Category: Ukraine

On 18 October 2023, the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Regarding Mandatory Registration and Use of Electronic Accounts in the Unified Judicial Information and Telecommunication System (UJITS) or its separate subsystem (Module) that provides for the exchange of documents” dated 29 June 2023 No. 3200-IX (hereinafter referred to as the Law) came into effect. The Law introduces changes to the provisions of procedural codes, particularly the Civil Procedural Code of Ukraine, the Commercial Procedural Code of Ukraine and the Code of Administrative Procedure of Ukraine.

The obligation to register electronic accounts in UJITS within the framework of civil and administrative proceedings arises gradually. As of 18 October 2023, the presence of an electronic account in UJITS became mandatory for lawyers, notaries, state and private bailiffs, arbitration managers, court experts, government authorities, local self-government bodies, and legal entities of state and communal ownership.

Starting from 21 February 2024 the registration of an electronic account in UJITS becomes mandatory for legal entities of private ownership, acting as participants in civil and administrative proceedings. This innovation is intended to simplify document circulation between participants in the judicial process and with courts. Importantly, after registering an electronic account in UJITS, the court sends all documents related to a case exclusively in electronic form to the participant’s electronic account in UJITS. In turn, a participant to the dispute has the right to send documents to another participant or to the court in electronic form through the electronic account in UJITS (without duplicating in paper form through postal mail). Nevertheless, participants in the judicial process do not lose the right to:

• submit documents to another party or the court in paper form (complying with procedural laws)
• receive copies of court decisions in paper form upon a separate request

It should be noted that under specific circumstances, procedural law requires a party to the dispute to send documents to other participants before filing them with the court. At the same time, a party is exempted from the obligation to send such documents to participants who have not fulfilled the obligation to register an electronic account in UJITS.

In case a party who is obliged to have an electronic account in UJITS applies to the court without having it, the court applies procedural consequences such as leaving the document submitted by such party without action, returning it, or leaving it without consideration. These procedural consequences are also applied by the court if the interests of such party in case is represented by an attorney.

Thus, the obligation to register electronic accounts in UJITS for legal entities has become one of the stages of the gradual digitization of the judiciary in Ukraine and should be taken into account when seeking protection of rights and interests in court.

By Talina Kravtsova, Partner, Yuri Neklyaev, Senior Associate, Asters

Integrites won the public tender and signed the procurement contract to become the legal advisor of NJSC Naftogaz of Ukraine on matters related to the activities of the company’s supervisory board and its committees throughout 2024, and will work with the UK’s Simmons & Simmons as co-executor under the contract.

Integrites has announced its mandate includes providing “comprehensive advice on issues of Ukrainian corporate and financial law, legislative regulation in the field of energy, as well as on anti-corruption legislation, compliance, and risk management matters.”

“This collaboration presents our firm with an honorable opportunity to support one of the key actors in the domestic energy sector, NJSC Naftogaz of Ukraine, in ensuring the energy safety of our country and facing the war challenges,” Managing Partner Oleksiy Feliv commented. “We are fully dedicated to providing top-notch quality service for the project with such an impactful mission.”

The Integrites team will be led by Feliv and include practitioners from the banking and finance and corporate/M&A teams.

Avellum, working with Linklaters, has advised Stellantis on the acquisition of the artificial intelligence framework, machine learning models, and intellectual property rights and patents of CloudMade.

Stellantis is a global automotive manufacturing corporation.

CloudMade is a developer of smart and innovative big data-driven automotive solutions.

According to Avellum, “CloudMade’s software technology will support Stellantis’ strategy of developing intelligent mobility products and enhancing the overall customer experience with personalized features.”

The Avellum team included Managing Partner Mykola Stetsenko, Managing Associate Oleksandr Kozhukhar, and Associate Olha Rudevych.

Avellum was unable to provide additional information on the matter.

In Ukraine, employee job titles should be named exclusively in accordance with the national classifier DK 003:2010 “Classifier of Professions”.

