According to requirement 2.5.f of the EITI Standard, the beneficial owner of a company is a natural person who directly or indirectly owns or exercises control over a legal entity.

Ukrainian legislation defines that the ultimate beneficial owner (hereinafter -"beneficial owner") is:

The indicators of an individual`s direct decisive influence on the activities of a legal entity is direct ownership of at least 25 per cent of the authorised (share) capital or voting rights of a legal entity. For indirect decisive influence, the same percentage of indirect ownership or exercise of decisive influence in another way

An individual who has a formal right to 25 per cent or more of the share capital or voting rights in a legal entity and acts as a commercial agent, nominee owner or nominee holder, or merely as an intermediary with respect to such right, is not a beneficial owner.

The concept of beneficial owner used for the preparation of EITI reports in the sense provided for by the Law on the Prevention and Counteraction of Legalization (Laundering) of Income.

Ukraine is one of the countries where there is an obligation to disclose information about the beneficial owners of all legal entities during state registration of their creation / changes to information about them in accordance with the Law of Ukraine "On State Registration of Legal Entities, Individuals - Entrepreneurs and Public Organizations".

Such information is included in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organisations (hereinafter – the “USR”) and must be available online on the official website of the Ministry of Justice and the Unified State Open Data Portal. The same resources contain public information on the members (founders) of all legal entities registered in Ukraine, the amount of the authorised capital of such legal entities and the percentage of shares in the authorised capital owned by their members (founders).

Since March 2022, in connection with russia's military aggression against Ukraine, public access to USR and the possibility to make changes in the normal mode in order to protect the register information from unauthorized actions have been limited.

At the same time, even during this period, access remained possible to the USR on the basis of service contracts in the form of an application program interface (API) concluded with SE "NAIS", which is the technical administrator of the Unified and State Registers.

From December 26, 2022, access to the USR was restored. Information from the USR in electronic form is provided on the condition that the person who wishes to receive such information is identified using the means of a qualified electronic signature.

From May 2023, an applicant identified using a qualified electronic signature can access the information of the Register in electronic form through the portal of electronic services, Portal Diya, as well as using the service in the form of a USR application software interface on the basis of a contract concluded with the technical administrator of this registry.

The information published in the USR does not always fully meet the requirements of the Standard. For example, the information on the country of citizenship, date of birth, place of residence, nature and share of ownership is not always complete, including for technical reasons (e.g. due to heterogeneity and differences in the rules for storing information in the database during different periods of the USR operations).

In addition, the current legislation does not require the disclosure of beneficial ownership information in the USR for representative offices of non-resident entities, Joint Venture Agreements, or Production Sharing Agreements .

In 2022, there was a rule according to which legal entities registered before July 2021 had to submit documents to the state registrar within a year to update information about the beneficial owner in the USR.

Also in July 2022, it was supposed to enter into force requirement for annual confirmation of information about the final beneficial owner. However, due to the introduction of martial law, the updating and annual confirmation of beneficial owner information was postponed, and from December 29, 2022, the obligation to annually confirm information was abolished.

Instead, it was established that legal entities must submit updated information about the ultimate beneficial owner within six months from the date of recruitment. legal acts, which will approve the provisions on the form and content of the ownership structure and the methodology for determining the ultimate beneficial owner by a legal entity, but not earlier than 90 days after the termination or cancellation of martial law in Ukraine.

The form and content of the ownership structure, approved in 2021, provides a schematic representation of the ownership structure of a legal entity, which reflects all persons who directly or indirectly own this person independently or jointly with other persons or regardless of formal ownership have the possibility of significant influence on the management or activity of the legal entity. Samples of drawing up a schematic image of the ownership structure can be found on the official website of the Ministry of Finance of Ukraine under the heading "Financial Monitoring". 6 months from the date of entry into force of the Methodology (October 3, 2023), but no earlier than 90 days from the date of termination or cancellation of martial law in Ukraine.

