Today, there is increasing talk about the “new philosophy” of the Economic Security Bureau of Ukraine (ESBU). While economic proceedings are not new to the legal community, the Bureau’s evolving approach is forcing defense attorneys to fundamentally rethink their strategic decisions and tactics.

Key Highlights of the Article:

The Team-Based Approach: Why a classic criminal law background is no longer enough and why involving tax attorneys and forensic economic experts is now critical.
Experience as a Key to Predictability: How understanding the ESBU’s internal logic and analyzing recent large-scale cases helps build realistic defense scenarios.
Institutional Challenges: Why the lack of established judicial practice and inconsistencies between the State Tax Service and the ESBU remain primary risk zones for business.
The ESBU Analytical Product: How to address the status of this document to prevent it from replacing a solid evidentiary base.

The ESBU is creating a new environment where success is driven not by universal methods, but by deep tax-financial expertise and systematic handling of economic data.

👉 Read the full article here: The New Philosophy of the ESBU as a Factor in Shaping New Business Defense Practices

Cryptocurrency in Ukraine has undergone numerous changes since its inception. Initially, it was an unregulated space where interaction occurred at one’s own risk.

Early Stages of Cryptocurrency Regulation in Ukraine

The first attempts at regulation began in the mid-2010s, but it wasn’t until 2020 that the first bills restricting the activities of crypto exchanges and wallets were passed.

Key Dates and Events:

2017: Initial warnings regarding the risks of using cryptocurrencies from the National Bank of Ukraine.
2020: Adoption of the first laws regarding cryptocurrencies.

The State of Crypto Licensing

In 2023, the mechanism for obtaining crypto licenses became more complex and subject to the strictest oversight.

Many nations recognize the need for supervision over cryptocurrencies and blockchain technology to prevent illegal activities, including money laundering and the financing of terrorism. Consequently, many national regulators have implemented specific criteria for issuing crypto licenses.

Conditions and standards vary by country. While some states insist on a detailed business strategy and sources of funding, others focus on identity verification and potential links to the criminal world. However, regardless of the procedural specifics, the possession of a crypto license is perceived by the market and investors as a positive indicator.

Basic Requirements for Obtaining a License

Obtaining a license requires strict compliance with certain criteria established by the state.

Documentation and Company Information: It is necessary to provide registration data, information about beneficiaries, and key figures within the company.
Financial and Legal Conditions: The company must have a stable financial position and comply with the legal requirements of Ukraine.
Security and Infrastructure Requirements: Servers and infrastructure must meet international security standards.

Application Process and Obtaining a License

To obtain a license for cryptocurrency activities in Ukraine, one must go through several stages, ranging from document preparation to passing inspections.

Steps for Filing an Application:

Collection and preparation of all necessary documents.
Payment of the state fee.
Submission of the application to the regulatory body.
Waiting for the application review and inspection results.

Timeframes and Cost: On average, the application review takes between 1 to 3 months. The cost of the license can vary depending on the type of activity and other factors.

Common Mistakes and Recommendations: Among the most frequent errors are incomplete documentation, mistakes in application forms, and failure to meet security requirements. It is recommended to study the requirements carefully and, if possible, involve legal services.

Advantages and Disadvantages of Licensing in Ukraine

Protection of Investor and User Rights: Licensing contributes to consumer protection, as companies are required to meet standards and regulations, ensuring the safety of client funds and data.
Support for Innovation and Market Development: Regulating cryptocurrencies stimulates investment and technological development within the country.
Restrictions and Complexities for Business: At the same time, licensing can impose additional financial and administrative burdens on companies, potentially slowing down innovation processes.

Comparison with Licensing in Other Countries

European Standards and Practices: In Europe, cryptocurrency regulation is moving toward unification and the creation of common standards. Ukraine can adopt the best practices of EU countries.
Experience of Neighboring Countries: Neighbors such as Poland and Belarus have their own specific features in crypto regulation, which can also be taken into account.
Global Trends in Crypto Regulation: At the global level, there is a movement toward creating international standards based on principles of security and transparency.

The Future of Cryptocurrency Regulation in Ukraine

Given global trends and the rapid development of the crypto market, Ukraine faces a series of questions regarding the further regulation of this sector.

Future Legislative Changes: Due to active international engagement and partnership with the European Union, Ukraine is considering amendments to existing cryptocurrency laws. These changes will aim to increase transaction transparency and investor protection.

Potential Impact on the Ukrainian Crypto Market: New regulations may attract more investors to the Ukrainian market by providing additional security guarantees. However, state intervention may also lead to certain restrictions for crypto businesses.

Expert Forecasts: Most experts agree that Ukraine will continue to move toward stricter cryptocurrency regulation while simultaneously creating favorable conditions for innovation. An increase in the number of licensed platforms and services is also expected.

