UKRAINE Law and Practice Contributed by: Denys Bugay, Volodymyr Vashchenko and Denys Shkarovsky, VB Partners
7.2 Scope of Designation The grounds for imposing sanctions by the National Security and Defense Council of Ukraine are as fol - lows: • actions of a foreign state, a foreign individual or legal entity, other entities (subjects) that create real and/or potential threats to national interests, national security, sovereignty and territorial integ - rity of Ukraine, promote terrorist activities and/ or violate the rights and freedoms of a person and citizen, the interests of society and the state, lead to the occupation of territory, expropriation or limitation of property rights, causing property losses, creating obstacles to sustainable economic development, full exercise of rights and freedoms by citizens of Ukraine; • resolutions of the General Assembly and the Secu - rity Council of the United Nations; • decisions and regulations of the Council of the European Union; and • violations of the Universal Declaration of Human Rights, the Charter of the United Nations. The grounds for imposing the special sanction of con - fiscation of assets with their transfer to state income are: • committing actions by a person creating a signifi - cant threat to the national security, sovereignty or territorial integrity of Ukraine (including via armed aggression or terrorist activity); or • facilitating to a large extent the commission of such actions. Such a basis for imposing a sanction as the fact that a person is being “owned or controlled” by a directly designated person is not directly provided for by the law. At the same time, sanction imposition on a beneficiary, first of all, may result in imposing the sanction on all the companies under their control. Moreover, sanction imposition on a beneficiary may lead to the impossibility of the company’s functioning, through the revocation of licences, or impossibility of
It is not possible, in fact, to prove the groundlessness of rights restrictions before a final decision is made. Quite often there are the cases of automatic sanctions imposition with no detailed verification of the exist - ence of any grounds, based on unverified information on the activities of individuals found in the media. Imposition of “Special” Sanctions – “Confiscation of Assets to State Income” The first stage involves the Ministry of Justice of Ukraine preparing and submitting a claim to the High Anti-Corruption Court for confiscation of assets and their transfer into state income. This claim must be filed during the period of martial law. This sanction can be imposed only on the individuals and legal entities: • who/which created via their actions a significant threat to the national security, sovereignty or ter - ritorial integrity of Ukraine (including through armed aggression or terrorist activity); • who/which significantly facilitated (including through financing) the commission of such actions by other persons; or • on whom/which the National Security and Defense Council of Ukraine imposed the asset-blocking sanction after 24 February 2022. Two groups of assets are subject to confiscation into state income: (i) assets belonging to a sanctioned per - son and (ii) assets, with respect to which a sanctioned person can perform the actions identical content-wise to the exercise of the right of disposition. The second stage involves the High Anti-Corruption Court considering the claim for imposition of a sanc - tion. The case is subject to consideration by a panel of three judges in the order of administrative proceed - ings within 30 days of the date of filing the claim. The persons whose assets are subject to confiscation and transfer into state income must be summoned to the court. However, their non-appearance does not prevent the case from being considered. The court makes a decision in favour of the party with the most convincing evidence.
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