UCIPR has analyzed the draft of the new Civil Code of Ukraine No. 14394 from the perspective of its potential impact on civil society organizations (CSOs). This is because CSO activities are largely based on civil law regulation mechanisms (contracts, property management, representation, liability, and judicial protection of rights, etc.).
The draft of the new Civil Code of Ukraine No. 14394 has been registered in the Verkhovna Rada of Ukraine, providing for a large-scale recodification of civil legislation; additionally, two alternative draft laws, No. 14394-1 and 14394-2, were registered. The document is intended to replace the current Civil Code of Ukraine and partially consolidate the regulation of several related areas of private law. Given the scale of the proposed changes, its adoption will directly affect all participants in civil circulation, including CSOs.
The draft contains positive aspects. In particular, rules regarding private legal relations with a foreign element are currently scattered across various laws, which often creates conflicts and difficulties, especially when concluding international treaties or resolving inheritance issues abroad. The project proposes to unite these norms into one book, which could make international legal relations more consistent and predictable.
The desire to establish clearer rules for the publicity of rights and property registration is also positive. The lack of a unified approach in this area previously complicated the verification of third-party rights and caused numerous disputes. The introduction of clear rules can reduce the number of conflicts and increase trust in the legal system.
At the same time, the draft has specific risks that may limit the self-sufficiency and stability of civil legislation. The document departs from the principle of the self-sufficiency of the Civil Code, moving key issues regarding the effect of norms over time, retroactivity, and overcoming conflicts to other laws. Such an approach creates additional vulnerability for the basic guarantees of civil law and increases the risks of their situational change.
The introduction of evaluative concepts, such as "morality/ethical" standards and "good custom," without clear criteria for their application, causes particular concern. In practice, this could lead to selective law enforcement and increases the risk of transactions being declared invalid on undefined grounds.
Additionally, the project expands the role of sub-legislative acts. This creates opportunities for executive authorities to effectively rewrite civil rules and regulate them "at the level of instructions."
The departure from the principle of the presumption of the lawfulness of a transaction, which is established for current civil legislation, requires a separate warning. Traditionally, any transaction is considered lawful and valid until otherwise expressly established by law or proven in court.
It is this presumption that ensures the stability of civil circulation, the predictability of contractual relations, and trust between parties. Its weakening can significantly increase legal uncertainty.
It is worth noting that the scale and simultaneity of the proposed changes will inevitably lead to a long transition period, the formation of contradictory judicial practice, and rising costs for participants of civil relations.
Civil society organizations, grant and charitable initiatives, volunteer projects, as well as small and medium-sized businesses, for whom stable contractual mechanisms and clear legal guarantees are of critical importance, are the most sensitive to such risks.
It is also important to note that the comments and risks previously identified during the analysis of draft laws No. 14056 and No. 14057 remains relevant within draft law No. 14394. A significant portion of the provisions that caused critical assessments have effectively been integrated into the text of the new Code without substantial conceptual refinement. The risks to which experts have already drawn attention persist and extend to the entire body of private law regulation.
Taking the above into account, the provisions of draft law No. 14394 require significant revision. A step-by-step or pilot implementation of new norms is advisable, with the definition of priorities for CSOs, small and medium-sized businesses, as well as for legal relations with a foreign element.
In addition, it is important to introduce a mechanism for constant monitoring and consultation with experts and stakeholders. This will allow for the timely identification of problematic provisions, their correction, and a reduction in the risk of legal uncertainty after the code enters into force.
Detailed analysis at the link.
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