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Annex 2

LAW OF UKRAINE

On sanctions

Verkhovna Rada of Ukraine

based on the provisions of the Constitution of Ukraine, the Declaration of the State Sovereignty of Ukraine, and universally accepted international rules and regulations,

stating that priorities for the national interests of Ukraine are in particular ensuring constitutional rights and freedoms of humans and citizens, protection of the state sovereignty, territorial integrity and inviolability of the state borders, prevention of interference into the domestic affairs of Ukraine, development of equal mutually beneficial relations with other states of the world in the interests of Ukraine,

claiming that direct or indirect interference into domestic or foreign affairs of Ukraine under any pretext is intolerable,

recognizing the need for urgent and efficient reaction to existing and potential threats to the national intersts and the national security of Ukraine, including hostile actions, armed assault of other states or non-state formations, damage to life or health of population, hostage taking, expropriation of state property and property of individuals and legal entities, infliction of material damage, obstructing sustainable economic growth and full excersise of rights and freedoms by citizens of Ukraine,

adopted this Law:

Article 1. Sovereign right of Ukraine for defence

1. In order to protect national interests, national security, sovereignty and territorial integrity of Ukraine, to combat terrorism, and to prevent violation of rights, freedoms and legitimate interests of Ukrainian citizens, public and state interests, and to renew their violated rights, special economic and other restrictive measures may be imposed (hereinafter - the sanctions).

2. Sanctions can be imposed by Ukraine to a foreign state, a foreign legal entity, a legal entity controlled by a foreign legal entity or a non-resident individual, foreigners, persons without citizenship, and entities involved in terrorism.

3. Imposition of sanctions is not limited by imposition of other measures to protect national interests, national security, sovereignty and territorial integrity of Ukraine, its economic independence, rights, freedoms and legitimate interests of Ukrainian citizens, public and state interests.

Article 2. Legal basis for sanctions

1. The legal basis for imposing sanctions is the Constitution of Ukraine, international treaties ratified by the Verkhovna Rada of Ukraine, laws of Ukraine, legislative acts of the President of Ukraine and the Cabinet of Ministers of Ukraine, decisions of the National Security and Defense Council of Ukraine, respective principles and provisions of the international law.

Article 3. Grounds and principles for imposing sanctions

1. Grounds for imposing sanctions are the following:

1) actions of a foreign state, foreign legal entity or individual, other entities that pose real and/or potential threat to national interests, national security, sovereignty and territorial integrity of Ukraine, support terrorism and/or violate rights and freedoms of humans and citizens, public and state interests, lead to occupation of territory, expropriation or limitation of property rights, damage to property, obstructing sustainable economic growth and full excersise of rights and freedoms by citizens of Ukraine;

2) resolution of the United Nations General Assembly and the United Nations Security Council;

3) decisions and regulations of the Council of the European Union;

4) violations of the Universal Declaration of Human Rights, the Charter of the United Nations.

2. Imposing sanctions is based on principles of legitimacy, transparency, objectiveness, conformity to the goals and efficiency.

3. Grounds for imposing sanctions also include actions listed in paragraph 1 part 1 of this article targeted at another foreign state, sitizens and legal entities of the latter and taken by a foreign state, a foreign legal entity, a legal entity controlled by a foreign legal entity or a non-resident individual, foreigners, persons without citizenship, and entities involved in terrorism.

Article 4. Types of sanctions

1. Pursuant to this Law the sanctions include:

1) asset freezing - a temporary restriction of a persons rights to use and manage their own property

2) trade restriction

3) restriction, partial or full suspension of resources transit, flights and transportation through the territory of Ukraine

4) actions preventing capital drain from Ukraine

5) suspending economic and financial obligations

6) termination or revoking of licenses or other permits that are prerequisites for the certain types of activity, in particular, termination or revoking of special permits for the subsurface use

7) ban on participation in privatization and rent of state property by residents of a foreign state and persons who are directly or indirectly controlled by residents of a foreign state or act in the interests thereof

8) prohibition to use radio frequencies of Ukraine;

9) restriction or termination of telecommunication services and use of communal telecommunication networks

10) prohibition on state procurements of goods, works and services from state-owned legal entities that are residents of a foreign state and from legal entities where part of the authorized capital is owned by a foreign state, also prohibition on state procurements from other economic entities that sell goods, works and services that originate from a foreign state under sanctions pursuant hereto

