UKRAINE Law and Practice Contributed by: Illya Tkachuk, Igor Krasovskiy and Inna Kostrytska, INTEGRITES
9. Due Diligence/Data Privacy 9.1 Technology Company Due Diligence In Ukraine, there are no specific regulations con- cerning the scope of due diligence information provided to bidders. Therefore, the board of directors may allow any level of technology due diligence, provided that data privacy require- ments are met. In privately negotiated transactions, the scope of due diligence information provided to differ- ent bidders can be adjusted at company’s dis- cretion, whereas identical information must be provided to all bidders in public auctions. 9.2 Data Privacy There are no special data privacy restrictions regarding the due diligence of a technology company. General rules of data protection apply. Confidential information and commercial secrets can be disclosed only with the data owner’s per- mission. Issues of personal data processing are regu- lated by the Law of Ukraine “On Personal Data Protection”. Generally, personal data may not be included in the scope of due diligence and used without the permission of personal data subjects. It is worth mentioning that Ukraine has not undertaken any obligation to apply the General Data Protection Regulation (GDPR) and, there- fore, the local regulation should apply. Howev- er, given that the GDPR applies to the owner of personal data, a Ukrainian technology company should comply with the GDPR as well as Ukrain- ian personal data regulation when dealing with the personal data of EU citizens.
of Ukraine, such as restrictions on divestments or purchase of foreign currency or prohibition of loan repayments. 8. Recent Legal Developments 8.1 Significant Court Decisions or Legal Developments No specific law or court decision concerning technology M&A in Ukraine has been made in the past three years. However, during the past three years Ukraine has adopted numerous laws and regulations aimed at bringing local regulation in line with EU standards. Specifically, these legislative changes make it easier to open a new company, improve corporate governance and provide more rem- edies for structuring M&A. The introduction of Diia City as a unique space for IT companies is another example of an important legislative effort to regulate the tech- nology sector. Finally, the new Law on “Joint Stock Companies” was adopted by the Ukrainian Parliament on 27 July 2022 and entered into force on 1 January 2023, except for some provisions. The new law aims to improve and further harmonise Ukrainian legislation with EU company law. In light of this, the authors note the positive impact of the recent legislative developments in Ukraine on the regulation of technology compa- nies, as well as M&A transactions involving such companies.
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