In the evening of November 26, the Verkhovna Rada approved the President's decree on the introduction of a military state in Ukraine. The UAC has analyzed the measures that can be implemented as a result of its introduction and the rights of citizens.

Military state is imposed in 11 regions of Ukraine: Vinnytsya, Luhansk, Mykolaiv, Odesa, Sumy, Kharkiv, Chernihiv, Donetsk, Zaporizhia, Kherson and internal waters of Ukraine Azov-Kerch water area.

This mode is temporary and will last for 30 days - from 07/26/2018 (from 14:00) until 12/26/2018 (until 14:00).

In areas where the military state is introduced, military commanders and military administration (in case of formation) directly or through executive agencies, local governments have the right to carry out, in particular, the following measures:

1. Forcibly dispose of property (both immovable and movable), which is in private or communal ownership, with the previous or following reimbursement of value.

• • • Such alienation may relate to both non-current assets and current assets owned by the entity.
    • The reason for the exclusion is signed Acceptance transfer (in the form approved by the CMU from 31.10.2012 No. 998, with enclosing the withdrawal of the property value on date of assessment), sealed by the military command and / or executive body / local government, which agreed on the decision on alienation.
    • An exhaustive list of property subject to alienation is recorded in the Act itself.
    • Due to such alienation, economic entities (in the general system or on a single tax of group 4):
• should display in the accounting income - by the date of drawing up the Act (regardless of when the compensation will be made - before or after the alienation). The amount of income is determined by the data of the Act;
• have the right to write off in the accounting the value of the assets that have been alienated to expenses;
• if they are VAT payers - the obligation to charge VAT - also the date of the Act and based on the value specified in the Act, but not lower than the minimum VAT base. At the same time, it is not necessary to adjust the previously displayed tax credit for Art. 198.5 of the Tax Code of Ukraine, since such an operation falls within the definition of economic activity, which is subject to VAT.
• If they are a taxpayer and reflect the adjustment for the difference, in case of disposal of fixed assets, it will be necessary to reflect the adjustments to the tax on profit, as defined in Art. 138 of the Tax Code of Ukraine.

• Ownership of property goes to the state from the date of signing the Act (this is also stated in the Act itself).

• In practice, a situation may arise that property valuation may be lower than its real value. Therefore, it is important that such an assessment can be appealed in court.

• • • The next reimbursement of the cost is made on the basis of the application with the addition of the Act and the document on the value of the property. They need to be provided to the military commissariat at the place of alienation of property. Documents are reviewed within 10 business days (and if necessary, additional checks are required - 1 month).
    • Refusal to accept and consider the said application is not allowed.
    • If after the abolition of the Military State the property has been preserved, the former owner may insist on his return (with the obligatory return of the amount received as compensation) - for this he must apply to the court.

2. Establishment of labor conscription for able-bodied persons not involved in work in the field of defense.

• Such employees retain their previous place of work (position). In addition, the average earnings must be kept for them (Part 1, Article 119 of the Labor Code).
• The amount of personal income tax, military salary and ECU, calculated on the average earnings of such persons, is not compensated.
• Notification, collection and recruitment of groups of able-bodied persons engaged in performing socially useful works is directly provided to the military commanders with the assistance of village and settlement heads, business managers (including housing maintenance enterprises, educational institutions, etc.).

At the same time, we note that it is not formally necessary for enterprises' managers to facilitate the employment of persons performing services under civil-law contracts (including entrepreneurs)

3. To regulate the work of enterprises of telecommunications, printing enterprises, publishing houses, TV and radio organizations, TV and radio companies and other enterprises, institutions, organizations and establishments of culture and mass media, as well as use of local radio stations, TV centers and printing houses for military needs and conducting of explanatory work among troops and population.

4. To prohibit the work of receiving and transmitting radio stations of personal and collective use and the transmission of information through computer networks.

5. In the event of violation of the requirements or non-fulfillment of the measures of the legal regime of the military state, remove from the enterprises, institutions and organizations of all forms of ownership, individual citizens telecommunication equipment, television, video and audio equipment, computers, as well as, if necessary, other technical means of communication ' bunch

6. The introduction of a curfew (the prohibition of staying in a certain period of time on the streets and other public places without specially issued passes and certificates), as well as to establish a special mode of light-inspiration.

7. To use the capacities and labor resources of enterprises, institutions and organizations of all forms of ownership for defense purposes, to change the mode of their work, to make other changes in production activity, as well as working conditions in accordance with labor legislation.

8. To prevent citizens who are on military or special account in the Ministry of Defense of Ukraine, the Security Service of Ukraine or the Foreign Intelligence Service of Ukraine, to change their place of residence (place of residence) without the permission of the military commissar or the head of the relevant body of the Security Service of Ukraine or the Foreign Intelligence Service of Ukraine; restrict the passage of an alternative (non-military) service.

9. Verify documents from individuals, and, if necessary, carry out an inspection of things, vehicles, luggage and cargo, office premises and citizens' homes, with the exception of restrictions established by the Constitution of Ukraine.

10. Establish a special regime of entry and exit, restrict the freedom of movement of citizens, foreigners and stateless persons, as well as the movement of vehicles.

We note that these are just some of the most commonly used measures that may apply to business entities. In this case they can be realized only:

- in the territory where the military state was introduced;

- be carried out solely on the basis of the decision of the military command (on its own or in agreement with the executive authorities or local self-government bodies).

We also note that the Decree does not contain any links to mobilization. Moreover, mobilization is carried out on the basis of a separate Presidential Decree, which should also be approved by the Verkhovna Rada. Given this, we can state that according to the legislation at this stage mobilization should not be carried out (but we do not exclude that the corresponding measures will actually be implemented).

Additionally, we would like to draw attention to the fact that the legislation provides for the possibility to stop the activities of commercial banks that are not involved in work in a special period, in the case of the introduction of martial law. The precondition is the non-inclusion of the bank in the list of banks authorized to work in a special period. Meanwhile, as stated on the official site of the NBU, the National Bank does not see the risks for the uninterrupted operation of the banking sector in the event of the introduction of a military state.

***

In case of any specific issues related to the military situation, we ask you to apply immediately.