Law of Ukraine "On Sanctions"

Abstract

Date of entry into force:

September 12, 2014

Article 1 of the Law establishes that in order to protect the national interests, national security, sovereignty and territorial integrity of Ukraine, counteract terrorist activity, prevent violation of rights, freedoms and legitimate interests of citizens of Ukraine, the society and the state, and restore any such violated rights, freedoms and legitimate interests, special economic and other restrictive measures (hereinafter referred to as "sanctions") can be used. 

Sanctions can be applied on behalf of Ukraine against a foreign state, foreign legal entity, legal entity controlled by a foreign legal entity or a non-resident natural person, foreigners, stateless persons, and terrorist entities. Application of sanctions does not exclude application of other measures to protect the national interests, national security, sovereignty and territorial integrity of Ukraine, its economic independence, and the rights, freedoms and legitimate interests of citizens of Ukraine, the society and the state.

According to Article 3 of the Law, the grounds for application of sanctions are:

·         actions of a foreign state, foreign legal entity or natural persons, or other entities, that create real and/or potential threat to the national interests, national security, sovereignty and territorial integrity of Ukraine, facilitate terrorist activity and/or violate human and civil rights and freedoms, or interests of the society and the state, result in occupation of territories, expropriation or restriction of property rights, material damages, or obstacles for sustained economic development and full-fledged exercise of rights and freedoms by citizens of Ukraine;

·         resolutions of the United Nations General Assembly and the Security Council;

·         resolutions and regulations of the Council of the European Union;

·         facts of violation of the Universal Declaration of Human Rights and the Charter of the United Nations.

The grounds for application of sanctions shall also be the above actions committed by a foreign state, foreign legal entity, legal entity controlled by a foreign legal entity or a non-resident natural person, foreigner, stateless person, or terrorist entity, against another foreign state, its citizens or legal entities.

According to Article 4 of the Law, types of sanctions according to the Law are:

·         blocking of assets – temporary restriction of a person's right to use and manage property owned by them;

·         restriction of trade operations;

·         restriction, partial or complete cessation of resource transit, flights and transportation across the territory of Ukraine;

·         prevention of movement of capital outside of Ukraine;

·         suspension of fulfillment of economic and financial obligations;

·         annulment and termination of licenses and other permits that must be procured (available) to conduct certain types of activity, in particular, annulment or termination of special permits for the use of subsurface resources;

·         prohibition to participate in privatization or lease of state property for residents of a foreign state and persons who are directly or indirectly controlled by residents of a foreign state or acting in their interests;

·         prohibition to use the radio frequency resource of Ukraine;

·         restriction or termination of provision of telecommunication services and the use of general usage telecommunication networks;

·         prohibition of government procurement of goods, works, and services from state owned legal entities – residents of a foreign state, and from legal entities where a portion of the statutory capital is owned by a foreign state; as well as government procurement from other business entities that sell goods, works, and services originating from a foreign state subjected to sanctions according to the Law;

·         prohibition or restriction for entry of foreign civilian and military ships into the territorial sea of Ukraine, its inland waters and ports; and for entry of aircraft to the airspace of Ukraine or landing on the territory of Ukraine;

·         complete or partial prohibition to execute legal operations related to securities issued by persons subjected to sanctions according to the Law;

·         prohibition to issue permits and licenses of the National Bank of Ukraine to make investments in a foreign state or to allocate currency on accounts and deposits on the territory of a foreign state;

·         suspension of issue of permits and licenses for importing currency into Ukraine from a foreign state or exporting currency from Ukraine; and restriction of cash payouts on payment cards issued by residents of a foreign state;

·         prohibition for the National Bank of Ukraine to register a participant of an international payment system where the payment organization is a resident of a foreign state;

·         prohibition to increase the amount of the statutory capital of business entities and companies where a foreign resident, foreign state, or a legal entity with a non-resident or foreign state shareholder owns 10 or more percent of the statutory capital or has influence over the management or work of such legal entity;

·         implementation of additional measures in the sphere of ecological, sanitary, phytosanitary, and veterinary control;

·         termination of trade agreements, joint projects, and industrial programs in certain spheres, in particular, in the sphere of defense and security;

·         prohibition to transfer technologies and rights to intellectual property objects;

·         termination of cultural exchanges, scientific cooperation, educational and sports contacts, and entertainment programs with foreign states and foreign legal entities;

·         refusal to issue and cancellation of visas to residents of foreign states, use of other prohibitions of entry to the territory of Ukraine;

·         termination of international agreements ratified by the Verkhovna Rada of Ukraine;

·         annulment of official visits, sessions and negotiations on issues of conclusion of contracts or agreements;

·         recalling state awards of Ukraine and other decorations;

·         other sanctions that correspond to the principles of their application established by the Law.

The procedure for application, cancellation and amendment of sanctions is established by Article 5 of the Law.

Original