On December 29, 2022, the Law of Ukraine "On Amendments to Certain Laws of Ukraine on Improving the Regulation of Ultimate Beneficial Ownership and Ownership Structure of Legal Entities" No. 2571-IX entered into force. The specified law was adopted with the aim of simplifying the submission of information about beneficial owners and ownership structure by legal entities entered in the USR and ensuring the entry of reliable data about beneficial owners into the register.

In 2022, the legislation did not provide for the inclusion of information on the ultimate beneficial owners of non-residents who have representative offices in Ukraine in the USR.

In 2022 and 2023, a number of amendments to regulatory acts aimed at eliminating this deficiency were adopted.

In addition, the requirement to enter information about representative offices that were registered before the introduction of the relevant rule into the USR is not addressed. Also, the specified changes do not address the disclosure of beneficial owners of non-resident members of the JVAs, who may not have permanent representation on the territory of Ukraine.

In Ukraine, there are non-state sources of information about the status of influential political figures. For example, the Open Register of National Public Figures of Ukraine, launched by the NGO "Anti-corruption Center". However, in 2022, access to the registry was closed due to martial law.

In 2017, Ukraine took an important step towards increasing transparency – it joined the Global Register of Beneficial Owners and became the first country to officially declare its readiness to provide data on beneficial owners for the register.

In order to establish and develop cooperation in providing information to the register, the Ministry of Justice, the State Agency for of e-governance, Transparency International Ukraine and the OpenOwnership consortium signed a Memorandum of Understanding. The CMU also made amendments to the by-laws that provide for the free transfer of information on beneficial owners to the Global Register of Beneficial Owners.

Information on the beneficial owners of Ukrainian companies contained in the UDR is already partially available in the Global Register of Beneficial Owners, but for correct display and search it will be necessary integration Further transformation of data to achieve full compliance with the Beneficial Ownership Data Standard is identified among the next steps under the Open Government Partnership Initiative in 2020-2021. However, this step has not yet been implemented.

Information about civil servants who are beneficial owners (controllers) of legal entities was available in the Unified State Register of Declarations of Persons Authorized to Perform the Functions of the State or Local Self-Government.

In 2022, the procedure for forming, maintaining and publication (provision) of information from the Unified State Register of Declarations of Persons Authorized to Perform State or Local Self-Government Functions. At the same time, in connection with the introduction of martial law on the territory of Ukraine in 2022, the deadline for submitting declarations was extended. Natural persons received the right to submit declarations within three months after the termination or cancellation of martial law or the state of war, which caused incomplete information in the register for 2022.

In September 2023, a law was adopted that restored electronic declaration and open access (taking into account security measures) to the register of declarations of persons, authorized to perform the functions of the state or local self-government. The law requires persons who in 2022-2023 did not submit a declaration of a person authorized to perform the functions of the state or local self-government to submit such declarations no later than January 31, 2024. occupied territories or where active hostilities are taking place, those who are being treated as a result of injury, etc., as well as family members of the specified persons) the obligation to submit declarations is postponed - no later than 90 days after the change of the conditions that grant the right to postponement.

At the beginning of December 2023, the National Agency on Corruption Prevention opened access to the Unified State Register of Declarations persons authorized to perform functions of the state or local self-government.

Information about owners of 5 percent or more of shares in joint-stock companies is available in the database of issuers posted on the website of the Agency for the Development of the Infrastructure of the Stock Market of Ukraine at the link http://smida.gov.ua/db/emitent. The specified database contains, among other things, information about the stock exchanges on which the shares of all issuers registered in Ukraine are placed.

On 13.05.2022, the NCCPFR suspended the license for the organization of trading products on commodity exchanges of PJSC "Ukrainian Interbank Currency Exchange" until the expiration date martial law As of the date of preparation of this Report, PJSC "Ukrainian Interbank Currency Exchange" has been excluded from the Register, and licenses to conduct activities on the capital markets have been canceled. At the same time, shares of only a small part of Ukrainian issuers are listed on stock exchanges. Among the accountable companies there are only two such companies:

Note: The data displayed on the map is current as of 2021.

