Important Draft Laws. Issue 23: Creation of the Ministry of Demography, Exemption of Clergy and Believers from Mobilization, and New Bankruptcy Rules

During this period, 39 draft laws were registered: three from the President, three from the Cabinet of Ministers, and 33 from MPs. The bills covered many areas, including culture, the judicial system (qualification exams for judicial candidates, administrative liability of legal entities), finance (military levy), and more. Read about them in our review.

Improvement of the Bankruptcy Procedure Code

Three draft laws have been registered in the Verkhovna Rada to improve the Bankruptcy Procedure Code. 

Bill 11446 expands the list of grounds for refusing to initiate bankruptcy proceedings. The commercial court would not have the right to initiate a bankruptcy case with the debtor providing evidence of solvency. Currently, the court can refuse to open a case if other legal disputes between the debtor and creditor over financial obligations are ongoing or if the debtor has satisfied all creditor claims before the court’s preparatory hearing. 

Bill 11449 proposes granting creditors the right to initiate insolvency proceedings, which, under current law, only debtors themselves can do. In this case, a court decision must confirm an undisputed debt (where the debtor has no objections to the creditor’s claims) as one of the grounds for opening proceedings.

Bill 11447 clarifies the list of tasks for the court during the preparatory hearing. Under the Bankruptcy Procedure Code, the court reviews submitted documents during the preparatory hearing, listens to the parties’ explanations, and evaluates the validity of the debtor’s objections. In addition to these tasks, the bill specifies that the court can verify the existence of the debt based on the evidence and objections presented by the parties, assess the validity of the applicant’s claims, determine the facts of the case that need to be established and gather evidence; rule on recusal requests; and establish the order of the case review. These changes aim to align the Bankruptcy Procedure Code with the provisions of the Commercial Procedural Code. 

Eliminating corruption risks in the reservation process

Bill 11453 aims to eliminate corruption risks associated with issuing documents required for reservations at Territorial Recruitment and Social Support Centers (TRSSC). The bill’s authors clarify specific provisions of the “Law on Mobilization.”

If reservation documents require certificates from the TRSSC, they must provide all necessary documents within three working days following a written request. Additionally, TRSSC employees are prohibited from sending individuals to the military medical commission or mobilizing them within ten days of the request (or until a decision on granting deferment is made). 

Improvement of the demobilization and rotation procedure for members of the military

Bill 11460 proposes allowing the discharge of military personnel who have served for at least three years during martial law, with at least 18 months of active participation in combat missions. These service members would be entitled to a 12-month deferment from re-mobilization after their discharge. If they voluntarily agree to continue service beyond the 36 months, their pay would be doubled.

Additionally, military personnel who voluntarily joined the service cannot be transferred to other units or branches of the military without their written consent. 

The bill also addresses the issue of reserving personnel. The authors propose reserving all employees of the State Border Guard Service, NABU, and SES fire and rescue units. Additionally, they suggest reserving half of the employees of the National Police, SBI, ESB, the prosecutor’s office, the State Emergency Service (except for employees already fully reserved), the State Criminal Enforcement Service, the Judicial Security Service, justice system institutions, pre-trial investigation bodies, and the patronage services of state authorities.

Currently, the share of reserved personnel for these services is determined by Cabinet of Ministers Resolution No. 76, which has been amended several times since the full-scale invasion. For instance, in 2022, all employees of the National Police, NABU, ESB, and SBI were reserved, while SES employees were not. In 2023, SES employees were exempted from conscription, and judges, some ministry staff, and parliamentary personnel were added to the reserved list. In 2024, NABU, ESB, and SBI could reserve up to 50% of their staff, while the National Police and SES could reserve more if needed. The bill’s authors want to codify these reservation conditions into law, making them harder to change. 

Additionally, they propose allowing individuals with a deferment or reserved status to leave the country without restrictions, provided they present a deferment document. 

Redistribution of military levy to support the Armed Forces of Ukraine

Bill No. 11442 proposes that all funds collected from the military tax be allocated to a special fund within the State Budget of Ukraine. Currently, the military levy is part of the general fund revenues of the State Budget. These funds would be directed exclusively to the needs of the Armed Forces of Ukraine in the following proportions:

• 50% for weapons and military equipment;
• 50% for payments to service members.

This bill aims to ensure stable funding to enhance the combat capability of the Ukrainian army. 

