GOLAW

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

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

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

If you are a foreign investor or an international company doing business in Ukraine, you probably know that this market is dynamic and promising, but at the same time unpredictable. In today's reality, economic instability, war, inflation, and constant changes in legislation create new challenges for business. Sometimes these circumstances change the situation so significantly that further performance of the contract becomes either excessively burdensome or impossible. A contract that was profitable yesterday may become a source of losses today or lose its meaning altogether. Termination of the contract is not always the best or only option. Is there a way out? Yes. Ukrainian legislation provides for an instrument that gives business entities the right to apply to the court to amend or terminate a contract. One of the key legal mechanisms in such situations is Article 652 of the Civil Code of Ukraine (hereinafter referred to as the CC of Ukraine), which opens the way for entrepreneurs to amend or terminate a contract in court if the performance of an obligation has become excessively difficult due to a significant change in circumstances. By court decision, the contract may be adapted to the new realities — for example, the terms of performance may be extended, price formulas or other material terms may be changed — while maintaining cooperation between the parties. In wartime, when business risks and operational challenges are changing extremely rapidly, knowledge and use of this mechanism can help protect investments and preserve key commercial relationships in Ukraine. Below, we will take a closer look at the circumstances under which a court may change the terms of a contract, how to distinguish between a material change in circumstances and force majeure, and what commercial risks exclude the fact of a material change in circumstances. Material change in circumstances: legislative regulation According to the Civil Code of Ukraine, a change in circumstances is considered material if they have changed to such an extent that, had the parties been able to foresee it, they would not have entered into the contract or would have entered into it on different terms. In such a case, if there is agreement, the parties may amend or terminate the contract. However, in practice, such negotiations lead the parties to a dead end. It is at this point that one of the parties, which is the initiator of the amendment or termination of the contract, may apply to the court with a corresponding claim. Thus, when filing a lawsuit to amend (terminate) a contract due to a material change in circumstances, a number of conditions specified in the Civil Code of Ukraine must be taken into account. In particular, if the parties have not reached an agreement, the contract may be amended or terminated by a court decision if the following conditions are met simultaneously: 1) at the time of concluding the contract, the parties assumed that such a change in circumstances would not occur; 2) the change in circumstances is due to reasons that the interested party could not eliminate after they arose, despite all the care and prudence required of it; 3) the performance of the contract would violate the balance of property interests of the parties and deprive the interested party of what it expected when concluding the contract; 4) it does not follow from the essence of the contract or business customs that the risk of a change in circumstances is borne by the interested party. It should be noted that a change in the contract due to a significant change in circumstances is permitted by a court decision in exceptional cases where termination of the contract is contrary to the public interest or would cause the parties damage that significantly exceeds the costs necessary to perform the contract on the terms changed by the court. Let us consider the example of the decision of the Northern Commercial Court of Appeal in case No. 910/14369/24 dated 04.06.2025: in July 2021, Anturion LLC (the Lessee) entered into a land lease agreement with the Kyiv City Council (the Lessor). Under the terms of the agreement, the Lessee undertook to commence construction on the land plot no later than three years from the date of state registration of the lease right, i.e., by 12.07.2024. However, due to the full-scale invasion by the Russian Federation, economic instability, and martial law, construction became virtually impossible. In addition, creditors terminated contracts, logistics were disrupted, and construction work was dangerous due to shelling and massive power outages. Anturion LLC applied to the court to amend the contract, namely: to postpone the start of construction for a period of "no later than three years from the end of martial law" on the basis of a material change in circumstances. Thus, we have the following situation: At the time of concluding the agreement, the parties could not have foreseen that a full-scale invasion would begin in Ukraine, which would directly affect the possibility of starting construction. The lessee took all possible measures, but encountered circumstances beyond its control and could not remedy them despite all its prudence and care: refusal to issue urban planning conditions and restrictions for the construction project (the lessee appealed against such refusals), termination of loan agreements due to the full-scale invasion, increased risks of danger to employees, etc. Performance of the agreement under the initial terms would have violated the balance of property interests of the parties and, in particular, would have forced Anturion LLC to pay double rent. The essence of the agreement or business practices did not imply that Anturion LLC bore the risk of changes in the circumstances described. Therefore, in the example given, a significant change in circumstances is clearly evident, as all four mandatory conditions are present at the same time. Having considered the case, the courts of first and appellate instances decided to satisfy Anturion LLC's claim in full and to make the appropriate changes to the land lease agreement. At the same time, it should be noted that the court determines the presence or absence of grounds for amending