THE LAW OF UKRAINE « ON LOBBYING”

On February 23, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Lobbying”. The law was signed by the President of Ukraine on 12 March 2024. For the first time in Ukraine, this law officially enshrines the term “lobbying” and the definition of related concepts, as well as establishes requirements for subjects conducting relevant activities, registration in the Transparency and Reporting Register, and restrictions on lobbying.

The concept of lobbying according to the adopted Law of Ukraine “On Lobbying”

One of the debatable issues that was actively discussed in the process of drafting the draft law was the question of defining the very concept of “lobbying”, in particular, in the part of introducing into the legislation, in addition to the term “lobbying”, also the term “advocacy” in order to separate the activities carried out by non-profit organizations. In the final version of the Law, it was decided to leave only one term – “lobbying” – defined as an activity carried out with the aim of influencing (attempted to influence) the object of lobbying in the commercial interests of the beneficiary (for remuneration received directly or indirectly, and/ or with the payment of actual costs necessary for its implementation) or in the individual’s own commercial interests and relates to the subject of lobbying. At the same time, commercial interest includes any material or non-material benefits that a person may receive as a result of exerting influence on the object of lobbying.

* At the same time, the commercial interest includes any material or non-material benefits that a person will receive or can receive within the scope of conducting economic activity after influencing (attempted to influence) the object of lobbying as a result of the adoption (issuance) of a normative legal act, introduction changes to it, loss of validity (cancellation) of a normative legal act, which is the subject of lobbying, or as a result of refraining from such actions.

At the same time, the Law provides for a number of exceptions that are not lobbying – in particular, such exceptions include activities related to the attraction, use, monitoring of the provision and use of international technical assistance, the implementation of projects and programs of international technical assistance; activities of public associations, other non-profit enterprises, institutions and organizations aimed at influencing (attempted influence) subjects of power (state authorities, other state bodies, local self-government bodies, legal entities under public law, endowed with power, their officials) for the purpose of making or refraining from making decisions by such entities, which are attributed to their authority, except when such activity concerns commercial interests; personal (on your own behalf) representation by an individual, legal entity of your interests in relations with state authorities, other state bodies, local self-government bodies, their officials, except for cases when such representation is carried out by a lobbying entity and/or carried out in its own commercial the interests of such a person.

According to the Law, the object of lobbying is the subject of law-making activity (except for the Ukrainian people in the all-Ukrainian referendum, and territorial community in the local referendum) or law-making initiative. The lobbying matter is a normative legal act, regarding the planning of the development, development, and/or adoption (issuance) of which, including the introduction of changes or cancellation, influences or attempts to influence the object of lobbying. At the same time, the Law establishes a number of restrictions in this part. Thus, a normative legal act regarding the following cannot be the matter of lobbying, namely: announcement of mobilization; introduction of martial law; declaration of a state of war and conclusion of peace; use of the Armed Forces of Ukraine and other military formations formed in accordance with the laws of Ukraine; introducing a state of emergency; declaration of certain localities as zones of emergency ecological situation; changes in the territory of Ukraine; amnesty.

Therefore, in the practical application of the concept of “commercial interest”, “lobbying matter”, as well as the sphere of its action established by the Law, are decisive for classifying the activity as lobbying.

The list of lobbying methods is not exhaustive, but includes direct or indirect communication with the object of lobbying on issues related to the subject of lobbying; preparation and distribution of advertising on issues related to the subject of lobbying; participation in events related to issues related to the subject of lobbying, to influence (attempting to influence) the object of lobbying; invitation of the object of lobbying to participate in events; organization and holding of events related to the subject of lobbying.

Subjects of lobbying

The most controversial issue during the work on the draft law turned out to be the issue of determining the circle of subjects to which the requirements of the Law apply. As mentioned above, non-profit organizations were initially included in a separate category. The issue of extending the provisions of the Law exclusively to persons engaged in lobbying under a contract (i.e., external consultants) was also raised, excluding from the scope of regulation businesses that represent their own interests through in-house GR-specialists. In the final version, all the specified categories are subjects of lobbying, if they carry out lobbying.

