party (such third party being referred to as a property guarantor). A mortgage serves as a guarantee that the debtor intends to properly fulfill their obligations to the creditor. If the primary obligation is not fulfilled (either in whole or in part), the creditor has the right to foreclose on the mortgaged property. The foreclosure procedure is governed by applicable legislation and may also be defined by the terms of the mortgage agreement. Grounds for foreclosure on mortgaged property Foreclosure becomes possible in case of a breach by the debtor of the terms or manner of performance of the obligation secured by the mortgage. The law provides that a creditor has the right to satisfy their claims through the sale of the mortgaged property only after properly notifying the debtor and fulfilling other procedural requirements. To protect creditor rights, it is crucial to strictly comply with legal formalities — from properly executing the mortgage agreement to timely submitting claims to the court or enforcement authorities. Methods of foreclosure on mortgaged property Ukrainian legislation provides several foreclosure options, enabling the creditor to enforce their rights in the event of the debtor’s default: Judicial foreclosure Foreclosure may be carried out based on a court decision. In such cases, the creditor files a claim with the court seeking foreclosure on the mortgaged property. Once a final and binding court decision is obtained, the enforcement service sells the property to satisfy the creditor’s claims. It is important for the creditor to submit a complete set of evidence confirming the legitimacy of the claims and the legality of the foreclosure. Out-of-court foreclosure There are also mechanisms allowing foreclosure without court involvement: Notarial writ of execution: if the mortgage agreement contains the relevant clause, a notary may issue a notarial writ of execution, which grants the creditor the right to enforce the debt against the mortgaged property without resorting to court proceedings. Agreement on satisfaction of mortgagee’s claims (mortgage reservation clause): such an agreement may provide for the transfer of ownership of the mortgaged property to the mortgagee or authorize the creditor to sell the property on their own behalf to any third party under a sale agreement. This expedites the satisfaction of creditor claims without judicial involvement. Specifics of foreclosure under martial law With the introduction of martial law in Ukraine, the legislature has temporarily restricted certain mechanisms for mortgagee rights enforcement, which directly affects the practice of foreclosure. Specifically, during martial law, the following provisions of the Law of Ukraine “On Mortgage” have been suspended: the mortgagee’s right to acquire ownership of the mortgaged property; the mortgagee’s right to sell the mortgaged property eviction of residents from mortgaged residential properties subject to court foreclosure decisions; sale of mortgaged property through electronic auctions or bidding platforms. These restrictions apply primarily to: individuals, consumer loans, residential property that serves as the sole residence or is located in combat zones or has been damaged. Legal entities, individual entrepreneurs (FOPs), and commercial property are not subject to these restrictions. For example, current court practice shows that in cases involving land plots (not designated for residential development) or non-residential buildings, courts often reject the application of the moratorium if the loan does not have consumer features. The Supreme Court has affirmed that filing a foreclosure lawsuit is not prohibited under the moratorium. The moratorium mainly applies to out-of-court procedures and the enforcement stage (i.e., sale of the property). Courts may grant foreclosure claims, but the execution of the judgment may be suspended if the property falls under the moratorium. Thus, creditors can record their claims even if actual enforcement is delayed. Notarial writs of execution and agreements on satisfaction of claims are permissible only in cases where the property or the loan is not subject to the moratorium. Judicial practice demonstrates a balanced approach: courts examine whether the loan is truly consumer in nature and whether it falls under legal protections, and they allow foreclosure on property that does not meet the criteria covered by the moratorium. Thus, despite existing restrictions, foreclosure on mortgaged property remains possible, but it depends on the legal status of the debtor, the nature of the loan, and the type of property involved. Judicial proceedings remain the most universal and secure tool for enforcing creditor rights. In summary, while martial law imposes additional challenges in the protection of creditor rights, it does not deprive creditors of the ability to act lawfully and satisfy their claims. Conclusion Overall, foreclosure on mortgaged property is an effective tool for protecting the creditor’s rights in the event of the debtor’s failure to fulfill their obligations. Legislation provides for both judicial and out-of-court foreclosure mechanisms, allowing the creditor to choose the most effective option depending on the specific circumstances. At the same time, the successful enforcement of the creditor’s rights depends on compliance with the prescribed procedures, proper documentation, and accurate determination of the legal status of the debtor and the property. Authors: Kateryna Manoylenko, Partner at GOLAW, Head of Litigation and Dispute Resolution practice, Attorney at law; Ihor Selivakin, Associate at Litigation and Dispute Resolution practice at GOLAW, Attorney at law; Viktoriia Prokopenko, Paralegal at Litigation and Dispute Resolution practice at GOLAW.

The state's mistake is not your burden

There is one simple but fundamental rule in relations between citizens, businesses, and the state: if the state has made a mistake, it has no right to correct that mistake at your expense if you have acted honestly and in good faith. These are not just nice words, but a real legal position that has been confirmed by both the European Court of Human Rights (ECHR) and the Supreme Court. 1. Why is this important right now? In times of war, reforms, and constant change, the risk of bureaucratic errors on the part of the authorities only increases. Somewhere, an official did not have time, somewhere he made a mistake, somewhere he applied the law incorrectly. At the same time, citizens and businesses cannot be burdened disproportionately for such mistakes. The key point is that this risk should be borne by the state. If you acted in good faith, relying on official documents/decisions, and complied with the requirements established by law, you are protected. 2. What is the principle of good governance? In dry legal language, it means that the state must act: in a timely manner; predictably; honestly; within the law. This rule is not just about "official ethics." It is a legal standard by which courts assess whether the authorities acted on the basis of, within the limits of, and in the manner prescribed by the Constitution and laws of Ukraine. Thus, back in 2009 (decision of April 16, 2009, No. 7 rp/2009), the Constitutional Court of Ukraine concluded: "if human rights have arisen on the basis of a decision by an authority, and the person is opposed to their change or abolition, the authorities cannot simply override the situation. This is a guarantee of stability in social relations." 3. What does the Supreme Court say? The Supreme Court has repeatedly emphasized: the risk of error by the state lies with the state itself; if a law can be interpreted in different ways, the interpretation in favor of the individual shall prevail; rights acquired in good faith cannot be taken away simply because an official once made a mistake. For example, the Grand Chamber of the Supreme Court, in its ruling of May 14, 2025, in case No. 466/2086/14-ц, explicitly stated: "[...] The need to correct an old ‘mistake’ should not disproportionately interfere with a new right acquired by a person who relied in good faith on the legality of the actions of a public authority. The risk of any error made by a state authority should be borne by the state itself, and these errors should not be corrected at the expense of other third parties [...]". 4. European approach The ECHR in the case of Rysovsky v. Ukraine formulated its position even more strictly: "The principle of 'good governance' should not, as a rule, prevent public authorities from correcting accidental errors, even those caused by their own negligence [...]. On the other hand, the need to correct a past "mistake" should not disproportionately interfere with a new right acquired by a person who relied on the legitimacy of the good faith actions of a public authority [...]. In other words, public authorities that fail to implement or comply with their own procedures should not be able to benefit from their unlawful actions or avoid fulfilling their obligations [...]". Therefore, the state can correct its mistake, but not at the expense of violating the rights of a bona fide citizen. At the same time, if the right has already been granted and the person acted honestly, compensation or other redress must be paid in the event of its revocation. Similar conclusions were reached by the ECHR in the cases of Gashi v. Croatia, Grafov v. Ukraine, and Kryvenky v. Ukraine. 5. Real examples from Ukrainian court practice "Revocation of fuel trading licenses: state liability for its own procedural errors" case No. 460/13337/23 A business entity obtained licenses for retail fuel trade from the tax authority after submitting all the documents required by law. A few months later, the licensing authority decided to revoke these licenses, citing the absence of information in the state register about the commissioning of the facilities. The court found that the facilities were factory-made modular gas stations, for which the law does not provide for any commissioning procedure. The regulatory authority did not prove any violations or submission of inaccurate data. The court ruled that the decision to revoke the licenses was unlawful, emphasizing that if the entity acted in good faith and complied with all legal requirements, the state had no right to revoke the granted right due to its own procedural errors. The risk of such an error lies with the state. "Cancellation of registration documents for reconstruction: violation of the principle of good governance" case No. 640/5473/20 The courts found that the owner of a residential building and land plot had reconstructed the facility on the basis of a duly registered notification of the start of construction work and a declaration of readiness for operation issued by the state architectural and construction control authority. The Department, citing the absence of a sample of previously designed networks, without conducting the inspection required by law and without establishing signs of unauthorized construction, canceled the aforementioned documents. The courts of first and appellate instances concluded that such actions violate the requirements of legality, proportionality, and good faith, since: the facility complies with the intended purpose of the land plot; the project documentation is approved and valid; the urban planning conditions and restrictions have not been canceled; the absence of sampling is not a sign of unauthorized construction. Taking into account the principle of good governance, the courts found the Department's order to be unlawful and revoked it as having been issued outside the scope of authority and without due legal procedure. 6. What does this mean for you? Good faith is key. If you acted honestly, using official decisions or documents, the state cannot take away your rights without compensation. The courts are on your side, both Ukrainian and European. An official's mistake is not your problem. The risk and consequences are on the state. Author: Tetiana Opanasiuk, Attorney at Litigation and Dispute Resolution practice at GOLAW

