Power to ascertain the fact of the occupation, the legal status of property owned by former all-union NGOs of the USSR, and the moratorium on its privatization

09 November 2022
Power to ascertain the fact of the occupation, the legal status of property owned by former all-union NGOs of the USSR, and the moratorium on its privatization
Home > Monitoring > Power to ascertain the fact of the occupation, the legal status of property owned by former all-union NGOs of the USSR, and the moratorium on its privatization

MPs propose to transfer the authority to ascertain the fact of the occupation of a part of the territory of Ukraine from the President to the Cabinet. Also, the Parliament addressed the issue of the legal status of property owned by former civic associations of the USSR and initiated the moratorium on its privatization. 

Legal status of property owned by former all-union civic associations of the USSR 

Draft bill # 6420 of September 6, 2022 

Sponsor: the Cabinet 

Status: adopted in the first reading 

Who is affected: the Cabinet, courts, the State Property Fund, persons who own or use the property of former all-union civic associations or privatized such property before the legal status of such property was established 

Background: in Soviet times, there was a significant number of all-union civic associations: all-union trade unions, the Volunteer Society for Cooperation with the Army, Aviation, and Navy (DOSAAF), and others. After the collapse of the Soviet Union, the status of their property was not defined by national legislation. Only in 1994, by the Resolution of the Verkhovna Rada, it was declared state property (temporarily). However, since no particular law addressed the issue, a significant part of such property was acquired by current owners by legal “workarounds.” Prosecutors occasionally tried to return parts of this property to the state but such cases are rare. A significant part of this property is lost by the state. 

Summary of the bill: 

  • defines that all voluntary Soviet Union-wide civic organizations (except creative associations) and their regional offices (including registered as legal entities) are recognized as all-union civic associations 
  • provisions that property owned by former all-union civic associations is now state property while property created after August 24, 1991, is property owned jointly by the state and persons who created this property 
  • the Cabinet will designate a government body responsible for managing the property of these associations. Until it does, this property will be managed by bodies recognized as its owners by the court 
  • retrieval of assets from third parties will be conducted in the court of law 
  • the body responsible for the retrieval of assets from third parties will be the State Property Fund 
  • legal transactions creating legal entities founded around the property of all-union civic associations will be liable to being declared void in the court of law. 

What is right: 

  • the bill fills the legal void in regulations on the property of all-union civic associations 
  • the state will potentially get assets worth a significant sum. 

What is wrong: 

  • regional civic organizations registered as legal entities cannot be affected by this draft bill since they are not all-union organizations. Moreover, such regional organizations (recognized as republican organizations prior to the collapse of the Soviet Union) have no problems with legal succession. Unlike all-union organizations, they were not dissolved after the collapse of the USSR but instead continued their operations under Ukrainian laws 
  • the bill does not define an algorithm for calculating shares that belong to the state and third parties when it comes to property created after August 24, 1991 
  • the bill will have negative consequences for the business climate since it provisions confiscation of property from bona fide purchasers. The resulting redistribution of assets will have negative consequences for the economy. 

Alternative solution: since a significant part of the property owned by the former all-union civic association became private property not because someone broke the law but because there was no law addressing the issue, the idea to retrieve all such property should be abandoned. Instead, a compromise should be proposed that will take into account the interests of both the state and persons who acquired such property or are using it. 

Moratorium on transferring the property of former all-union civic organizations 

Draft bill # 6421 of December 10, 2021 

Sponsor: the Cabinet 

Status: adopted in the first reading 

Who is affected: the Cabinet, courts, the State Property Fund, persons who own or use the property of former all-union civic associations or privatized such property before the legal status of such property was established 

Summary of the bill: 

  • prohibits acquisition of property owned by former all-union civic organizations currently owned by their legal successors or legal entities created by such successors until the government body responsible for managing such property is legally designated 
  • prohibits the disposal of shares owned by agents created around the property owned by former all-union civic associations. 

What is right: the state will stop losing property owned by former all-union civic associations. 

Ascertainment of the fact of the occupation of a part of Ukraine 

Draft bill # 8088 of September 29, 2022 

Cosponsors: a group of 11 MPs with Ruslan Horbenko as the first signatory 

Status: adopted in the first reading 

Who is affected: inhabitants of the temporarily occupied territories and inhabitants of the rest of the country, the President, the Cabinet, and government bodies 

Summary of the bill: the following powers will be transferred from the President to the Cabinet: 

  • to determine the start and end dates of the temporary occupation of Ukrainian territories 
  • to introduce temporary board control on the boundaries of the temporarily occupied territories 
  • to decide on the legal status of the temporarily occupied territories under martial law. 

What is right: 

  • the bill is compliant with the Constitution: the Constitution does not grant the President the authority to decide on the legal status or boundaries of the temporarily occupied territories 
  • management decisions concerning including or excluding territories from the list of temporarily occupied territories will be made more quickly.