Access to data on holders of special permits can be obtained online on the website of the Geoinform Ukrainy DNEP at the following link: http://geoinf.kiev.ua/specdozvoli/*.
*The information manager has stopped publishing data for the period of martial law.

The search system allows you to search for valid, invalid and temporarily suspended permits.

The following information is available in the system:

- the owner of the permit;

- information about the site subsoil provided for use (location, geographical coordinates, area, number of reserves on the date of issuance of the permit, degree of subsoil development, information on testing of reserves);

- registration number of the permit;

- date of issuance, duration and validity of the permit;

- type of useful minerals;

- basis for granting permission;

- type of use of subsoil, purpose of use of subsoil;

- special conditions of permission;

- requisites of agreement on conditions of use of subsoil area;

- the source of funding;

- the amount of the fee paid for the granting of a special permit.

As of the date of this Report, the register of special permits for subsoil use contains information on 136 special permits issued during 2020, all of which are valid.

Scanned copies of all these permits, together with agreements on the conditions of subsoil use (including work programs) are published on the website of the State Geonadra under the link: https://www.geo.gov.ua/nadrokorystuvannya/vydani-speczdozvoly-ta-ugody/*.
*The information manager stopped publishing data for the period of martial law.

Information about special permits from the above register is published or integrated into the following government resources:

In September 2021, information on special permits for the use of subsoil was posted on the State Geological Portal:

1) in the form of an interactive map, which outlines the contours of special permits for the use of subsoil in each of the regions of Ukraine, via the link: https://nadra.gov.ua/.

2) in the format available for further processing (.xlsx), as well as other formats (kmz, json) at the link: https://nadra.gov.ua/site/opendata*.

*The information manager has stopped publishing data for the period of martial law.

As part of the integration of state cadastres, in October 2019, a "Geonadra" layer with information on issued permits for the use of subsoil was applied to the Public Cadastre Map, to which access is provided by DNVP "Geoinform of Ukraine", at the link: http://newmap.land.gov.ua*.

*The information manager stopped publishing data for the period of martial law.

In 2019, the Database of Special Subsoil Use Permits was created on the Unified State Open Data Web Portal, which is subject to annual updates. Data are displayed in .xls format files separately for water and all other types of minerals.

The databases include, in particular, information about the owner, the state of subsoil use, the type of mineral, the industry in which the mined mineral is used, the name of the subsoil area provided for use, the registration number of the permit, the date of its issuance, the duration and validity of the permit. As of the date of this Report, information on special permits is partially reflected in these databases.

According to the Procedure for Granting Special Permits, the State Geosoil Service is required to publish, together with issued special permits, the corresponding agreements on the conditions of subsoil use, which are an integral part of such special permits.

The Law of Ukraine "On the Open Use of Public Funds" requires mandatory disclosure by managers and recipients of state and local funds budgets, state and communally owned business entities, information about the contracts concluded during the reporting period. At the same time, the amount of information made public does not include the text of the contracts.

The Law on EITI provides for mandatory disclosure to the Ministry of Energy of "material" conditions and extracts from agreements related to the extraction of minerals, namely: agreements on the conditions of subsoil use, URP, DSD and other contracts, on the basis of which project activities are carried out, within 1 month from the date of receipt relevant information from business entities. Business entities have 1 month from the date of conclusion of such agreements to transfer information to the Ministry of Energy.

At the same time, the Law on EITI does not set clear requirements for the publication of information regarding agreements concluded/amended before the law enters into force (that is, until November 16, 2018).

The main contractual document that defines the conditions of subsoil use is the agreement on the conditions of subsoil use.

