On 16 June 2015 the Parliament of Ukraine adopted Law No. 521-VIII “On Amending Certain Laws of Ukraine with Respect to Strengthening Transparency in Extractive Industries in Ukraine” (the “Law”). The Law was approved by the President and came into force on 12 July 2015.
The Law is aimed at implementing European standards of financial accountability, making Ukraine compliant with the requirements of the Extractive Industries Transparency Initiative (EITI).
EITI is a global standard to promote open and accountable management of natural resources. It seeks to strengthen government and company systems, inform the public and improve trust. Ukraine was accepted as an EITI Candidate country on 17 October 2013. Adoption of the Law and compliance with EITI requirements should ultimately improve the investment climate in Ukraine’s oil and gas sector.
The Law provides for the following:
- subsoil users (including those engaged in exploration for and production of hydrocarbons) are required to submit and disclose information on national and local taxes and fees, other payments and commercial activities associated with mining operations;
- state bodies responsible for state regulation in the sphere of the subsoil use activities (the Ministry of Ecology, the State Geology Service, local authorities, etc.) are required to publish information on exploration, subsoil use and protection of mineral resources;
- the Cabinet of Ministers of Ukraine (CMU) will be required to disclose to the public information on national and local taxes and fees, other payments, and contextual information about the extractive industries;
- the procedures for such disclosure, scope of information to be published by the state bodies and reported by the subsoil users are to be elaborated and adopted by CMU within 2 months of the date the Law becomes effective.
LAW: Law No. 521-VIII “On Amending Certain Laws of Ukraine with Respect to Strengthening Transparency in Extractive Industries in Ukraine” dated 16 June 2015.