Important Draft Laws. Issue 25: New Public Procurement Law, Encouraging Patronage in Sports, and Strengthening Climate Security

Law on climate security

The main idea of the climate security bill is to establish the Climate Security Research Center. This would be an independent research and analytical body focused on climate issues, which will perform the following functions: 

• Conducting scientific research in the field of climatology;
• Monitoring climate factors and identifying potential climate threats;
• Forecasting climate changes and developing and implementing solutions to strengthen climate security, among other tasks.

The Research Center is expected to become a key institution within the system of bodies responsible for climate security (including the Verkhovna Rada, the Cabinet of Ministers, local authorities, and the Environmental Protection Ministry), as its work would form the basis for shaping state climate security policy. Funding for the institution’s creation is planned to come from environmental taxes on atmospheric emissions and discharges of pollutants into water bodies.

It is worth noting that in May 2024, the government registered a framework bill defining the foundations of national climate policy. Once passed, Ukraine is expected to establish a Scientific Expert Council on Climate Change and Ozone Layer Preservation, whose tasks are similar to the functions of the Research Center. Therefore, if both bills are adopted, the issue of distributing powers between these bodies will arise. 

New public procurement law

Bill 11520 aims to solidify the best practices implemented during martial law (Cabinet of Ministers Resolutions No. 169, 1275, and 1178, which currently regulate public procurement) and to improve public procurement rules in Ukraine in line with European standards. It introduces the following new procurement procedures:  

Innovative Partnership: This procedure allows the state to enter long-term contracts with companies to develop and implement new products or technologies. For example, if Ukraine needs to create a new energy management system for schools, the state can collaborate with a company to develop such a system from scratch. This innovation resembles the existing competitive dialogue procedure, where the buyer cannot precisely define the necessary technical and qualitative characteristics (specifications) of works or services and negotiates with procurement participants to decide.

Project Competition: The contracting authority announces a competition where participants submit project proposals (architectural, engineering, artistic, etc.). These proposals are evaluated based on technical excellence, innovation, aesthetic qualities, and more. The competition winner is granted the right to negotiate and sign a contract with the contracting authority using a negotiated procedure.

Dynamic Procurement System: This system is introduced for recurring purchases, such as office supplies, electricity, or repair services. Dynamic Procurement Systems (DPS) will expand the capabilities of Prozorro Market, enabling the procurement of not only goods but also services and works, which is crucial for recovery processes. DPS combines the advantages of an electronic catalog (automatic selection of the best offer) and open bidding (the possibility of appealing decisions).

Reserved Contracts: The state contracts with businesses founded by war veterans or people with disabilities. These state contracts provide these enterprises with additional opportunities for growth and development.

According to the legislative project, the government would receive more authority. It could determine which goods and services must be procured through the Prozorro Market electronic catalog, the dynamic procurement system, or reserved contracts. This expansion of the Cabinet of Ministers’ powers could lead to excessive government intervention in the procurement process, potentially limiting the rights of contracting authorities and their ability to address their specific needs.

The bill also allows contracting authorities to combine goods, works, and services into a single procurement process if these goods, services and works share a common goal or are interrelated. For example, this could involve purchasing medical equipment and services for installation and setup. Suppose the contracting authority plans to procure goods, services and works simultaneously. In that case, the electronic system’s procurement subject will be determined by the component with the highest cost or the one most critical for fulfilling the contract. 

The bill proposes raising the threshold amounts at which state institutions must conduct tenders through the Prozorro system. For goods and services, the proposed threshold is set at UAH 400,000 (currently UAH 200,000; UAH 100,000 during martial law). Goods valued between UAH 50,000 and 400,000 must be procured through electronic catalogs.

The threshold for works remains unchanged at UAH 1.5 million. Procurement of works valued between UAH 200,000 and UAH 1.5 million could be conducted without using the electronic system, but a mandatory report on the procurement must be published. On the one hand, raising the procurement thresholds may reduce the number of open tenders, potentially increasing the risk of abuse by contracting authorities. On the other hand, considering that the UAH 200,000 threshold was established in 2015, and inflation over this period is roughly 230%, this increase likely reflects an adjustment for inflation.