PPP IN UKRAINE: A GAME CHANGER OR JUST A NAME CHANGE

On 30 July 2025, the President of Ukraine signed the Law of Ukraine “On Public-Private Partnership” No. 4510-IX, adopted by the Verkhovna Rada of Ukraine on 19 June 2025 (the “Law”). The Law will come into force on 31 October 2025 and will replace the Law of Ukraine “On State-Public Partnership” No. 2404-VI dated 01 July 2010. According to the Law, the term “state partner” will be changed to “public partner”, and state-public partnership (“SPP”) will become public-private partnership (“PPP”). 1. WHAT IS A PPP, AND HOW DOES IT WORK? A PPP is a collaboration between the state and the private sector. In such a partnership, the state/public partner provides a certain asset for use by the private partner, who, in turn, invests in its development/restoration, etc., and receives it for use for a specific period. Thus, without spending its own resources, the state has the opportunity to develop its infrastructure, and the private partner, having received the asset for use, can commercialise it and, during the term of use, not only recoup its investment but also make a profit. In other words, SPP/PPP is a two-way street and provides for the possibility of risk sharing between partners. Moreover, unlike other forms of investment, SPP/PPP is an option for accessing public sector services. 2. LINGUISTIC UPDATE OR REAL CHANGE? The Verkhovna Rada received the draft law on 01 July 2022. In October of the same year, the draft law was adopted as a basis, and it was finally adopted almost three years later. So why did it take so long? Work on the draft law began in 2021, aiming to create a platform for attracting investment from the private sector. In 2022, after the start of the full-scale invasion, the adoption of the Law became not just a potential investment tool but an absolute necessity. According to World Bank estimates as of 31 December 2024 (RDNA4 report), restoration and reconstruction over the next decade will require USD 524 billion. Obviously, such funds will be a heavy burden on the state budget. SPP/PPP is a real way out of the situation – the investor: (1) invests in development; (2) takes on part of the risk; (3) is motivated to commercialise the asset as effectively as possible to make a profit; and (4) uses the asset and, after a specific period of time, returns it modernised to the state. The state only needs effective tools for businesses to use. According to IFC data (2023), the implementation of reforms aimed at improving the investment climate is expected to help attract an additional USD 282 billion, stimulating Ukraine’s development. According to the legislators, the work on the draft law aimed to identify genuine growth points in the field of SPP/PPP and develop practical, effective solutions. The work aimed to modernise the order and procedure. In connection with European integration, the work was accompanied, among other things, by the search for compromises on issues of compliance with European legislation and relevant negotiations with Brussels. As the authors of the Law note, a significant number of issues were successfully defended, and we ended up with a Law that corresponds to the realities of Ukraine and has the potential to be effective. 3. WHAT ARE THE GROWTH POINTS? A few statistics: according to the Ministry of Economy, out of 200 SPP agreements concluded, only 22 are actually being implemented. At the same time, 114 are not being implemented, 53 agreements have been terminated or have expired, and 11 have been suspended due to the armed aggression of the russian federation. In other words, the survival rate of concluded SPP agreements is about 10%. No one knows for sure how many were lost along the way to the conclusion. For comparison, in Turkey alone, 250 projects are being carried out over the past 30 years, and another 20 are still under construction. The main point of growth was and remains confidence in the state partner, or rather, the lack thereof. Moreover, the challenges with the state partner arise not only during the cooperation itself, but already on the way to it. Thus, the following challenges come to the fore: (1) legislative – a long and complex procedure – under the old law the preparation of documents could take up to three years, which is inefficient for both the investor – during this time, market conditions and the investment attractiveness of the project may change significantly, as well as for the state partner itself – potentially lost opportunities at the very beginning of the work, inefficiently spent resources of the state apparatus on the project; (2) human resources – the bureaucratic reality of the apparatus and the lack of expertise – SPP/PPP projects are rare in Ukraine, and, accordingly, the lack of experience and unwillingness to delve into the matters often lead to projects being stalled at the outset, and private investors face significant resistance at this stage. (3) practical – unformed selection committees lead to the need to form them up to six months, and some selection committees cannot even be formed because no representative is provided; the unwillingness of state and local government bodies to give guarantees slows down the attraction of funding for project implementation; (4) reputational – yes, reputational, SPP/PPPs are not a well-known concept in Ukraine, and private partners do not really understand the investment potential. Those who do understand have already had the opportunity to encounter the issues mentioned above, and their reluctance to repeat the experiment is entirely logical. An additional, but perhaps the most relevant factor today, remains the armed aggression of the russian federation, which adds potential risks of unprofitability of investments in infrastructure during martial law. 4. WHAT CAN WE EXPECT? First and foremost, we expect the most significant issues to be solved and the PPP actually to work: (1) procedure The law provides for two possible procedural routes – standard and simplified. The simplified procedure may be used for: ● projects with a threshold value of up to EUR 5,538,000; ● infrastructure and economic recovery projects, including concessions, during the period of martial law and for seven years after its termination or cancellation. The standard procedure will apply to all other projects. The preparation of a PPP project under the standard procedure will take place in two stages: the first is the preparation of a concept note, and the second is the preparation of a feasibility study. At the same time, the simplified procedure will include only one stage – preparation of a concept note. The decision on the implementation of the PPP will be made within 45 days from the date of submission of the concept note, while under the standard procedure – within 90 days from the date of submission of the feasibility study. In other words, the time required to prepare the documentation for the PPP will be significantly reduced. (2) selection committees, expertise It is envisaged that to ensure the possibility of organising and conducting a selection process, the public partner will have the opportunity to establish a permanent selection committee by its decision. According to the lawmakers, such commissions will exist at the Ministry of Economy, the Ministry of Infrastructure, and the Ministry of Defence. Other public partners will also be able to form permanent selection committee. Additionally, if necessary, a public partner may establish a selection committee for a separate PPP project. However, if the committee’s composition for a separate PPP project is not approved, its function will be performed by the permanent selection committee of the public partner. As we can see, the introduction of permanent selection committee will contribute to: ● the effective work of selection committee and reduce the time spent on their meetings for each individual project; and ● the development of expertise among members of permanent selection committee, which will have a positive impact on both the quality and speed of organising and conducting tenders for projects. (3) eliminating bureaucracy and corruption An additional step to reduce corruption risks and optimise the tender process will be the introduction of an electronic trading system (ETS), which will enable tenders to be conducted. According to the authors of the Law, the ETS will exist separately from Prozorro, but will be under the control of their administrative team. (4) guarantees The law provides guarantees of rights for both private partners and creditors. The PPP agreement will be subject to a guarantee of legislative stability – during the term of the PPP agreement, it will be governed by the legislation of Ukraine in force on the date of conclusion of the agreement, in terms of 1) the Law, 2) regulatory and legal acts adopted for its implementation, and 3) tax legislation in terms of regulating (determining) the object of taxation, the tax base, tax rates and tax incentives. The guarantee of legislative stability shall not apply to 1) legislation that mitigates the liability of the private partner; 2) legislation that reduces the object of the taxation, tax base, tax rates or establishes new tax incentives (extends existing incentives), abolishes taxes; and 3) changes to legislation that do not worsen the position of the private partner. There are also possibilities for compensation for losses in connection with certain legislative changes, actions/inaction of state and local government bodies, as well as in the event of termination of a PPP agreement. In other words, the position of the private partner within the framework of cooperation under a PPP agreement can only improve as a result of changes in the relevant legislation, and in the event of losses under certain circumstances, there is a possibility of compensation. (5) reputation The adoption of the Law is an important step towards increasing investment attractiveness, including through practical approaches and better regulation. At the same time, given the small number of successful projects, the first PPP projects will certainly be riskier for investors. 5. WHAT ELSE IS INTERESTING? ● Project initiation Previously, SPP proposals could be prepared by both state and private partners, but according to the Law, PPP projects can only be initiated by the public partner. The private partner still has the opportunity to submit proposals and ideas to the public partner, but they do not initiate the official procedure. On the one hand, transferring the initiative to the public partner and aligning it with European legislation enables the state to focus on priority areas of PPPs, which is a rational approach in the context of the country’s recovery. On the other hand, given the lack of knowledge about PPPs and the human factor, the existence of incentives for public partners to be effective is critically important. ● New public partners The Law expands the circle of potential public partners to include state-owned enterprises (in cases specified by Law) and public sector business companies. This means that from now on, property belonging to such public partners may become the subject of PPPs, which accordingly expands the scope of cooperation and opportunities for both public and private partners. ● New areas Previously, SPP could be applied to a specific list of areas and other areas of activity involving the provision of socially significant services, but under the new Law, PPPs can be implemented in all areas except those for which the law establishes restrictions or prohibitions on the implementation of PPPs and/or the transfer of a specific object to a private partner. In other words, opportunities are now beyond socially significant services, and potential investors will be able to choose from a broader range of areas. ● New forms of state support and its sources The new Law defines grants as a form of state support, as well as a demand guarantee (difference compensation). This makes it possible to support projects that are not potentially profitable and to eliminate the risk of demand instability. Moreover, from now on, there is the possibility of co-financing by state-owned enterprises, municipal enterprises and public sector business companies, which expands financing opportunities and reduces dependence on state and local budgets. 6. WHAT COULD POTENTIALLY BE PROFITABLE? Everything that is in demand from the public partner and for which it is unable to attract the necessary resources in sufficient volume. Based on current realities, it is obvious that the most pressing priorities for PPPs will likely be defence, infrastructure, and energy. Based on both the experience in Ukraine and the experience of other countries, it is possible to predict some possible models of cooperation within the PPP. In the defence sector: ● construction of military facilities and their subsequent maintenance The private partner designs, builds and launches the facility, then ensures its operation for a specified period and receives payments. For example, under the Skynet 5 private finance initiative agreement (PFI) in the UK, Airbus Defence and Space up launch and maintain satellites, and the public partner makes payments to the companies. This cooperation will continue until the Skynet 5 system is replaced. ● construction of infrastructure facilities for the military with subsequent maintenance A private partner builds housing and buildings for various purposes for military use and provides their subsequent maintenance, receiving a stable income over a long period of time. For example, the Allenby/Connaught project in the United Kingdom in 2006, which is designed to last 35 years and aims to improve the lives of 18,700 soldiers, involves the renovation of 562 buildings, the demolition of 496 buildings, and ancillary services such as catering, cleaning, property management, etc. In infrastructure: ● design, construction, modernisation and operation of infrastructure facilities The private partner is granted the use of the infrastructure facility, invests in it and receives payments from its users, paying a certain percentage of the income to the public partner. At the same time, upon completion of the project, the infrastructure facility is returned to the public partner. There is already an example of such a project in Ukraine – a 35-year concession for the port of Olvia, which provides for investments in the development of the port of approximately UAH 3.4 billion and at least UAH 80 million in investments in the infrastructure of Mykolaiv. ● construction of housing, social infrastructure and their maintenance The private partner builds housing in accordance with the agreements and financing agreed upon by the parties, provides housing management and maintenance services, and the public partner guarantees its long-term lease and payment of fees throughout the project term. Upon completion of the project, such housing is transferred to the public partner. Ireland’s Social Housing Bundle 1 project, which is based on this principle, has enabled the construction of 534 new homes and provides a profit for the private partner over the 27 years of the project. The Irish School Bundle projects, a series of PPP projects for the construction and maintenance of schools, provide for 25 years of cooperation and profit. In energy and critical infrastructure ● construction and operation of energy sources A private partner builds, owns and operates an energy source for a certain period of time and then transfers it to the state. For example, the Albanian PPP project Devoll Hydropower, which is one of the largest hydropower investments in the Balkans and involves the construction of three hydropower plants with a capacity of 278 MW, is being implemented under a concession agreement. ● design, construction and maintenance of critical infrastructure This example is being followed by the Seaham Garden Village project, which is designed for 40 years. Under this concession, the concessionaire has designed, is building and will maintain the heating network, as well as providing related services (metering, billing, customer service). These are just a few examples of PPP cooperation. Real opportunities will arise after the public partner initiates projects. AUTHORS: (1) Oleksandr Melnyk, Partner at GOLAW, Head of Corporate and M&A practice, Attorney at law; (2) Yevhenii Ahashkov, Senior Associate at Corporate and M&A practice at GOLAW; (3) Yaroslav Maltsev, Paralegal at Corporate and M&A practice at GOLAW.