The Order of the Ministry of Economy of Ukraine No. 1410 dated 16 January 2024 approved amendments to this Classifier, which complement the list of professions in accordance with the current demands of employers operating in international markets.

Key changes

• The Classifier of Professions has been updated with 42 new professional job titles, including 29 in the IT sector.
• Some professional job titles in the IT sector have been abolished (in particular, computer communications analyst, software and multimedia analyst, applied programmer, system programmer, software development and testing specialist, etc.).
• Some professional job titles in the IT sector have been brought into line with the generally accepted English-language titles (in particular, the position of “computer data bank analyst” has been changed to “data analyst”, the position of “computer software engineer” to “software engineer”, etc.).
  Recommendations
• We recommend that employers, especially those in the IT sector, consider the above changes when hiring new employees and developing relevant internal documentation, and bring the job titles of existing employees in line with the updated Classifier of Professions.

By Lina Nemchenko, Partner, Mariana Marchuk, Counsel, Baker McKenzie

Oleksiy Koltok and Oleg Klymchuk have been appointed as Partners with Sayenko Kharenko in Kyiv.

Koltok specializes in litigation: commercial, corporate, government and regulatory, real estate, debt settlement, and bankruptcy disputes, among others. He joined the Sayenko Kharenko team back in 2013. Before that, he was the Head of the Litigation Unit with Universal Bank, between 2008 and 2013. Earlier, he spent two years as Head of the NPL Division in Kyiv for UkrSibbank.

Klymchuk focuses on intellectual property, media, and technology projects including advertising and marketing, data protection, and transactional work in the technology sector. He joined Sayenko Kharenko in 2014 and spent ten years with the firm, interrupted by a six-month stint with Brandsfield. He was appointed a Counsel in 2018 and Head of SK’s Technology, Media, and Communications group in 2020. Earlier, he spent a year with Asters and almost six with Noerr as a Senior Associate. He started his career with the Alexandrov & Partners Law Office in 2006, spending a year and a half with the firm.

“Sayenko Kharenko celebrates its 20th anniversary this year,” the firm announced. “We are proud that even during the difficult period of war, our specialists continue to grow professionally. The promotion of Oleksiy Koltok and Oleg Klymchuk recognizes their achievements and represents another important milestone in the firm’s development.”

“I am sure that we have even more challenges ahead, but with such a great team this journey becomes exciting and rewarding,” Partner Nazar Chernyavsky commented. “Trusting Oleksiy and Oleg with partnership status is an evolutionary stage of our growth, and I strongly believe that it will make us even more resilient and dynamic.”

On January 31, 2024, Ukraine’s National Energy and Utilities Services Commission (the Regulator) adopted Resolution No. 232 On Approval of Amendments to the Resolution of the Regulator 1812 dated October 4, 2023 (the Amendments).

It has postponed the deadline for the registration of participants of the wholesale energy market from February 1, 2024 until April 1, 2024.

In his comments posted on the Regulator’s website, the Chairman of the Regulator encourages all market participants to complete the registration by the new deadline if they are required to do so by law. Apparently, the deadline is unlikely to be postponed further, so if a market player carries out transactions involving wholesale energy products, it should comply with the registration requirements by April 1, 2024 to avoid certain negative consequences.

The most important change is an additional option to apply for the registration by an authorized representative of a non-resident of Ukraine in Excel(xls or xlsx) format through the electronic Services Portal of the Ministry of Economy (https://my.gov.ua/). Such electronic registrations must include a qualified electronic signature of the authorized representative in compliance with the requirements of the Laws of Ukraine “On Electronic Documents and Electronic Document Management” and “On Electronic Trust Services”. In particular, the signature must use the ECDSA signature algorithm. In addition, the amendment specifies that the registered market participant cannot be controlled by persons registered (residing) in the occupied territories unless they are registered as internally displaced persons as per Ukrainian laws.

