Sanctions 2025

UKRAINE Law and Practice Contributed by: Denys Bugay, Volodymyr Vashchenko and Denys Shkarovsky, VB Partners

2.2 Enforcement 2.2.1 Enforcement Responsibilities

• introduction of a prohibition on violation/circum - vention of sanctions; • definition of the notion of “sanctions circumven - tion”; and • introduction of a new crime: violation of sanctions and/or intentional circumvention of sanctions. The draft law was prepared on the basis of Direc - tive (EU) 2024/1226 of the European Parliament and of the Council of 24 April 2024 on the definition of criminal offences and penalties for the violation of Union restrictive measures and amending Directive (EU) 2018/1673. On 3 June 2025, the draft law passed its first read - ing. Taking into account that the new draft law was registered by the President of Ukraine, there is a high chance that sanctions violation and/or circumvention will be criminalised soon. 2.2.3 Civil Enforcement Action Despite the fact that the institution of sanctions has existed in Ukraine since 2014, there is still no direct liability for sanctions breaches. However, certain civil enforcement actions may be applied indirectly in response to such breaches. For example, the National Bank of Ukraine may impose fines amounting to tens of thousands of hryvnias on financial institutions for failing to ensure proper finan - cial monitoring of their clients. 2.2.4 Criminal Enforcement Action There is no criminal liability for sanctions breaches in Ukraine. That is why criminal enforcement actions for sanctions breaches remain limited. However, in the absence of a specific criminal offence for sanctions violations, Ukraine has pursued pros - ecution under related crimes: collaboration with the aggressor state, financing terrorism or aiding the enemy. 2.2.5 Mitigation Given the absence of legal liability for violation of sanctions, there is no provision for mitigating steps which can be taken to avoid or lessen penalties.

Given the diverse range of sanctions that can be imposed in accordance with the Law of Ukraine “On Sanctions”, the list of the entities responsible for their enforcement is also wide, and includes the state authorities, banks and non-banking institutions, among others. For example, for cancelling a licence to carry out a certain type of activity (eg, in the field of producing and distributing alcoholic beverages), the state tax authorities would be responsible for compliance with the relevant sanction. For terminating economic and other financial transactions, banks and other financial institutions would be responsible for sanctions com - pliance. General control over implementation of the decision taken by the National Security and Defense Council of Ukraine on imposing sanctions is entrusted to the Secretary of the National Security and Defense Coun - cil of Ukraine. Ensuring the compliance with, and monitoring of, the effectiveness of sanctions is usually entrusted to the Cabinet of Ministers of Ukraine, together with the Security Service of Ukraine and the National Bank of Ukraine. This is directly stated in the Decision of the National Security and Defense Council of Ukraine. 2.2.2 Breaching Sanctions Currently, there is no legal liability, including criminal liability, for breaching sanctions. However, in January 2025, the President of Ukraine registered in the Parliament a draft law on the Crimi - nalisation of Violations and/or Intentional Circumven - tion of Sanctions. The draft law proposes amendments to: (i) The Law of Ukraine “On Sanctions”, (ii) The Criminal Code of Ukraine and (iii) The Criminal Procedure Code of Ukraine. The key amendments are:

213 CHAMBERS.COM