Conclusion

Cryptocurrency regulation in Ukraine is a complex and multifaceted process that requires attention from the state, business, and the public. Given the rapid development of technology and the changing economic situation, it is vital to find a balance between supporting innovation and protecting the interests of investors and users.

It can be said with confidence that the future of cryptocurrencies in Ukraine looks promising, and the country has every chance to become one of the leaders in this field within the post-Soviet space. Finally, it is worth noting that up-to-date and in-depth information about cryptocurrencies and their regulation in Ukraine requires constant monitoring and analysis, as the situation can change very rapidly.

The question of real estate registration is extremely important. State registration of rights allows one to be the owner of immovable property in the legal field, which is necessary for entering into contracts and performing other legal acts.

In this article, we will talk about what the legislator considers as real estate, which rights regarding this type of property require registration, who are the subjects and grounds for registration, as well as the administrative fee.

Let’s start with the main point, namely the legislative definition of immovable property. According to the Civil Code of Ukraine (CCU), immovable property includes land plots and objects located on the land plot, the removal of which is impossible without their depreciation and change of purpose (Article 181 of the CCU): residential buildings, residential and non-residential premises, their parts, apartments, and others.

State registration of rights to immovable property is the official recognition and confirmation by the state of the acquisition, modification, or termination of proprietary rights to immovable property by entering the relevant information into the State Register of Proprietary Rights to Immovable Property (Article 2 of the Law No. 1952-IV, hereinafter referred to as the Law).

So, which proprietary rights to immovable property require registration?

Ownership rights and trust property rights as a means of securing the performance of obligations regarding immovable property, an object of unfinished construction, trust property rights as a means of securing the performance of obligations regarding a future immovable property object.
Special proprietary rights to an object of unfinished construction, future immovable property object.
Proprietary rights to immovable property derived from ownership rights, namely: the right of use (servitude, emphyteusis), the right to build on a land plot (superficies).
And other proprietary rights provided for in Article 4, paragraph 1 of the Law.

Once we have determined the object and type of rights associated with it, let’s move on to the subjects of registration (who specifically deals with this matter?):

Once we have determined the object and the type of rights involved, we move on to the registration subjects (who specifically handles this matter?):

Notary;
State registrar of property rights;
Executive bodies of rural, urban, and city councils, Kyiv, Sevastopol city, district, district in the cities of Kyiv and Sevastopol state administrations.

Depending on whether it is secondary or primary real estate, the basis for registering rights to the object varies. Let’s consider the grounds for registration of secondary real estate, as stipulated by the legislation:

Agreements that confirm your right to property (purchase and sale agreement, contract of subcontracting, trust ownership agreement, etc.);
Certificates that confirm ownership rights (certificate of ownership for a share in common property, inheritance certificate, certificate of acquiring property through public auctions, etc.);
Court decisions regarding the acquisition, alteration, or termination of property rights to real estate, unfinished construction projects, future real estate objects;
Court resolutions approving (recognizing) a settlement agreement;
Will that establishes an easement on real estate;
Other grounds specified in Article 27 of Law No. 1952-IV.

When it comes to primary real estate, it is important to note that state registration plays a vital role. According to Article 331, Part 3 of the Civil Code of Ukraine, prior registration of this property is considered as proof of ownership, even if it already appears as a completed building.

The legislator has divided the registration procedure for unfinished construction objects into two categories: those registered for the first time and others.

If it is the first registration, pay attention to the following list of documents:

Application for state registration of rights.
Land document.
Building passport.
Right to carry out construction work.
Technical passport.
Absence of any fact indicating a halt in construction work due to violations of urban planning legislation.
Absence of any fact indicating acceptance into operation of the completed construction object.
Construction acceptance and transfer certificate, if applicable.
Documents confirming the completion of work on the construction site (e.g., certificates of completed work).

If the registration is for an object that already has ownership rights or special property rights, changes are automatically made through the software of the State Register of Rights:

Object characteristics are updated based on the information from the Unified State Electronic System in the field of construction.
The type of property right is changed (from special property right to ownership).
State registration of encumbrances on real estate in favor of the construction client is carried out (only in the case of an indivisible object).

When registering any object, do not forget to provide your passport and identification code or statutory documents if you are a legal entity.

Finally, the administrative fee for registering property rights correlates with the timeframe, and for the standard period of 5 working days, the fees are as follows:

Ownership rights (including trust property as a means of securing obligations) – 270 UAH.
Special property right for an unfinished construction object – 270 UAH.
Special property right for a future real estate object – 335 UAH.
Trust property rights for an unfinished construction object or future real estate object – 30 UAH.
Other derivative property rights derived from ownership – 130 UAH.
Registration resulting from notarial actions – 270 UAH.

