The Procedure for Establishing an E-Resident States, Large-Scale Privatization

The Procedure for Establishing a List of States Whose Citizens or Residents can Acquire the Status of E-resident is in Effect

On 31.05.2023, Resolution No. 534 of the Cabinet of Ministers of Ukraine entered into force, approving the Procedure for establishing a list of states whose citizens or residents can acquire the status of electronic resident (e-resident).

It is provided that states cannot be included in such a list if there are:

  • provisions regarding the recognition of such a state as an aggressor state in relation to Ukraine in legislative acts;
  • the information on the inclusion of such a state to the list of high-risk jurisdictions subject to a call for action (the FATF “black list”);
  • the information on the inclusion of such a state in the list of states with weak measures to combat money laundering and terrorist financing (the FATF “gray list”);
  • the information on the recognition of such a state as a country with weak regimes of prevention and countermeasures against the legalization (laundering) of proceeds obtained through crime, the financing of terrorism and the proliferation of weapons of mass destruction in the reports and recommendations of the European Commission.

Establishing such a list or making changes to it is carried out by the Ministry of Digital Transformation of Ukraine in agreement with the State Financial Monitoring Service.

Let us please remind you that on 01.04.2023, Law No. 2654-IX entered into force, allowing foreign citizens to carry out business activities in Ukraine, while staying outside its borders, by acquiring the status of “e-resident”.

Restoration of Large-Scale Privatization and Improvement of Management of Sanctioned Property: the Draft Law was Adopted in the Second Reading

On 30.05.2023, the Verkhovna Rada of Ukraine adopted in the second reading draft law No. 8250, which provides for the improvement of the management structure of the State Property Fund of Ukraine (SPFU), the restoration of large-scale privatization and more effective management of sanctioned property.

Thus, the draft law provides for the following innovations in the field of regulation of the legal regime of sanctioned property:

  • according to the decision of the Higher Anti-Corruption Court of Ukraine sanctioned property will be transferred to the SPFU;
  • the SPFU will independently make management decisions regarding sanctioned property (regarding privatization, sale / lease of such property)
  • all received funds will be sent to the Fund for the Liquidation of the Consequences of Armed Aggression.

In addition, the draft law:

  • will make it possible to resume large-scale privatization;
  • prohibits sanctioned persons and citizens of aggressor countries from holding the positions of heads of state-owned enterprises and members of supervisory boards;
  • cancels the procedure for the approval of directors of state-owned enterprises under the management of the SPFU with local authorities;
  • removes restrictions on the term of state property lease contracts for the period of martial law.

Let us please remind you that on 01.04.2022, the Verkhovna Rada limited the validity period of new state property lease contracts to the period of martial law (plus 12 months after its cancellation). Therefore, this draft law provides for an increase in the possible terms of such contracts to five years.