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Military transactions to be exempt from merger control during state of war in Ukraine

Ukraine
30/05/2024
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On 16 May 2024, the Law of Ukraine “On Amendments to the Customs Code of Ukraine and other Laws of Ukraine regarding the Peculiarities of Customs Control and Customs Clearance of Certain Categories of Goods” came into force after being passed by parliament on 20 March 2024.

In addition to introducing amendments to the Customs Code of Ukraine on customs control and customs clearance of biomethane transported by pipeline, the law amends the Law of Ukraine "On Protection of Economic Competition", which provides merger control exemption for transactions taking place outside Ukraine to develop and implement technologies and production of military and dual-use goods.

Hence, the Law exempts companies from the obligation to obtain prior approval by the Antimonopoly Committee of Ukraine for the above transactions provided that:

  • the ultimate recipients and/or purchasers of the technologies/goods are exclusively the Armed Forces of Ukraine, law enforcement agencies, other military formations established in accordance with the law, the State Service for Special Communications and Information Protection of Ukraine, military administrations established by law, entities directly involved in the fight against terrorism, measures to ensure national security and defence, repulsion and deterrence of armed aggression by the Russian Federation, or anti-terrorism entities; 
  • the technologies/goods are not developed and implemented/produced on the territory of Ukraine as of the date of concentration or domestic production is insufficient for the state's defence capability, and
  • control is acquired by a business entity that carries out economic activities in the markets for the production, sale, or purchase of military products, military services, or the development and implementation of military technologies and dual-use goods.

The exemption will be in effect for the period of martial law and for 90 days after its termination or cancellation.

The Law aims to strengthen the defense capability of Ukraine against russian armed aggression by speeding up the execution of transactions.

For more information, contact your CMS advisor or local CMS experts Maria Orlyk, Olga Belyakova.

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