Subsidies in Ukraine: social protection in a new way

The subsidy programme began in the 1990s and has been helping families for more than 25 years and remains a major protection against increases in housing and utility prices and payments. Families can apply for a subsidy in Ukraine if their utility bill exceeds a certain amount that they need to pay. It is calculated differently for everyone and depends on income:

First the average monthly income has to be calculated;
This income is divided by the number of persons living in the house/apartment. This is how you can determine the average income per person per month;
It is then divided by the minimum that one can live on in a month;
The total is divided by 2 and multiplied by 20%;

This is how you find out the percentage of your average monthly income and the mandatory payment.

Subsidies 2021: What changes to the rules?

From the beginning of May, the 2021 subsidy is given differently. An important rule is that the 2021 subsidy will only be paid in cash. Such changes allow you to dispose of the remaining money after the payments have been made. According to the government’s decision, families who received the housing benefit last year and this year will receive it for the next period without an application from the citizen, i.e. it is automatically reassigned. But not all households are included in this decision. Families will not receive the subsidy if:

The subsidy was not a cash grant;
The subsidy was granted without persons registered in the dwelling;

Also under the new rules, those who are not eligible for the subsidy will lose their entitlement:

Have bought any vehicle or house whose value exceeds 50 thousand UAH;
Saved funds of any currency in a bank with interest of more than 100 thousand UAH;
Acquired and sold any currency in the amount exceeding UAH 50 thousand during the year prior to submitting the application for subsidy;
Were abroad for more than 59 days and declared no income;
Failed to pay utility bills or alimony payments for several months;
There was an illegally received subsidy in the previous year, after which the funds have not been repaid;
Have several new cars in their possession;
Have a car that is less than 5 years old;
Have not worked, studied or have no income;
Own a large flat or house;

The State Social Inspectorate regularly monitors and verifies the accuracy of all information submitted for the assignment of the subsidy.
The subsidy is checked by the social inspectors who follow up:

Accuracy and completeness of information on property and material status;
The verification of personal files of persons;
Payments and assignments of social assistance;
Measures to recover state social assistance funds paid in excess;

The Chief State Social Inspector verifies the subsidy with additional rights, namely:

A check on the individual’s living conditions to determine the family’s background to the application. This is done at the discretion of the head of the relevant social welfare body;
Checking the information on the place of residence of all family members;
Visiting places where family members work.

Actions carried out during the verification of the beneficiary are lawful. However, according to Article 30 of the Constitution of Ukraine and Article 13 of the CPC, there are three prohibitions:

No unlawful entry into a person’s home is allowed;
No unlawful examination is allowed;
No unlawful search except by a reasoned decision of a court.

The decision on whether or not to apply for the subsidy is made within 10 days. If a person does not agree with the refusal or the amount of the subsidy, he or she will have to double-check and clarify the information to correct the error. This information has 30 days to be clarified and can only be prolonged if the applicant is ill.

It is often the case that people may be deceived by telling them that the pensioner’s subsidy will be taken away if they become employed. However, the subsidy for pensioners can be based on wages and pensions. If a pensioner has stopped working or retired, he or she needs to apply to the social security office within a month with a declaration, and the aid will be transferred taking into account only one income – the pension.

Applying for a subsidy: how to do it and where to apply?

The subsidy 2021 is granted to people who present a passport or other proof of nationality. You can apply at the social welfare office in the place where you are registered. It is best if the application is submitted with all the necessary documents, i.e:

Declaration of expenditure and income;
Certificate of income;
A repetition of the no-obligation agreement (if any);
Rental agreement (if you have one);

What income you have to declare

Wages after you have paid all taxes;
Pension;
Scholarship;
State social cash payment for people declared legally unemployed;
Money transfers abroad;

The percentage of income does not include payments such as

Help when a child is born;
Support when a child is adopted;
Support for women with the title of “Heroine Mother” of Ukraine;
Social support for orphans;
Assistance for children who have been granted guardianship;
Child support received; Support for children;
Support from charitable organisations;
Amounts paid to an employee to compensate for damages incurred during the period of employment;

Also income is not taken into account:

Alimony paid, if documented;
The amount for travel vouchers received free of charge;
Payments to persons working in the commission on polling day;
Funds received for their role in anti-terrorist operations;

The forms and declarations you need to fill in are available free of charge and are provided when a citizen applies directly to the subsidy office. You can also find the forms on the website of the Ministry of Social Affairs. If you are older, your grandchildren or children may help you. Once you have filled in all the forms and documents, you can submit them by mail to the address of your local social security office. The address can be found on the website of the Ministry of Social Policy. You can also hand them in person to an official of the local council of the local community or to the Administrative Services Centre. They will forward the documents to the right place for you within a few days.

