Attn: The Verkhovna Rada of Ukraine

Based on the entry into force of the latest amendments to the legislation in the field of prevention of legalization of proceeds from crime, by 10/11/2021, most legal entities whose founders (owners, participants, members of senior management, etc.) fall under the definition of ultimate beneficial owners. are obliged to enter information in the USR about the ultimate beneficial owner and ownership structure.

However, the below are exempted from entering information about the ultimate beneficial owner: political parties and their structural formations; trade unions, associations of trade union organizations provided for in the articles of association of trade unions and their associations; creative unions and their local branches; employers’ organizations and their associations; bar associations; housing cooperatives; chambers of commerce and industry; religious organizations; government agencies; local self-government bodies and their associations; public and municipal enterprises, institutions and organizations.

The law strengthens the requirements for already registered legal entities in terms of submitting information to the state registrar on the presence or absence of the ultimate beneficial owner and ownership structure. At the same time, a three-month period has been set for the relevant actions, which began on July 11 and expires soon – on October 11.

In this regard, the Ministry of Justice of Ukraine approved an update to Form 2 (Application for state registration of a legal entity (except for public organizations and public authorities); Form 4 (Application for state registration of a legal entity – public organization); Form 6 (Application for confirmation of information on the ultimate beneficial owner of a legal entity).

Authorized CEBs still refrain from providing official explanations on how to fill in the relevant forms and submit documents, which in practice leads to refusals to enter information about the ultimate beneficial owners or to entering inaccurate information into the USR. In fact, legal entities are placed in conditions under which their actions aimed at bringing information about them in accordance with the law are indirectly blocked by the state.

In particular, it concerns the establishment of a knowingly insufficient deadline for legal entities to submit information on the ultimate beneficial owners, the lack of official recommendations or explanations from the authorized state bodies.

Due to the fact that from the organizational point of view the outlined procedure is quite complicated, today the state has a situation in which by the end of the deadline for submission of relevant information a significant part of legal entities will not have enough time to provide information on ultimate beneficial owners by October 11 of the current year. Otherwise, for failure to submit or late submission to the state registrar of information about the ultimate beneficial owner or its absence or documents to confirm the information about the ultimate beneficiary of the legal entity, a fine of 1,000 to 3,000 NTMI (Non-Taxable Minimum Income) will be imposed (i.e., from 17,000 to 51,000 UAH in 2021), and, in accordance with Art. 166-11 of the Code of Ukraine on Administrative Offenses, the head of the legal entity will be brought to responsibility.

Taken together, the above, among other things, makes it impossible for the relevant persons to fully ensure the quality of the law as an integral part of the principle of the rule of law, guaranteed both by Art. 8 of the Constitution of Ukraine and the Universal Declaration of Human Rights. Thus, the provisions of the analyzed amendments to the law contradict the requirements that the law should be comprehensible by the interested persons and drafted with sufficient clarity to enable them to regulate their behavior in order to be able – if necessary, with appropriate consultation – to anticipate, reasonably in the given circumstances, the consequences that may result from its action.

Therefore, today the state, represented by the authorized bodies of legislative and executive branches, must take immediate measures to resolve this situation.

At the same time, on September 22 of this year, the Parliamentary Committee on Economic Development recommended the Verkhovna Rada of Ukraine to adopt in the first reading the draft law No. 5807, which stipulates that if the founders of a legal entity are only individuals who are the ultimate beneficial owners of such legal entity, information about its ultimate beneficial owner is not indicated; to register changes to the information about the legal entity, the natural person who is the ultimate beneficial owner of the legal entity submits a notarized copy of the identity document only in the absence of the specified document in the registration file or in case of its change; extend the term for the fulfillment of the obligation of legal entities registered before the entry into force of this Law to notify the state registrar of information on the ultimate beneficial owner and ownership structure from three months to one year.

At the same time, the requirement to submit information on ultimate beneficial owners for NGOs and charitable organizations is an unjustified interference with freedom of association. CSOs work for the public, not the private interest, and their benefits are aimed at the public. Therefore, the changes that can be made through the draft law No. 5807 would make it possible to relieve social tensions around the analyzed issue, allowing the legal entities not to provide relevant information.