Incidentally, a year ago, we published an article recommending that the military levy be targeted and used exclusively for defense needs. 

Exemption of clergy and believers from mobilization

Bill No. 11439 proposes that clergy of religious organizations, whose activities are not banned in Ukraine, and citizens who provide written confirmation that military service contradicts their religious beliefs be exempt from mobilization. Instead, they would be assigned to alternative (non-military) service. At the same time, these individuals may choose to voluntarily enlist in military service under contract if they so wish.

Strengthening liability for violations of cultural heritage protection laws

Bill No. 11459 proposes granting local authorities the right to seize or purchase cultural monuments into communal ownership. Actions leading to the damage or destruction of the monument would result in a warning for the owner, along with a set deadline to implement preservation measures. If these measures are not implemented, the Cultural Heritage Protection Authority may confiscate or buy out the monument.

People’s deputies are also proposing to increase fines for violating legislation on the protection of cultural heritage: 

The accompanying draft law expands the list of criminal and administrative offenses in cultural heritage protection. It proposes introducing criminal liability for: 

• Destruction or damage to cultural monuments that are under state protection or in the process of being included in cultural heritage registers;  
• Submission of false information in urban planning documentation;  
• Failure to comply with orders from cultural heritage protection authorities or obstruction of their activities;
• Facilitation of illegal urban development activities;  
• War crimes against cultural heritage.

Such actions may be punishable by fines or imprisonment. Additionally, depending on the severity of the crime, the owner may be stripped of their rights to the monument and prohibited from engaging in professional activities in urban planning for up to three years. It is expected to promote a more careful attitude toward cultural heritage and enable the state and local authorities to take adequate measures to prevent violations in this area.

Establishment of the Ministry of Demography and Diaspora of Ukraine

The bill on the fundamentals of state demographic policy (No. 11424) proposes the creation of the Ministry of Demography and Diaspora of Ukraine. Its functions would include developing strategic documents on state demographic policy and strengthening ties with the diaspora, particularly involving the diaspora in Ukraine’s recovery, attracting investments to the Ukrainian economy, maintaining continuous connections with Ukraine, and coordinating projects with the Ukrainian diaspora and overseas Ukrainians. 

Additionally, the bill proposes the establishment of the Fund for the Restoration of Ukraine’s Demographic Potential and the Interdepartmental Coordination Commission on Demographic Policy. The Fund would gather resources from various sources (state budget, donors, grants, EU programs, donations, etc.) and finance projects within the framework of state demographic policy, including initiatives to return refugees and migrants. The Commission, chaired by the relevant Deputy Prime Minister, would coordinate various departments’ activities in the demographic policy field. 

Some of the responsibilities of the new Ministry of Demography and Diaspora would overlap with the existing powers of the Ministry of Social Policy. The creation of new executive bodies alone would not solve the demographic issues. Specific and practical measures are needed to improve the country’s socio-economic conditions to influence demographic indicators.

Although the bill’s authors claim that its implementation will not require additional expenses, establishing new bodies and structures will necessitate funding for the administrative apparatus. 

Amendments to the rules of the eRecovery program

Two draft laws, Nos. 11444 and 11440 have been registered in the Verkhovna Rada. They propose amendments to the eRecovery program. These changes simplify the process of obtaining compensation for housing destroyed or damaged by Russia’s aggression. 

Under Bill No. 11444, Ukrainians purchasing housing using eRecovery compensation funds would be exempt from the mandatory state pension fee (1% of the property value in the purchase-sale agreement). 

Accounts opened to receive compensation cannot be seized or have funds withdrawn from them, except in cases of illegal receipt of compensation. Liability is introduced for the misuse of compensation: recipients must return the total amount if misused.

The bill also introduces the concept of territories unfit for habitation. The Cabinet of Ministers would determine the procedure for recognizing settlements as uninhabitable. Such territories would include areas and settlements where more than 70% of housing and infrastructure (such as natural gas, electricity, heating, water, and sewage systems) have been damaged or destroyed. Housing in these zones would be considered destroyed, and no inspection of such housing would be required to receive compensation.  

Compensation could be used to repay loans for purchasing or investing in new real estate or land plots. If the damaged property was purchased through a mortgage or is being used as collateral, compensation would only be provided with the creditor’s consent.

