On 28 November 2025, the Cabinet of Ministers of Ukraine approved the Procedure on the Provision of Partial Compensation for the Value of Property Belonging to Business Entities that Was Destroyed or Damaged as a Result of the Armed Aggression of the Russian Federation, as well as Partial Compensation of Insurance Premiums under Insurance Contracts Against War Risks, which establishes a state mechanism for compensating business entities for property destroyed or damaged due to war-related risks and for partially reimbursing insurance premiums.
This Procedure introduces a state mechanism that defines the rules for obtaining this compensation and establishes a clear and uniform process for businesses seeking assistance.
War risks and scope of compensable damage
The Procedure targets damage directly attributable to “war risks,” including from missiles, unmanned aerial vehicles of any type, artillery shells or fragments, air-defence and missile-defence systems, fires, explosions, and shock waves.
To qualify, property must be located within the following “high-risk territories” – the Dnipropetrovsk, Donetsk, Zaporizhzhia, Mykolaiv, Odesa, Poltava, Sumy, Kharkiv, Kherson, and Chernihiv regions, excluding territories of Ukraine temporarily occupied by the Russian Federation.
Eligible assets include buildings and structures (e.g. industrial, administrative, warehouse, etc.), individual premises within buildings (e.g. offices, workshops), unfinished construction projects whose construction began after 1 January 2021, and external and internal engineering networks and equipment (e.g. heating, water supply, electricity supply systems, etc.).
The Procedure sets a maximum compensation amount for damage to or destruction of property of UAH 10 million (EUR 203,000) per business entity including affiliates for the entire duration of the programme.
Compensation is available only within the limits of allocated budget funding. Hence, the effectiveness of the Procedure depends on the availability of budgetary resources.
Eligibility criteria for participation in the compensation programme
Applicants must be enrolled in the compensation programme for the Procedure. To be enrolled, a business entity must pay a one-time fee equal to 0.5% of the total probable loss for all property submitted for participation.
The categories of businesses excluded from eligibility include the following:
• non-residents of Ukraine;
• those undergoing bankruptcy or liquidation;
• entities with tax debt as of the first day of the month preceding the month of application;
• recipients of state aid in violation of its terms;
• entities or individuals subject to Ukrainian sanctions;
• entities whose ultimate beneficial owner is a citizen of an aggressor/occupying state or a person affiliated with terrorist organisations;
• citizens or legal entities of an aggressor/occupying state (with limited exceptions for residents lawfully residing in Ukraine); and
• entities subject to EU restrictive measures.
Application procedure for compensation
Only business entities included in the compensation programme are entitled to apply for compensation. Without prior inclusion, no claim will be processed.
Once a war risk event occurs, the enrolled applicant submits a compensation application in the prescribed form together with all required documents.
Submitting the application constitutes automatic accession to an agreement assigning to Ukraine the applicant’s right to claim compensation from the Russian Federation for damaged or destroyed property up to the amount of the compensation received. The right is deemed assigned when compensation funds are credited to the applicant’s bank account.
Payment of the compensation
Upon receipt of an application, the Export Credit Agency of Ukraine has 30 calendar days (with a possible 30-day extension) to verify the information, organise valuation of the damage, and issue a compensation decision.
Indirect losses (e.g. lost profits, taxes, and similar costs) are expressly excluded from compensation.
Insurance premium compensation
In addition to compensating losses, the Procedure provides for partial reimbursement of insurance premiums paid by eligible companies for war-risk coverage. The eligibility criteria are identical to those applicable to damage compensation.
Compensation is paid after the expiration of the insurance contract. The maximum amount of premium compensation per business entity including affiliates in a calendar year is UAH 1 million (EUR 20,000) in aggregate for all insurance contracts expiring in that year.
To participate, a business entity must pay a one-time fee of UAH 5,000 (EUR 101) for each application and submit the application for inclusion when concluding the insurance contract.
Conclusion
The introduction of the Procedure represents an important step toward creating a predictable framework for managing war-related risks. The key limitation of the mechanism, however, lies in its strict dependence on the availability of state budget funds. Compensation is provided exclusively within the limits of budgetary allocations, and the Procedure explicitly states that payments will not be made if funding is unavailable while participation fees are non-refundable.
For more information on this Procedure for obtaining compensation in Ukraine, contact your CMS client partner or the CMS experts:
Natalia Kushniruk
Partner, Kyiv (CMS Ukraine)
T +380 44 391 3377
E natalia.kushniruk@cms-cmno.com Maksym Morozov
Senior Associate, Kyiv (CMS Ukraine)
T +380 44 391 3377
E maksym.morozov@cms-cmno.com
