The draft law “On Amendments to Certain Legislative Acts of Ukraine regarding Defining Final Beneficiary Owners of Legal Entities and Public Persons” (the “Law”) has been adopted by the Ukrainian Parliament on 14 October 2014 and signed by the President on 24 October 2014.
Main Aspects of the Law
As a key transparency and anti-corruption measure, the Law introduces:
- the concept of the ultimate “beneficial owner of a legal entity” and expands the concept of “public figures” considerably;
- mandatory obligations for Ukrainian legal entities, other than state and municipal enterprises, to identify their ultimate beneficial owners, store information about them, disclose it to the State Register of Legal Entities and Individual Entrepreneurs and regularly update it (for example, in case of change of ultimate beneficial owners and/or owners of substantial interest in the legal entity, including ultimate beneficial owners);
- administrative liability for a legal entity’s failure to disclose (or update) information about their beneficial ownership of shares in the form of a fine (from UAH 5,100 to UAH 8,500) imposed on the Director/Manager of the legal entity; and
- an obligation for legal entities, registered before the Law enters into force, to disclose (or update) the information about their beneficial ownership of shares to the State Register of Legal Entities and Individual Entrepreneurs within six months from the date the Law enters into force.
According to the Law, information included in the State Registry of Proprietary Rights Over Immovable Property (the “Registry”) becomes publicly available. Previously, such information was only available to the owners/users (including their respective heirs) of the relevant property and state/municipal authorities.
The Registry includes information about land plots, buildings, structures, integral property complexes, residential (including apartments) and non-residential premises (including parts thereof), as well as encumbrances over such property. The Registry also provides information regarding the owners and users of the property, such as lessees and persons in favour of whom the servitude, emphyteusis or superficies are established, as well as mortgages and tax pledges established over the property. Individuals and companies can obtain information from the Registry by means of either (i) applying to the state registration officers or notaries for a hard copy of the extracts from the Registry or (ii) obtaining the information electronically from the website of the Ministry of Justice. Information from the Registry is provided with respect to the property only. Thus, details of the property need to be provided (such as address or identification number) in order to obtain information from the Registry. Requesting and obtaining information about individuals or companies (such as a list of property they own or use) will not be possible, since details of a particular property need to be provided in order to receive information (including who owns or uses the property).
On the contrary, state and municipal authorities (including judges, prosecutor officers and notaries) are entitled to access and obtain information from the Registry by means of providing either the details of a property or the names of individuals or companies.
The detailed procedure for accessing the Registry and obtaining information from it is still pending and will be established by the Cabinet of Ministers of Ukraine by way of adopting the relevant resolution.
The draft Law No.5114 “On Amendments to Certain Legislative Acts of Ukraine regarding Defining Final Beneficiary Owners of Legal Entities and Public Persons” dated 07 October 2014 available here (in Ukrainian).