Sanctions 2025

UKRAINE Trends and Developments Contributed by: Denys Shkarovsky, Volodymyr Vashchenko and Denys Bugay, VB Partners

remain indifferent to the issue of criminalising sanc - tions violations and circumvention. That is why, right after the adoption of the EU Direc - tive, а working group has been established under the Ministry of Justice, comprising representatives of • the Prosecutor General’s Office; • the Security Service of Ukraine; • the National Bank of Ukraine; • the National Securities and Stock Market Commis - sion, the Ministry of Justice; • the Ministry of Internal Affairs; • the Ministry of Economy; • the National Agency on Corruption Prevention; and • the Institute of Legislative Ideas. The working group drafted a bill aimed at criminalising sanctions violation and circumvention. On 14 January 2025, a simplified version of the draft law was submitted to the Parliament of Ukraine by the President. The draft law proposes significant amendments to: (i) the Law of Ukraine “On Sanctions”, (ii) the Criminal Code of Ukraine and (iii) the Criminal Procedure Code of Ukraine. Amendments to the Law of Ukraine “On Sanctions” The draft law prescribes: • prohibition of sanctions violation and circumvention – although the institution of sanctions has existed in Ukraine for over ten years, no such prohibition (b) circumvention is understood to include virtually any actions aimed at concealing the assets of a sanctioned person; (c) the value of assets shall exceed UAH151,400 (almost EUR3,000); and (d) circumvention shall also cover causing a sanc - tioned company or a company whose ultimate beneficial owner is sanctioned to go bankrupt; currently exists in Ukrainian legislation; • a definition of sanctions circumvention: (a) the list of actions is very broad;

• nullity of transactions concluded in violation of the Law of Ukraine “On Sanctions”; and • expansion of the areas to which sanctions do not apply. According to current legislation, sanctions do not apply only to the payment of taxes, fees, repayment of tax debt and arrears in social security contributions. The draft law establishes that sanctions do not apply to the free-of-charge alienation/transfer of assets by a sanctioned person in favour of the state. Key amendments to the Criminal Code of Ukraine The first key amendment to the Criminal Code of Ukraine is the introduction of a new crime: viola - tion of sanctions and/or intentional circumvention of sanctions (section – crimes against the foundations of national security). Violation is defined as non-compliance or obstruc - tion of compliance with sanctions. Circumvention is defined in the Law of Ukraine “On Sanctions”. The punishment ranges from a fine of UAH425,000 (EUR8,000) to imprisonment for up to six years with disqualification from holding certain positions or engaging in specific activities for ten to 15 years. Additional conditions for liability are (i) the aggre - gate value of the subject of the violation exceeds UAH151,400 (almost EUR3,000) and (ii) the violation involves military or dual-use goods (regardless of value). Qualifying features – commission of a crime. • By an official/a person providing public services/ repeatedly or by prior conspiracy within a group/ involving assets of significant value. (a) Punishment is a fine of UAH1.2 million (EUR25,000 EUR) or imprisonment for up to seven years with disqualification from holding specific positions or engaging in specific activi - ties for ten to 15 years. • By an organised group/official who holds a respon - sible or particularly responsible position or involv - ing assets of particularly significant value.

224 CHAMBERS.COM