On November 2, 2016, a law aimed at protecting against illegal takeovers came into effect. As a result, the number of hostile takeovers decreased tenfold. The Ministry of Justice of Ukraine received 60 complaints about registration actions. Now the ministry has influence on notaries and public registrars through monitoring and auditing ambiguous activity. Besides, the functions of business and immovable property registration were decentralized and transferred to the local level. This was informed by Pavlo Moroz, Deputy Minister of Justice of Ukraine, during a briefing at Ukraine Crisis Media Center. Such a reform should have beneficial effect on investment attractiveness. “A foreign investor invests only in the countries, where effective protection of investment objects is ensured, and where the state guarantees that these objects will not be stolen, as well as makes it possible to derive earnings from this investment. The investment climate in our country requires restarting. The main area that concerns every investor is confidence that his investment will be protected,” noted Pavlo Moroz.
Today, a wide circle of people can register rights to immovable property: accredited agents, notaries, civil servants of administrations. “If previously we had about two thousand registrars controlled by the Ministry of Justice, today we have 10,000 independent persons who conduct registration actions throughout Ukraine. However, some of them are abusing this right. Such activities must be controlled, and abuses must be prevented in the harshest possible way. […] An important novelty of the law is the introduction of criminal responsibility, which provides for up to 10 years’ imprisonment. This makes people think thrice before doing that,” says MP Andriy Pomazanov. “The law provides for inevitability of punishment. The Ministry will do everything to punish the offenders. We have the authority to revoke their access to the register and submit the corresponding information to law enforcement authorities,” emphasized Andriy Reun, deputy director of state registration and notary department of the Ministry of Justice of Ukraine.
Volodymyr Marchenko, president of the Notary Chamber of Ukraine, urged not to equate all notaries to the so-called “black notaries” who violate the law. To further promote the reform, he proposes to transfer the functions uncharacteristic of the state to the Chamber of Notaries; to delegate powers on approving a professional code of ethics for notaries to the congress of notaries, and include the Chamber representatives in the registration complaints commission. “Today the Notary Chamber of Ukraine is the only body that protects not only the professional interests of notaries, but also the rights of citizens,” noted Mr. Marchenko.
Most complaints about illegal takeovers considered by the Commission relate to the cases opened before the adoption of the law. The mere submission of the draft law increased activity of raiders. “The law works. The complaints considered by the Commission now are not new; they are echoes of the period before the law adoption,” noted Olena Pertsova, Pavlenko Legal Group. Among the negative points, she noted that the cases have not yet reached the court, and the police do not know how to respond to them. The law enforcement system lacking reform does not promote the process either.