The specified agreement is concluded between the State Geosoil Department and the holder of a special permit for the use of subsoil, and according to the Procedure for granting special permits, the Temporary Order and the Oil and Gas Law, it is integral to it part.
The agreement must contain conditions on the technical, technological, organizational, financial, economic, social, and environmental obligations of the parties and on the procedure for regulating relations between them in the process of subsoil use on the given subsoil area.
The specified agreement also contains a work program, which is drawn up as an appendix, and special conditions for the use of subsoil, which provide for:

1) requirements for work efficiency;

2) modern technologies of mineral extraction and processing;

3) the procedure for extracting minerals, in particular with the aim of preventing negative environmental consequences and ensuring the safety of built-up areas;

4) types, volumes and terms of work on the subsoil area;

5) grounds for termination of activity, related to the use of a subsoil area.

Additional conditions may be established in accordance with the legislation in the agreement on the conditions of use of an area of oil and gas-bearing subsoil located within the continental shelf or the exclusive (marine) economic zone of Ukraine concluded between the State Geosoil and the subsoil user.

Sample agreements on the conditions of subsoil use are approved by the order of the State Geodesy and posted on their official website at the link http://www.geo.gov.ua/primirni-ugodi-pro-umovi-koristuvannya-nadrami/.

Scanned copies of 136 special permits and corresponding agreements on the conditions for the use of subsoils are posted on the official website of the State Geodesy, which corresponds to the information in the register of special permits for the use of subsoils.

At the same time, separate conditions for the use of subsoils and the development of mineral deposits could be contained in the materials of the technical and economic substantiation of the conditions for the mineral raw materials that are not publicly available.

According to the Law on UPR, UPR provides that the state, represented by the CMU, entrusts the investor with the search, exploration and extraction of minerals (including oil, gas and condensate) for a specified period, and the investor undertakes to perform the assigned work at his own expense and at his own risk.

The investor has the right to compensation for expenses related to from URP, at the expense of part of the extracted products ("compensation products"). The quarterly share of compensatory products cannot exceed 70% of the total volume of produced products until the investor's expenses are fully reimbursed. The rest of the products ("profitable products") are distributed between investors and the state in the manner determined by the PSA. Until the moment of distribution, all extracted products are considered the property of the state.

According to the general rule, the URP is concluded based on the results of the competition. At the same time, the law also provides for certain cases of concluding a public procurement contract without holding a competition. More detailed information on such cases is provided in this subsection below.

The maximum term for which the agreement is concluded is 50 years with the possibility of extension at the initiative of the investor.

Some business entities that have a special permit for the use of subsoil, enter into a DSD with other business entities.

The DSD is not the basis for the emergence of the right to use the subsoil, but only regulates the civil-law relations between the parties to the contract.

For the DSD, their participants undertake to act together without forming a separate legal entity to achieve a certain goal. The conditions of the joint venture, including the coordination of the joint actions of the participants or the management of their joint affairs, the legal status of the property allocated for joint activities, the coverage of the costs and losses of the participants, their participation in the results of joint actions and other conditions are determined by agreement of the parties.

Ukrainian legislation does not contain special requirements for the joint venture in the field of subsoil use, except for the prohibition of making special permits as a contribution to joint activities

A concession is a separate form of public-private partnership. Until October 2019, concession contracts could be concluded for projects involving the search, exploration of deposits and extraction of minerals, extraction of hard coal, lignite (lignite), its processing

In particular, under the concession contract, state authorities or local governments could transfer individual mining facilities (for example, mining and beneficiation plants) for use by private individuals. Such private individuals (concessionaires) received the right to conduct the activities provided for in the contract (in particular, extraction) and to receive profits and products as a result of fulfilling its conditions.

Although the concession contract did not grant the right to use the subsoil, this type of contract was directly related to the extraction of minerals. In particular, the concession agreement provided that the concessionaire will carry out the types of activities clearly provided for in the agreement and will use the concession object for its intended purpose (for the extraction of minerals), and the concessionaire will be able to check compliance with this and other conditions of the agreement and terminate it if the concessionaire violates them. concession", the provisions of which do not apply to projects on prospecting, exploration of deposits and extraction of minerals, and which rules on the peculiarities of the concession of objects of the fuel and energy complex have been removed from the special legislation.

Thus, during 2020, concession contracts in the mining sector were not concluded.

* according to the data of the Ukraine national EITI Report for 2024