the agreement based on its internal conviction, assessing the situation as a whole and the plaintiff's compliance with all the conditions provided for in Article 652 of the Civil Code of Ukraine. Therefore, in the event of a significant change in circumstances that could not have been foreseen by the parties at the time of concluding the agreement and that significantly disrupt the balance of their interests, the interested party may use such an instrument as a change to the agreement through the courts. Judicial practice: what the Supreme Court pays attention to The Supreme Court has repeatedly emphasized that a significant change in the circumstances that guided the parties when concluding the contract must not be the result of the parties' behavior, but must be external to the legal relationship between them. Amending a contract due to a significant change in circumstances by court decision, based on the principle of freedom of contract, is an exceptional measure. For the court to exercise this power, both the four conditions mentioned above must be met and it must be established that the termination of the contract is contrary to the public interest or will cause the parties damage that significantly exceeds the costs necessary to perform the contract on the terms changed by the court. In other words, such termination would be unjustified according to the principle of "least negative consequences" for the parties to the contract (paragraphs 88-90 of the resolution of the Grand Chamber of the Supreme Court of 13 July 2022 in case No. 363/1834/17). Thus, amendment of a contract under Article 652 of the Civil Code of Ukraine is an exceptional measure, which requires, inter alia, proof that termination of the contract would cause disproportionate damage or be contrary to public interest. The Supreme Court emphasizes that such circumstances must be external to the will of the parties and not caused by their actions. However, along with the established practice taken into account by the courts when resolving relevant disputes, certain legal conclusions of the Supreme Court that shape approaches to the application of the provisions of Article 652 of the Civil Code of Ukraine in specific legal relations, which we will consider below, also deserve attention. Force majeure and a significant change in circumstances are different legal situations The Civil Code of Ukraine does not contain a clear definition of the term "force majeure," but it does use the concept of "circumstances of insurmountable force." In judicial practice, these concepts are considered synonymous. The courts define force majeure circumstances (circumstances of insurmountable force) as extraordinary and unavoidable circumstances, the existence of which objectively makes it impossible for a person to fulfill their obligations under the contract. In particular, rocket attacks, air raid alerts, Russia's military actions, etc. may be recognized as force majeure circumstances. However, it should be noted that the parties must prove how the above actions affected the performance of the obligation. At the same time, a significant change in circumstances is an evaluative category. It consists in the fact that at a certain moment, the performance of the contract under the initial terms becomes more burdensome and complicated for one of the parties to the contract. For example, due to an increase in the cost of the obligation being performed for the party or a decrease in the value of the performance received by the party. In other words, a material change in circumstances significantly alters the balance of the contractual relationship, making it impossible to perform the obligation. In turn, force majeure circumstances (circumstances of insurmountable force) make it impossible to perform the obligation in principle. Therefore, force majeure and a material change in circumstances are different legal situations. A material change in circumstances may be applied in the absence of force majeure. In this case, the person must prove the existence of all four conditions necessary for amending the contract by court decision (Resolutions of the Grand Chamber of the Supreme Court of 31.08.2022 in case No. 910/15264/21, of 16 August 2023 in case No. 910/17639/21, of 23 October 2024 in case No. 922/4801/23). We emphasize that the existence of force majeure circumstances excludes the possibility of amending the contract due to a material change in circumstances. In particular, in the resolution of the Grand Chamber of the Supreme Court dated 10.10.2024 in case No. 910/332/24, the court came to the following conclusion: "The conclusions of the court of appeal regarding the existence of grounds for applying Article 652 of the Civil Code of Ukraine to the disputed legal relations and making changes to the contract on the basis of this provision, while simultaneously establishing grounds for satisfying the claim in view of the existence and circumstances of force majeure, indicate the incorrect application by the court of appeal of the specified provision of substantive law in this case, since in the event of force majeure, the provisions of Article 652 of the Civil Code of Ukraine do not apply." Thus, force majeure circumstances and a significant change in circumstances are different legal categories that cannot be applied simultaneously to the same circumstances. Therefore, when choosing a method of legal protection, the plaintiff must carefully examine all the circumstances and determine what exactly is happening in their situation: force majeure or a significant change in circumstances. Martial law is not a material change in circumstances In judicial practice, parties often try to justify the existence of a material change in circumstances by the fact of the introduction of martial law or active hostilities. However, courts are critical of such arguments. In particular, in the resolution of the Grand Chamber of the Supreme Court of 10 October 2024 in case No. 910/332/24, the court stated the following: "The plaintiff could and should have foreseen, with a certain degree of prudence, the difficulties in performing the contract associated with the introduction of martial law, given that at the time of the conclusion of the contract, martial law had already been introduced throughout Ukraine. Therefore, the occurrence of the events mentioned by him cannot be