Ukraine's Parliament has adopted a Sanction Law consisting of a list with more than 25 types of economic restrictions to be applied against countries, foreign legal entities and individuals involved in terrorism and other activities that threaten sovereignty and territorial integrity of Ukraine. The law was voted on in Parliament on August 14, 2014.
With an aim to protect Ukraine's national interests and national security, as well as to counter terrorism and human rights violations, sanctions may be applied against a) foreign countries; b) foreign legal entities as well as legal entities under the control of foreign legal entities or c) foreigners, stateless persons and other subjects involved in terrorist activity.
The Sanctions Law stipulates that the grounds for restrictions to be applied are, inter alia, the activities of a foreign country, foreign legal entities or individuals and other subjects that create real and/or potential threats to national interests, national security, sovereignty and territorial integrity of Ukraine as well as actions that facilitate terrorism and/or encroach upon human rights and freedoms, activities that lead to expropriation or proprietary rights restrictions, damages to property, impediments to sustainable economic development and full-fledged exercise of Ukrainian citizens' rights and freedoms.
Types of sanctions
- Assets freeze;
- Limitation of trading operations;
- Complete or partial halt of the transit of resources through the territory of Ukraine along with limitations applicable to flights and transportation;
- Ban on export of capital;
- Suspension of economic and financial transactions;
- Annulment or suspension of permits/licenses to carry out particular economic activities;
- Ban on participation in privatization or lease of state property for residents of foreign states or persons under the direct or indirect control of foreign states residents;
- Ban on using radio frequency resources of Ukraine;
- Complete or partial ban on telecommunication services provision;
- Ban on participation in governmental procurement schemes for entities from a country subject to sanctions in accordance with the Sanctions Law;
- Ban or limitation of access to Ukraine water and air area for foreign military and civil vessels and aircrafts;
- Complete or partial ban on transactions with securities, issuer of which is a person/entity subject to sanctions in accordance with the Sanctions Law;
- Ban on permits to invest in other countries as well as permits to deposit foreign exchange assets abroad issued by the National Bank of Ukraine;
- Ban to issue permits/licenses allowing for export/import of foreign exchange assets, and limitation of cash withdrawal from credit/debit cards issued by residents of foreign countries;
- Ban for residents of foreign countries to be registered by the National Bank of Ukraine as a member of the International Payment System;
- Ban on charter capital increase in legal entities in which foreign country or legal/natural persons hold 10% and more of charter capital or have influence on company's management/activities;
- Introduction of sanitary and phytosanitary measures;
- Suspension of trade agreements, joint projects and programs, including in the military and defense sector;
- Ban on technology transfer as well as transfer of other intellectual property rights;
- Suspension of cultural exchange, scientific and educational cooperation;
- Visa and access restrictions;
- Suspension of international agreements approved by the Ukrainian Parliament;
- Suspension of official meetings and negotiations on future contracts and agreements;
- Revocation of national awards and other distinctions;
- Other sanctions based on the general principles set forth in this Law.
Introduction, amendment and cancellation of sanctions
The suggestions as to the introduction, amendment and cancellation of sanctions are made by the Ukrainian Parliament, the President of Ukraine, the Ukrainian government (Cabinet of Ministers of Ukraine), the National Bank of Ukraine and the Security Service of Ukraine. However, the decision as to the introduction, amendment and cancellation of sanctions is made by the National Security and Defence Council of Ukraine ("the Security Council") as follows.
In case of sector sanctions, the Security Council's decision is enacted by the President's of Ukraine decree and is subject to approval of the Parliament of Ukraine within 48 hours. The Security Council's decision is effective upon the approval by the Ukrainian Parliament.
In case of personal sanctions, the Security Council's decision is enacted by the President's of Ukraine decree, which renders the Council's decision effective.
In addition, the Sanctions Law also considers as a sanction the termination of international treaties to which Ukraine is a party. In this case the decision to denounce international treaties is made by the Parliament of Ukraine.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.