In view of the above, taking into account the need to consolidate the efforts of public authorities and civil society organizations to ensure the rights of legal entities, we call on the Verkhovna Rada of Ukraine to include public associations with legal entity status and charitable organizations in the list of legal entities that do not provide information on the ultimate beneficial owner of the legal entity (clause 9 of the second part of Article 9 of the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations”), for example, by approving in the second reading as a whole and with the relevant amendments Draft Law “On Amendments to Certain Laws of Ukraine Concerning the Indication and Submission of Information on the Ultimate Beneficial Owner and the Ownership Structure of a Legal Entity” No. 5807 of July 20, 2021.

Collection of signatures under the Statement is completed, in case of questions please contact legalreformscso@gmail.com.

Civil society organizations that supported the statement:

1. 1. Initiative Center to Support Social Action “Ednannia”
   2. Ukrainian Center for Independent Political Research (UCIPR)
   3. Centre for Democracy and Rule of Law
   4. Ukrainian Helsinki Human Rights Union
   5. Human Rights Center ZMINA
   6. Reanimation Package of Reforms
   7. Ilko Kucheriv Democratic Initiatives Foundation
   8. Association to Promote Self-Organization of the Population, All-Ukrainian NGO
   9. NGO Detector Media
   10. NGO CRIMEASOS
   11. Together against Corruption
   12. Caritas Ukraine International Charitable Foundation
   13. Ukrainian Volunteer Service
   14. Union of Ukrainian Youth in Ukraine
   15. Vostok SOS Charitable Foundation
   16. Media Initiative on Human Rights
   17. Information Analytical Center “Civic Space”
   18. INTERNATIONAL CHARITABLE FOUNDATION “IZOLYATSIA. PLATFORM FOR CULTURAL INITIATIVES”
   19. Kharkiv Institute of Social Research NGO
   20. NGO “Odesa Institute of Social Technologies”
   21. Access Point NGO
   22. German-Ukrainian Partnership Network IBO
   23. Development Together NGO
   24. CO CF “Station Kharkiv”
   25. Parents in Action NGO
   26. Coalition of NGOs Zaporizhzhia Reform Council
   27. NGO UKRAINE:DII (ACTION)
   28. Galician Institute of Development NGO
   29. International Development Foundation Charitable Foundation
   30. Charitable Organization “Charitable Foundation “Creativity Territory””
   31. NGO “Owl Expert Group”
   32. NGO “Doctor Bersieniev International Charitable Foundation”
   33. NGO Association of IDPs of Donbas “DOBROTVOR”
   34. NGO United Veterans Movement “Interaction”
   35. Foundation of Local Democracy NGO
   36. NGO “Institute of Reforms and Innovations”
   37. Institute of Social Policy of the Region NGO
   38. NGO VI “Kharkiv Station”
   39. CENTER FOR SUSTAINABLE DEVELOPMENT INITIATIVES NGO
   40. NGO “Molod-DIIE”
   41. NGO “Institute of Reforms and Innovations”
   42. NGO “BABYLON Club”
   43. NGO “Wind of Changes in Popasnianshchyna”
   44. Poltava Branch of the Public Service of Ukraine
   45. PA “Sheep and Goat Breeding of Ukraine”
   46. My Province NGO
   47. Charity Organization “For Ukraine Charitable Foundation”
   48. NGO Center of Conscious Parenthood “Sources of Joy”
   49. Stanytsia-Luhansk Center for Social and Cultural Development “Big Family”
   50. ILIUS NGO
   51. NGO “Training and Consulting Center for Access to Information”
   52. NGO “Educational and Methodical Center for Human Rights Protection”
   53. Alliance for Civil Rights
   54. Vetpromspilka
   55. NGO “Union of Veterinary Organization Owners”
   56. NGO Center for the Development of Public Initiatives “Podilskyi Krai”