If you are a community resident, then you need to contact

Headmen;
The body that coordinates the work of the village head’s team;
Community Protection Unit;
Centre for the provision of administrative services of the territorial society;
The social defence body of the district state administration;

You can apply for a subsidy online in several ways:

Delivery of important documents by e-mail
Using an electronic digital signature; if not, then you have to register on the website of the Ministry of Social Policy;
Use BankID identification;

In order to apply for a subsidy online, you must:

On the Ministry of Social Policy resource, find the link to go to;
Register by mail, electronic signature or BankID, at your discretion;
Fill in the necessary data and enter the bank where you will receive the subsidy;
Fill in the form and be sure to check that your details are correct, then submit.

The notification, which will include the amount of the subsidy, or possibly a refusal, will come a couple of weeks later.

All people who are legally present and residing in Ukraine are eligible for the subsidy. Subsidies in Ukraine can be applied for:

The person registered in the house;
Unregistered person living in the house renting it (documents confirming that the person lives at this address must be attached to the application);
Children under 18 years of age and without parental care;
An incapacitated person of working age who has been granted guardianship.

In the event of the death of the beneficiary, the subsidy is paid to one family member. This is done upon written request. The deadline is three months.

The subsidy is calculated on the basis of the number of people living in the household who pay for utilities. It also includes persons who are in the service, but their income is not taken into account. This is determined from the first month that the subsidy is applied for.

If the number of family members who are registered and living in the building is less than the number of registered and living in the building, the subsidy is calculated on the basis of the number of registered and living in the building. This is done according to the commission’s decision. In order to prove that the registered family members do not live in the house, certificates must be provided. This can be documents that prove that the person is elsewhere due to work, study, medical treatment, etc.

It is compulsory for recipients of the subsidy to give notice of any changes in the family, namely

Changes in the number of people living in the accommodation;
Changes in social status, including marriage and its termination;
Changes in the conditions of communal services;
Changes in the costs of managing the block of flats;
One person in the family has bought a house, a flat, a vehicle, land, and expenses for services other than medical ones have occurred;

This must be done within one month of the start of the change.

Since the beginning of May, the accrual of the subsidy for incapacitated people who are unable to work has been made for overtime housing. This category of persons includes:

Persons under 18 years of age;
Ukrainian citizens receiving old-age, disability or seniority pensions;
Persons receiving assistance from the state. These may be adults and children who have a childhood disability, temporary assistance for a non-working person who has reached the general retirement age but has not become eligible for a pension payment.

It has also become known that from the beginning of October, the amount of the 2021 subsidy may differ in different regions of Ukraine. The reason for this could be a lockdown or a region moving into the red zone where strong quarantine restrictions will apply. As a result of a new wave of coronavirus, people in the red zone will automatically receive quarantine surcharges and support from the government.

With all of the above in mind, the recipients of the subsidy should not withhold any information that could affect the granting and amount of the subsidy. Because subsidy checks are carried out on a regular basis and this will all become known very quickly, the budget will have to be refunded as a result. We recommend that you contact the social welfare office at your place of registration, discuss all the nuances and choose the best solution for yourself.

It is impossible to imagine modern business without partners — suppliers, distributors, logistics providers, and contractors. However, every new counterparty represents not only an opportunity for growth but also a potential risk. If a partner acts in bad faith, it can lead to tax assessments, VAT blocking, or even the initiation of criminal proceedings.

The tax authorities are increasingly analysing supply chains as a whole rather than focusing on isolated business transactions. Consequently, simply holding a signed contract and a delivery note is no longer sufficient; it is vital that the selection of counterparties is conducted with due diligence. This means that a taxpayer must demonstrate reasonable care and foresight when collaborating with partners to avoid the risk of engaging with fictitious or problematic suppliers. Such an approach does not impose an obligation to prove the legality of a counterparty’s activities, but rather confirms the taxpayer’s own good faith within the principle of “reasonable care.”

In his blog for Liga Zakon Business, a tax solicitor from Riyako & Partners explains how to navigate these risks and vet third-party vendors to ensure the tax authorities have no grounds for inquiry.

The article covers:

What a supply chain is and why it matters;
The specific risks that arise within supply chains;
Stages of third-party vendor due diligence;
Compliance recommendations from a tax solicitor to protect your company.

Thousands of Ukrainians encounter difficulties with property built without the proper permits. These may include residential houses, holiday cottages, garages, or extensions erected without the required approvals, project documentation, or in breach of building regulations. Such property, known as unauthorised construction (самобуд), carries significant legal risks. Owners often become aware of the problem only when they need to sell, gift, or pass the property on by inheritance. Leaving the situation unresolved may result in fines and, in some cases, even demolition of the building.

Solicitors specialising in property law provide clients with full legal support in the process of legalising unauthorised buildings in Kyiv and other regions. They assist in navigating the complexities of Ukrainian legislation and guide owners through the challenging path from unlawful construction to obtaining legitimate ownership rights.

In this article, we will explain in detail what unauthorised construction means under the law, why legalisation is necessary, the steps involved in the process, and we will also answer common questions about regularising property without documentation in Kyiv.

