The Constitution of Ukraine and the Civil Code of Ukraine govern the right to private ownership. The Land Code of Ukraine which entered into force on January 1, 2002 (the "Land Code") and other legislative acts adopted in development of the Land Code signified important steps in terms of ensuring that private property rights became a foundation of the Ukrainian legal system. The Law of Ukraine "On Ownership" (the "Ownership Law"), dated February 7, 1991, was the first post-Soviet legislative act which aimed at modifying Ukraine's legal system of property ownership toward more liberal principles. The Ownership Law recognized private ownership in additional to the traditional state and collective ownership of property, and included Ukrainian residents, foreign individuals and foreign legal entities among those entitled to own property in Ukraine. According to the Ownership Law, owners of property, including foreign investors and joint ventures, are allowed to use such property for commercial purposes and to keep the results of commercial use of such property (including revenues and manufactured products). The Constitution of Ukraine gives foreign citizens and stateless persons the same rights and freedoms as well as the same duties as Ukrainian citizens. Under the Ownership Law, foreign states, citizens and legal entities are entitled to own property in Ukraine, unless otherwise provided for in applicable Ukrainian legislation.
Under the Civil Code, real estate property comprises of land plots, as well as objects located on the land plot, the removal of which is impossible without their depreciation or changes to their designated purpose. The Civil Code further provides that the regime of real estate property may be extended through a separate law to aircraft and sea ships, inland vessels, space device, and other objects, the rights to which are subject to state registration. An enterprise as integral property is considered real estate for the purposes of state registration and performance of transactions therewith.
In addition to traditional mechanisms of acquiring ownership rights to property (purchase, gift, inheritance, etc.), the Civil Code and the Land Code provide that any person may obtain ownership rights to real estate property if they openly possesses a real estate object for ten consecutive years or openly possesses a land plot for 15 consecutive years (acquisitive prescription rule). The Codes also recognize new types for the rights of third parties and establish the concepts of "servitudes" (easements) and "good-neighbourliness." The Land Code sets forth procedures for the establishment and termination of servitudes, description of the types of servitudes and specific provisions relating to the boundaries between adjacent land plots.
Ownership of land
The applicable Ukrainian legislation governs private, municipal and state ownership to land. In general, according to Ukrainian law, land may be held in ownership, in temporary use (lease) or in permanent use. The Land Code applies to all types of land in Ukraine and all participants of land relations (including Ukrainian and foreign individuals and legal entities, state and municipal authorities); it governs the legal relations in the area of the ownership, use of and transactions of land in Ukraine.
Under the Land Code, all land in Ukraine, in addition to the distinction between agricultural and non-agricultural land, is classified under the following categories contingent upon its use: (i) agricultural land; (ii) land for dwellings and public development (construction); (iii) land used for industry, transportation, communications, defence and other purposes; (iv) land used for environmental protection; (v) land for therapeutic use; (vi) land for recreational use; (vii) land for historical-cultural purposes; (viii) forested land; (ix) land for water resources; and (x) reserve land.
The Land Code restricts the sale of agricultural land until January 1, 2007. Ukrainian individuals and legal entities are entitled to buy most types of land. Foreign individuals, legal entities and foreign states are allowed to own, use and transact with certain non-agricultural land in Ukraine, but are explicitly prohibited from owning agricultural land. Foreign legal entities may own only non-agricultural land: within the city limits, if they purchase buildings or structures or land plots for construction purposes; and beyond the city limits, if they purchase buildings or structures. Ukrainian legislation contains special procedures for the acquisition of state-owned and municipal land by foreign legal entities. State or municipal land may be sold to a foreign legal entity if such an entity establishes and registers its permanent establishment in the form of a commercial representative office in Ukraine. State-owned land plots are sold to foreign legal entities by the Cabinet of Ministers of Ukraine upon approval of the Verkhovna Rada of Ukraine. Municipal land plots are sold to foreign legal entities by the relevant local councils with approval of the Cabinet of Ministers of Ukraine. Joint venture enterprises established with participating foreign legal entities and individuals acquire the title to non-agricultural land plots according to the established procedure for foreign legal entities.
If the land is privately owned, in order to buy land, the seller and the buyer must enter into a sale-purchase agreement, which must be notarized and registered. Unless the company already owns the building situated on the land plot in question, any land owned by the state or municipality can be sold only at auction.
Land lease
Only state or municipally-owned legal entities are entitled to hold a land plots for permanent use, i.e., without an established time limit. Land plots may be leased out to Ukrainian individuals and legal entities, foreign individuals and legal entities, international associations and organizations, and foreign states. Under the Land Code, a land plot can be leased for a short term (up to five years) or long term (up to fifty years). The Land Code establishes the right of a lessee to sublease the land plot, subject to the landlord's consent. Provisions of the Land Code refer to a separate law to regulate various issues dealing with land leases. Currently, land lease relations are regulated in detail by the Law of Ukraine "On Land Leasing" (the "Land Lease Law"), dated October 6, 1998.