   57. Zaporizhzhia Regional Charitable Society of Beekeepers
   58. NGO “By Acting We Make a Difference!”
   59. PA “Ukrainian Association of Manufacturers and Distributors of Veterinary Drugs and Feed Additives”
   60. CO CF “Star”
   61. NGO “Join and Change”
   62. NGO “Garbage-Free Zaporizhzhia”
   63. NGO “Legal Support”
   64. AUST-ER NGO
   65. NGO “Rural Development Promotion”
   66. League of Professional Women NGO
   67. Kharkiv Non-Profit Non-Governmental Organization “Actual Woman”
   68. Legal Innovations NGO
   69. Motion+ NGO
   70. NGO SMART MEDIA
   71. VYSHHOROD CITY NGO “Our City”
   72. NGO “Civic Position of Ukrainians”
   73. NGO “Choice”
   74. NGO “Social Perspective”
   75. NGO Crimean Human Rights Group
   76. NGO Center “Social Indicators”
   77. NGO “For Myself”
   78. CF “CO SAM”
   79. NGO “Lustration Anti-Corruption Council of Prydniprovia”
   80. NGO “Kharkiv City Weightlifting Federation”
   81. Sports Federation of Weightlifting of Ukraine
   82. NGO ALL-UKRAINIAN PARENTAL PROJECT “MIO-LIFE”
   83. NGO “Safe Place”
   84. Odesa Regional Organization of All-Ukrainian NGO Committee of Voters of Ukraine
   85. NGO “Center for Social Transformation”
   86. NGO “SHTUKA”
   87. Khmilnytskyi District Public Organization “LAW”
   88. Kirovohrad Regional Organization of the All-Ukrainian NGO “Association for the Promotion of Self-Organization of the Population”
   89. NGO Information Human Rights Center “Edelweiss”
   90. NGO “NATIONAL UNION OF CONSUMERS”
   91. NGO “Urban City Development Agency”
   92. NGO “Agency for Local Initiatives”
   93. NGO “Strong People of Donbas”
   94. Town Hall Festival Agency
   95. Social and Political Development Bureau
   96. Charitable Organization “Network of 100 percent of life Rivne”
   97. NGO “Democratic Transformations Laboratory”
   98. Women’s Anti-Corruption Movement  NGO
   99. Berezan Community Foundation Charitable Organization
   100. NGO “Question Mark”
   101. NGO “Molod-DIIE”
   102. NGO Center “Women’s Perspectives”
   103. Association “Ukrainian importers of fish and seafood”
   104. Chernihiv Public Committee For Human Rights Protection
   105. After Silence NGO
   106. NGO “Humanitarian Center”
   107. Franchise Employers Association
   108. Ukrainian Capital Markets Association (UCMA)
   109. Phoenix Social Youth Group NGO
   110. Kherson City Non-Governmental Organization “Steve Jobs Center for Information Technology Promotion”
   111. Night at the University Creative Association
   112. NGO Academic Center “Science and Education”
   113. “Creative Initiative” Foundation
   114. Veles+ NGO
   115. Steps to the Future NGO
   116. United Gust Community Development Foundation
   117. IUS NGO
   118. Spectrum Kharkiv NGO
   119. NGO “Country of Free Community”
   120. NGO “Women’s Hub”
   121. NGO “Belozerka Center for Regional Development”
   122. Academy of Socio-Economic Initiatives NGO
   123. Center for Civil Liberties
   124. Feminist Workshop NGO
   125. Civil Network OPORA
   126. NGO “Free Development Agency”
   127. Ukrainian League of Lawyers for Corruption Combating
   128. NGO “Territory of New Changes”
   129. NGO “FUNDAMENTALS OF CONSCIOUSNESS”
   130. NGO “Together HUB”
   131. NGO Crisis Media Center “Siverskyi Donets”
   132. Winners to Chornobyl NGO
   133. UPO “Fumigation Association”
   134. Ukrainian Paint and Coatings Association
   135. Association “Ukrainian importers of fish and seafood”
   136. Law and Democracy Foundation 
   137. All-Ukrainian NGO “Ukrainian Fire and Technological Safety Union”
   138. International Embassy of Women-Entrepreneurs