By Maksym Sysoiev, Partner, Dentons

On 24 January 2024, the NEURC adopted the Resolution “On Amendments to Certain Resolutions of the National Energy and Utilities Regulatory Commission (NEURC)” (the “Resolution“) to bring the secondary legislation in line with the Law of Ukraine “On Amendments to Certain Laws of Ukraine on Restoration and Green Transformation of the Energy System of Ukraine” No. 3220-IX dated 30 June 2023 (the “Law on “Green” Transformation“).

The Resolution provides for amendments to the NEURC Resolution “On Approval of Regulatory Acts Governing the Activities of the Guaranteed Buyer (GB) and the Purchase of Electricity at the Feed-in Tariff (FIT)” No. 641 dated 26 April 2019, namely:

are set out in a new version:

• the Procedure for the purchase of electricity generated from renewable energy sources (RES) by the GB to determine the cost of the service to ensure an increase in the share of electricity production from RES and to determine the cost of the service under the market premium mechanism
• the Model agreement for the purchase and sale of electricity under the FIT
• the Model agreement for the provision of services to ensure an increase in the share of electricity production from RES

are being approved:

• the Model agreement on participation in the balancing group of the GB (concluded between the GB and RES producers who want to join the balancing group of the GB)
• the Model agreement on the provision of services to support the production of electricity from RES under the market premium mechanism

These amendments mean that SE “Guaranteed Buyer” and the members of the balancing group of the GB are obliged to bring the agreement for the purchase and sale of electricity under the FIT in line with the model agreement for the purchase and sale of electricity under the FIT approved by the NEURC no later than the date of entry into force of the relevant provisions of the Law on “Green” Transformation (namely, by 26 January 2024) and conclude an agreement on participation in the balancing group of the GB. If a member of the balancing group of the GB fails to update the mentioned agreements, the GB will not take into account the forecast data of electricity supply provided by such a member of the balancing group of the GB, the commercial metering administrator will not take into account the actual data of electricity supply by the electrical installations of such a member of the balancing group of the GB, and the GB will not buy the electricity produced by such a member.

The Resolution approves amendments to the Market Rules approved by NEURC Resolution No. 307 dated 14 March 2018, which relate to the part of determining the volume of unreleased electricity, i.e. the difference between the volume of electricity that should have been supplied and the volume of electricity actually received by the consumer.

The Resolution imposes the following obligations to resolve the issue of imbalances:

• the transmission system operator (TSO), the producers of electricity under the FIT and the distribution system operators (DSOs) must, no later than 1 March 2024, determine, and provide to the GB the volumes of unreleased electricity by electricity producers under the FIT in the period from 8 September 2022 to 26 January 2024
• the GB, the producers of electricity under the FIT and the DSOs must, no later than 1 April 2024, settle the relations regarding the reimbursement of a share of the cost of settling the electricity imbalance and the cost of deviation arising from 8 September 2022 to 26 January 2024, as well as the calculation and approval of the cost of the service to ensure an increase in the share of electricity production from RES

Also, the following NEURC resolutions are no longer valid:

• “On Approval of the Model Electricity Purchase and Sale Agreement between the GB and the business entity that acquired the right to support based on the results of the auction” No. 2803 dated 13 December 2019
• “On Approval of the Procedure for the Sale and Metering of Electricity Generated by Consumers, as well as Payments for It” No. 2804 dated 13 December 2019

The Resolution entered into force on 26 January 2024, except for the provisions regarding the invalidation of the NEURC resolutions and the approval of the Model Agreement on Participation in the Balancing Group of the GB, which entered into force on 25 January 2024.

By Yaroslav Petrov, Partner, Asters

The Government of Ukraine introduced draft law No.10449 to the Parliament, aiming to improve certain issues of mobilization, military records and military service. The published version of the draft law is not final, however, as of now, the Government is proposing the following changes to the current legislation.