REFORM OF SUBSOIL USE: FROM LEGISLATIVE CHANGES TO EUROPEAN INTEGRATION

1. Legal framework On 17 January 2025, Law of Ukraine No. 4154-IX came into force, amending the Code of Ukraine on Subsurface Resources and the State Programme for the Development of Ukraine's Mineral Resources Base for the period up to 2030. In accordance with these amendments, the Government was authorised to amend the list of minerals and components and the lists of subsoil plots (mineral deposits) of strategic and/or critical importance (the – “Lists”). On 14 July 2025, the Cabinet of Ministers of Ukraine adopted Resolution No. 845, which amended the Lists. Reminder, that these minerals and subsoil plots may be granted for use through two mechanisms: by holding electronic auctions for the sale of special permits for subsoil use, and by concluding a production sharing agreement (the “PSA”). These steps are part of a broader policy on the management of critical materials, which is being implemented under the Ukraine Facility. In particular, in the second quarter of 2025, international tenders are planned to be launched for the conclusion of production sharing agreements (PSAs) using standard terms and conditions. At the same time, it should be noted that legislative changes in Ukraine were adopted in the context of the European Act on Critical Materials (Regulation (EU) 2024/1252 11 April 2024), although they are not a direct implementation of this act. However, the directions of the reforms are significantly correlated with the European approach to strengthening strategic supply chains for raw materials. 2. New lists According to the updated lists, 11 items have been classified as strategic minerals (uranium, titanium, zirconium, copper, nickel, tantalum, strontium). Another 28 items have been recognised as critical (lithium, rare earth elements, vanadium, gallium, indium, caesium, tin). The government also detailed the instruments for accessing these resources: 23 deposits and 3 blocks can be transferred for use under PSA terms. The Surska, Novohurivska and Safonivska blocks, included in the new lists, have great potential. These three plots are uranium deposits, and Ukrainian businesses have already conducted exploration on them. Investors and the state are quite interested in uranium mining due to the need to meet the needs of the Ukrainian energy sector; 40 deposits and 15 blocks will be available for permits through electronic auctions. Among these sites, the Kruta Balka block stands out. Promising deposits of lithium, cesium, feldspar, tantalum, niobium and rubidium have been discovered on this plot. Given global forecasts that demand for lithium will grow to 6 million tonnes by 2030, these reserves are of strategic importance for the production of batteries and high-tech products. At the same time, some of the deposits and/or sites on the lists are temporarily occupied, so they are inaccessible and cannot be exploited. 3. A new level of cooperation with the EU A good example of this new level of cooperation with the EU is the inclusion of the Balakhivsk graphite deposit in the list of strategic projects under the European Commission's decision of 4 June 2025. This decision was adopted in accordance with Regulation (EU) 2024/1252 and is a testament to the recognition of Ukrainian resources as part of Europe's overall security of supply. Obtaining strategic project status allows the Balakhivsk deposit to apply for funding from European instruments and to conclude off-take agreements, i.e. the advance sale of part of the production to investors, which lays the foundation for the economic sustainability of the project even before production begins. In addition, strategic project status provides for simplified licensing procedures at the EU level and priority consideration of funding applications. This is particularly important for Ukrainian projects, which often face bureaucratic obstacles in accessing European capital. 4. First steps in the restoration of the PSA Among the first practical steps towards the restoration of PSAs, on 8 April, a decision was made to hold PSA tenders for the Svichanska and Mezhigorskaya fields located in western Ukraine. These will be the first production sharing agreements since the start of the full-scale war, and thanks to their safe geographical location, they are expected to be highly attractive to investors. In addition, on 4 April 2025, the Government amended the PSA for the Oleska block and transferred the rights and obligations of the investor to PJSC Ukrnafta, demonstrating further activation of the domestic production market. By comparison, as of 2023, there were 12 hydrocarbon distribution agreements (PSAs) in force, and no new agreements have been concluded since then. Such changes and decisions, after a long "wait", may indicate that the state is very interested in resuming PSAs and implementing such projects. 5. General terms and conditions of PSCs The conditions for concluding an PSA are not clearly defined by law. They are determined separately for each investment object. However, the general conditions of an PSA may be the same as those for the Mezhyhirska and Svichanskaya blocks: the competition is open to Ukrainian citizens, foreigners, stateless persons, as well as legal entities of Ukraine or other countries and their associations that have the necessary financial, economic and technical resources, experience or qualifications in hydrocarbon production; the winner of the tender is obliged to invest at least UAH 1 billion (approximately EUR 210 million) in the first stage of geological exploration within five years. Mandatory work includes conducting electrometry and gravimetry of the entire site, 3D seismic exploration of at least 300-400 square kilometres (depending on the size of the site), drilling at least two exploratory wells and two wells to study the deep geological structure; the agreement is concluded for 50 years with a clear distribution of profits: a maximum of 55% of the compensation products are allocated to the investor to cover expenses, and the state's share in the profitable products ranges from 35% to 65%, depending on the ratio of the fixed expenses to the maximum amount of compensation products; if deposits are discovered, the investor is obliged to ensure their industrial development and give preference to Ukrainian goods and services on equal terms. Electronic auctions are available to companies of any size and have a lower entry threshold than PSAs. However, they have completely individual conditions for each auction. PSAs are usually applied to plots, while electronic auctions are used for deposits, which are much smaller in area than plots. It should be noted that changes are currently being made to the terms of PSAs and electronic auctions due to the recent signing of an agreement between Ukraine and the United States to establish a joint investment fund. In addition to the inclusion of additional obligations, additional guarantees for partners are also expected to be introduced. 6. Opportunities for foreign businesses Foreign investors have significant legal guarantees, including equal conditions with Ukrainian businesses and no special permits or restrictions on participation in tenders. Investment protection is provided in accordance with international agreements, with the possibility of international arbitration in the event of disputes. Financial incentives include access to European funding for strategic projects, opportunities to conclude off-take contracts and preferential taxation for projects in the field of critical materials. Strategic advantages include early access to some of the world's largest reserves of titanium, lithium and rare earth elements, proximity to European markets and participation in the formation of strategic EU supply chains. Projects in western regions are particularly attractive, as risks are minimal and logistics links with the EU are well developed. Geographical proximity to European borders ensures not only investment security but also optimal transport costs for product exports. 7. Conclusion The reform of subsoil use in Ukraine demonstrates a strategic shift in state policy on mineral resource management in coordination with European initiatives in the field of critical materials. The legislative changes of 2025 created the legal basis for a differentiated approach to the management of 39 types of strategic and critical minerals through electronic auctions and production sharing agreements. Of particular significance is the granting of EU strategic project status to the Balakhovka graphite deposit, which opens up access to European funding. Practical steps to implement the new policy demonstrate Ukraine's readiness to effectively use its mineral and raw material potential even in wartime, laying the foundation for economic stability and strengthening its strategic role in ensuring Europe's resource security. Authors: Oleksandr Melnyk, Partner at GOLAW, Head of Corporate Law and M&A practice, Attorney at law; Yaroslav Maltsev, Paralegal at Corporate Law and M&A practice at GOLAW.

Amending a contract in court due to a material change in circumstances: what international businesses need to know in the Ukrainian context

Beneficial owner of income for applying benefits under DTTs: the Ukrainian approach

International double taxation treaties (“DTTs”) often provide that income of non-residents from Ukraine in the form of dividends, interest or royalties, can be subject to preferential tax rates. However, these benefits are not automatically applicable – certain requirements must be complied with to activate them. Application of the preferential tax rate usually requires, inter alia, confirmation the status of beneficial (actual) recipient (owner) of income (“BO”). Though it may appear simple, the practical application of the BO status often leads to considerable difficulties for taxpayers. 1. The definition of BO In accordance with the provisions of the Tax Code of Ukraine (“Tax Code”), the BO is a person (legal or individual) who is entitled to receive such income and is its beneficiary, i.e., has the right to actually dispose of this income. However, a legal entity or individual is not a BO, even if it is entitled to receive it, but acts as an agent, nominee (nominal owner) or performs only intermediary functions. This may be indicated if such a subject: does not have sufficient authority or right to use and dispose of the income; and/or transfers the income received (or the majority of it) to another party without performing significant functions, using significant assets and bearing significant risks in such a transaction; and/or lacks the necessary resources (qualified personnel, fixed assets owned or used, sufficient equity capital, etc.) to actually perform the functions, use the assets and manage the risks associated with the income formally assigned to it. Additionally, the interpretation of the concept of BO is contained in the Commentaries of the OECD on the Article 11 “Interest” of the Model Tax Convention on Income and on Capital. The Commentaries state, inter alia, that “a conduit company cannot normally be regarded as the beneficial owner if, though the formal owner, it has, as a practical matter, very narrow powers which render it, in relation to the income concerned, a mere fiduciary or administrator acting on account of the interested parties”. 2. Approaches of Ukrainian courts to qualifying the BO Judicial practice in Ukraine has been actively developing regarding the clarification of the BO status and the criteria for a non-resident to be recognized as a BO. In their decisions, the courts, inter alia, pay attention to the following aspects: obligations to third parties: If an income recipient is under a pre-existing obligation to pass the income on to a third party, it cannot qualify as the BO. The BO should be the entity that ultimately receives and controls the income without being subject to such obligations (the judgement of the Supreme Court dated March 18, 2025, in case No. 500/1744/24); delay of funds on "technical accounts": The duration of funds being held by a “transit” company is not decisive in proving or disproving the BO status. Even if the transfer to the real recipient occurs years later, the company may still be regarded as a “transit company”. What matters is the actual flow of funds and the identity of their final recipient (the judgement of the Supreme Court dated April 17, 2025, in case No. 160/18691/23); decision-making right: In order to confirm the status of the BO, it is essential that the recipient of income has the genuine right to decide how the income will be used. This means the recipient must have real right to make decision to retain the funds, reinvest them, distribute them, or otherwise manage them at its own discretion (the judgement of the Supreme Court dated May 29, 2025, in case No. 480/9226/23); influence of related parties: The existence of a connection between companies – income payer and income recipient, common beneficiaries, related companies or structuring of assets between them is not recognized under the Tax Code as a valid ground for challenging the status of BO. Even if entities are linked by common owners but comply with the requirements set by law when conducting transactions, then the recipient of income will be recognised as the BO (the judgement of the Supreme Court dated June 24, 2025, in case No. 120/10439/24). It is necessary to consider these aspects when applying for tax benefits, as in the case of a court dispute, the court will also take into account the case law. 3. The application of the “look through approach” In accordance with the provisions of the Tax Code, if a non-resident – a direct recipient of income originating from Ukraine – is not the BO of such income, the DTT provisions with the country of residence of the actual BO can be applied. This approach, known in the doctrine as the “look through approach”, allows to “skip” the intermediary straight to the actual BO. To confirm the status of BO in this case, the following documents must be provided to the tax agent paying income: from the income recipient – a statement in free form confirming that such a subject does not have the status of the BO, as well as confirming that the other non-resident has such status; from the actual BO – a statement in free form confirming that such a subject has the status of the BO and documents confirming this status (including, but not limited to, licences, contracts, official letters from competent authorities), as well as a document confirming the tax residency. In summary, to take advantage of this approach, the correct determination of the BO within the chain of intermediaries, is also the key point. The issue of determining the status of the BO is one of the main factors in the possibility of applying the tax benefits provided by DTTs. Failure to clearly understand and comply with the special criteria may result in significant tax risks for taxpayers. Ukrainian judicial cases demonstrate that courts analyse the essence of transactions and the real role of the non-resident owner of income in depth. Formal compliance usually is not sufficient if there is no real economic function and control over the income. Taxpayers are advised to be particularly careful when structuring cross-border transactions with passive income. It is important to document the economic substance of such transactions and be prepared to prove the status of the BO. Authors: Viktoriia Bublichenko, Partner at GOLAW, Head of Tax, Restructuring, Claims and Recoveries practice, Attorney at law; Tetiana Fedorenko, Senior Associate at Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law; Vadym Zhukov, Paralegal at Tax, Restructuring, Claims and Recoveries practice at GOLA