   139. Volyn NGO “Volyn Press Club”
   140. NGO Art Center “Art Space”
   141. Center for Reforms, Democracy and Law, Non-Governmental Organization
   142. Mexican Cultural Center “Estrella” NGO
   143. Primorsky District Organization of Veterans of Ukraine
   144. PA “Public Control in Action”
   145. Unity of Virtues NGO 
   146. Kakhovka Community Development Foundation NGO
   147. Bar City Art Amateur Theater NGO
   148. Kharkiv Regional Foundation Public Alternative
   149. NGO Agency for Creative Initiatives “More”
   150. Kultprozhektor NGO
   151. NGO “Ukrainskyi Ustrii”
   152. CO “Nadiia”
   153. NGO Resource Development Center “Community” 
   154. NGO Federation of Convergent Pedagogy
   155. NGO Communication Center “Palms”
   156. Women’s Union of Bukovyna
   157. NGO “People’s Defense”
   158. Podillia Public Service
   159. NGO “Cultural Agency A” 
   160. Ukrainian Expert League
   161. Locator-Media NGO
   162. Ukrainian Hairdressers Association
   163. Charitable Organization “Charitable Foundation for the Implementation of Ideas”
   164. Public Association “Association of Civil Society Organizations of Luhansk Region”
   165. NGO CRIMEAN HUMAN RIGHTS GROUP
   166. NGO Dia-Svit
   167. Novochervonyanka NGO
   168. Gender Club Dnipro NGO
   169. NGO “World for All”
   170. NGO “Parallel 50”
   171. NGO “Magic Runes”
   172. NGO “Heritage!”
   173. PA EA Ecosystem
   174. NGO “Privacy Hub”
   175. Khmelnytskyi Regional Society of the All-Ukrainian Organization of People With Disabilities “Union of Organizations of the People With Disabilities of Ukraine”
   176. NGO “Kremin Business Association”
   177. NGO “Community Time” Advocacy and Analytical Platform
   178. NGO Agency for Change “Perspective”
   179. NGO OBIRUCH Assistance to Persons with Disabilities
   180. Equality in Action NGO
   181. NGO Melitopol City Jewish Community
   182. META Charitable Foundation “From a shared vision – to joint actions”
   183. LASKA Charity Foundation
   184. KHERSON REGIONAL NON-GOVERNMENTAL ORGANIZATION “RIGHT TO LIFE”
   185. NGO “Woman of the Future”
   186. All-Ukrainian Association of Importers of Meat and Meat Products
   187. Chernihiv Center for Human Rights
   188. Childhood Angel NGO
   189. NGO Information Resource Center “Legal Space”
   190. Lviv Tourist Board Association
   191. NGO “D.O.M.48.24”
   192. Association of Women-Lawyers of Ukraine “JurFem” NGO
   193. Lviv City NGO Cultural Management Center
   194. Konotop Society “Dignity”
   195. NGO “Chernihiv Human Rights Union”
   196. NGO “Family for Persons with Disabilities”
   197. NGO “Social Synergy”
   198. CO CF “You-Angel”
   199. Sofos Charity Foundation
   200. NGO “Gnivan Public Service”
   201. NGO “Analytical Center of the Agrarian Union of Ukraine”
   202. NGO “MOVEMENT IN TIME”
   203. Truth Hounds NGO
   204. NGO Rehabilitation Center for People with Disabilities “Future”
   205. ICO Green Dossier Information Center
   206. Eco-Charity Charitable Foundation
   207. Kachyne Lake NGO
   208. Dobrochyn Center
   209. NGO New Forces Movement
   210. Union of the People’s Council of Chernihiv Region NGO
   211. CO “Center for Economic Education”
   212. NGO “MELITOPOL GREEK SOCIETY”
   213. NGO “Melitopol City Society for the Protection of Animals”
   214. NGO Melitopol National-Cultural Karaite Society “Jamaat”
   215. NGO “Public Television: Chernihiv”
   216. Ukrainian Institute of International Politics
   217. Eastern European Institute of Development
   218. Studena NGO
   219. NGO “Institute of Finance and Law”
   220. NGO “Living Library”
   221. East European Development Institute INGO
   222. NGO “Public Legal Protection”
