Ukraine implemented “Anti-Oligarch Law” #5599

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On 23 of September, Ukrainian Parliament adopted the Draft Law #5599 that will initiate anti-oligarch policy. As we published previously, Ukraine came up under the control of the group of oligarchs. According to Focus.ua this group controls more than 23% ($42,1 bn) of Ukrainian GDP. With this Law, Volodymyr Zelenski aims to bring more transparency and clarity to the national economy.

National Security and Defense Council of Ukraine (NSDC) will be empowered to include physical persons to a special public registry. It will include oligarchs personal details, declarations, list of related legal entities, individuals, political parties and mass media. Overall, the registry will accumulate all information about oligarchs sphere of influence.

Who are oligarchs?

NSDC will consider an individual as an oligarch should one meet at least three of the four criteria:

1. Participation in political activity (party members, deputies and their relatives, ministers etc.)
2. Has a significant impact on the media (is an owner or a beneficiary).
3. Is a beneficiary or an owner of a monopoly or legal entity that dominates the market.
4. Net worth of the assets exceeding 1m of subsistence minimums (2,270 billion UAH or approx. $ 88 m).

Once NSDC includes the individual to the registry, he will be obliged to fulfil a special declaration on the annual basis. Moreover, oligarchs will face some barriers and limitations:

• Prohibition to make contributions in support of any political parties (directly or indirectly)
• Prohibition to be beneficiary or buyer in large-scale government privatizations
• Prohibition to finance any political campaign or demonstrations with political requirements.

Government officials will be obliged to apply “Connection declaration” after each unofficial contact (e.g., telephone call or meeting) with oligarch or its representative. The new Law is expected to come into effect in the first part of October. For further information on how you or your business can prepare for the new standards or to discuss your potential actions, please contact our Kyiv Tax and Legal Department at kyiv@eurofast.eu.