The Land Lease Law says that land lease agreements must be in written form and must contain the plan (scheme) of the land plot. The mandatory elements of a land lease agreement include the subject of the lease (its location and size), the term of the agreement, the amount of lease payments, the purposes of the lease, the terms of maintenance of the object of the lease, all existing restrictions and encumbrances. After the conclusion, a lease agreement needs to be registered with the relevant authorities in order to be effective.
Ownership of buildings
The right to own immovable property is granted by the applicable Ukrainian law to both Ukrainian and foreign individuals and legal entities. The Civil Code governs the general rules relating to the use, disposal and sale of buildings and guarantees the freedom to sell, lease and carry out other transactions with buildings. Under the laws governing privatization procedures in Ukraine, if buildings and structures were recorded on the balance sheet of the state or municipal enterprise and were included in the privatization documentation at the time such an enterprise was privatized, the newly privatized enterprise would "inherit" such buildings and structures.
According to the Civil Code, the rights to real estate arise after state registration of such rights. Ownership certificates proving the right of ownership of buildings and structures are issued by a special local authority in charge of the state registration of rights to real estate. However, before an ownership certificate is issued, the local office of the Bureau of Technical Inventory needs to conduct a thorough assessment of the building and to produce an updated "technical passport" for the building. This often presents a problem because no such technical passport exists and building owners are usually reluctant to incur the costs involved in securing the assessment/passport.
The basic intellectual property legal framework was set by Ukraine after gaining its independence, through adoption of a number of laws on protection of inventions and utility models, trademarks and service marks, industrial designs and varieties of plants. In 1993 the Law on Copyright and Related Rights was also adopted.
In 1996 Ukraine made another big step by including in the Constitution of Ukraine fundamental principles of ownership and the protection of intellectual property rights of the citizens’ for the results of their intellectual activity.
Since Ukraine planned to join World Trade Organization, it has followed the respective requirements through ratification of international treaties and adoption of internal laws aimed at perfecting intellectual property legislation. Particularly, in 2001-2003 Ukraine enacted the new Civil Code and Commercial (Economic) Code, both of which define the basic principles of intellectual property protection, the new Customs Code, the Criminal Code as well as amendments to the Code of Ukraine on Administrative Infringements, which established a system of penalties for various intellectual property infringements.
The following laws constitute the basic framework for protection of intellectual property rights:
Ukraine is a member of the following international treaties:
Patents
An invention may be patented provided it satisfies the criteria of uniqueness, inventiveness and industrial applicability. The Patent Law defines in detail how each of these criteria is interpreted. Patents for inventions are valid for 20 years from the application date for registration.
A utility model may be patented if it satisfies the criteria of uniqueness and industrial applicability. A utility model patent is valid for 10 years from the date application for registration.
Industrial designs are patentable if they satisfy the criteria of uniqueness. An industrial design patent is valid for 10 years from the application date for registration and may be extended for another term not exceeding 5 years.
The owner of the patent is entitled to assign ownership or to allow use of the invention, utility model or industrial design to any third party based on a written contract.
Trademarks
In order to be protected in Ukraine, trademarks must be registered. Trademark registration is valid for ten years and may be renewed each time for another term of ten years. The owner of a trademark certificate has the right to assign its ownership or to allow the trademark to be used by any third party based on a written contract.
According to the provisions of the Paris Convention, publicly known trademarks are protected in Ukraine without the need for registration provided the trademark is acknowledged by a competent court or an authorized state authority as publicly-known.
In compliance with the provisions of the Paris Convention, the law of Ukraine establishes a 6-month term for taking advantage of previous filing priority and the exhibition priority.
Origin Marking
Under the law, two categories of origin markings are defined – simple and qualified. Simple origin markings do not require any registration to be protected, while qualified ones must be registered with a competent state body to enjoy protection. The qualified markings might be either the name of the place of origin, or a geographical indication of origin.
Foreign origin marking protected under an international treaty must be registered in Ukraine to be enforceable. Ukrainian producers may register origin markings in a foreign state only after it is first registered in Ukraine.
Copyright
The Copyright Law establishes protection for copyrights and related rights. Copyright protection, is granted distinctively to scientific, literary, and art works including, but not limited to, musical composition with or without lyrics, audio-visual works, applied arts, photographic works, sculpture works, paintings, transla¬tions, arrangements, computer programs, databases and architectural works. The related rights protection is granted to performance, phonograms and programs of broadcasting organisations.
Copyright Law protections apply not only to transmitted items but also to those not transmitted; and no formalities are observed for a copyright or a related right to accrual (state registration is voluntary).
Copyrights are generally enforceable from the moment of their creation for the lifetime of the author and for 70 years thereafter. Related rights are usually enforceable within a 50 year term.
Both copyrights and related rights consist of personal (that cannot be alienated or given for use to other persons) and proprietary rights. Property rights may be transferred by a person to any third party based on a written contract specifying the ways the work will be used, the amount of remunera¬tion, manner in which it will be paid and the duration of the contract.
Prepared in accordance with the materials of DLA Piper Ukraine LLC