1. Call-up notice: service, details, excused absence

A call-up notice to appear before the military office may be served:

• in person against the signature
• via the electronic account of a conscript, person liable for military service or reservist

A call-up notice must include the following information:

• full name and date of birth of a recipient
• the name of the military office that issued a call-up notice
• the purpose of the call to the military office
• place, day and time of arrival
• wet signature or electronic signature of an official who issued a call-up notice
• registration number of a call-up notice
• explanation of the consequences of non-appearance and the obligation to report the reasons for non-arrival

Justifiable reasons for non-arrival under a call-up notice cover the following events:

• natural disaster, illness of a person, actions of the aggressor country or other circumstances that made it impossible to arrive in person at the specified place and time
• death of a close relative (parents, spouse, child, siblings, grandparents) or a close relative of a spouse

2. Deferment from mobilization

The draft law clarifies the rules on the right to deferment for certain categories of individuals, in particular the following:

• persons temporarily unfit for military service due to health reasons for a period of 6-12 months (with subsequent medical examination by a military medical commission)
• women and men with three or more dependent children under the age of 18, except for those who have child support arrears exceeding the total amount of payments for three months
• women and men who have a child (children) under the age of 18, if the other parent of such child (children) died, was deprived of parental rights, declared missing or dead
• persons engaged in permanent care after a sick wife (husband), child, or their parents who, according to a medical certificate of a medical and social expert commission or a medical advisory commission of a healthcare institution, require permanent care
• a guardian of a person declared incapacitated by a court
• persons having a family member of the first degree of kinship (i.e., parents of the husband/wife, a spouse, children, including adopted children) as person with a disability of group I and taking permanent care after him/her (not more than one person is eligible for deferment), as well as family members of the second degree of kinship (not more than one person is eligible for deferment and in the absence of family members of the first degree of kinship or their physical incapacity), confirmed in accordance with the procedure established by the Government
• persons having a member of the family of the first degree of kinship (i.e., parents of the husband/wife, a spouse, children, including adopted children) as a person with a disability of group II and taking permanent care after him/her (not more than one person is eligible for deferment), in the absence of other persons who can provide such permanent care, confirmed in accordance with the procedure established by the Government
• students for vocational (vocational-technical), professional pre-university and higher education studying full-time or under a dual form of education and obtaining a level of education that is higher than the previously obtained level of education in the sequence specified in part two of Article 10 of the Law of Ukraine “On Education” (except for postgraduate students obtaining a level of education at the expense of individuals or legal entities on a contractual basis), as well as doctoral students and persons enrolled in internships. Students who have the right to deferment for the duration of their studies, in case of losing of this right after the enactment of the draft law, will not be eligible to military service till the end of the current academic year
• teaching staff of professional higher education institutions, provided that they work at such institutions as the principal place of job, not less than part-time at level 0,75
• persons who were discharged from military service (within two years) if they served during martial law and were discharged from service in the reserve due to the expiry of their service term
• persons liable for military service who served and were discharged from service in the reserve due to release from captivity

3. Reservation of persons liable for military service

It is proposed to amend the organization and procedure for reservation as follows:

• the quota for reserving civil servants of categories A and B is up to 50% of persons liable for military service, while for category A it remains 100%
• employees of the police, National Anti-corruption Bureau, State Bureau of Investigation, prosecutors, Economic Security Bureau, Service for Emergency Situations, court/justice systems, pre-trial investigation, patronage services may be reserved on general basis
• the ultimate beneficial owners of entities that are critical to the economy and the population may be reserved
• reserved individuals will be obliged to clarify their personal military data via the electronic account of a conscript, person liable for military service, reservist or at the military office at their place of residence or location.

