"Anti-Raider Law" aims to reduce the risks of property misappropriation
Redcliffe Partners, Kyiv, Ukraine,
Thu, Nov 3, 2016
The Law No. 5067 "On Amendments to Certain Legislative Acts of Ukraine relating to the Improvement of State Registration of Rights to Immovable Property and Property Rights Protection" (the "Anti-Raider Law") came into force on 2 November 2016.
The Anti-Raider Law is aimed at eliminating approaches that have often been used by raiders, including submission of forged documents for registration without an owner’s knowledge, theft of registrars’ digital keys to misappropriate property, and illegal transferring of immovable property to the share capital of the raider’s company.
Specifically, key aspects of the Anti-Raider Law include:
Certification of the signatory’s authenticity
Mandatory notarial certification of signatures on the company’s:
- constitutional/founding documents, or amendments thereto, and corporate resolutions when changes to information about the legal entity are submitted for state registration;
- documents of transfer or partitioning of properties; and
- notices of withdrawal from full partnerships or limited liability companies.
Higher digital security
- electronic digital signatures will only be provided in the personal presence of signatories;
- the electronic registration of immovable property titles can be performed only upon the identification of the applicant via an electronic digital signature; and
- state registrars will be obliged to use a new protected digital set of personal keys to perform registration.
Increased liability for violations
- notaries who violate the procedure of property rights registration will be subject to having their license revoked upon the decision of the Disciplinary Bar Commission of the Ministry of Justice; and
- submitting of forged documents for state registration of rights to immovable property is a criminal offence, with potential liability up to UAH 34 000, or up to 5 years of imprisonment.
More time to challenge acts of state registration
- decisions, actions or inactions of a state registrar, can be challenged to the Ministry of Justice of Ukraine and its territorial divisions anytime during 60 calendar days following the actions of the state registrar; and
- prior to performing a state registration, the state registrar is obliged to inform the owner(s) about any registration actions which are being undertaken with regard to their properties.