What Counts as Unauthorised Construction under Ukrainian Law?

Before discussing how to legalise an unauthorised building, it is important to understand what the law regards as such. According to current Ukrainian legislation, a building is considered unauthorised if it breaches one or more of the following conditions:

No legal rights to the land. The property has been built on a plot that does not belong to the person by ownership or lease, or where the land has a different designated purpose. For example, building a residential house on agricultural land.
No building permit. Construction was carried out without the appropriate authorisation to commence building works. This also includes projects erected without an approved design.
Breach of building regulations. The structure has been built in significant violation of state building standards, rules, or requirements, such as health and safety, fire safety, or other mandatory provisions.

Legalising a house without a permit requires a thorough assessment of each of these aspects. Even one breach is sufficient for a building to be deemed unauthorised.

Why Is It Important to Legalise Unauthorised Construction?

The key problem is that such property cannot be sold, gifted, or bequeathed as real estate. In legal terms, you only own the building materials used, not the property itself. This means you cannot fully dispose of it — for example, secure a mortgage against it, let it out, pass it on by inheritance, or contribute it as capital to a company.

A further issue is fines. The State Architectural and Construction Inspectorate (ДАБІ) not only has the power to impose significant penalties but may also issue an order requiring demolition. Ignoring the matter may therefore result in serious financial losses and forfeiture of the property.

For this reason, timely legalisation is critical for safeguarding assets and ensuring legal security.

How to Legalise an Unauthorised Building: Step-by-Step Guide

Although the process varies depending on circumstances, it usually involves several key stages. The most complex situation arises where the owner lacks documents not only for the building but also for the land on which it stands.

Step 1: Securing land rights

Application to the local council. In Kyiv, this means submitting an application to the City Council requesting recognition of the unauthorised building. The application is supported by documents such as a technical passport for the building, approvals from health and fire authorities, a survey plan, and other evidence of compliance with building standards.
Council decision. If approved, the council issues a decision recognising the building and granting permission to prepare land documentation.
Technical documentation. A licensed land management organisation prepares the technical documents. Once completed, the land parcel is assigned a cadastral number.
Transfer of land ownership. With the documents ready, the council issues a decision transferring the land into ownership or use, forming the basis for further legalisation through the courts.

Step 2: Recognition of ownership through the courts

Filing a claim. The next step is to submit a claim to court seeking recognition of ownership rights over the unauthorised building.
Court proceedings. Case law in such matters is generally favourable. With valid land documents, refusal is highly unlikely.
Court ruling. The court’s decision is the key legal instrument confirming ownership.

Step 3: Commissioning the building and registering ownership

Declaration of readiness. With land documents and a court ruling, the owner applies to the State Architectural and Construction Inspectorate (ДАБІ) for acceptance of the building into operation.
Property registration. Once registered, full ownership rights are granted and must be entered in the State Register of Property Rights.

At this point, the legalisation process is complete, and the owner may freely dispose of the property.

Conclusion

Legalising unauthorised construction in Kyiv is not a mere formality but a vital step in protecting property rights. Although the process may seem complex and time-consuming, the right legal strategy and professional guidance can ensure success. Addressing the issue without delay allows you to avoid fines, safeguard your property, and secure the full range of ownership rights.

FAQ: Common Questions about Legalising Unauthorised Buildings

Can I sell an unauthorised building?
No. Ukrainian law draws a strict distinction between building materials and real estate. Without officially registered ownership, you can only sell the materials, not the property itself. No notary will certify a sale contract for such an asset.

What happens if I do not legalise my property?
Consequences can be severe. You cannot sell, gift, or bequeath it. Authorities may impose fines depending on the complexity of the property. In some cases, courts may even order demolition at your expense. Even if the building stands on your own land, breaches of regulations do not exempt you from liability.

How do I legalise a garage, cottage, or house?
The process depends on the type and size of the building. Smaller structures built before 1992, or those qualifying for simplified procedures, may follow an easier route. Generally, the steps are similar: gather documentation, carry out technical inspection, obtain necessary approvals, and register ownership. Each case has its nuances, so professional advice is strongly recommended.

Do I need a lawyer in Kyiv for legalisation?
Yes, in most cases. The process is legally and procedurally complex, requiring knowledge of regulations, planning law, and case practice. A solicitor specialising in unauthorised construction can prepare documents, assess risks, file claims, and represent you before the authorities and courts, significantly improving the likelihood of success.

The construction business, which works with government tenders, is under constant supervision by law enforcement agencies. Even conscientious contractors face criminal proceedings due to subjective assessments by investigators, inaccuracies in documentation, or formal violations. Today, every company manager must understand that performing work under a contract does not guarantee the absence of claims. Is it possible to operate legally, profitably, and at the same time avoid the risk of criminal prosecution? Yes, if you act proactively, build the right legal strategy, and have the protection of an experienced lawyer.

