Implementation of Screening for Direct Foreign Investments

On 22 September 2025, the Verkhovna Rada of Ukraine registered Draft Law No. 14062 aimed at implementing a mechanism for the verification and monitoring of direct foreign investments in strategic sectors to protect Ukraine’s national security. It is intended to ensure transparent rules for investors and restrict access of unscrupulous capital to critical infrastructure and sensitive information.

The Draft Law has been developed with the purpose of regulating the procedure for direct foreign investments into operators of critical infrastructure, entities engaged in the use of subsoil of strategic importance, as well as entities dealing with military-purpose goods and dual-use goods.

The document establishes a screening mechanism – a legal procedure for the verification and subsequent monitoring of investments, aimed at safeguarding the national security and national interests of Ukraine. The mechanism will be regulatory in nature.

The main innovations of the Draft Law are:

  • the designation of the authorized body, its competence and powers with respect to conducting screening, the procedure for submitting applications by investors, the list of information to be provided for verification, and the decision-making process (approval, conditional approval, or refusal);
  • the definition of the range of deeds and threshold values subject to mandatory screening, as well as the types of investment operations (direct/indirect, acquisition or partial participation) that determine the object of review;
  • the creation of a Register of Foreign Investors within the framework of monitoring approved investments, as well as the determination of the rights and obligations of investors, the types of violations, and liability for breaches of legislation in this field;
  • the establishment of the procedure for appealing decisions of the authorized body, thereby ensuring procedural protection of investors’ rights.

The legal foundation of the Draft Law is linked to EU Regulation No. 2019/452 –the document developed taking into account the best international practices of screening foreign direct investment and examples of national legislation in EU Member States and the United States (CFIUS).

Given the martial law and existing risks of concentration of “aggressive” capital, the adoption of the Draft Law aims to establish transparent rules for foreign capital’s access to sensitive sectors, safeguard strategic assets, and increase investment attractiveness for bona fide investors in the long-term perspective.

We will closely monitor further developments in this area, in particular regarding the status of this Draft Law, and will report on them in the future Legal News.