In this issue:
- Consolidation of the declarative procedure at the level of the laws
- Ensuring the transparency of the list of exceptions
- Validity periods of declarations and permitting documents
- Other peculiarities of the application of the Law
In the conditions of application of martial law, the issue of simplifying the permit procedures for starting economic activity arose. To resolve this issue, the Cabinet of Ministers of Ukraine adopted Resolution No. 314 on March 18, 2022, which established the declarative approach for starting economic activity. At the same time, the situation required regulation at the level of laws, in connection with which on July 17, 2024, the Law of Ukraine "On Amendments to Certain Laws of Ukraine on Simplifying the Conditions for Conducting Business Activities During the Period of Application of the Martial Law (Emergency State) in Ukraine" was adopted on July 17, 2024 (registration number 7331). A brief overview of the main provisions of the Law is provided in our newsletter.
Consolidation of the declarative procedure at the level of the laws
The recently adopted Law amends three main laws regulating the issue of permitting documents necessary for starting a business:
- Law of Ukraine "On the permit system in the field of economic activity";
- Law of Ukraine "On licensing of types of economic activity";
- Law of Ukraine "On peculiarities of providing public (electronic public) services".
Amendments to these laws enshrine the possibility of acquiring the right to conduct certain actions regarding the implementation of economic activity or types of economic activity on the basis of submitting a declaration on the conduct of economic activity to the relevant licensing authorities free of charge without obtaining documents of a permitting nature.
The procedure for submitting the declaration, the list of information specified in it, the list of certain actions regarding the implementation of economic activity or types of economic activity that cannot be carried out on the basis of the submission of such a declaration in the conditions of martial law, and the specifics of issuing permission documents of the issuance of permission documents are determined by the Cabinet of Ministers of Ukraine.
Relevant declarations, in accordance with the changes introduced by the Law, are submitted in paper form or through the portal of electronic services of legal entities, natural persons - entrepreneurs and public organizations, but in case of impossibility of submission in the specified ways, such statements and documents are submitted in the manner determined by the Cabinet of Ministers of Ukraine. Submission of the declaration is possible at the choice of the business entity, regardless of the declared (registered) location (place of residence), the place of business activity or the location of the relevant object.
The permitting authority (licensing body, entity providing public (electronic public services)) maintains a list of submitted declarations on the conduct of economic activity, which contain information about economic entities that work according to the declarations. Such lists are posted on the official websites of the relevant bodies (after entry into force by law, such lists must be published within 15 calendar days)
Ensuring the transparency of the list of exceptions
Currently, Resolution of the CMU No. 314 of March 18, 2022 provides for a number of types of activities, that cannot be conducted based on the declarations. However, the grounds for including such activities in the list of exceptions are not properly regulated.
The changes introduced by the adopted Law provide that activities are included in such a list if the implementation of such actions or activities on the basis of a declaration on the conduct of economic activity may lead to the occurrence of at least one of the following consequences:
- causing a threat to national interests;
- negative impact on the functioning of critical infrastructure facilities;
- violation of normal living conditions of the population;
- negative impact on environmental safety.
The law provides that in the event that the Cabinet of Ministers of Ukraine adopts a decision to supplement the list of certain actions regarding the implementation of economic activity or types of economic activity, the right to conduct which cannot be acquired on the basis of the submission of a declaration on the conduct of economic activity, the Cabinet of Ministers of Ukraine sets a deadline, within which business entity should apply to the relevant licensing authority with an application for obtaining a licensing document.
Validity periods of declarations and permitting documents
The changes adopted by the Law provide that the declaration received in accordance with this Law is valid during the period of martial law and until the end of the calendar year in which martial law is suspended or canceled, but not less than three months from the date of its termination or cancellation.
Documents of a permissive nature, licenses, results of public (electronic public) services, the validity period of which expires during the period of martial law, are considered to be those whose validity is extended during the period of martial law and until the end of the calendar year in which martial law is terminated or canceled, but not less than three months from the date of its termination or cancellation.
In the event that a business entity that has acquired the right to conduct business activities on the basis of a declaration on the conduct of business activities, within the period of its validity, applied to the permitting authority with an application for the receipt of a corresponding document of a permitting nature in the manner, time period and under the conditions provided for by law, the declaration on the conduct of economic activity is valid until the decision on the issuance or refusal to issue a permit document is made by the licensing authority.
The submission of notices, reports or documents, the requirement for submission of which is provided by the legislation on the issue of documents of a permissive nature, is carried out by the end of the calendar year in which martial law was suspended or abolished, but not less than three months from the day of its termination or abolition, for the entire period of non-submission reporting or the obligation to submit documents or in another term established by law.
During the period of martial law, the period specified by law for applying for the re-registration of documents of a permissive nature, making changes to the information specified in the declarations on the conduct of economic activity is suspended. From the date of termination or cancellation of martial law, the specified periods continue to run, taking into account the time that passed before their suspension.
Other peculiarities of the application of the Law
The changes introduced by this Law apply exclusively to the period of martial law introduced by the Decree of the President of Ukraine "On the introduction of martial law in Ukraine" dated February 24, 2022 No. 64/2022, approved by the Law of Ukraine "On the approval of the Decree of the President of Ukraine "On the introduction of martial law in Ukraine" dated February 24, 2022 No. 2102-IX.
During the period of martial law, planned inspections regarding compliance by licensing authorities (their officials) with the requirements of the legislation on the issue of licensing documents and the established procedure for their issuance are suspended.
The law enters into force on the day following its official publication. Declarations on the conduct of economic activity, submitted in accordance with the legislation before this Law enters into force, continue to operate in accordance with this Law. Declarations submitted in accordance with this law, as well as before the entry into force of this law, are equated to documents of a permissive nature.
Prepared by:
- Alyona Shulima, Partner of Pragma Consulting Group, Ph.D.
- Olena Yaliieva, Counsel of Pragma Consulting Group
DISCLAIMER: The general information provided in this Newsletter is not legal advice, cannot be cited as legal authority, and cannot replace the advice of a lawyer who has reviewed the facts of your case. The information provided is intended to be accurate as of the date of publication, but please be aware that laws are constantly changing.