The bill removes restrictions on using non-price criteria. Currently, price must account for at least 70% of the decision-making weight, with the remaining percentage allocated to non-price criteria such as product quality, environmental sustainability, delivery speed, and more. After the bill is passed, contracting authorities can determine the list of criteria for selecting a supplier at their own discretion. While this aligns with European practices, it also introduces corruption risks, as non-price characteristics are significantly more complex to compare objectively.

The bill prohibits announcing new procurements until similar previously announced ones are closed. This aims to reduce instances of contracting authorities abandoning procurements midway. Between 2021 and 2023, businesses spent nearly UAH 7 million on submitting documents for never-completed tenders.

The bill also introduces a ban on participation in public procurements for citizens and legal entities with ties to Russia, Belarus, and Iran. 

Ban on Russian software and resources

The government proposes strengthening Ukraine’s digital security and cyber defense. One of the potential threats to the country’s defense capabilities is the widespread use of software products of Russian origin. The aggressor state could potentially use such software to access state information resources, restricted information, and the personal data of Ukrainian citizens.

Lawmakers propose banning Russian digital products and access to websites owned by sanctioned individuals or organizations to address this issue. New types of sanctions are being introduced to implement this measure.  

Specifically, the ban applies to software developers connected to the aggressor state or sanctioned countries or individuals. Using and configuring hostile software would be prohibited for legal entities only. Access to websites and services that threaten national security would also be banned.

An alternative bill proposes keeping only the first type of sanction, which involves banning the import, sale, and use of software products connected to Russia. The National Security and Defense Council of Ukraine (NSDC) would decide whether to apply such a sanction.

Right to demobilization in the event of the death of a stepsibling

The draft law proposes restoring the right to discharge from military service for those whose half-brother or half-sister died or went missing during combat. These provisions would also apply to citizens whose half-brother or half-sister was posthumously awarded the title of Hero of Ukraine for their merits during the Revolution of Dignity.

Establishment of Unmanned Systems Forces within the Armed Forces of Ukraine

Bill 11507 (approved on September 3) provides for officially including a new branch of the Armed Forces of Ukraine — the Unmanned Systems Forces. This decision formalizes the creation a new military structure, initiated by the President in February 2024.

Revocation of veteran status

The revocation of veteran status is proposed as a punishment for criminal offenses. The Criminal Code would be amended to stipulate that a court may revoke veteran status if a person is convicted of crimes against national security, peace, human security, or international order. Conviction for such crimes would result in the loss of veteran status and the corresponding benefits.

It should be mentioned that in August, the government registered a separate bill proposing that veteran status be revoked if a person is guilty of crimes against national security, falsified documents, provided false information to obtain the status, or voluntarily requested its cancellation. An alternative bill suggests clarifying that a person losing their status under these conditions would also forfeit all benefits and social assistance previously available to them. 

New fines for obstructing emergency services

Bill 11496 proposes introducing fines for parking vehicles that block the passage of firefighters and other emergency services. The fine would be UAH 1,700, and the violator would lose their driving privileges for three to six months. A related bill, 11497, stipulates that if actions by, say, firefighters were necessary to save lives or prevent significant damage and led to the destruction of property obstructing their work, such damage would not require compensation. The bill also proposes allowing civil protection services to move obstructing vehicles, even using special equipment, without first calling the police or a tow truck, as is currently required.

Preservation and protection of traditional folk crafts

The government bill 11526 aims to systematize data on folk craft artisans, their techniques, and products. 

The government proposes creating a State Register of Folk Craft Artisans to make it happen. This registry would help gather information about artisans, preserve their knowledge and skills, and promote Ukrainian folk crafts worldwide. The registry software has already been developed with international technical assistance through the EU InnoLab project. Donors would fund future expenses related to the registry’s operation. The Ministry of Culture and the State Arts Agency employees would maintain the registry. 

The register would display the artisans’ personal data, the date they obtained the status of a folk craft artisan, types of production, the town or village where they work, a list of their products, descriptions, and photos (if available). This information would be publicly accessible. 

To obtain the status of a folk craft artisan, applicants must fill out an application in the Register and await a decision from the State Arts Agency based on an assessment of their craftsmanship by renowned folk art masters. 

The bill proposes introducing a “Mark of Folk Craft Products” — a special designation that artisans can use to certify the authenticity of their products, making counterfeiting more difficult. 

