Since the beginning of Russian aggression, the government has been actively developing compensation mechanisms for those affected by the war, including entrepreneurs.
On March 20, the Cabinet of Ministers adopted Resolution No. 326, which approves the Procedure for determining damage and losses caused to Ukraine as a result of the armed aggression of the Russian Federation. This document outlines the directions and criteria for developing methodologies for determining losses, as well as the state bodies responsible for assessing and approving them.
The main direction for assessing the losses of private companies is specified in paragraph 14 of the Procedure — “economic losses of enterprises.” According to this, the following types of business losses will be assessed:
- Destruction or damage to property;
- Lost profits caused by the inability or obstacles to conducting business activities;
- Losses from unpaid goods, works, and services provided and consumed in temporarily occupied territories.
In addition, depending on the area of business activity, entrepreneurs may fall under other categories of damage assessment defined in the Procedure.
How business owners can receive compensation for war-related damages:
- Proof of property ownership
- Documentation of destruction or damage to property
- Assessment of damages
- Identification of the party responsible for causing the damage and ensuring compensation
How to document losses from unpaid goods and services?
At this time, the methodology for determining losses from unpaid goods, works, and services provided and consumed in temporarily occupied territories has not yet been approved. A mechanism for calculating lost profits is also missing. To document these losses, the Cabinet of Ministers must clarify the list of territories that currently have or previously had the status of temporarily occupied. Before February 24, 2022, this status applied to the Autonomous Republic of Crimea and the city of Sevastopol.
Entrepreneurs should not wait for the quick adoption of the necessary regulations. They must begin documenting their losses now. This may include: delivery notes for goods, acceptance certificates for works and services, transport invoices confirming shipment of goods to buyers, copies of payment demands (invoices) issued to customers, as well as bank statements confirming the absence of incoming payments from customers for supplied goods and services.
Unfortunately, the issue of compensation based on a court decision can only be considered after Ukraine’s victory. The state is actively working on developing mechanisms for reparations, discussing which authorities will make such decisions and from what sources they will be funded. At this stage, our law firm will help you properly collect all necessary documents and submit them to the relevant authorities.
