Draft bill #11443 of July 25, 2024 

Cosponsors: 14 MPs from the Servant of the People faction and groups Trust and Platform for Life and Peace with Serhii Ionushas as the first signatory 

Status: sent for review to the Law Enforcement Committee 

Who is affected: legal entities operating in Ukraine, law enforcement agencies, human rights organizations, and courts 

Summary: 

  • fines imposed on legal entities will be increased from 170,000 UAH for minor offenses to 1,275,000,000 UAH for special grave crimes 
  • the application of additional (non-financial) penalties will be allowed 
  • special confiscation mechanism will be introduced: seizure for the benefit of the state of money, valuables, and other property that is not legally owned by the legal entity and acquired illegally, including through corrupt actions 
  • courts will be allowed to temporarily restrict the operations of legal entities. The court will be allowed to temporarily prohibit: 
    • participation in public procurement 
    • using a license (license suspension) 
    • participating in the privatization of state and municipal property 
    • participating in the leasing of state and municipal property (including extensions of lease agreements) 
    • obtaining or extending a special permit for the use of subsoil (including permit suspension) 
    • participating in social trilateral dialogue bodies 
    • purchasing domestic government bonds of Ukraine 
    • creating self-regulatory organizations and participating in their activities 
    • providing and receiving advertising services 
    • to be a sponsor 
    • participating in public-private partnerships 
    • engaging in joint enterprises 
  • courts will be allowed to temporarily limit legal entities from obtaining rights and benefits guaranteed by the state. In particular: 
    • receiving any benefits and assets from the state and community 
    • attracting, using, and managing funds from international technical projects and international financial operations 
    • receiving state aid 
    • acquiring resident status in Diia City — a special tax regime for IT industries 
    • receiving state and other financial support for export activities. 

What is right: the bill introduces a new system of criminal liability for legal entities because the existing system is ineffective. Currently, sanctions applicable to legal entities are unbalanced. The stipulated fines are too low, making them insufficiently effective in achieving punishment and preventing repeated offenses. Meanwhile, such sanctions as property confiscation or liquidation are too severe and may jeopardize the existence of the legal entity. 

Background information: changes in criminal procedural legislation are outlined in the recommendations of the Organization for Economic Co-operation and Development as one of the steps necessary for bringing Ukraine closer to EU membership.