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Publication date: 18.05.2024
Draft Law No. 11195: Protection of the rights of third parties in the context of the application of sanctions
On April 23, 2024, the draft Law No. 11195 was registered in the Verkhovna Rada of Ukraine, aimed at introducing changes to some laws of Ukraine regarding the mechanism of protection of the property rights of third parties. The initiator of this draft law is David Arahamiya, who emphasizes its importance in the context of protecting the property rights of citizens and legal entities under the conditions of sanctions.
The purpose of the draft law
The main goal of the draft law is to establish clear legal mechanisms for restoring the rights of third parties in cases where their rights were violated during the consideration of cases on the application of sanctions. This applies, in particular, to those cases when the owners of shares, shares or other securities may suffer as a result of sanctions imposed on sanctioned persons.
The main provisions of the draft law
The draft law provides for a number of specific measures aimed at protecting the property rights of third parties:
Foreclosure of shares (parts) and other securities: The draft law provides for the mechanism of foreclosure of shares or other securities belonging to a legal entity whose ownership structure includes a sanctioned person. This avoids situations where sanctions imposed on one person negatively affect other non-sanctioned persons.
Determining shares in the ownership structure: The draft law defines the number of interests in the ownership structure of a legal entity that belongs to the sanctioned and other non-sanctioned persons. This ensures transparency in determining who and to what extent owns shares in a legal entity.Transfer of accounting of shares: If necessary, it is provided for the transfer of accounting of shares of limited liability companies or companies with additional liability to the accounting system maintained by the Central Securities Depository. This facilitates the process of management and accounting of such shares.
Escrow accounts: It is proposed to open escrow accounts for the storage of securities and shares owned by unauthorized persons. This allows you to protect the property rights of such persons, ensuring safe storage of their assets until all legal issues are resolved.
Information and transfer of rights: Unauthorized persons will be informed about the need to take actions to register ownership of securities and shares. At their request, rights to securities and shares can be transferred from escrow accounts to their own accounts.
Relinquishment of the right of ownership: If within 5 years non-authorized persons do not take the necessary actions to register the right of ownership of securities or shares, it is considered that they have renounced such right. In this case, these assets become the property of the state through the State Property Fund of Ukraine.
Importance of the bill
The proposed draft law No. 11195 is an important step in improving mechanisms for the protection of property rights of third parties under the conditions of the application of sanctions. It is aimed at ensuring justice and protecting the rights of those who may suffer as a result of the imposition of sanctions on others.The introduction of clear rules and mechanisms for the settlement of such situations will help to avoid legal uncertainty and protect the interests of unauthorized owners.
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After registration of the draft law in the Verkhovna Rada, it must go through several stages of consideration, including discussion in committees and voting in the parliament hall. If the draft law is supported by the majority of people's deputies, it will enter into force and become part of the legislation of Ukraine.
Successful implementation of this law will also require appropriate by-laws and organizational measures to ensure its effective implementation. This includes the creation of the necessary registers, establishment of information mechanisms and cooperation with the Central Securities Depository.
Conclusion
Draft Law No. 11195 on Amendments to Certain Laws of Ukraine Regarding the Mechanism for the Protection of the Property Rights of Third Parties is an important and timely legislative act. It is aimed at protecting the property rights of citizens and legal entities under the sanctions regime, which is especially relevant in the current difficult political and economic situation. The adoption of this law will contribute to the strengthening of the legal system of Ukraine and the protection of interests