Why is the construction business under attack?

Criminal proceedings are most often initiated according to the following standard scenarios:

Overstatement of the cost of work – the investigation checks the compliance of the contract price with actual market rates.

Non-compliance with project documentation – any changes or deviations may be classified as a breach of contract.

Violation of tender procedures – most often, law enforcement agencies conduct checks for collusion between tender participants.

Improper performance of work – even minimal delays or adjustments to the project can be grounds for criminal charges.

Can a company that has performed all the work efficiently and on time find itself in a criminal case? Unfortunately, yes. The system works in such a way that even formal grounds can be used to initiate a case, and then everything depends on the effectiveness of the defence.

What can be done to minimise risks?

Conducting your own expert examinations – independent forensic examinations of goods, work and damages help prevent accusations of overpricing or non-compliance of work with technical requirements.
Audit of the enterprise for the period of contract execution – assessment of financial transactions and internal processes allows you to identify possible risks in advance and eliminate them before the start of inspections.
Digital hygiene and information security – it is important not to store confidential information in open access, minimise correspondence about business transactions and control corporate devices.
Preparedness for searches and inspections – the company must prepare its employees and office in advance for possible investigative actions, provide legal support and a response algorithm.
Checking counterparties before concluding agreements – unreliable partners can lead to criminal prosecution even for conscientious companies, so due diligence is mandatory.
Compliance and internal control – clear mechanisms for controlling financial transactions and contractual relationships help minimise risks and comply with legal requirements.
Protecting corporate equipment from seizure and analysis – the company must implement preventive measures to avoid situations where electronic devices are used as evidence in a case.
Legally correct response to law enforcement requests – monitor deadlines and wording in responses to avoid undue attention and additional investigative actions.
Preparing the team for unusual situations – staff should know how to behave during searches and interrogations so as not to give investigators grounds for further accusations.
Working with open sources – monitoring public registers and the media helps to quickly identify risks and respond to potential threats in a timely manner.

If your business is under pressure, act immediately

RIYAKO & PARTNERS law firm specialises in criminal defence of businesses operating in the field of public procurement. We help minimise risks, accompany companies during inspections and investigative actions, and build defence strategies before the situation gets out of control.

If you work in the construction industry and are facing inspections or pressure, please contact us for advice. We know how the system works and we know how to work around it within the law.

The war in Ukraine has presented entrepreneurs with complex challenges, forcing them to adapt to the new realities. Despite the difficulties, many companies not only continue to operate, but also find new opportunities for development. In this article, we will look at the key aspects of doing business during the war and give recommendations on how entrepreneurs should act in conditions of instability.

1. Legislative changes and new regulations

In the context of the war, the Ukrainian government has introduced a number of legislative changes aimed at supporting the economy and business. The main changes include:

Simplification of the tax system. A number of incentives for entrepreneurs have been introduced, including the possibility of switching to a simplified taxation system. This allows businesses to focus on operating activities, reducing the tax burden.
Moratorium on inspections. The government has temporarily restricted tax and other types of inspections, allowing businesses to focus on adapting to new conditions
Introduction of special economic zones. Special regimes providing tax breaks and other preferences for businesses have been introduced in the regions most affected by the war.

On 18 June 2024, the Verkhovna Rada adopted the Law of Ukraine ‘On Amendments to the Tax Code of Ukraine regarding the peculiarities of tax administration during martial law for taxpayers with a high level of voluntary compliance with tax legislation’, by which for legal entities and individuals-entrepreneurs p. par. 69.41.3. pts. 69.41. The Tax Code of Ukraine establishes such peculiarities of tax administration, in other words, a number of advantages, namely:

a moratorium on documentary audits (subject to certain exceptions)
reduced period of desk and documentary audits (5 and 10 working days, respectively);
provision of COE to the taxpayer within 15 calendar days, without extending the period of consideration of the application;
assigning a compliance manager to the taxpayer;
receipt by a taxpayer, upon request, within 5 days, of information on the availability of tax information that may indicate tax risks in the activities of such a taxpayer.

Law No. 3813-IX of 18.06.2024 defines a list of requirements that taxpayers – legal entities and physical persons – entrepreneurs must meet in order to be included in the List of taxpayers with a high level of voluntary compliance with tax legislation. It should be noted that inclusion in this List is possible only if the taxpayer meets all the requirements specified in par. 69.41.1 p.p. 69.41.1 of the TC of Ukraine.

As to simplification of conditions for business, the Verkhovna Rada of Ukraine supported in the second reading and as a whole Draft Law No. 7331 ‘On Amendments to Certain Laws of Ukraine Concerning Simplification of Conditions for Conducting Business Activities during the Period of Martial Law in Ukraine’, which transfers permits and licences to the declarative principle for the period of wartime, thus significantly simplifying business activities.