A law has been adopted that allows booking men who are not registered or are wanted by the TCR

On October 9, the deputies adopted a law that provides for the possibility of booking men liable for military service who are not registered or are wanted by the TCR (draft law No. 13335). According to the draft law it will be possible to book even those employees of critical enterprises and enterprises of the defense-industrial complex who: - are not registered with the military; - have missing or incorrectly executed military registration documents; - have not specified their personal data in the TCR; - are wanted for violating the rules of military registration, legislation on defense, mobilization training and mobilization. Such employees can be booked for 45 calendar days from the date of conclusion of an employment contract, regardless of the number of people already booked at the enterprise. At the same time, such a reservation is provided only once a year and does not exempt from liability for violation of the rules of military registration. However, it should be noted that currently information is being disseminated in the open access that before the final vote, the mention of critical enterprises was excluded from the draft law. That is, there is a possibility that the final version will refer to the possibility of reservation under the new rules only those military personnel who work at defense enterprises. However, it will be possible to analyse the content of the final version of the document only after it is signed by the President of Ukraine and officially published. Follow GOLAW updates to always be up to date with the latest legal news. Author: Natalia Matviichuk, Senior Associate at Litigation and Dispute resolution practice at GOLAW, Attorney at law

GOVERNMENT EASES IMPORT RULES FOR EQUIPMENT IN LARGE-SCALE INVESTMENT PROJECTS: WHAT HAS CHANGED AND HOW IT WILL WORK

On 9 September 2025, the Government approved amendments to the Procedure for importing new equipment (machinery) and components into the customs territory of Ukraine and their targeted use, which are imported by an investor with significant investments exclusively for their own use in the implementation of an investment project with significant investments in accordance with a special investment agreement, concluded in accordance with the Law of Ukraine “On State Support for Investment Projects with Significant Investments in Ukraine” (the “Amendments” and the “Procedure” respectively). The basic Procedure was approved by Resolution of the Cabinet of Ministers No. 860 of 11 August 2021. Information about the Amendments has been published on the website of the Ministry of Economy. What are the Amendments about? The aim is to cut red tape for investors implementing special investment agreements. The amendments concern the deadline for submitting equipment lists, the requirement to indicate country of origin, and the method of calculating estimated value. The purpose is to align regulation with real business processes, making it simpler and quicker to import equipment for investment projects. What exactly has changed? Deadline for submitting a written request to the Ministry of Economy of Ukraine The Amendments establish a new deadline for investors to submit a list and volumes of equipment — instead of five days, it is now twelve months from the date of receipt of the conclusion on the feasibility of the project. The requirement to indicate the country of origin in the list of equipment has been abolished This eliminates the need to re-approve documents when changing a manufacturer or sub-supplier, which is particularly important for international supply chains. The definition of the ratio between the estimated and customs value of equipment has been clarified The cost of equipment is now indicated in the currency of the supply contract with a parallel reflection of the total amount in hryvnia, which reduces the risk of discrepancies due to currency fluctuations. It should be noted that the key conditions for participating in the programme remain unchanged: investment of more than €12 million, the creation of at least 10 jobs, projects implemented in defined sectors (from manufacturing and transport to healthcare, education, and tourism), and a maximum implementation period of five years. What does this mean in practice? Based on the available information, the following conclusions can be drawn: extending the deadline to twelve months gives investors greater flexibility and time to run tenders and procurement without rushed decisions; dropping the country-of-origin requirement removes unnecessary bureaucracy and repeated approvals when suppliers change; the updated valuation rules, linking prices to the contract currency with parallel hryvnia figures, lower currency-related risks, and simplifying customs procedures; and the fact that the core eligibility criteria remain the same confirms the stability of the state support model — the amendments are targeted simplifications rather than a complete redesign. Authors: Oleksandr Melnyk, Partner at GOLAW, Head of Corporate Law and M&A Practice, Attorney at Law Vladyslava Zaichko, Paralegal at Corporate Law and M&A Practice at GOLAW

Legal risks and peculiarities of investing in property near water bodies

Despite the attractiveness of being located near water, water fund land has a special legal status, which significantly affects the possibility of using it for investment. These lands are mostly in state and municipal ownership, cannot be privatised and have strict restrictions on their use, including development. Investing in property located near water bodies may involve a number of risks. Water fund lands include land occupied by: - seas, rivers, lakes, reservoirs, other water bodies, swamps, and islands not covered by forests - coastal protection strips; - hydrotechnical and other water management structures and canals, as well as land allocated for their right-of-way; - coastal strips of waterways; artificially created land plots within the waters of seaports. In accordance with the Procedure for the Use of Water Fund Lands, the use of lands of coastal protection strips along rivers, around water bodies and on islands is subject to restricted economic activity. Activities that adversely affect or may affect their condition or contradict their purpose are prohibited on these lands. Ukrainian legislation establishes coastal protection zones, which are strips along rivers, lakes, estuaries and seas subject to a strict development regime. The Water Code defines the standard widths for these strips: 25 m (small rivers and ponds <3 hectares), 50 m (medium rivers, large ponds) and 100 m (large rivers, lakes) from the water's edge. For seas and bays, a coastal protection zone of at least 2 km from the shore is established, but within settlements, the width of such a zone is determined by comprehensive plans for the spatial development of territories of territorial communities, master plans of settlements, and in the absence of such plans or if the boundaries of such zones are not established by the said urban planning documentation, they are determined by a width of 100 metres. The absence of a land management project or the exact boundaries of the coastal strip does not mean that it does not exist. By law, the widths of the strip are set by regulation and are automatic. The Supreme Court emphasises that the existence of the coastal strip is determined by law, even if the boundaries are not approved by the documentary record (Supreme Court Resolution of the CCC of the Supreme Court of 17.09.2024 in case No. 910/10049/22). Any construction on these territories, except for special hydraulic or port facilities, is prohibited. The Supreme Court has repeatedly confirmed that the Land Code of Ukraine does not and has not provided for the possibility of leasing a land plot within the coastal protection zone for the construction and maintenance of a residential building, outbuildings and structures. The land in the coastal zone belongs to the state or community and is classified as "water fund land". The law prohibits its transfer to private ownership or lease for commercial development. Facilities built in violation of these regulations are recognised as unauthorised construction and are subject to demolition. Ownership of such buildings does not arise - the Civil Code expressly provides that a person who has carried out unauthorised construction does not acquire ownership of such real estate. 1. Regarding the transfer of ownership and lease of water fund lands Article 59 of the Land Code of Ukraine states that water fund lands may be owned by the state, municipalities and private entities. Regarding private ownership Pursuant to paragraph (g) of part four of Article 83 of the Land Code of Ukraine, communal lands that cannot be transferred to private ownership include water fund lands, except in cases specified by the Land Code of Ukraine. Citizens and legal entities may, by decision of executive authorities or local self-government bodies, be granted free of charge ownership of enclosed natural reservoirs (with a total area of up to 3 hectares). Owners may create fishery, anti-erosion and other artificial reservoirs on their land plots in accordance with the established procedure. Thus, Ukrainian legislation restricts the free transfer of water fund lands to private ownership to the transfer of only enclosed natural reservoirs (with a total area of up to 3 hectares) by decision of an authorised body. The acquisition of water fund lands by citizens and legal entities (transfer of ownership of these lands to them) contrary to the requirements of the Land Code of Ukraine is impossible; the location of water fund lands indicates the impossibility of a private owner, and therefore a new owner, except as provided for in Article 59 of this Code (resolutions of the Grand Chamber of the Supreme Court of 11 September 2019 in case No. 487/10132/14-ц, of 15 September 2020 in case No. 372/1684/14-ц). Regarding the lease of water fund lands. In accordance with the current legislation, executive authorities or local self-government bodies may lease land plots of coastal protection strips, right-of-way and coastal strips of waterways, lakes, reservoirs, other water bodies, swamps and islands from the water fund for haymaking, fisheries (including fish farming (aquaculture), cultural, recreational, sports and tourist purposes, research, care, accommodation and maintenance, as well as for other purposes. Thus, despite the ban on privatisation, the law allows for the use of water fund lands for special projects: - aquaculture (fish, shrimp, mussel breeding); - recreational activities (creation of recreation centres, tourist sites, campsites); - scientific or environmental projects; - water transport infrastructure or hydraulic structures. A lease may be executed for both land and a water body (e.g., a pond or lake), often in the same agreement (the so-called complex lease). Water fund lands may be leased only for limited purposes, in particular, in accordance with the designated purpose of such lands. For example, according to Annex 59 "Classifier of types of designated purpose of land plots" to the Procedure for Maintaining the State Land Cadastre, approved by Resolution of the Cabinet of Ministers of Ukraine No. 1051 dated 17.10.2012, the category of land "water fund lands" includes 16 designated purposes. The legislator clearly limits the functions of such land: for example, the law allows the lease of coastal strips only for economic activities within the framework of fishing, recreation, scientific needs, etc. Lease of water fund lands is not just a contractual registration of a plot, but a whole procedure that requires compliance with a number of mandatory stages. Failure to do so may result in any use of such land being deemed illegal. In particular, this procedure consists of the following steps: availability of land management documentation Before talking about leasing, you need to make sure that the land plot: is included in the State Land Cadastre (SLC); has a specific designated purpose that meets the plans of the future user (e.g. recreation, fisheries, water supply); is agreed with the relevant authorities — environmental and water management authorities, if it concerns areas with a high environmental protection status or located within water protection zones. Without these conditions, the lease will be legally null and void, and any further investment will be at risk. land auctions (auction) Lease of state and municipal land is carried out exclusively through electronic auctions. There are exceptions, but they apply only to certain categories of users, such as state-owned water companies or scientific institutions. Thus, an investor should prepare to participate in a competitive procedure with open bids and transparent conditions. state registration of the agreement Even after the lease agreement is concluded, the document does not come into force until it is registered in the State Register of Real Property Rights. Only from the moment of registration does the lessee receive a full-fledged right of use, with the possibility of conducting business activities, submitting permit applications, developing projects, etc. 2. Conclusions Investing in real estate near water bodies or in water fund lands requires special care. These lands have a special legal status, privatisation restrictions and strict conditions of use. Any construction or use without complying with legal requirements may result in the object being declared unauthorised and demolished. Nevertheless, investors have access to legal mechanisms of use, primarily lease at public auctions for targeted projects (aquaculture, recreation, science, port infrastructure). Successful investment is only possible if it is legally verified and all the regulated procedures are followed. Authors: Ihor Selivakin, Associate at Litigation and Dispute Resolution practice at GOLAW, Attorney at law Viktoriia Prokopenko, Paralegal at Litigation and Dispute Resolution practice at GOLAW

Protecting foreign businesses from illegal actions by state bodies and enterprises under martial law: challenges and legal instruments