4. Military duties

The updated list of military duties of conscripts, persons liable for military service and reservists may include certain new obligations, namely:

• register the electronic account of a conscript person liable for military service and reservist
• undergo medical examination to determine fitness to military service
• clarify military data within 60 days as of the date of the introduction of the mobilization / the day of publication of the new law
• in the event of a change of place of residence and registration as an internally displaced person, enroll to military records at the relevant military office within 7 days from the registration
• bear a military registration document and show it at the request of an authorized representative of the military office or a police officer
• for persons who voluntarily arrived at the military office and are referred to undergo training in connection with mobilization, arrive at the military office within 2 months from the day of passing the military-medical commission
• for those with limited fitness – to undergo a second medical examination within 9 months from the date of entry into force of this law
• men aged 25 to 55 diagnosed with disability of groups II and III (except for those who were diagnosed with disability of groups II and III as a result of diseases, wounds (traumas, contusions, mutilations) sustained in the course of defence of the country, as well as the absence of a limb due to amputation) after 24 February 2024, are subject to re-evaluation for fitness for military service by the end of 2024

In addition, the draft law clarifies that male citizens of Ukraine who turn 17 in the year of military registration and until they reach the age of 25 should be enrolled in military records of conscripts every year in January-March. Those who reach the age of 25 shall be included in the military records of persons liable for military service.

5. Measures of influence

If a person liable for military service or a reservist fails to perform military duties during mobilization, the head of the military office is authorized to send a demand to such individual in electronic form or by post within 5 days.

If a person does not voluntarily report to the relevant military office (or foreign diplomatic mission of Ukraine if a person is abroad) within 10 calendar days from the date of delivery of the demand, the military office is entitled to apply to the court in order to impose on such individual temporary restrictions, which may include the following:

• temporary restriction on the right to travel abroad
• temporary restriction of the right to drive a car
• seizure of funds and other valuables in bank accounts or other financial institutions, non-bank payment service providers or electronic money

These restrictions may be in effect until the duties under the demand of the military office are properly performed.

6. Procedure to apply to court

The draft law proposes the following procedure for consideration by the administrative court of the application of a military office for enforcement measures:

• the proceedings are conducted on the basis of a written application of the military office, which is submitted to the court of the first instance within 5 days from the date of establishing the circumstances of non-compliance with the military office’s demand
• consideration of the application takes place as a court hearing with notification of the parties. In case of non-appearance of the parties, the court considers the application in written proceedings
• the court shall deliver a judgment no later than 15 days from the date of commencement of the proceedings
• court judgments are subject to immediate enforcement
• appeals against judgments may be filed within 15 days from the date of their pronouncement, and for persons who did not participate in the case – within 15 days from the date of receipt of the full text of a judgment
• filing an appeal against a court judgment does not prevent its execution
• the court of appeal shall consider the case within 15 days from the date of opening the appeal proceedings

7. Travelling abroad

When crossing the border, male citizens of Ukraine aged 18 to 60 (except for diplomats and their families) will be obliged to show their military documents with a mark of enrollment to military records or exclusion from such.

In addition, the right of a citizen of Ukraine to leave Ukraine may be temporarily restricted in cases of martial law in Ukraine or its certain areas.

8. Persons liable for military service abroad

The performance of consular actions in foreign diplomatic institutions of Ukraine during martial law at the application of male citizens of Ukraine aged 18 to 60 is carried out on the condition that they have military documents.

The domestic and international passports of Ukrainian citizen may be issued outside of Ukraine for male persons aged 18 to 60 on the condition that they have military documents.

9. Military transport duty

The draft law proposes that relevant state authorities submit to the military office information on registered vehicles, watercraft, tractors, self-propelled chassis, self-propelled agricultural, road construction machines, agricultural machinery that may be useful for purposes of Armed Forces during a special period.

As of the moment of the introduction of general mobilization, it is prohibited to carry out any actions (in particular, moving to other regions or outside the territory of Ukraine, transfer of ownership, rent (leasing), pledge) with vehicles intended for useful for purposes of Armed Forces during a special period and registered with military offices (except for those that have already been transferred as of the date of publication of the new law).

10. Basic military training and service

The draft law introduces the concept of basic general military training (as a separate academic discipline), which is taught in professional higher and higher education institutions of all forms of ownership, military educational institutions, and is also conducted by training centers of the Armed Forces of Ukraine, etc. Basic general military training will be compulsory for men and voluntary for women. NGOs and associations, including war veterans’ associations, will be involved in conducting such training.

