Ukraine has implemented special confiscation for legal entities: President Zelensky has signed the law.

Ukrainian President Volodymyr Zelensky has signed a law (Bill No. 11443) aimed at enhancing mechanisms for holding legal entities accountable for bribing foreign officials.

This is reported on the VR website.

Additionally, Bill No. 10319 regarding tax measures for the ongoing fight against bribery of foreign officials in international business transactions has been signed.

“These are very important steps in Ukraine’s further movement towards OECD membership,” noted Zheleznyak.

Recall that the purpose of adopting Bill No. 11443 is to ensure Ukraine fulfills its obligations to implement the recommendations of the Organization for Economic Cooperation and Development (OECD) Council regarding the continued fight against bribery of foreign officials in international business transactions and to establish an effective mechanism for holding legal entities accountable, in accordance with the OECD Convention on combating bribery of foreign public officials in international business transactions.

The bill proposes amendments to the Criminal Code of Ukraine, which will include:

• grounds for applying criminal liability measures to legal entities;
• grounds for exempting legal entities from criminal-legal measures;
• increased fines imposed on legal entities as the main criminal-legal measure and the possibility of applying additional (non-financial) criminal-legal measures;
• rules for applying criminal-legal measures and restrictions on the liquidation of legal entities through a special procedure;
• the possibility of applying special confiscation based on a ruling on the application of criminal-legal measures to legal entities and cases for applying special confiscation on such grounds.

The document also proposes that additional (non-financial) criminal-legal measures may be applied to legal entities: temporary restrictions on the activities of legal entities or temporary limitations on the acquisition of rights and benefits.

As explained in the bill, temporary restrictions on the activities of legal entities involve a prohibition for the legal entity to engage in certain types and/or kinds of activities for a specified duration determined by a court ruling. In particular:

1. Participating in public procurement;
2. Utilizing a license (suspending the license);
3. Engaging in the privatization of state and communal property;
4. Participating in the leasing of state and communal property (including extending the lease agreement);
5. Obtaining or extending the term of a special permit for subsoil use (including suspending the special permit for subsoil use), etc.

At the same time, temporary restrictions on acquiring rights and benefits involve a prohibition for the legal entity to obtain certain rights and/or benefits defined by Ukrainian legislation for a specified duration determined by a court ruling. In particular:

1. Receiving any benefits and assets from the state and community;
2. Attracting, using, or utilizing funds from international technical projects and international financial operations;
3. Receiving state assistance as a business entity (being a recipient of state aid);
4. Aquiring resident status in "Diia City";
5. Receiving state and other financial support for export activities.

Furthermore, the bill proposes amendments to the Criminal Procedure Code of Ukraine, which would include:

• a special procedure for autonomous criminal proceedings concerning legal entities at both the pre-trial investigation stage and trial stage;
• features regarding the participation of representatives and defenders of legal entities, which provide for an expanded scope of rights and procedural opportunities for the defense;
• the possibility of lifting restrictions on legal entities;
• ending the pre-trial investigation either by closing the criminal proceedings or by submitting to the court an act on the application of criminal-legal measures to the legal entity;
• features concerning the execution of rulings on the application of criminal-legal measures.

The duration for applying additional (non-financial) criminal-legal measures is proposed to be determined by the court and set from six months to three years.

Background. Previously, Mind reported that taxation for residents of “Diia.City” has been improved. For individual entrepreneurs and legal entities under the single tax, changes will take effect from January 1, 2025.