The introduction of martial law in Ukraine in February 2022 has created a difficult legal and operational environment for the activities of not only domestic but also foreign companies in Ukraine. The actions of state bodies and enterprises, dictated by the specifics of martial law, sometimes create significant challenges for the stability of foreign business. In such conditions, it becomes particularly important for representatives of foreign companies to have a clear understanding of the potential risks and available legal mechanisms for protecting their rights and interests. 1. The current investment climate in Ukraine is favourable for foreign businesses Despite the ongoing hostilities, Ukraine remains an attractive investment destination for foreign businesses. Numerous multinational companies that had a manufacturing or trading presence in the country before the invasion began continue to operate there. At the same time, new players are emerging — those who have made a strategic decision to invest in the Ukrainian economy even under the conditions of martial law. For example, according to information posted on the UkraineInvest website, 1109 new foreign companies were registered in Ukraine in 2024. The largest number of investors were American, Turkish, and Polish companies. Also, based on open sources, the British company Unilever is building a production plant in the Kyiv region, with investments of over €20 million, and the Swiss company Nestlé recently built a new factory in Volyn region, investing approximately $50 million. The involvement of American businesses, whose presence in Ukraine is steadily growing, deserves special attention. In particular, on 26 December 2023, National Nuclear Energy Generating Company Energoatom signed a $437,5 million contract with Westinghouse Electric Company LLC to purchase equipment for the implementation of the AP1000 nuclear facility for the Khmelnytskyi Nuclear Power Plant. The parties signed a cooperation agreement in this area back in 2021, but it was during the war that they advanced to a new level of cooperation. Moreover, on 30 April 2025, Ukraine and the United States of America signed an agreement to establish the US-Ukraine Investment Fund for Reconstruction, designed to attract private capital from the United States for the reconstruction and modernisation of the Ukrainian economy, ensure financing for critical projects in the field of mineral resource development, promote innovation, technological development and recovery, and improve Ukraine’s investment climate. According to media reports, one of the first potential participants in this fund is the investment company TechMet, which has expressed interest in financing a project to extract lithium in the Kirovohrad region — a resource that is critical for the development of battery technologies and green energy. In addition, investment activity by American companies in the field of innovation and start-ups has intensified. For example, during the full-scale invasion, the Pravo Venture technology platform was created, which connects accredited US investors with Ukrainian start-ups. Currently, the platform works with start-ups such as Mosqitter and Promin Aerospace. Thus, despite the martial law, foreign companies continue to invest in Ukraine. Moreover, promising projects that help attract foreign investment continue to develop. 2. Key challenges under martial law Despite the positive dynamics of investment activity, this does not fully guarantee protection of foreign businesses from illegal actions by state bodies and enterprises, especially under martial law conditions. The risk of unjustified use of enterprise capacities, together with the risk of expropriation of property for state needs, is currently a serious obstacle to doing business in Ukraine. According to the Law of Ukraine “On the Legal Regime of Martial Law,” the military command and military administrations under martial law have the right, among other things, to use the capacities and labour resources of enterprises, institutions, and organisations of all forms of ownership, as well as to forcibly expropriate privately owned property for defence needs. On the other hand, currency restrictions introduced by Resolution No. 18 of the National Bank of Ukraine of 24 February 2022 significantly complicate international currency transactions. In particular, restrictions on cross-border transfers of currency values from Ukraine, the establishment of a 180-day deadline for settlements under export-import operations, as well as increased financial monitoring requirements reduce the financial flexibility of foreign companies. This has a negative impact on liquidity planning and management, especially for businesses integrated into international supply chains. At the same time, it should be noted that currency regulation in Ukraine is dynamic and constantly changing in line with the current economic situation and financial stability needs. In particular, the National Bank of Ukraine is gradually introducing certain relaxations, such as expanding the list of permitted currency transactions, simplifying restrictions on cross-border fund transfers, and softening requirements for import settlements. These changes open up opportunities for a partial resumption of international payment activities. In addition, another pressing challenge for foreign businesses in Ukraine is the labour shortage caused primarily by mobilisation measures. Although the Law of Ukraine “On Mobilisation Preparation and Mobilisation” provides for the possibility of conscripting a substantial part of the male population, in practice, many companies have adapted to the new conditions, finding effective ways to preserve production capacity and retain qualified personnel. In particular, the procedure for reserving employees, approved by Resolution No. 76 of the Cabinet of Ministers of Ukraine of 27 January 2023, provides practical tools for reserving key specialists, which contributes to stable operation and business development in conditions of martial law. Another significant issue is the improper performance by state bodies and enterprises of their contractual or statutory obligations. Citing force majeure circumstances, including those caused by the war, some entities are in fact trying to avoid responsibility or postpone the fulfilment of their obligations for an indefinite period. In particular, certain difficulties are observed in the activities of the state enterprise Guaranteed Buyer, which faces objective challenges in timely settlements with renewable energy producers for electricity already supplied. However, national courts have increasingly ruled in favour of energy producers, obliging the state enterprise Guaranteed Buyer to make full payments to the producers. Consequently, despite all the challenges faced by both foreign and Ukrainian businesses under martial law, companies have still been able to adapt to the new realities and specifics of operating in unusual conditions. 3. Judicial and arbitral protection of rights and interests Even under martial law, Ukraine’s judicial system continues to function steadily in most regions of the country. This allows foreign companies to apply to national courts or commercial arbitration institutions to protect their rights and legitimate interests in cases provided for by law. It is important for foreign companies that administrative courts in Ukraine continue to actively protect businesses from unlawful actions by state authorities. Such disputes include, in particular tax-related matters – such as appeals against tax notices-decisions, additional charges of monetary obligations or blocking of tax invoices. Foreign investors can be confident that they have effective legal mechanisms for defending their interests and protect themselves from excessive administrative pressure. In turn, commercial courts provide effective protection in cases arising within the framework of contractual and other property relations between business entities, in particular between foreign companies and state enterprises. The most common disputes concern non-performance or improper performance of obligations under contracts for supply, construction, lease, service provision, and other agreements. It is also important that commercial courts handle bankruptcy cases, which allows foreign companies to enforce their claims within the liquidation procedure, file creditor claims, and initiate appropriate procedural actions to protect their property interests in the event of a counterparty’s financial insolvency. At the same time, it should be noted that in regions close to active combat zones, the activities of courts may be partially restricted. In particular, some courts operate exclusively through electronic document exchange, specifically via the Electronic Court subsystem. In contrast, in the western and central regions, as well as in Kyiv itself, the courts continue to function in a stable manner. Accordingly, regardless of the timeframes for case consideration, judicial and arbitration protection mechanisms remain available to foreign businesses and are capable of ensuring the effective restoration of violated rights, which is an especially critical factor in the challenging conditions of wartime. 4. Alternative legal instruments for protecting rights and interests In addition to court or arbitration proceedings, foreign businesses in Ukraine can use a number of alternative legal instruments to protect their rights and legitimate interests. Pre-trial dispute resolution becomes particularly important in a state of martial law, when a rapid response to violations of rights is crucial. As of 15 December 2023, the Law of Ukraine “On Administrative Procedure” has been in force in Ukraine, which for the first time systematically regulates the procedure for external administrative activities of executive bodies, local self-government bodies, and other entities that adopt administrative acts. It guarantees interested parties, including foreign companies, the right to be involved in the consideration of the relevant administrative case: to present their arguments, submit documents, review the case materials, and, in case of disagreement, appeal against the decision of a particular body in a pre-trial procedure. In practice, this means that before applying to the court, a foreign business may request a review of a decision or action of a public authority directly with that authority or with a higher authority. For example, a decision of a territorial body of the State Tax Service may be appealed to the central authority, namely, directly to the State Tax Service of Ukraine. At the same time, in the event of disputes related to business operations, foreign companies can also use pre-trial settlement as an effective tool to respond to violations by counterparties, in particular, state enterprises. This approach allows an acceptable result to be achieved without resorting to a commercial court or arbitration. In some cases, even the mere fact of filing a claim with a commercial court encourages the other party to engage in dialogue, which makes it possible to settle the dispute amicably even before a court decision is made. Current Ukrainian legislation also provides for the possibility of mediation — voluntary settlement of a dispute with the participation of a neutral intermediary. The Law of Ukraine “On Mediation” of 15 December 2021 allows conflicts to be resolved without resorting to court, which can be useful in cases where a foreign company seeks to avoid publicity. 5. Practical recommendations As a result, operating a foreign business in Ukraine during martial law requires not only strategic foresight but also flexibility in risk management. Below are key practical tips for foreign companies that can help reduce legal risks and ensure effective protection of rights and interests in Ukraine. Before implementing an investment project, it is advisable to conduct a comprehensive legal review that considers not only the usual corporate and tax risks, etc., but also the specific risks of martial law — in particular, the possibility of expropriation of enterprise property for defence purposes or the use of enterprise resources by military command or administrations. Investment or foreign economic agreements should include clearly defined provisions on force majeure circumstances, changes in legislation, mechanisms for protecting business and investments, the possibility of arbitration, etc. Such foresight minimises the risk of unilateral revision of obligations or loss of control over assets. Careful documentation of each stage of communication with representatives of state bodies and enterprises is a prerequisite for successful legal protection. In the event of litigation, these documents will constitute key evidence. In the event of a dispute with state authorities or state enterprises, it is not always recommended to go to court immediately. In some cases, it may be more appropriate to first attempt pre-trial dispute resolution tools, which can significantly save time and financial resources. If the pre-trial procedure has not yielded results, it is necessary to apply to the court as soon as possible. It is particularly important not to delay filing claims, as the general statute of limitations is three years, but depending on the circumstances of the particular case, it may be shorter — in particular, six months or even less. In the difficult conditions of martial law, it is extremely important for foreign businesses to use the services of experienced legal advisors. Cooperation with specialists who are deeply versed in the Ukrainian legal field, judicial practice, and procedural aspects significantly reduces legal risks, ensures proper protection of rights and interests, and contributes to the successful conduct of business, regardless of the format or scale of presence in the Ukrainian market. Authors: Kateryna Manoylenko, Partner at GOLAW, Head of Litigation and Dispute Resolution practice, Attorney at law Anastasiia Klian, Counsel at Litigation and Dispute Resolution practice at GOLAW, Attorney at law

