On March 3, 2022, the Cabinet of Ministers of Ukraine issued Resolution No. 187, which introduces a moratorium on the performance of obligations to Russia and its residents.

The moratorium applies to the following entities and persons (“Qualified Persons”): 

• The Russian Federation
• Citizens of the Russian Federation
• Legal entities established and registered under the laws of the Russian Federation
• Legal entities established and registered under the laws of Ukraine, whose ultimate beneficial owner is the Russian Federation, a citizen of the Russian Federation, or a legal entity established and registered under legislation of the Russian Federation
• Legal entities established and registered under the laws of Ukraine, in which the Russian Federation, a citizen of the Russian Federation, or a legal entity established and registered under legislation of the Russian Federation holds a corporate shareholding of 10 percent or more.

Exempted from this moratorium are the following:

• Citizens of the Russian Federation legally residing in Ukraine, and
• Legal entities established and registered under the laws of Ukraine whose ultimate beneficial owners are Citizens of the Russian Federation who legally reside in Ukraine.

The moratorium prohibits these actions: 

1. Performance (both voluntarily and through enforcement) of monetary and other obligations vis-a-vis the Qualified Persons;
2. Disposals, pledges (mortgages) or any other actions that should or may result in alienation of real estate objects, securities, corporate rights (participatory interests), vehicles, aircraft and ships, inland navigation ships by Qualified Persons (as defined above), except for free-of-charge transfers of the above properties in favor of the State of Ukraine;
3. Disposals, pledges (mortgage) or any other actions that should or may result in alienation of real estate objects, securities, corporate rights (participatory interests), vehicles, aircraft and ships, inland navigation ships in favor of the Qualified Persons.

All transactions in violation of the moratorium (including those envisaging the future transfer of properties) will be considered null and void. 

The moratorium came into force  on March 4, 2022 and will be effective until the earlier of (a) the passing of a special law on dealings with persons related to the aggressor-state (i.e. the Russian Federation) or (b) one month after termination of martial law in Ukraine. 

For the duration of the moratorium, lenders (creditors) who fall within its scope face serious issues with repayments in Ukraine. If creditors hold security provided by Qualified Persons, enforcement against such security may be unavailable. Any transactions with Qualified Persons should be carefully analyzed in view of the moratorium.

Source: Resolution of the Cabinet of Ministers of Ukraine “On Protection of the National Interests on Ukraine in Future Claims related to the Military Aggression of the Russian Federation” No. 187, dated March 3, 2022.