considered as a basis for amending certain clauses of the contract and its annex due to a significant change in circumstances, and the court of first instance did not establish the existence of force majeure circumstances." Thus, the fact of martial law itself is not a basis for amending the agreement. However, it should be remembered that each situation is unique, so if properly proven, martial law and its consequences may be considered a significant change in circumstances. Amendments to the contract after its performance are not permitted Another important aspect highlighted by the Supreme Court concerns amendments to a contract that has already been performed. The court clearly distinguishes between circumstances where the parties can still file a lawsuit to amend the contract due to a material change in circumstances and circumstances where such a time has passed. Thus, in the ruling of the Commercial Court of Cassation dated 06.06.2023 in case No. 910/21100/21, the court states the following: "In addition, as correctly stated by the court of first instance, amendments to the procurement contract, in particular regarding the term of performance of the obligation, are possible only until the moment of performance of the obligation (ruling of the Supreme Court dated 05.09.2018 in case No. 910/21806/17), which is determined by the legal consequences of amending the contract by court decision, established by Article 653 of the Civil Code of Ukraine (if the contract is amended by court order, the obligation is amended from the moment the court decision on the amendment becomes legally binding). Therefore, by court decision, changing the term of performance of the obligation in the contract after its performance is not permitted." Thus, amendments to the contract, in particular regarding the term of performance of the obligation, by court decision are possible only until the moment of its actual and complete performance. Business entities must take into account that they carry out entrepreneurial activities at their own risk In similar cases, the Supreme Court has also pointed out that when doing business, a person should be aware that they're doing it at their own risk, the person must make their own commercial assessment of the consequences of the relevant actions, independently calculate the risks of adverse consequences resulting from certain actions, and independently decide whether to take (or refrain from) such actions (resolution of the Grand Chamber of the Supreme Court of 02.07.2019 in case No. 910/15484/17, resolution of the Supreme Court of 13.11.2018 in case No. 910/2376/18). Thus, in its ruling of 14.06.2023 in case No. 910/8232/22, the Commercial Court of Cassation noted the following: "In view of the above, the Supreme Court, taking into account the essence of entrepreneurship and the principles of entrepreneurial activity, which is based, in particular, on the principles of own commercial risk, considers that the complainant's reference to significant changes in the conduct of economic activity, inflationary processes, and other consequences of the introduction of martial law in Ukraine do not indicate the simultaneous existence of conditions under which, in accordance with Article 652 of the Civil Code of Ukraine, the agreement concluded between the parties may be amended by a court decision in the version of the supplementary agreement proposed by the plaintiff." An interesting example is that courts do not consider interference by state authorities in the activities of an enterprise to be a commercial risk for the latter. Thus, in its ruling of 14 May 2020 in case No. 910/15314/19, the court concluded that interference by state authorities in the plaintiff's activities is a significant change in circumstances that neither the plaintiff nor the defendant could have foreseen in advance, or that the risk of such actions by state authorities is borne by the party to the contract, in particular, the court noted the following: "At the same time, the court of appeal draws attention to the fact that the opening of criminal proceedings and the conduct of a pre-trial investigation with the subsequent seizure of documents and raw materials necessary for the production of gasoline could not have been prevented by either the plaintiff, the defendant, or anythird party after these events occurred, even with all the care and prudence required of them, since pre-trial investigations in any criminal proceedings are conducted by competent authorities subject to mandatory, full, and unquestionable compliance with the requirements of criminal procedure law, including the requirements regarding the secrecy of the investigation. In addition, the court found that neither the contract nor business customs provide that the risk of sudden investigative actions taken in criminal proceedings is borne by the supplier under the contract. Thus, given the essential terms of the contract, without any changes to them, their performance at the time of the dispute violates the balance of property interests of the parties and deprives FIRST GROUP LLC of what it expected when concluding the contract. Thus, it should be noted that business entities, when applying to the court with a request to amend the contract due to a material change in circumstances, must be prepared for higher standards of proof, since the line between commercial risk and a material change in circumstances is rather blurred and in each individual case is considered by the court according to its internal conviction. Conclusions In summary, it can be said that the institution of a material change in circumstances is not just an abstract legal norm, but a real chance to restore justice and balance the interests of the parties in complex contractual situations. However, taking advantage of such an opportunity is sometimes a daunting task. Judicial practice shows that courts take a cautious approach to changing contracts in court, paying particular attention to the existence and compliance with the conditions set out in Article 652 of the Civil Code of Ukraine. Therefore, before going to court, it is necessary not only to clearly formulate your legal position, but also to gather convincing evidence, as this may be the decisive argument in the fight to restore the balance of interests between the parties. 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.