TOP-10 QUESTIONS ON MERGER CONTROL IN UKRAINE

Which transactions require merger clearance? If the transaction constitutes “concentration” under Ukrainian law, merger clearance may be required. The definition of “concentration” includes different types of transactions: (1) merger or acquisition; (2) acquisition of control (direct or indirect); (3) joint ventures. However, not every concentration requires merger clearance. Only concentrations exceeding financial thresholds are notifiable. What are the mandatory filing thresholds? Concentration requires merger clearance if one of two alternative tests is triggered. Test 1: the combined global assets or turnover of all parties exceed EUR 30 million; and the assets or turnover in Ukraine of each of at least two parties exceed EUR 4 million. Test 2: the assets or turnover in Ukraine of at least one party exceed EUR 8 million; and the global turnover of at least one other party exceeds EUR 150 million. All thresholds are calculated on a group-wide basis for the preceding financial year. Which transactions are exempt from merger clearance? The following transactions are excluded from the definition of “concentration” and are not notifiable: within-group transactions, where control within the group is established in accordance with Ukrainian merger control rules; creation of a joint venture that will not operate as an autonomous economic entity on a lasting basis (such a transaction is considered a “concerted practice”); acquisition of shares by a financial or securities institution for resale within one year, provided it does not exercise voting rights in the governing bodies; acquisition of control over an entity or its part by a bankruptcy trustee or state authority official; acquisition of assets or shares by a financial institution under a restructuring plan, with resale within two years; and acquisition of assets or shares by a bank through foreclosure on collateral, with resale within one year, provided it does not exercise voting rights in the governing bodies or use the assets. Also, under martial law, an acquisition of control by a state-owned company (with 50% or more state participation – meaning that a private investor may hold up to 50%) or its controlled entities over energy or utility companies is not regarded as a “concentration”, provided that the acquisition aims to prevent or eliminate emergencies or disruptions in the supply of energy, heat, water, or gas. How are foreign-to-foreign transactions treated under Ukrainian merger control rules? Foreign-to-foreign transactions may trigger Ukrainian merger control filing requirements if the parties exceed the relevant financial thresholds. Accordingly, even in the absence of sales, assets, or a local presence in Ukraine, notification may still be required. However, under martial law and for 90 days thereafter, foreign-to-foreign transactions aimed at the development and implementation of technologies, as well as the manufacture of military and dual-use products in Ukraine that meet certain criteria, are exempt from the obligation to obtain merger clearance and may be carried out. Which authority is responsible for issuing merger clearance in Ukraine? The Antimonopoly Committee of Ukraine (AMC) is the primary state body responsible for protecting competition, reviewing transactions, and issuing merger clearance. If the AMC prohibits a concentration, the Cabinet of Ministers of Ukraine may override its decision if the positive effects for the public interest outweigh the negative impact on competition. When should parties submit notification? The parties can submit a notification at any time, but they should obtain merger clearance before closing the transaction. However, if the parties conduct concentration via competitive procedures (bidding, auctions, contests, tenders, etc.), they may submit the notification either before the procedure starts or within thirty days after the winner is announced. What are the key procedural deadlines in Ukraine’s merger control review process? Standard review Preview period – up to 15 calendar days. The AMC checks whether the notification and accompanying documents comply with formal requirements. Substantive review (Phase I) – up to 30 calendar days. The AMC assesses whether the concentration can be approved or whether there are grounds for prohibition% if there are no grounds for prohibition and there are no restrictions under sanctions law, the AMC issues merger clearance within Phase I; clearance is also deemed granted if, by the end of Phase I, the AMC has not initiated Phase II. In-depth review (Phase II) – up to 3 months. Initiated if there are grounds for prohibition. The AMC conducts a comprehensive analysis of the transaction and its impact on competition, collects opinions of competitors, consumers, experts, and other relevant parties, and conducts surveys. Total duration: up to 45 calendar days (preview and Phase I); up to 4,5 months with Phase II. Fast-Track review Combined preview and substantive review – up to 25 calendar days from filing. Available if: only one party carries out activities in Ukraine; or combined share of the parties does not exceed 15 per cent on the relevant market, and 20 per cent on vertically related markets. In practice, however, the AMC may still apply the standard procedure even if fast-track conditions are formally met. For example, where a party has not previously undergone review, the AMC may consider notification under standard review and require disclosure of the group’s formation history, including dates of acquisition and incorporation, as well as details of earlier transactions. Under what conditions does the AMC approve a transaction? The AMC approves a transaction (concentration) when it determines that the transaction does not result in monopolisation or a substantial restriction of competition in the relevant market. If the AMC identifies potential adverse effects on competition, it may still approve the transaction provided that the parties propose remedies that eliminate those effects. The AMC does not grant merger clearance if Ukrainian sanction legislation prohibits the transaction. What financial penalties apply for failure to notify of a transaction? Failure to notify of a transaction (concentration) may result in a fine of up to 5% of the group’s annual turnover for the last reporting year. The actual amount of the fine may vary significantly depending on whether the violation leads to monopolisation or a substantial restriction of competition. In addition, the AMC may consider aggravating or mitigating factors when determining the final amount of the fine. For example, monopolisation or restriction of competition across more than two regions of Ukraine, or repeated violations, may be treated as aggravating factors. Conversely, filing for clearance before the formal investigation begins, active cooperation with the AMC, and mitigation of adverse effects are considered mitigating factors that may reduce the fine. What should parties take into account before filing? Before submitting a merger filing to the AMC, the parties should carefully consider the following: screen for Ukrainian sanctions – conduct a thorough check to confirm that none of the parties to the transaction (concentration), including their ultimate beneficial owners, are subject to Ukrainian sanctions; assess activities in russia and belarus – verify whether any of the groups involved conduct business in russia and belarus. If so, collect information on their exit plans and timelines; identify control relationships – prepare detailed information on all control links between entities, each entity’s corporate details and actual business activities; define relevant markets and market shares – clearly define the relevant market and calculate the parties’ market shares. This is essential, particularly to assess eligibility for a fast-track review; prepare required documents – ensure all documents are duly apostilled (legalised) and notarised, where applicable. These include powers of attorney for representatives, documents confirming ultimate beneficial owners (if any), evidence of funding availability, extracts from business registers, and any other documents required. AUTHORS: Oleksandr Melnyk, Partner at GOLAW, Head of Corporate and M&A practice, 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

The Verkhovna Rada has updated the competitive conditions for the development of renewable energy

On 10 February 2026, the Verkhovna Rada of Ukraine adopted in the second reading Law No. 13219 “On Amendments to Certain Laws of Ukraine on Improving the Conditions of Support for Electricity Production from Alternative Energy Sources” (the “Law”). The Law was developed to achieve the goals of the National Energy and Climate Plan until 2030 and the National Renewable Energy Action Plan, taking into account European approaches. The Law shall enter into force on the day following its publication. Among the main changes are: FiP instead of CfD The Law introduces a feed in premiums (FiP) mechanism for winners of green auctions instead of the contract for difference (CfD) model for the period until 31 December 2029. How the previous model (CfD) worked: The state effectively guaranteed a fixed price. If the market price was lower, the difference was compensated. If the market price was higher, the producer returned the surplus. How the new model (FiP) will work: The producer sells electricity at market price. Additionally, it receives a fixed premium if the auction price is higher than the market price. If the auction price is lower than the market price, the state does not have to pay the premium to the producer. Thus, unlike the CfD model, FiP does not provide a complete guarantee of the producer's income, but guarantees a minimum level of income at the auction price. The producer retains the opportunity to receive additional income in the event of an increase in market prices, while being protected from their fall, which encourages more active integration into the competitive electricity market. It should be noted that the CfD model applies only to auctions held under the previous support regime, while the FiP mechanism is used for new auctions until 31 December 2029. Continuation of green auctions Green auctions have also been extended from 31 December 2029 to 31 December 2034. Extending the auction period to 2034 creates favourable conditions for planning the next cycles of design and construction of renewable energy stations and demonstrates the readiness of legislation to ensure the sustainable development of the industry. Reduction of bank guarantees The law provides for a reduction in the amount of the bank guarantee for winners of green auctions. From now on, the guarantee when concluding a contract is reduced from EUR 15 to EUR 10 per kilowatt of capacity, and in the event of an extension of the construction period, from EUR 30 to EUR 10 per kilowatt. At the same time, the security for participation in the auction remains unchanged and, as before, amounts to EUR 5 per 1 kW of capacity, in the form of an unconditional and irrevocable bank guarantee or financial security. Thus, the law does not lower the requirements at the auction entry stage, but significantly reduces the financial burden on investors after winning, thereby lowering the risks of project implementation, facilitating their financing, and lowering the barrier to market entry. Introduction of a new financial instrument to guarantee implementation In addition, the Law introduces an alternative financial instrument for guaranteeing project implementation. In addition to a bank guarantee, it is possible to provide financial security in favour of a guaranteed buyer, which will facilitate the implementation of projects while keeping the terms of the agreement unchanged. Increased competition between technologies To increase competition between technologies, the Law provides for a more flexible approach to quotas for supporting renewable energy sources. The minimum share of participants in certain technologies – in particular solar, wind, bioenergy, and others – is reduced from the previous 10% to 5%. This means that a lower barrier of 5% has now been set for each type of generation, which expands the opportunities for small and local projects to participate. Previously, the 10% rule was a mandatory share of the total quota at auction, but now it has effectively been halved for all major green technologies. It is important to note that there is also an exception: solar power plants with energy storage facilities, where the minimum share of 10% remains in place. Harmonisation with EU practices The system of guarantees of origin (GoO) has been improved: its validity is limited to 12 months (instead of the current 18). These changes are aimed at harmonising the regulatory and technical framework and creating the conditions for mutual recognition of guarantees of origin and integration of registries, subject to further compliance with EU standards and international procedures. Integration of energy-intensive facilities The Law provides for the possibility of integrating energy-intensive energy storage facilities (BESS) into the cable pooling mechanism. This means that at a single connection point to the electricity grid, it is permissible to locate generating and energy storage facilities simultaneously, provided the maximum capacity agreed with the distribution or transmission system operator is observed. In other words, generation and BESS can share one network infrastructure and one permitted capacity without the need for a separate connection for each facility. Previously, such a combination of generation and storage facilities was not regulated by law, but now it opens up new prospects for the development of the electricity storage market in Ukraine. Support and development of environmental infrastructure It is also envisaged that local authorities will be able to provide free work on laying cable lines from transformer substations (TP/KTP) to the locations of electric charging stations with a capacity of up to 200 kW, as well as developing the necessary design and engineering documentation for such connections. The relevant changes are aimed at supporting and developing environmental infrastructure. Flexibility regarding installed capacity The law provides for a permissible deviation of the actual installed capacity of the facility within 10% of the capacity for which the producer has acquired the right to state support based on the results of the “green” auction. This means that in the event of a slight excess or shortfall in installed capacity within such a deviation, the right to support is retained and does not require a repeat auction procedure. Clear time frame for the application of the market premium The law establishes time and term limits on the Guaranteed Buyer's obligation to purchase electricity based on the results of auctions using the market premium mechanism. In particular, incentive support shall only apply during specific time intervals: from 04:00 to 23:00 during the period from 1 April to 31 October and from 06:00 to 21:00 during the period from 1 November to 31 March, with the exception of electricity supplied from energy storage facilities within the relevant generation facility. At the same time, it is envisaged that the Cabinet of Ministers of Ukraine may additionally determine daily time intervals for generation to which state support applies for individual auctions. The adoption of Law No. 13219 creates an updated, more market-oriented and competitive model for the development of renewable energy in Ukraine. The introduction of the FiP mechanism instead of CfD strengthens the role of market incentives and at the same time increases the responsibility of producers for price risks, while the continuation of “green” auctions until 2034, the reduction of financial guarantees, the improvement of guarantees of origin, and the integration of energy storage systems create more predictable conditions for investors and open up additional opportunities for the technological development of the sector in line with European standards. Authors: Oleksandr Melnyk – Partner, Head of Corporate Law and M&A Practice at GOLAW, Attorney at law; Oles Riabchuk – Senior Associate, Corporate Law and M&A Practice at GOLAW, Attorney at law; Yaroslav Maltsev – Paralegal, Corporate Law and M&A Practice at GOLAW.

Disputes Over IT Products and Software Code: Who Owns Them?