Additionally, the bill prohibits the production of these crafts using animal and plant species listed in the Red and Green Books. 

Strengthening cultural heritage protection: New rules for acquisition and a significant increase in fines for violations

Bill No. 11498 proposes granting local communities the right to purchase cultural heritage objects if the owner or other individuals cause damage to the monument through illegal actions (a similar bill, 11459, was discussed earlier). The purchase price of such objects would be determined based on regulations approved by the government, and local authorities would handle the acquisition process. The bill also significantly increases fines for violations in cultural heritage protection by 10 to 20 times, raising them from thousands to hundreds of thousands of hryvnias, depending on the severity of the violation.

 New categories of violations are introduced, such as conducting work on newly identified cultural heritage sites without permission. Additionally, the bill proposes imposing fines not only on legal entities, as is currently the case, but also on individual entrepreneurs and civil organizations that own, use, rent, or commission work on cultural heritage sites.

Flexible management of archaeological heritage lands

Bill No. 11506 proposes changes to managing lands where archaeological monuments are located. Currently, these lands can only be in state ownership or must be expropriated into state ownership. 

The bill introduces the possibility of such lands being held not only by the state but also by local municipalities. This change would allow local governments to take responsibility for preserving archaeological monuments. If these obligations are violated, the lands could be forcibly reclaimed into state ownership. 

Promoting patronage in sports

Bill 11521 clarifies that anyone who transfers funds to the “Olympic Ukraine” and “Paralympic Ukraine” accounts is considered a patron of physical culture and sports. The patron status could be granted to those who directly financially support institutions, organizations, and activities related to developing the Olympic, Paralympic, and health-oriented movements.

To obtain this status, patrons must sign a patronage agreement with the beneficiaries and receive confirmation that the recipients have notified the Ministry of Youth and Sports or the local sports authority about the support. This would enable the government to better track which institutions and projects businesses support and to what extent.  

Sports patrons could benefit from privileges granted to this category under current legislation, including eligibility for state awards, memorializing their name on sports facilities or institutions, promoting their activities in the media, and tax benefits.

Lawmakers propose amendments to the Tax Code to incentivize businesses to support sports in Ukraine. Under the general system, taxpayers could reduce their taxable income by the amount of their patronage support, up to 0.75% of their total earnings, while sole proprietors (FOPs) could reduce it by up to 5% of their income. Currently, the tax incentive for businesses is an exemption from corporate income tax on up to 8% of total profit if the funds are directed towards supporting physical culture and sports. 

Changes in the system of continuous professional development for medical professionals

Bill 11527 proposes expanding the powers of the Ministry of Health to include: 

• Defining unified qualification requirements for medical, pharmaceutical, and rehabilitation individuals.
•  Developing procedures for certifying such professionals to ensure they meet these standards.
•  Creating a process for verifying the qualifications of individuals who received their education abroad, among other related tasks.

The Ministry of Health (MOH) would also be responsible for approving the list of specializations for higher and specialized pre-higher education in healthcare, regulations on internships, medical residencies, specialization courses, and continuous professional development programs.

Additionally, proposed changes to labor laws would require that professional standards in healthcare be approved only after agreement with the MOH. 

The possibility for the judiciary to recognize registered partnerships formed abroad

In Ukrainian legislation, there is a new provision on conflict of laws that allows courts to consider the legislation of foreign countries when resolving disputes involving foreigners. In the area of family relations, this applies only to official marriages.

In Europe, more and more countries are legalizing registered partnerships. In Ukraine, there have been attempts to legislate the regulation of such partnerships, but they have not reached a logical conclusion. This challenges our judicial system, which cannot resolve disputes concerning relationships registered abroad. Therefore, lawmakers propose allowing Ukrainian courts to address the legal and property issues of couples who registered partnerships abroad, using conflict of laws provisions without waiting for domestic legalization. These provisions would also apply to de facto (common-law) marriages recognized in Ukraine.

Incorrectly filed application Is not a reason for pension denial

The bill clarifies that the Pension Fund cannot refuse to grant a pension if the application is not in the standard format but contains all the necessary information and accompanying documents. This also applies to citizens requesting pension recalculations. Thus, the Pension Fund would be prohibited from unjustifiably denying pension applications, which often happens now and creates additional bureaucratic obstacles for future pensioners and increases the burden on the courts.