According to this draft law, during the period of martial law the declarative principle will apply to business entities whose activities require licences and permits. In terms of status, the declaration is equal to licences, permits and other results of public services and has a number of advantages, such as: the possibility of filing the declaration in any place regardless of the legal/actual address of the business; no need to change the information in the declaration and other permits during the period of martial law, etc.

2. Risk management and security

Doing business in times of war requires special attention to security and risk management. The main aspects to be addressed are:

Employee safety. Companies must provide their workers with a safe working environment, taking into account possible hazards. This may include evacuation to safe regions, provision of personal protective equipment and psychological support. Employers must also organise a process for employees to receive briefings and training on safety measures during air raids and first aid to victims of shelling. Managers of enterprises should provide workers with a workplace in a building with mandatory shelter, which, if possible, should be equipped to perform work in order to ensure continuous operation of the enterprise.
Asset protection. Businesses should take steps to protect their assets by, among other things, insuring property, providing physical security and utilising modern technology to monitor facilities remotely.
Financial risk management. Economic instability requires careful cash flow management, planning financial reserves and utilising instruments to hedge currency risks.

For proper risk management, businesses need to implement a risk management system at enterprises, which consists of building a strategy and making decisions to minimise losses that may arise due to the impact of negative and unpredictable circumstances, as well as to reduce such impact on the activities of the business entity.

3. Changing the business model and adapting to new conditions

In the context of war, many businesses are forced to rethink their business models. The main approaches to adaptation include:

Diversification. Expanding product or service lines, entering new markets, changing suppliers are just a few ways to minimise risk and remain competitive.
Digitalisation. With the constraints of physical mobility, the importance of going online has increased significantly. This can include developing online shops, implementing CRM systems and other measures to optimise business processes. With regard to document management in the enterprise, the process of digitising paper documents related to the enterprise’s activities and the introduction of digital document management is important. To implement electronic document management at the enterprise will be the use of document management systems such as M.E.Doc and ‘Vchasno’, which greatly simplify and accelerate the exchange of documents between counterparties, as well as give the opportunity to maintain primary documentation in electronic form. Thus, it is especially important to ensure the digitisation of primary documentation, as under martial law there is an increased risk of its loss, and the process of restoring such documents is both difficult and sometimes even impossible. It should also be noted that signing contracts and other documents with EDS is equal to signing them in paper form and has the same legal effect.
Relocation. Under martial law, there was a need to preserve the capacity and protect the employees of enterprises in order to ensure their proper functioning. In this regard, managers, in order to protect enterprises, often make decisions to relocate the main facilities of the business to safer territories where there is no active hostilities and business operations are possible. Sometimes enterprises do not carry out full relocation of business, if it is possible, taking into account the situation in the territories where the legal entity is located, but partial relocation of facilities, if the enterprise is not in the territory of active hostilities, but still in the zone of greater risk.
Co-operation with the government and international organisations. The government and international donors offer various business support programmes, including financial grants, credit lines and advisory assistance. Active participation in such programmes can help a business not only to survive, but also to find new opportunities for growth
Entering the international market. For many companies – representatives of big business, it became an incentive to scale up – to move to the next stage and enter the international market. To enter the international market, a company needs a comprehensive approach and mandatory development of a strategy and step-by-step plan to ensure proper functioning of all processes, study of local legislation in terms of regulation of business and tax relations in a foreign country.

4. Social responsibility and community support

The concept of social/corporate social responsibility is particularly relevant in war conditions, as during the martial law period business plays an important role in supporting society and the economy. Many companies actively participate in volunteer projects, provide support to the Armed Forces of Ukraine, help migrants and other vulnerable categories of the population.

Such economic activities are carried out mainly by companies that belong to large businesses, but it should be noted that increasingly small and medium-sized businesses are also actively joining initiatives for social support of society.

5. Legal aspects and recommendations

In war conditions, there are many legal issues faced by entrepreneurs, as legislation in such conditions is particularly dynamic and subject to change in response to the current situation in the country. In this regard, it is extremely important to monitor current changes in legislation and take them into account when conducting business activities. Here are some recommendations:

Consultation with a legal professional. Consult with legal counsel regularly to understand current legislative changes and their impact on your business.
Document preparation. Ensure that all transactions, particularly contracts with at-risk counterparties, are properly documented.
Labour law compliance. Ensure that workers’ rights are respected, particularly regarding pay, holidays and safe working conditions.
Military records at the enterprise. Keeping military records is mandatory for business entities; this obligation is enshrined at the legislative level. Business managers need to ensure proper maintenance of military records at the enterprise, preparation of necessary documents and control over compliance with the legislation, as violation of the rules of military registration and mobilisation is punishable by fines, the amount of which can reach up to UAH 59,500.

