Analytical note on draft law №13606 in the context of the possibility of performing registration actions in relation to persons subject to sanctions

On August 7, 2025, the Cabinet of Ministers of Ukraine initiated the registration of draft law №13606, “On Amendments to Certain Legislative Acts of Ukraine in the Areas of State Registration to Ensure the Public Legal Interest.” According to the explanatory note, the purpose of the draft law is to improve the accessibility, transparency, and efficiency of registration processes, as well as to protect them from potential abuse.

At the same time, an analysis of the draft law in terms of its possible impact on the implementation of sanctions policy revealed significant threats to national security and inconsistencies with approaches applied in the EU.

In particular, the draft law proposes to amend the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Associations” and the Law of Ukraine “On State Registration of Property Rights to Real Estate and Their Encumbrances” to effectively allow state registration based on a court decision (except for a settlement agreement approved by a court ruling), regardless of the sanctions imposed.

Currently, under the Law of Ukraine “On Sanctions,” establishing the fact that sanctions have been applied, which makes state registration of rights impossible, constitutes grounds for refusal of state registration. This rule is aimed at ensuring strict compliance with imposed sanctions restrictions and preventing the re-registration and subsequent withdrawal of frozen assets. However, the draft law proposes adding an exception — “except for the state registration of rights based on a court decision (except for a settlement agreement approved by a court ruling).” As a result, if the draft law is adopted, court decisions would take precedence over sanctions imposed by Presidential Decree. It would become possible, for example, to re-register real estate or rights to a legal entity based on a district court decision in a civil case.

Such changes would not only pose threats to national security and undermine the effectiveness of sanctions policy but also contradict EU approaches, negatively affecting the harmonization of Ukrainian legislation within the framework of Ukraine’s and its government’s European integration efforts.

According to Part 1, Article 5 of the EU Council Regulation “Concerning Restrictive Measures in Respect of Actions Undermining or Threatening the Territorial Integrity, Sovereignty and Independence of Ukraine” (№ 269/2014 of March 17, 2014), the unfreezing of assets pursuant to a court decision is possible only by a decision of a competent authority and only under strict conditions.

Moreover, such a practice is not typical in the legislative regulation of sanctions in other partner countries. For example, in the United Kingdom, it is also necessary to obtain a special license to enforce a court decision. This requirement is provided for in paragraph 5(1) of Schedule 5 to The Russia (Sanctions) (EU Exit) Regulations 2019.

Thus, the legislation of partner countries follows the approach that unfreezing the assets of a sanctioned person cannot take place automatically based on a court decision; instead, a licensing mechanism applies.

It should also be noted that the proposals of draft law №13606 are inconsistent with the objectives of draft law  №12406 (on criminalizing the violation and circumvention of sanctions), which is currently being prepared for adoption in the second reading, as they create additional loopholes for circumventing sanctions restrictions.

The Institute of Legislative Ideas, as co-author of draft law №12406, continues to emphasize the need to introduce in Ukraine a mechanism for granting permits to perform actions prohibited by sanctions, which would also cover the possibility of enforcing court decisions. Such a mechanism would enable Ukraine to fulfill one of its European integration commitments, make sanctions policy more flexible, minimize the risk of human rights violations, enhance transparency, and bring Ukrainian legislation closer to the best international standards.

In light of the above, the Analytical Center “Institute of Legislative Ideas” recommends not supporting the adoption of draft law №13606 in its current version and calls for further improvement of sanctions policy, particularly in terms of introducing a mechanism for granting permits to perform actions prohibited by sanctions.