In addition, the concept of regular military service is being replaced by basic military service. Such military service can be performed by persons under the age of 25, who can choose the year and period of their service – in peacetime the service will last up to 5 months, and during martial law – up to 3 months.

11. Social and other guarantees of servicemen

The draft law also proposes the following:

• provision of 90-day paid leave to servicemen after their release from captivity
• establishment of the right to resign from military service during martial law after release from captivity, upon election as a parliamentarian, in case of a disability of the I or II group, as well as in connection with the end of the term of service – in the case of continuous service for 36 months during the martial law
• granting the right to military service during mobilization to individuals convicted to serve a sentence with probation (except for those convicted of military crimes and crimes against the foundations of national security).

By Yuna Potomkina and Anton Sintsov, Counsels, Asters

Integrites’ Cross-Border Litigation and Private Client practices Co-Head Dmytro Marchukov has been appointed as a Senior Partner at the firm.

Marchukov became the firm’s sixth equity partner, and the second one to be elevated to the position during the war in Ukraine, after lllya Tkachuk’s appointment in October 2022 (as reported by CEE Legal Matters on November 15, 2022).

Marchukov’s practice includes disputes, transnational insolvency and receivership, asset tracing and recovery, fraud investigation, commercial and investment arbitration, and recognition and enforcement of foreign judicial and arbitral awards. He joined Integrites as a Partner back in 2018. Before that, he spent two and a half years with Avellum as a Partner, four years with EPAM as a Counsel, and six years with Magisters as an Associate. 

“Dmytro’s promotion […] recognizes his dedication to client service, his passion for law, and the impact he has on the firm and its clients,” Managing Partner Oleksiy Feliv commented. “His outstanding expertise coupled with a great sense of humour and intelligence have earned him the respect and gratitude of his network. We are happy to have Dmytro on board and wish him all the best in his new role.”

“While equity partner promotions have historically been quite rare for the Ukrainian market, equity partnership at Integrites has remained open even during the large-scale war,” Marchukov added. “Becoming an EP is a journey one cannot complete alone. I, therefore, gladly thank my fellow partners, our team, administrative staff, and very many others in the firm for helping me along the way, on which we shall keep going together.”

Asters, working with Brodies LLP, has advised the Export Credit Agency of Ukraine on developing a new war risk insurance mechanism for the international export of Ukrainian goods through the Black Sea. Watson Farley & Williams reportedly advised the Ministry of Economy of Ukraine. Norton Rose Fulbright reportedly advised arranger Marsh Limited.

According to Asters, the new mechanism, approved by the Ukrainian government, was formalized by a Framework Reimbursement Agreement signed by the Ukrainian Export Credit Agency with Marsh Limited as arranger, Ascot Underwriting Limited as lead underwriter, and a group of underwriters acting through Lloyd’s of London.

The mechanism involves placing relevant funds in accounts at Ukrainian state banks – Ukrgasbank and Ukreximbank – “enabling these banks to issue corresponding irrevocable letters of credit, each confirmed by DZ Bank AG. This provides shipowners and vessel charterers with cover for the transport of goods through the Black Sea and supports the agreed reimbursement of underwriters in the event of payment of claims,” Asters reported.

Since the beginning of the Russian full-scale invasion, export logistics have emerged as a critical concern for Ukraine. “It is difficult to overestimate [the war risk insurance mechanism’s] significance for securing a steady export of food and other critical supplies from Ukraine to the rest of the world [in times of war] through Ukraine’s most convenient but extremely vulnerable route along the Black Sea,” Asters Senior Partner Armen Khachaturyan, who led the firm’s team, commented. “The benchmark deal may well serve as a good precedent for similar solutions in other war-affected areas of the world contributing to international trade and geopolitical stability. We are happy to be a part of this tremendous effort.”