The subject of lobbying can be a natural person who has full civil legal capacity, a legal entity registered under the legislation of Ukraine, or a representative of a foreign legal entity. At the same time, restrictions are established, according to which the following persons cannot be subjects of lobbying:

• a person authorized to perform the functions of the state or local self-government during his tenure in the relevant position and within one year after his dismissal from the position or the termination of his powers in the position;
• an individual who has a conviction for committing a criminal offense, or who has been subject to an administrative penalty for committing a corruption offense related to corruption, or who has been subject to an administrative penalty in the form of a ban on lobbying;
• an individual who does not have full civil legal capacity;
• state authority, other state authority, local self-government body, legal entity under public law;
• an individual or legal person who is included in the list of persons connected with the conduct of terrorist activities, or in respect of whom international sanctions or restrictive measures (sanctions) have been applied in accordance with the Law of Ukraine “On Sanctions”;
• legal entities associated with the aggressor state, in particular, which have separate branches and units working in such a state;
• subjects of ensuring law-making activity, defined by the Law of Ukraine “On Law-making Activity”;
• a legal entity against whom criminal legal measures have been applied in the last five years based on a judgment that has entered into force;
• media;
• political party and local political party organization;
• religious organization;
• a candidate for an elected position in the elections of the President of Ukraine, elections of people’s deputies of Ukraine, local elections.

The law also establishes restrictions on clients, beneficiaries and sources of lobbying funding, which correspond to the specified restrictions.

Similarly, these persons cannot be clients or beneficiaries under the lobbying contract.

Lobbying entities will be subject to the Rules of Ethical Conduct, which must be approved by the Cabinet of Ministers of Ukraine after public consultations with interested parties.

Transparency register and data submitted to it

The key element of the transparency system in the field of lobbying should be the Transparency Register, which will ensure the collection of information about lobbying entities and their reporting, as well as provide open access to such information (except for information with limited access). According to the adopted Law, the holder and administrator of the Register is the National Agency on Corruption Prevention.

Registration in the Register is necessary for acquiring the status of a lobbying subject. When registering, lobbying entities must provide identification data of a person (legal or physical), contact data, source of funding (if available), and information about the sphere of lobbying (the sphere of public relations in which the lobbying entity plans to carry out or carries out lobbying).

The entry into force of the above-mentioned Law is determined by the start of the Register’s operation: the Law enters into force two months after the day the Transparency Register starts functioning, but no later than January 1, 2025. The day the Transparency Register starts functioning is the day the Cabinet of Ministers of Ukraine publishes a notice in the newspaper “Holos Ukrainy” on the start of operation of the Transparency Register.

Exclusion from the Register is possible both at the initiative of the lobbying entity (in this case, the status of the lobbying entity is considered terminated from the date of submission of the relevant application), and in a number of other cases: in the event of circumstances, due to which the entity cannot carry out lobbying, or cannot be a client or by the beneficiary of lobbying under the contract, or in case of death or termination of the subject of lobbying.

In case of exclusion from the Register at the initiative of the business entity, the corresponding entry in the Register within 5 days from the date of receipt of the application. In the event that exclusion from the Register occurs for other reasons, the National Agency for the Prevention of Corruption verifies the relevant information within 30 days, and in cases where it is about the deprivation of status due to non-compliance with the criteria for business entities – the lobbying entity is allowed to provide its explanations.

In addition, it is possible to suspend the status of a business entity – at the request of such an entity or in case of imposing an administrative penalty in the form of a ban on lobbying.

Reporting on lobbying activities

The report is submitted by lobbying entities twice a year – for the first half of the year – by July 31, for the second half – by January 31.

After the entry into force of this Law, the lobbying entity shall for the first time submit a lobbying report for the first half of 2025 – by July 31 of the relevant reporting year.

The lobbying report is submitted in electronic form for all areas of lobbying. The report must contain identification data of the business entity, identification data of the client or other beneficiary of lobbying, the subject and object of lobbying (in terms of lobbying spheres), the date of conclusion, the term of validity and the price of each lobbying agreement (in the ranges: up to 100 thousand hryvnias; from 100 thousand hryvnias . hryvnias up to 1 million hryvnias; from 1 million hryvnias to 10 million hryvnias; over 10 million hryvnias), the amount of funds received by the lobbying entity during the reporting period from the client under each lobbying contract (within the ranges specified above), the amount of funds , spent by the lobbying entity during the reporting period for each area of lobbying, with a list of lobbying subjects (in the event that the lobbying is carried out in the lobbying entity’s own commercial interests or in the commercial interests of the beneficiary without concluding a lobbying contract, in the ranges indicated above), meetings and communication with objects of lobbying that occupy a responsible or particularly responsible position within the meaning of the Law of Ukraine “On Prevention of Corruption”, during which lobbying was carried out, the amount of contributions made by the subject of lobbying in support of political parties, contributions to election funds (indicating the names parties/their local organizations, size, type of each contribution and date of its implementation).