Important Draft Laws. Issue 53: Updated Civil Code, Investment Screening, and Oversight of Local Authorities’ Decisions

Updated Civil Code: digital rights, online contracts, the right to be forgotten, and risks to freedom of speech

Bills No. 14056 and 14057 propose a new version of the first two books (out of six in total) of Ukraine’s Civil Code—those on general provisions and personal rights. Most of the amendments modernize outdated norms, addressing digital property, the internet, new forms of contracts, privacy protection, and the automation of legal relations. Yet some provisions have drawn sharp criticism from journalists, human rights advocates, and legal experts.

One of the most debated clauses is the new definition of false information. Under the draft, information would be deemed false if it violates the presumption of innocence (Article 277)—that is, it would be prohibited to call someone guilty without a court verdict publicly. The bill also stipulates that value judgments are not subject to proof (Article 277); however, if they cause moral harm, the affected person may seek moral compensation (Article 280). This could open the door to a new wave of lawsuits against journalists, bloggers, or anyone expressing a negative opinion about a public figure. Moreover, as under current legislation, Bill No. 14057 would permit preventive bans on publication—allowing an individual or public authority to petition a court, even before a piece is released, to prohibit its dissemination (Articles 278–279). This applies when a person believes their personal rights might be violated. While such provisions currently cover information published in newspapers, books, films, and television or radio programs, the bill would extend them to digital platforms, including social networks, websites, blogs, and video-hosting services.

The update also concerns personal rights in the digital space. A person would have the right to request the deletion of information about themselves if it is false, outdated, no longer of public interest, or violates their rights (“the right to be forgotten,” Article 302-2). In Ukraine’s context, however, there are concerns that this provision could be used to remove critical materials about public figures—even when those materials contain accurate information.

A significant innovation is the recognition of digital objects as property. Previously, the law did not clearly define whether one could own an account, cryptocurrency, digital photograph, or domain name—but under the draft, these objects would be officially recognized as property (Article 177-5). A person can transfer them by inheritance, sell them, or seek legal protection through the courts.

The right to the protection of one’s image, voice, name, and pseudonym would also be significantly expanded—these elements would be recognized as components of personal rights. Their use without the owner’s consent, especially in the media, on social networks, or in advertising, could be considered a violation (Articles 294-3, 300–302, 306-1, 306-3, 306-4).

The bill would also introduce new forms of compensation for moral harm—for example, the possibility of a public apology, retraction (Article 277), right of reply (Article 277-1), and reconciliation (Article 277-2). In some cases, regardless of whether a journalist’s fault is proven, a person would have the right to demand that their version of events be published in the same manner as the original material in which they were mentioned. This provision could significantly affect the work of journalists, as it would impose an obligation to give a platform even to those mentioned only in passing—if they believe their rights have been violated.

Law on the screening of foreign direct investments

Bill No. 14062 proposes introducing in Ukraine a mechanism for screening foreign direct investments—that is, a special procedure to assess their potential impact on national security. Under this mechanism, a foreign investor, before agreeing to acquire a stake in a company or obtain control over it, would be required to submit documentation to the Ministry of Economy. Within the Ministry, the government would establish a Commission for Assessing the Impact of Foreign Investments, which would evaluate risks and analyze the investor’s ownership structure. The Commission would necessarily include representatives of the Security Service of Ukraine, the Foreign Intelligence Service, the Ministry of Foreign Affairs, as well as relevant sectoral authorities responsible for protecting critical infrastructure.

Screening would not apply to all investments, but only to those involving critical infrastructure; enterprises engaged in the production or trade of military or dual-use goods; or companies that exploit strategic mineral resources. The review would be mandatory if an investor sought to acquire more than 25% of the voting rights in a company operating in one of the above sectors, to appoint executive bodies or elect a majority of the supervisory board, or to purchase assets valued at more than 10% of the company’s total assets.

The draft law would set clear time frames for such reviews: the Ministry of Economy would be required to consider the investor’s application within 90 days. Following the review, the investor would receive either approval, conditional approval (for example, for a smaller investment amount), or refusal. Once approved, the investment would be subject to ongoing monitoring—the Ministry of Economy would track any changes in the investor’s ownership structure and compliance with the terms of the agreement, with all data entered into the Register of Foreign Investors.

In the event of a breach of the terms of an investment agreement, the bill would establish sanctions, including deprivation of voting rights and dividends, invalidation of transactions, and a fine amounting to 50% of the investment value.