Conclusion

Doing business in times of war is a complex process that requires entrepreneurs to be flexible, think strategically and adapt quickly to change. However, by taking into account all challenges and opportunities, companies can not only survive these difficult times, but also emerge from them stronger and more competitive.

Entering into contracts with counterparties is an important factor in conducting business activities. When entering into a contract, it is necessary to consider the potential risks that may arise in the course of fulfilling that contract.

Main risks when concluding contracts

1. Improper counterparty due diligence

It is advisable to check the counterparty with whom the contract will be concluded, even if the company has been cooperating with it for a long time, but there has been a break in such cooperation. If the contract is concluded with a new counterparty, such verification is mandatory.
Проверка контрагента осуществляется с целью установления “добросовестности” субъекта хозяйствования. Ненадлежащая проверка контрагента может стать основанием для возникновения споров в процессе выполнения договора, а в дальнейшем – обращения в суд.

This verification is done with the help of open resources such as:

‘Judicial Power of Ukraine’
Unified State Register of Court Decisions
Automated system of enforcement proceedings
Unified register of debtors
Unified State Register of Legal Entities, Individual Entrepreneurs and Public Formations

It is also necessary to check that the person signing the contract has the authority to sign the contract. The existence of such authority should be stated in the company’s Articles of Association or another document to be provided to the other party to the contract to confirm the signatory’s authority.

A number of rulings of the Supreme Court contain a stable legal position on this issue, which is that if the contract contains a condition that it is signed by a person acting on the basis of the company’s charter or other document confirming his powers, this indicates that the other party to the contract is aware of such documents, and the court may not take into account the references of this party to the fact that it was unaware of the limitation of the powers of the counterparty’s representative (rulings of the Supreme Court of 09. 04.2019 in case No. 924/491/17

2. Failure to agree on contentious issues at the stage of drafting the treaty

The agreement by the parties of the material terms of the contract is a very important stage in the process of contract conclusion.Issues arising in the process of consideration and agreement of the parties to the draft contract can be settled and recorded in a protocol of disagreements. Thus, the parties will reach a compromise and establish mutually beneficial terms of co-operation.

3. Failure to record oral agreements between the parties to the contract in writing

Contractual relations between counterparties are often not limited to the conclusion of a contract. Certain conditions for the fulfilment of the contract are disclosed in more detail in annexes to the contract. Also, in the process of co-operation, the parties may agree on the need to make changes to the concluded contract. Such changes must be fixed by signing additional agreements to the contract or other documents. Lack of written agreement on amendments to the contract may in the future become the basis for the counterparty to apply to the court and proving the existence of agreements in such a case becomes much more difficult.

4. Insufficient attention to the section that provides for the application of penalties for improper fulfilment/non-fulfilment of the terms of the contract

A fairly common situation is when the parties to a contract decide not to specify in detail the section providing for the application of penalties for non-fulfilment or improper fulfilment of the terms of the contract.
As a consequence, it is impossible to collect penalties (fines, penalties) from the counterparty for breach of fulfilment of the obligation.
The ruling of the BP of the Supreme Court of 10.12.2019 in case No. 904/4156/18 states that if the terms of the contract do not establish the amount of penalty for breach of monetary obligation, and part six of Article 231 of the Civil Code of Ukraine does not establish a specific amount (percentage) of the penalty, but only determines the procedure for its establishment in the contract based on the discount rate of the National Bank of Ukraine and the period of application of the sanction, there are no grounds for the application of such a measure of liability as a contractual sanction.

5. Lack of specificity in the contract regarding actions in case of force majeure events

The occurrence of force majeure in itself does not release the business entity from liability for breach of contract terms, as such circumstances must be certified by the Chamber of Commerce and Industry of Ukraine or regional CCIs, which establishes the causal link between the presence of force majeure and the inability to fulfil the obligation under the contract. Accordingly, the document certifying the existence of force majeure in a particular case is the CCI certificate issued as a result of consideration of the company’s application.

On the question whether the CCI letter dated 28.02.2022 No. 2024/02.0-7.1 is evidence of the existence of force majeure, the Supreme Court in its ruling dated 13 September 2023 in case 910/7679/22 expressed the following position:

‘The letter of the CCI dated 28.02.2022 No. 2024/02.0-7.1 is not proof of the onset of force majeure for all economic entities of Ukraine with the beginning of the military aggression of the Russian Federation. Each business entity that cannot fulfil its obligations under a certain contract must prove the existence of force majeure.’

Thus, there is a need for a business entity to obtain a CCI certificate of certification of force majeure in each specific case.Also, it should be taken into account that if the contract defines a term within which a party must notify the other party of the occurrence of force majeure, such notification is mandatory. If the contract establishes a term for such notification, late notification or failure to notify the counterparty of the occurrence of force majeure deprives the party of the right to refer to these circumstances, if provided for in the contract. Otherwise, a breach of the notice period does not automatically mean the loss of the right to invoke force majeure.