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.  

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  

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.

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

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

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

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.

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.

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.

The status of a representative office of a foreign company directly affects the taxation of the activities carried out by such a representative office in Ukraine. According to the provisions of the Tax Code of Ukraine, a permanent establishment is a fixed place of business through which the business activity of a non-resident is wholly or partially carried out in Ukraine. Such a place of business may, in particular, consist of a branch, office, factory, workshop, warehouse or premises used for the delivery of goods, server, etc. At the same time, in practice, disputes often arise regarding the qualification of a representative office: whether it performs only non-commercial functions, or actually carries out business activity in Ukraine and, accordingly, should be recognized as a permanent establishment. In this article, we will consider the current approaches of court practice to certain issues regarding the recognition / non-recognition of a non-resident’s representative office as having the status of a permanent establishment. Preparatory and auxiliary activities of a representative office Both domestic and international legislation provides that one of the cases when the business activity of a non-resident carried out through its representative office in Ukraine does not fall under the definition of a “permanent establishment” is when such representative office carries out activities of a preparatory or auxiliary nature. In particular, in the resolution dated February 15, 2024, in case No. 640/35881/21, the Supreme Court noted that when distinguishing core activities from preparatory and/or auxiliary ones, it is necessary to take into account that: preparatory or auxiliary activities must be carried out for the benefit of the non-resident, and not for third parties; core activities are usually perceived as activities that are substantial and significant based on the commercial goals and objectives of the organization; preparatory activity precedes the commencement of the non-resident’s core activity in the territory of Ukraine; auxiliary activity supports the process of conducting the core business activity by the non-resident and is carried out simultaneously with the core activity, but does not qualify as one. At the same time, auxiliary activity may be conducted either on a temporary or on a permanent basis. Thus, in this case, the Supreme Court concluded that, by their nature, the actions of the representative office related to the registration of medicinal products in Ukraine, as well as their subsequent promotion for sale, are of a preparatory and auxiliary nature, since such activities are intended to ensure the possibility of marketing the respective medicinal product in the territory of Ukraine. However, these operations do not necessarily lead to the generation of income in the territory of Ukraine. In the resolution of the Sixth Administrative Court of Appeal dated December 04, 2024, in case No. 640/13698/22, the issue of preparatory and auxiliary activities of a representative office was also examined, in particular taking into account the criterion of receiving / not receiving income from a certain activity of the representative office. The court noted that the activity of a representative office, which does not generate any income for the parent company, cannot, under any circumstances, constitute a significant part of the overall business activity of the enterprise, and therefore has an exclusively auxiliary nature. Duration of a representative office’s activity and expenses for its maintenance Tax authorities often refer to the long duration of a representative office’s activity on the territory of Ukraine, as well as to the significant amount of expenses incurred by the parent company for its maintenance, as circumstances which, in their opinion, indicate that such a representative office meets the criteria of a permanent establishment. At the same time, in the resolution of the Supreme Court dated February 15, 2024, in case No. 640/35881/21, it was concluded that international legislation does not establish specific timeframes after which a representative office acquires the status of a permanent establishment. As a general rule, in order to qualify as a permanent establishment, the activity must be regular, stable, and stationary – that is, carried out at a specific location and with a certain degree of permanence. However, in the opinion of the Supreme Court, the amount of expenses incurred by a non-resident to maintain a representative office may, under certain conditions, be considered a factor supporting the conclusion that such a representative office