Oversight of local council decisions and creation of a personnel reserve for heads of district administrations

Current legislation does not provide for a formal review of the legality of regulatory acts adopted by regional, village, township, city, or district councils. If a council adopts an unlawful decision or one that violates someone’s rights, that act can only be challenged in court. Bill No. 14048 would authorize the government to designate a state body responsible for reviewing the legality of regulatory acts adopted by regional councils (the respective local administration would review acts of other councils). The review would determine whether such acts comply with the law, whether they were adopted within the council’s powers, and whether proper procedures were followed. The bill would allow 60 days from the date of adoption to conduct the review. If any violations or irregularities are identified, the state body or local administration would, within three days of their discovery, require the council to correct them, granting twenty days for compliance. If the violations are not remedied, the matter could be referred to court with a request to annul the act. In addition, the same body or local administration would be empowered to suspend the implementation of decisions that pose a threat to Ukraine’s territorial integrity, while simultaneously petitioning the court to declare them invalid.

The bill would also change the procedure for appointing heads of district state administrations. Instead of submitting a single candidate, the head of a regional administration would now submit three nominees to the government, which would in turn forward them to the President for consideration. At least two of these candidates must come from the personnel reserve. This reserve would be formed through a competitive selection process conducted by the Senior Civil Service Commission. The Commission would submit candidates to the Cabinet of Ministers, which would select individuals for inclusion in the reserve. The procedure for organizing the reserve and providing professional training to its members would also be approved by the government.

New rules for dismissing employees and local deputies, and expanded powers for military administrations during martial law

Under current regulations, an employee may be dismissed if they fail to appear at work for more than four consecutive months without explanation. Bill No. 14063 would introduce an additional ground for dismissal—if the employer has been unable to contact the employee for more than six months or if the employee’s whereabouts are unknown.

Currently, a labor contract may be suspended for up to 90 days if, due to hostilities or occupation, the employer and employee are unable to perform their duties. The bill would retain these grounds but allow the suspension of a labor contract for the entire duration of martial law. If, as a result of the war, the employer loses access to property or facilities and is unable to provide employees with work, they would be entitled to terminate the employment contract.

Currently, an employer must fully settle accounts with an employee whose workplace is located in a temporarily occupied territory on the day of dismissal. The bill would allow such payments to be made later, after the temporary occupation has ended.

 Internally displaced persons are already entitled to terminate their employment contracts through employment centers if they are unable to return to their previous workplaces. The bill would extend this right to internally displaced pensioners.

Currently, the heads of military administrations do not have the authority to dismiss local government officials. The bill would grant them this authority, allowing them to terminate early the mandates of, and dismiss, local government officials and the staff of local councils and their executive committees, as well as to approve temporary council structures for the period of martial law.

The bill also proposes new rules for the resignation of local council deputies. Currently, a deputy cannot relinquish their mandate solely by submitting a resignation letter; the council must adopt a corresponding decision. Under the bill, during martial law, a deputy would be permitted to submit a written statement of resignation, after which the head of the military administration would be required to terminate the mandate within ten days.

New rules for installing individual heat substations in buildings with centralized heating

Bill No. 14067 would establish the procedure for installing individual heat substations (IHS) in multi-apartment buildings (the bill does not apply to private houses, summer cottages, or small two-unit buildings). An IHS is specialized equipment installed within or adjacent to a building. It connects to the central heating network and enables regulation of both the volume and temperature of heat and hot water supplied to the building.

The proposed amendments stipulate that all residential and non-residential buildings connected to centralized heating systems must be equipped with IHS units, provided this is technically feasible and economically justified. Special commissions established by local authorities would determine technical feasibility and economic viability. Installation could be undertaken by building owners, heat-supply companies (in which case the related costs would be included in tariffs), or local authorities.

With an IHS in place, residents would be able to adjust their heat consumption—for example, by lowering heating during warmer weather—and thereby reduce energy use and save money.

Clarifying the procedure for terminating land lease agreements and the grounds for termination of ownership rights

Currently, the law allows a land lease agreement to be terminated through the courts if one party fails to fulfill its contractual obligations or if the leased property is destroyed or damaged. However, the law does not specify how the court should consider real estate located on the leased land.

Bill No. 14076 would elaborate on these provisions. In the event of lease termination, the court must determine whether any buildings or perennial plantings on the plot belong to the tenant. If such objects exist, the court would decide how and within what timeframe the lease should be terminated, as well as whether the tenant is required to restore the land to its original condition. If restoration is prohibited by law or would be prohibitively expensive, the court could order either the landowner to buy out the tenant’s property or, conversely, the tenant to buy out the land beneath their real estate.

Bill No. 14075 would clarify the grounds for judicial termination of lease agreements. Henceforth, systematic nonpayment of rent—defined as two or more instances—would constitute grounds for termination. Underpayment, meaning when rent is paid in an amount less than stipulated, can also serve as grounds for termination if the court considers it a material breach.

Bill No. 14074 would amend the Land Code by introducing a new ground for terminating land ownership rights. If a landowner fails twice or more to comply with orders from a state authority to eliminate violations related to the misuse of land (that is, use not in accordance with its designated purpose), this could lead to the termination of ownership and the transfer of the plot to state or communal ownership—depending on which authority initiated the seizure and to which category the land belongs.