Yaroslav Baienko, Senior Associate at Litigation and Dispute Resolution practice at GOLAW, Attorney at law Introduction The Ukrainian IT industry faces a paradox: the technical complexity of products is increasing, while the legal framework governing relationships among development participants often remains at the level of “verbal agreements.” Typical triggers for conflicts include the breakdown of partnerships in startups, the departure of key developers, a change in contractor, and corporate mergers, when it turns out that the rights to the company’s core product have not been legally formalized. A common myth in business: “I paid for the development—so the code is mine.” This logic, natural from an economic standpoint, has nothing to do with legal reality. The purpose of this article is to explain how the law and judicial practice determine the owner of software code and an IT product, and why proper legal documentation is a critical condition for protecting a business. Software Code as an Object of Law According to the Law of Ukraine “On Copyright and Related Rights” dated December 1, 2022, No. 2811-IX[1] (hereinafter—the Law), a computer program is a set of instructions in the form of words, numbers, codes, diagrams, and symbols expressed in a form suitable for reading by a computer. Article 20 of the Law expressly provides that computer programs are protected as literary works. Copyright arises from the moment of creation and does not require registration or any formalities (Part 2 of Article 11). This is confirmed in paragraph 17 of Resolution No. 5 of the Plenum of the Supreme Court of Ukraine dated June 4, 2010[2] , which states that protection extends to computer programs regardless of the manner or form of their expression, and in paragraph 18—that a work is considered created from the moment it is given any objective form. Fundamentally: the form of expression of the program—source code and object code—is protected. Ideas, algorithms, concepts, and functionality are not protected by copyright. This was explicitly confirmed by the Supreme Court in its ruling of May 22, 2023, in Case No. 760/16961/19[3] , interpreting Article 10 of the TRIPS Agreement and Article 18 of the Law: “only the form of expression of programs is subject to protection, i.e., source and object codes, while their structure, algorithms, and ideas are not subject to protection.” A competitor may create a program with similar functionality by writing their own code. At the same time, the list of protected objects extends beyond the code itself: specifications, flowcharts, databases, and interfaces. The situation with interfaces is not entirely clear-cut. In the case of Lotus Development Corp. v. Borland International, Inc. (U.S. Court of Appeals, First Circuit, 1995; affirmed by the U.S. Supreme Court), the court recognized a menu interface as a method of operation, which is not subject to copyright protection. In Oracle America, Inc. v. Google LLC (U.S. Supreme Court, 2021), the copying of 11,500 lines of the Java API was found to constitute fair use. The court noted that Google had copied only the portion of the API necessary to ensure compatibility with the Java platform, and that such use was transformative in nature. The decision does not mean that APIs are generally not protected by copyright—the Court deliberately left this question open, deciding the case solely on the basis of the fair use doctrine. Although decisions by U.S. courts are not a source of law in Ukraine, these cases are significant for two reasons. First, Ukraine is a party to the Berne Convention and the TRIPS Agreement, which form a common international framework for copyright protection, and Ukrainian courts already rely on TRIPS provisions when interpreting national legislation (in particular, in the aforementioned Supreme Court ruling of May 22, 2023, in Case No. 760/16961/19). Second, the principle of distinguishing between an idea and its form of expression, upon which both cases are based, is explicitly enshrined in Article 18 of the Law and Article 9(2) of the TRIPS Agreement, so the findings in Lotus and Oracle can be used as a compelling doctrinal argument in Ukrainian courts when deciding on the patentability of interfaces and APIs. To identify indirect copying in the case of Computer Associates International, Inc. v. Altai, Inc. (U.S. Court of Appeals, Second Circuit, 1992), a three-step “Abstraction-Filtration-Comparison Test” was formulated: abstraction (reconstructing the order of creation from the code to the main function), filtration (separating protected elements from ideas and scène à faire), and comparison of the remaining protected core—the so-called “golden nugget.” This test has become an international standard for analyzing non-literal software copying and has been adopted by courts in the EU, the UK, Australia, and other jurisdictions. In Ukraine, judges generally do not examine the code themselves—this is done by court experts in computer-technical expertise. The Altai-test methodology can be used by experts as a scientifically sound investigative tool when conducting computer-technical examinations, and by the parties as an argument in procedural documents when substantiating the fact or absence of copying of non-literal elements of a program. Correct identification of the subject matter of the dispute is of decisive practical importance. When a party asserts a claim regarding a “software product,” the court must determine exactly what is the subject of the dispute: the source code, the compiled application, the database, the interface design, or a combination thereof. Each of these elements may have a different legal regime and different rights holders. Author and Rights Holder The author of a computer program is always a natural person. They hold inalienable moral rights (Art. 11 of the Law): authorship, name, and the integrity of the work. Economic rights (Article 12 of the Law)—reproduction, distribution, adaptation, public communication, and other forms of use—determine who may commercially use the code, license it to third parties, or prohibit such use. Property rights may belong not to the author, but to another person—the employer, the client, or the acquirer under a contract. In IT disputes, the subject of the conflict is precisely these economic rights: who has the right to use, modify, and commercialize the software product. The author-programmer’s moral rights are preserved in this context but do not affect the distribution of commercial rights. An important nuance for startups: co-authorship of the original program does not automatically extend to its modifications. In Case No. 760/16961/19[4] , the co-author of the original program lost the dispute in three instances because he could not prove a creative contribution to each subsequent version of the product. Work for Hire: When an Employee Creates the Code Article 14 of the Law defines a work made for hire as a work created by an employee in connection with the performance of duties under an employment contract (agreement). For code to be recognized as a work made for hire, several conditions must be met simultaneously: the existence of an employment relationship, the creation of the program during the term of the employment contract, at the employer’s expense, and within the scope of duties or pursuant to a written work assignment. The Law established that property rights to a work for hire belong to the employer from the moment of creation, unless otherwise provided by the contract. This resolved a long-standing conflict between Article 429 of the Civil Code (joint rights) and the previous version of the Law. The severity of this conflict is illustrated by Case No. 760/18303/14-ц[5] : employees of a state-owned enterprise registered copyright in their own names for a program created under a government contract. The court of first instance ruled against the employer, erroneously applying Article 429 of the Civil Code. The Kyiv Court of Appeals (ruling dated February 6, 2024) overturned the decision, recognized the program as a work made for hire, and invalidated the employees’ certificate, applying Article 16 of the Law “On Copyright and Related Rights” in the 1993 version, which was in effect at the time the disputed legal relationship arose. Key conclusion: the state of funding and non-payment of royalties do not alter the status of a work made for hire. In practice, employers make common mistakes: they fail to include software development in a programmer’s job description, do not formalize work assignments, and do not document the creation of deliverables. If the employment contract lacks a clear description of duties related to code creation, a programmer may argue in a dispute that a specific development went beyond the scope of their job duties and, therefore, is not a work-for-hire. A separate risk involves working on corporate equipment. In Case No. 756/960/15-ц, the Kyiv Court of Appeal[6] refused to recognize the contractor’s authorship without a copyright certificate. In Case No. 2-6118/11, the Solomyanskyi District Court of Kyiv[7] emphasized: an object module in and of itself is not proof of authorship. Conclusion: side projects—in your free time and on personal equipment. Client and Contractor: The Riskiest Scenario Outsourcing development, including the widespread practice in Ukraine of collaborating with individual entrepreneurs (FOPs), is the riskiest model for determining the rights holder. Article 15 of the Law establishes that property rights to a work created on commission are transferred to the client in their entirety from the moment of creation, unless otherwise provided by the commission agreement. This is a new provision that has significantly improved the position of clients compared to previous regulations. It is important to distinguish between the transfer (disposition) of property rights and licensing. Transfer means the complete transfer of all property rights to the transferee. A license merely grants permission to use the work in a specified manner and for a specified term. If the contract contains only wording regarding the “performance of work,” the court may classify the relationship as a contract for services: the client receives a tangible result but not intellectual property. This is confirmed in the Supreme Court’s ruling in Case No. 910/2683/19[8] regarding the mixed nature of a software development contract (elements of a contract for work and Article 1112 of the Civil Code). Key documents that the client must ensure are in place from the very start of the relationship with the developer: a contract with an IP clause, technical specifications, and acceptance and transfer certificates specifying the transfer of property rights. These documents form the evidentiary basis for ownership of rights long before any dispute arises—and it is precisely their absence that is the most common reason why a client loses in court, even when they have full factual control over the product. Technical control does not guarantee ownership rights Access to a GitHub repository, cloud infrastructure, or keys constitutes de facto control, not legal title. GitHub and GitLab platforms record the authorship of commits and the history of changes, which can serve as evidence. However, control over a repository does not imply ownership of the code—just as storing a painting does not make the custodian the owner. The court evaluates technical evidence in conjunction with contractual relationships and deeds of assignment. The party controlling the infrastructure may block access to the product without having the rights to do so—this gives rise to separate claims for access. Even loading a program into RAM can constitute copying: paragraph 31 of Resolution No. 5 of the Plenum of the Supreme Court of Ukraine dated June 4, 2010 ([9] ) states that storing a copy of a program in a computer’s memory constitutes a violation of economic copyright. Open-source as a hidden factor Modern development is impossible without open-source components—up to 80–90% of a commercial product’s codebase may consist of open-source libraries. Licenses (MIT, BSD, Apache 2.0, GPL, LGPL, MPL) have fundamentally different terms. Using GPL components without complying with the terms may require the source code of the entire product to be disclosed. License incompatibility can make legal distribution impossible—each component must be checked for compatibility. The “unclean hands” doctrine denies legal protection to anyone who has violated licenses themselves. This principle was applied in the case of Lasercomb America, Inc. v. Reynolds (U.S. Court of Appeals, Fourth Circuit, 1990), where the court denied the plaintiff copyright protection due to abuse—the inclusion of terms in the license agreement that restricted competition. The doctrine of unclean hands as such is not part of Ukrainian law, but its logic corresponds to the general principles of Ukrainian civil law. In particular, Part 6 of Article 13 of the Civil Code of Ukraine prohibits actions committed with the intent to cause harm to another person or in a manner that constitutes an abuse of rights, and Part 3 of Article 16 of the Civil Code grants the court the right to deny protection of rights to a person who abuses their civil rights. Therefore, the argument regarding the “dirty hands” of a counterparty who has itself violated the licensing terms of open-source components may be relevant in Ukrainian court proceedings as well—through the mechanism of abuse of rights. An open-source audit can shift the balance of power in a dispute: if the “author’s” code turns out to have been borrowed from open libraries, the scope of the disputed rights will be significantly reduced. How to Prove Code Copying The plaintiff must prove: the identification of the product, the authorship and origin of the code, the legal basis for acquiring the rights, and the fact of the infringement. Copying can be direct—borrowing code in the same language with “cosmetic” changes (renaming variables, rearranging blocks, renumbering lines)—or indirect: borrowing the structure, sequence of operations, and interfaces without copying the code itself. A simple “cosmetic overhaul” does not make a program an original work. For indirect copying, the case of Computer Associates v. Altai established a three-step test: abstraction (reconstructing the creation sequence from the code back to the main function), filtering (separating protected elements from ideas and the scène à faire), and comparison. The result of filtering is the “golden nugget”: the protected core of the program. In Ukraine, judges generally do not examine the code themselves. This is done by court experts in computer and technical forensics. The quality of the expert’s conclusion is often a decisive factor. In the same case No. 760/16961/19[10] , the fragment of source code attached to the registration certificate proved insufficient to identify the program—and the court found it impossible to establish the fact of modification. The lesson is clear: keep the complete source code for every version of the product, otherwise even indisputable authorship will be impossible to prove. Recommendations for Businesses In-house: a programmer’s job description must explicitly include software development; each project must be accompanied by a written work assignment; work results should be documented in reports specifying the transfer of property rights. A separate confidentiality agreement (NDA) should be provided for. Regarding post-employment non-compete clauses—the effectiveness of such provisions in Ukrainian jurisdiction is limited due to the absence of direct legislative regulation; therefore, in practice, protection is primarily ensured through NDAs and agreements on the non-disclosure of trade secrets. Outsourcing/Individual Entrepreneurs: The contract must contain a comprehensive IP clause: a direct reference to the transfer of all property rights to the client, a definition of the transfer date, and a list of specific rights. It is recommended to include the contractor’s obligation to transfer source code, technical documentation, and all access rights, as well as liability for infringing third-party rights through the unlicensed use of open-source components. Documentation that holds up in a dispute: systematic maintenance of repositories with named author identification, signed acceptance and transfer acts for each development stage, a registry of used open-source components and their licenses, and, if necessary, state copyright registration as an additional protective measure. Conclusions The owner of an IT product is not the person who paid for the development, not the person who has access to the repository, and not even the person who wrote the code. The owner is the person who holds legal title—a properly documented basis for acquiring property rights. Since the Law came into effect, the rules for the distribution of rights have become significantly clearer, but they only apply if properly formalized in a contract. The contractual and evidentiary basis is more important than technical control over the code. Control over a GitHub account or cloud server grants de facto power, but not legal authority. Dispute prevention is significantly cheaper than litigation—the costs of properly formalizing IT relationships legally are a fraction of the potential losses for a business that risks losing rights to its core product. [1] Law of Ukraine “On Copyright and Related Rights” dated December 1, 2022, No. 2811-IX [2] Resolution of the Plenum of the Supreme Court of Ukraine dated June 4, 2010, No. 5 [3] Resolution of the Supreme Court dated May 22, 2023, in Case No. 760/16961/19 (Civil Cassation Court) [4] Resolution of the Supreme Court dated May 22, 2023, in Case No. 760/16961/19 (Civil Cassation Court) [5] Decision of the Kyiv Court of Appeal dated February 6, 2024, in Case No. 760/18303/14-c [6] Ruling of the Kyiv Court of Appeal in Case No. 756/960/15-ц [7] Judgment of the Solomyanskyi District Court of Kyiv dated October 31, 2011, in Case No. 2-6118/11 [8] Resolution of the Supreme Court in Case No. 910/2683/19 (June 25, 2020) [9] Resolution of the Plenum of the Supreme Court of Ukraine dated June 4, 2010, No. 5 [10] Ruling of the Supreme Court dated May 22, 2023, in Case No. 760/16961/19 (Civil Cassation Court)