should be granted the status of a permanent establishment. At the same time, in order to determine whether such expenses are indeed significant, it is necessary to compare the amount of funding allocated to the representative office with the overall amount of funds received by the non-resident from its business activity, also taking into account the specifics of the business sector, market conditions, and other relevant factors in their entirety. A similar approach was also outlined in the resolution of the Sixth Administrative Court of Appeal dated May 05, 2025, in case No. 320/44103/23, which stated that the duration of the representative office’s presence at a specific location, the number of personnel, and the amount of fixed assets available cannot serve as grounds for granting such representative office the status of a permanent establishment, if its activities are limited to purely preparatory and/or auxiliary functions. Identity of activities and the conclusion of contracts on behalf of the parent company Disputes regarding the recognition of a permanent establishment of a foreign company in Ukraine often arise based on the existence of powers of attorney issued to certain individuals by such company, authorizing them to perform a wide range of functions. Tax authorities, as a rule, take into account not the actual actions performed under the power of attorney, but the content of such power of attorney itself. Thus, in the resolution dated July 04, 2024, in case No. 160/11095/23, the Supreme Court identified the following features of a permanent establishment, which may be applied either simultaneously or separately: the representative office carries out activities that are wholly or partially identical to the core activity of the non-resident; a person (other than an agent with an independent status) acts on behalf of the company and uses authority in the contracting state to conclude contracts on its behalf. In order to avoid recognition of identity between the activities of the parent company and those of the representative office, the latter’s activities must differ from the statutory functions of the parent company. Regarding the second feature, it is worth noting that the prevailing position remains that issuing a power of attorney with broad powers (including authority to conclude any contracts related to the non-resident’s activity) is not sufficient grounds for concluding that the representative is performing the functions of a permanent establishment. Conclusions regarding the performance of permanent establishment functions must be based directly on the analysis of the actual actions performed by such representative, rather than on the content of the power of attorney (resolution of the Supreme Court dated December 21, 2022, in case No. 200/7051/20-а, resolution of the Second Administrative Court of Appeal dated October 10, 2024, in case No. 440/18088/23, resolution of the Third Administrative Court of Appeal dated January 09, 2024, in case No. 160/9196/23). Engaging in investment activity Court practice sometimes reflects the view that the purchase and sale of corporate rights and other investment activities carried out by a non-resident’s representative office are not considered grounds for recognizing the representative office as a permanent establishment, even if such activities correspond to the activities of the parent company. However, in a recent resolution of the Supreme Court dated March 20, 2025, in case No. 280/4264/21, it was concluded that, according to the provisions of international and domestic legislation, investment activity is one of the types of business activity. In particular, for professional investors, such activity may constitute core business activity and a source of independent income. Therefore, in the opinion of the Supreme Court, it is important to distinguish whether the representative office is conducting investment activity as an independent (core) type of business activity, or whether it has an auxiliary nature related to supporting or developing the core activity. Thus, considering that in this case the representatives of the foreign company were carrying out investment activity (primarily concluding contracts for the purchase and sale of shares in Ukrainian companies) on behalf of the foreign company, and such activity was also identical to the core activity of that company, the representative office was recognized as a permanent establishment. Conclusion In conclusion, it should be noted that the determination of the status of a non-resident’s representative office in Ukraine is of significant importance for tax consequences and, in practice, often presents challenges. In general, as the analysis of court practice shows, courts go beyond a formal analysis and focus on the actual substance of the representative office’s activity. Therefore, foreign businesses should take the above-mentioned approaches into account when planning their activities in Ukraine in order to minimize the risks of tax disputes, additional tax assessments, and other negative consequences. 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