   223. Jet NGO
   224. Agency of Bill Market Development NGO
   225. NATIONAL ASSOCIATION OF MAKOTOKAI KARATE OF UKRAINE NGO
   226. NGO “BikeDay Kyiv”
   227. NGO “OLBERY”
   228. NGO “INTERNATIONAL EMBASSY OF WOMEN-ENTREPRENEURS” 
   229. Kuznetsovsk City Center of the Children’s Public Association “Children’s Alpine Movement of Ukraine” 
   230. NGO “Observatory of Democracy”
   231. Communal Work Association NGO
   232. Ukrainian Pirate Community
   233. NGO “FREE RADIO”
   234. NGO “Women in Media” Association
   235. Educational Project Excellent School NGO
   236. NGO Alliance of Ukrainian Unity
   237. CO CF Ukraine Behind Bars
   238. Voznesensk Community Foundation Charitable Organization
   239. NGO Information Press Center
   240. Center of Information Studies and Resource Service “Meridian”
   241. NGO My Vidradnyi
   242. CPSCC “POSTUP”
   243. NGO “Non-Governmental Media Advocacy Group”
   244. NGO “Alive-I” 
   245. DEMOCRATIZER NGO
   246. Jewish-Ukrainian Social Initiative Charitable Foundation
   247. NGO “PEOPLE” Initiative
   248. NGO Oreli
   249. NGO “Gender Creative Space”
   250. NGO Crimean Center for Business and Cultural Cooperation “Ukrainian House”
   251. NGO “Ukrainskyi Ekskurs”
   252. NGO “Drug Control”
   253. NGO NIKOPOL CENTER OF SPIRITUAL AND SOCIAL-PSYCHOLOGICAL REHABILITATION “Open Doors”
   254. NGO “Against Corruption”
   255. Legal Development Network PA
   256. AUA “Foundation “Parity”
   257. A-GORA NGO
   258. Mountains Community NGO
   259. PA “Territory of Change!”
   260. Chernihiv City Children’s and Youth NGO Center for Sports and Variety Dance INSIDE 
   261. NGO “All-Ukrainian Movement Financial Maidan”
   262. NGO “Economists Club”
   263. NGO “Institute of Management and Strategies”
   264. NGO THEMIS Human Rights Association
   265. NON-GOVERNMENTAL ORGANIZATION YOUTH AND STUDENTS ASSOCIATION “POTENTIAL OF THE FUTURE”
   266. NGO “TIME OF THE PEOPLE”
   267. NGO “ENERGY OF COMFORT”
   268. PA “Boycott of Firefighters of Ukraine”
   269. NGO “Starychi Football Club”
   270. NGO “Institute of Contemporary Art”
   271. NGO “Halychyna News VARTO”
   272. Ukrainian Halychyna Foundation Charitable Foundation
   273. NGO Ukrainian Historical and Fortification Forum
   274. Wings of Hope Charitable Foundation
   275. NGO “PEOPLE’S INITIATIVE”
   276. NGO “Physicians of Good Will”
   277. NGO “Future without Borders”
   278. NGO “Acting Together Community”
   279. NGO “Breakthrough-City”
   280. All-Ukrainian NGO “European Way”
   281. NGO “European Public Initiative”
   282. NGO “Workshop of Creative Ideas “Urban Fox”
   283. Animal Aid League
   284. EQUITAS NGO
   285. Association of Zoo Protection Organizations of Ukraine All-Ukrainian NGO
   286. NGO “Cultural and Artistic Foundation DUSHA UA”
   287. NGO “GarageCraft Manufactory”
   288. Equitas NGO
   289. NGO Kharkiv City Sports Dance Club “Image”
   290. NGO “GARAGE COOP No.8”
   291. NGO “Youth Television”
   292. NGO “Tavria Region”.
   293. NGO “Zero Waste Lviv”
   294. NGO “Activity without Restrictions”
   295. To be a European
   296. NGO “Buchach-ART”
   297. PURE HEARTS MOVEMENT
   298. GO “FACILITATION!”
   299. NGO “Bereznivska BRAMA”
   300. Public Alliance “Women’s Political Action”
   301. NGO “REZAVOD”
   302. Crimean Civil Society Institute
   303. NGO Society of Conscious Citizens
   304. NGO Bulgarian Cultural and Educational Center “Saints Cyril and Methodius”
   305. NGO “Melitopol Society of Bulgarian Culture “Balkans”
   306. PA Innovative Aarhus Network of Territorial Communities of Ukraine and the City of Kyiv
   307. NGO “UKRAINSKYI USTRII”