Features of the Enforcement of Foreign Court Decisions in Ukraine

In today’s environment of active international relations, the issue of recognizing and enforcing foreign court decisions in Ukraine has become particularly relevant. The growing number of international disputes involving Ukrainian companies and citizens in the areas of business, family, inheritance, and property law necessitates the creation of effective mechanisms for enforcing foreign court decisions within Ukraine. The possibility of recognizing and enforcing foreign court decisions in Ukraine is enshrined in Article 81 of the Law of Ukraine “On Private International Law” and the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. The procedure for recognizing and enforcing such judgments is outlined in Section IX of the Civil Procedure Code of Ukraine (hereinafter—the CPC of Ukraine), which establishes the principles, conditions, and requirements for the recognition and enforcement of foreign court judgments in Ukraine in accordance with international standards. Below, we outline the main steps for successfully navigating the procedure for the recognition and enforcement of a foreign court judgment in Ukraine, as well as common mistakes applicants often make. Key Steps and Common Mistakes in the Procedure for Recognition and Enforcement of Foreign Court Decisions in Ukraine It is worth noting that foreign court decisions are subject to recognition and enforcement in Ukraine if there is an international treaty, the binding nature of which has been approved by the Verkhovna Rada of Ukraine, or on the basis of the principle of reciprocity. Therefore, the first practical step before filing a petition with the court for the recognition and enforcement of a foreign court judgment is to verify the existence of an international treaty between Ukraine and the state whose court issued the relevant judgment, governing the recognition and enforcement of court judgments. However, the absence of an international treaty does not in itself preclude the recognition and enforcement of a court decision if the application of this principle is provided for by national law. That is, in the absence of an international treaty, the process of recognizing and enforcing a foreign court’s decision is carried out in accordance with the principle of reciprocity. Thus, Article 462 of the Code of Civil Procedure of Ukraine establishes that if the recognition and enforcement of a foreign court’s decision depends on the principle of reciprocity, it is presumed to exist unless proven otherwise. The second important step is determining the competent court to which the relevant motion is filed, as well as complying with the established procedure and deadlines for its submission. The procedure for such an application is not very complicated: the relevant petition is filed with the court along with the necessary attachments, the list of which is specified in Articles 466–472 of the Code of Civil Procedure of Ukraine. If an international treaty, the binding nature of which has been approved by the Verkhovna Rada of Ukraine, establishes a specific list of documents to be submitted, the applicant must follow that list. In the absence of such a treaty or if it does not specify the list of attachments, the following must be attached to the petition: a duly certified copy of the foreign court’s decision; a document confirming that the decision has become final (if this is not stated in the decision itself); a document confirming proper notification of the party that did not participate in the case; a document specifying which part of the judgment is enforceable (if it has been enforced previously); a document confirming the representative’s authority (if the motion is filed by a representative); It is also worth paying attention to practical nuances that often serve as grounds for denying a motion. In particular, a common mistake is failing to properly notify a party to the case of its proceedings, or the lack of sufficient evidence of such notification. If the party against whom a foreign court decision was rendered proves that they were not properly informed about the proceedings abroad or were unable to exercise their right to defense, this may constitute an independent ground for refusing to recognize and enforce the foreign court decision. An equally common ground for refusal is the applicant’s failure to take into account the existence in Ukraine of a court decision that is already in the enforcement stage and was rendered between the same parties and on the same grounds. In such cases, the courts rely on the principle of the inadmissibility of double jeopardy and the principle of legal certainty. In this context, it is worth noting several Supreme Court rulings that reflect current approaches in judicial practice regarding these issues. Review of Relevant Judicial Practice of the Supreme Court In a ruling of the Civil Cassation Court within the Supreme Court (hereinafter “CCC SC”) dated July 30, 2025, in Case No. 756/7283/23, the issue of compliance with the time limits for filing a petition with the court for recognition of a foreign court’s decision was examined. In June 2023, the applicant filed a motion with the Obolon District Court of Kyiv seeking recognition and authorization for the enforcement of the decision of the District Court of Novo Mesto (Republic of Slovenia) dated January 3, 2020, which became final on February 13, 2020, in Case No. P 229/2016-46 regarding the recovery of funds. By a ruling of the Obolon District Court of Kyiv dated February 21, 2024, the motion was denied, in particular because the debtor does not reside in Ukraine and the judgment is already being enforced in Slovenia, which could lead to double recovery. By a ruling of the Kyiv Court of Appeals dated September 24, 2024, the decision of the court of first instance was overturned; however, the motion was also denied—on other grounds. The Court of Appeals reasoned that the applicant filed the motion on June 12, 2023, i.e., outside the three-year period established by Article 463 of the Code of Civil Procedure of Ukraine. The Supreme Court upheld the position of the appellate court and noted that the time limit for submitting a foreign judgment for enforcement is three years from the date it becomes final under national law. Since the judgment in Case No. P 229/2016-46 became final on February 13, 2020, and the applicant filed the motion only on June 12, 2023—that is, after the expiration of the three-year period—this constitutes grounds for denying the motion. Other grounds for granting a motion for permission to enforce a foreign court’s decision were considered by the Civil Chamber of the Supreme Court in its ruling of October 22, 2025, in Case No. 308/17585/23. The facts of the case were that the applicant filed a petition with the court seeking recognition and permission to enforce the judgment of the District Court of Humenné (Slovak Republic) dated October 5, 2020, and the order dated February 5, 2021, in case No. 17Cb/26/2020 regarding the recovery of funds from a Ukrainian citizen for failure to fulfill contractual obligations. By a ruling of the Uzhhorod City and District Court of Zakarpattia Oblast dated April 2, 2024, the applicant’s motion was granted. The court found no deficiencies in the form or content of the motion. By a ruling of the Transcarpathian Court of Appeal dated November 7, 2024, the ruling of the Uzhhorod City and District Court of the Transcarpathian Region dated April 2, 2024, was overturned, and a new court decision was issued, which denied the motion to recognize and grant permission for the enforcement of the court decision of the Slovak Republic. The denial was based on the improper notification of the debtor regarding the proceedings. At the same time, the Supreme Court disagreed with the conclusion of the appellate court, noting that the latter had failed to take into account that, in the event of improper notification by a foreign court regarding the proceedings, procedural law grants a person who did not participate in the court proceedings the opportunity to file appropriate objections to the motion with the court hearing the motion. Thus, the debtor was duly notified and informed of the filing and consideration of the relevant motion, and also had a real opportunity to exercise his procedural rights. This was the basis for the Supreme Court’s conclusion that the appellate court’s position was erroneous and, accordingly, for the reversal of its decision in this part. It is worth separately addressing the categories of cases that most frequently arise in the practice of recognizing and enforcing foreign court decisions in Ukraine, namely regarding the collection of alimony. In this category of cases, the Civil Chamber of the Supreme Court, in its resolution of January 28, 2026, in Case No. 456/1567/24, issued a legal opinion stating that a motion for permission to enforce a foreign court’s decision may be denied if a decision of a national court already exists and is being enforced between the same parties. In March 2024, the applicant filed a petition with the Stryi City and District Court of Lviv Oblast seeking recognition and permission for the enforcement of the decision of the District Court of Prague dated June 15, 2009, regarding the collection of child support. By a ruling of the Stryi City and District Court of Lviv Oblast dated October 30, 2024, the motion for enforcement of the foreign court’s decision was granted, and permission was granted to collect child support pursuant to the foreign court’s decision. By a ruling of the Lviv Court of Appeals dated September 23, 2025, the decision of the court of first instance was overturned and a new ruling was issued, on the grounds that there were no legal grounds for granting the motion, given the existence of a judgment by a Ukrainian national court ordering the payment of child support. The Supreme Court upheld the appellate court’s position and noted that the existence of a national court decision on the collection of child support, which is already in the enforcement stage, precludes the possibility of granting the motion for permission to enforce a foreign court decision. Otherwise, this would lead to the simultaneous existence of two enforcement documents regarding the recovery of the same amounts from the debtor in favor of the same person. Thus, it can be concluded that when filing a motion for permission to enforce a foreign court’s decision, it is necessary to carefully consider both substantive and procedural nuances. Before filing the motion, it is advisable to thoroughly analyze the circumstances of the case and the available documents, as well as to ensure that the motion is properly drafted in accordance with the requirements regarding its form, content, attachments, and deadlines. Authors: Anastasia Klian, Head of Litigation and Dispute Resolution practice at GOLAW, Attorney at law; Oleksandra Belyuga, Paralegal at Litigation and Dispute Resolution practice at GOLAW

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