Public statement of Ukrainian civil society organizations regarding the establishment and state registration of ultimate beneficial owners of civil society organizations

September 30, 2021

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

Civil society organizations that supported the statement:

    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
    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”
    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
    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”
    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
    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
    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”
    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”
    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”
    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
    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”
    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”
    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
    226. NGO “BikeDay Kyiv”
    227. NGO “OLBERY”
    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” 
    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”
    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
    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
    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”
    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