EBA Urges Verkhovna Rada Speaker and Parliamentary Factions to Reject Draft Law Threatening Property Rights

The European Business Association (EBA) has raised concerns over draft law No. 11195, which aims to protect third-party property rights but could potentially lead to the state seizing assets from non-sanctioned individuals. In a press release, the EBA has called on Ruslan Stefanchuk, the Speaker of the Verkhovna Rada, and the heads of parliamentary factions to not support this document.

The draft law proposes giving public authorities the power to foreclose 100% of a block of shares or securities owned by a legal entity if a person in the ownership structure is subject to an asset freeze, even if their ownership is less than 25%. If the sanctioned person owns 25% or more of the shares, the alienation will be done through a court application.

According to EBA experts, the draft law does not provide a transparent and quick mechanism for restoring property rights of non-sanctioned shareholders. It could potentially allow the state to appropriate shares belonging to innocent individuals, leading to a shutdown of businesses and scaring away foreign investors.

The EBA emphasizes that such legislative proposals violate fundamental constitutional rights and international obligations, and could harm Ukraine’s investment prospects. The draft law, if adopted, could result in the state misappropriating assets and depriving founders of their rights to own and manage a legal entity, even if they have not been sanctioned.

The EBA’s concerns highlight the potential negative impact of the draft law on Ukraine’s investment climate and urge lawmakers to reconsider their support for the document.