Bill No. 11440 simplifies the procedures for obtaining compensation for housing not registered in the State Register of Property Rights (SRPR) (housing acquired or purchased after 2013 was registered automatically). Previously, to receive compensation for such housing, obtaining an ownership certificate from the Bureau of Technical Inventory (BTI) was necessary. In many cases, this was impossible due to the destruction of BTI offices or their location in occupied territories or combat zones.

The legislative project proposes that registrars and notaries be allowed to enter data into the SRPR based on paper ownership documents without the need to verify information with the BTI if access to the archives has been lost. 

A list of BTI offices would be created, and property registration through these offices would grant the right to use the simplified procedure. During martial law and for one year after its termination, a restriction (a prohibition on disposing of or using real estate) would be imposed on property ownership rights for properties registered through registry books at BTI without being entered into the Register of Property Rights if access to these registry books is unavailable. A court decision can obtain permission to dispose of such property before the end of martial law, provided access to the BTI registry books is restored.

Increased fines for business offenses

Bill No. 11443 amends the Criminal and Criminal Procedure Codes. The main changes involve increasing fines for legal entities, introducing non-financial punishment measures, and implementing special confiscation procedures.

The Criminal Code proposes increasing the amounts of fines as follows: 

• For minor offenses, the fine would range from UAH 170,000 to UAH 340,000 (currently from UAH  170 to  UAH 340,000);
• For serious crimes, from UAH 340,000 to UAH 34 million (currently from UAH 340,000 to UAH 1.275 million);
• For particularly serious offenses, from UAH 1.275 million to UAH 127.5 million (currently from UAH 1.275 million to UAH 1.7 million).

Non-financial punishment measures are also being introduced, including temporary restrictions on activities (such as using licenses, participating in public procurement, purchasing domestic government bonds, privatizing state property, etc.) and limitations on receiving rights and benefits (such as prohibitions on receiving state benefits, attracting funds from international technical projects, or obtaining Diia City resident status). These measures serve as punishments for money laundering and corruption. They would be applied only by court decision and for six months to 3 years.

Additionally, types of punishments for legal entities now include special confiscation. This involves the seizure of property acquired through criminal means, such as bribing state officials (corruption) or property intended for bribery for the benefit of the state. 

The Criminal Procedure Code now outlines the procedure for criminal proceedings against enterprises and the procedure for the participation of a representative and legal counsel for the legal entity.

Termination of automatic extension of detention (arrest) without a court decision

Suppose the court’s decision on detention expires, and the court cannot review the extension. In that case, detention is automatically extended until a court decision is made, but for no more than two months. Draft law No. 11436 proposes eliminating part 6 6 of Article 615 of the Criminal Procedure Code of Ukraine and releasing detainees from custody if there is no court decision to extend their detention.

Changes in the rules for IQ testing for future judges

Currently, candidates for the judge position must pass a qualification exam, which includes anonymous testing and practical tasks. Anonymous tests cover cognitive abilities (the so-called IQ scale), Ukrainian history, and law, while practical tasks focus on each court specialization (administrative, economic, and general: civil and criminal). Candidates pass the exam by scoring over 75% on each test and practical task.

Draft laws 11425 and 11425-1 propose removing the requirement to score 75% on the cognitive abilities (IQ) test, maintaining this requirement for other tasks. Instead, a candidate would be considered to have passed if they achieve an “acceptable average score” on the cognitive abilities test, as determined by the High Qualification Commission of Judges of Ukraine (HQCJ). Additionally, the proposals clarify that the HQCJ would not publish the cognitive abilities test program and question list on its official website. However, it would continue to publish the program and questions for other subjects at least 30 days before the test (as it currently does). 

The proposal’s authors justify the need for these changes by stating that Ukraine needs more ready and validated tests for judicial position competitions, which raises doubts about their reliability and validity. Secondly, the HQCJ fears that most judicial candidates would be unable to meet the 75% threshold during testing. This concern is supported by the competition for disciplinary inspectors of the High Council of Justice, where only 19% of candidates successfully passed the test. This suggests that the current tests are too complex and do not align with candidates’ cognitive abilities.

However, introducing such changes could significantly reduce the transparency of the judicial selection process. Setting an “acceptable average score” at the discretion of the HQCJ, without clear criteria for its determination, increases discretion and opens up opportunities for corruption. Additionally, the refusal to publish the cognitive abilities test program and question list deprives candidates of equal preparation opportunities and could be used to manipulate test results.