11) prohibiting or restricting entry of foreign non-military ships and warships into the territorial sea of Ukraine, its internal waters, ports, and of aircraft into the airspace of Ukraine or their landing in the territory of Ukraine

12) prohibiting, in full or in part, any transactions to be effected with securities issued by entities that are subject to sanctions under this Law

13) disallowing the issue of permits and licenses of the National Bank of Ukraine (NBU) to invest in a foreign state, hold monetary values in accounts and deposit thereof in the territory of a foreign state

14) discontinuing the issue of permits and licenses on bringing into and out of Ukraine monetary values, and restraining cash withdrawals using payment cards issued by residents of foreign states

15) banning the registration by the NBU of a member of an international payment system, the payment institution of which is a resident of a foreign state

16) prohibiting an increase of the authorized capital of economic entities, enterprises, in which a resident of a foreign state, foreign state, legal person, a member of which is a nonresident or a foreign state, own 10 percent or more of the authorized capital or can influence the management of a legal entity or its activity

17) introducing additional measures related to ecological, sanitary, phytosanitary and veterinary control

18) terminating trade agreements, joint projects and industrial programs in certain spheres, particularly, in defense and security

19) prohibiting technology transfers, rights to objects of intellectual property

20) discontinuing cultural exchanges, scientific cooperation, education and sports liaisons, entertaining programs with foreign states and foreign legal entities

21) refusing and cancelling visas for residents of foreign states, restricting in other ways entering into the territory of Ukraine

22) terminating international treaties ratified by the Verkhovna Rada of Ukraine

23) annulling official visits, meetings, negotiations related to the conclusion of treaties or agreements

24) depriving state awards of Ukraine, other forms of distinctions

25) other sanctions conforming to the principles of their application set forth by this Law.

2. Sanctions under this Law are not deemed as measures to protect rights and interests of foreign economic activity entities. The procedure and terms of application of such protective measures are regulated by a specific law.

Article 5. Application, cancellation and amendment of sanctions

1. Proposals for the application, cancellation and amendment of sanctions shall be submitted for consideration of the National Security and Defense Council of Ukraine by the Verkhovna Rada of Ukraine, the President of Ukraine, the Cabinet of Ministers of Ukraine, the National Bank of Ukraine, and the Security Service of Ukraine.

2. A decision on the application, cancellation and amendment of sanctions against a foreign state or an undefined group of people engaged in carrying out certain activity (sectoral sanctions) provided for in Article 4 Part 1 paragraphs 1-5, 13-15, 17-19, 25 of this Law, shall be adopted by the National Security and Defense Council of Ukraine, enacted by a decree of the President of Ukraine and approved by a resolution of the Verkhovna Rada of Ukraine within 48 hours from the day of the decree issue by the President of Ukraine. The respective decision becomes effective from the moment the resolution of the Verkhovna Rada of Ukraine is issued and is legally binding.

3. Decision on imposing, termination and amendment of sanctions to certain foreign legal entities, legal entities controlled by a foreign legal entity or a non-resident individual, foreigners, persons without citizenship, and entities involved in terrorism (personal sanctions) set forth in paragraphs 1-23, 23-25 part 1 article 4 hereof is taken by the National Security and Defense Council of Ukraine and is put into force by decree of the President of Ukraine. The respective decision becomes effective from the moment the decree of the President of Ukraine is issued and is legally binding.

4. Termination of international treaties ratified by the Verkhovna Rada of Ukraine as a sanction pursuant hereto is implemented by the Verkhovna Rada of Ukraine on the recommendation of the President of Ukraine or other subject of legislative initiative.

5. Decision on imposing sactions should contain a timeframe for their implementation excluding the sanctions that imply suspension of rights or other sanctions that in essence cannot be applied temporarily.

6. Decision on amending sanctions is taken by the same authority that made the decision on imposing the sanctions pursuant hereto at its own initiative or based on proposals from other state authorities set forth in part 1 of this article.

7. Decision on cancellation of sanctions is taken by the same authority that made the decision on imposing the sanctions pursuant hereto if the sanctions have achieved the goals.

Article 6. Final provisions

1. The present Law shall come into effect from the day following the day of its publication.

2. Laws and regulations of Ukraine shall be applied to the extent they do not contradict this Law.

 President of Ukraine

PETRO POROSHENKO

 

Kyiv
14 August 2014
No. 1644-VII

 

 

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