Registration of international technical assistance in Ukraine

Our law firm offers expert legal support throughout the registration and implementation of international technical assistance projects in Ukraine.

Since the beginning of the Russian war against Ukraine, many governments have started to provide (and keep providing) international assistance to the people of Ukraine. Much of Ukraine’s technical and financial aid is provided based on international technical assistance (ITA). The number of international technical assistance agreements is expected to increase in the upcoming years due to the plans to rebuild Ukraine. There is a specific procedure for registering such assistance under the legislation of Ukraine so the government can supervise it and account it accordingly.

General information about international technical assistance in Ukraine.

The Resolution of the Cabinet of Ministers of Ukraine No. 153 defines the registration procedure of international technical assistance: “On the creation of a unified system of involvement, using and monitoring of international technical assistance,” dated February 15, 2002. Under international technical assistance, the following help can be provided:

any property necessary to ensure the implementation of projects (programs) tasks, which is imported or purchased in Ukraine;
works and services;
intellectual property rights;
financial resources (grants) in national or foreign currency;
other resources not prohibited by law, including scholarships.

Ukrainian legislation doesn’t oblige all the help provided to Ukraine by other countries to be under the registered ITA. We’ve experienced that some projects were started and continued for months before the international technical assistance agreement was actually registered.

But the fact that the international technical agreement was registered can give the following (not exclusively) benefits:

The funds received by the Executor under the ITA aren’t taxable; this applies both to VAT and corporate/profit tax (articles 142.3. and 197.11. of the Tax Code of Ukraine);
The goods (including materials, machines, and equipment which is to be supplied to or purchased by the company that is actually performing the works and services) that are imported to Ukraine under the international technical assistance agreement is can be exempt from customs duties, and the Value added tax (articles 282 and 305 of the Customs Code of Ukraine);
Possibility to obtain a residence permit for the foreign staff involved in the project.

Definitions of the rules of international technical assistance in Ukraine.

This is one of the most important parts of the rules, where the names of the parties of ITA are defined. It is essential to know the exact definitions of all parties of the ITA because the rights and obligations are based on it. So, when conducting an application, make sure that the parties of the international technical assistance registration card are named correctly and that the names correspond to the fundamental roles of the parties.

Beneficiary – can be only the central body of the executive power, the Council of Ministers of the Autonomous Republic of Crimea, regional, Kyiv, Sevastopol city state administrations, whose competence includes the formation and/or implementation of state policy in the relevant field and/or region, where the performance of the project (program) that is interested in the results is expected performance of the project (program), the executive body of local self-government, the jurisdiction of which extends to the territory of the performance of the project (program), the Secretariat of the Cabinet of Ministers of Ukraine, the Office of the President of Ukraine, committees and the Apparatus of the Verkhovna Rada of Ukraine, the National Bank, the Supreme Court, higher specialized courts, the National Anti-Corruption Bureau, Accounting Chamber, other state bodies.

Executor (or implementer) – any person (resident or non-resident) who has a written agreement with the Development Partner or a person authorized by the Development Partner and ensures the project (program) implementation, including on a paid basis.

Responsible person – a natural person who is appointed by the recipient (beneficiary) to organize works related to the implementation of the project (program) and who directly prepares reports for submission to the Secretariat of the Cabinet of Ministers of Ukraine.

Development partner – a foreign state or a government or government-authorized body or organization of a foreign state, or foreign municipal body, or an international organization providing international technical assistance under international treaties of Ukraine. The Development partner is a donor.

Project (program) coordinator – the deputy head of the beneficiary or the head of the structural division of the beneficiary, who is authorized by the head of the beneficiary to ensure the supervision of the implementation of the project (program), the preparation of the results of current and/or final monitoring and their submission to the Secretariat of the Cabinet of Ministers of Ukraine.

Project – a document defining the joint actions of the project participants (development partners, executors, beneficiaries, recipients), as well as the resources necessary to achieve the goals of providing international technical assistance, including co-financing from other sources, within the established terms.

Recipient – resident (individual or legal entity) directly receiving international technical assistance according to the project (program). Sometimes, it might be necessary to process a company formation in Ukraine.

Strategic program – a document that, based on the results of the analysis of the problems of the socio-economic development of Ukraine, determines the priority areas of technical and economic cooperation between the development partner and Ukraine. This document is developed in the manner and for the period agreed between the development partner and the Secretariat of the Cabinet of Ministers of Ukraine.

Subcontractor – any person (resident or non-resident) who has a written agreement with the executor or recipient, ensures the implementation of the project (program) in part or in whole, and conducts procurement procedures at the expense of international technical assistance funds within the framework of the project (program).

Grant agreement – an agreement between a development partner or an executor and a recipient on transferring financial resources (grants) in national or foreign currency within a project (program) framework.

Sometimes, the beneficiary and the receiver can be the same person.

The procedure of the registration of international technical assistance in Ukraine.

The registration is being processed through the Secretariat of the Cabinet of Ministers of Ukraine, which is the primary authority for conducting the signup of international technical assistance in Ukraine. All the documents are submitted to the mentioned authority.

The first step is filling out the request. Initially, it is a beneficiary to request help from foreign governments and/or organizations. So, under the said rules, the Ukrainian ministry or a local government shall request international technical assistance by sending a letter to the Secretariat. Suppose a school or any other infrastructure object shall be repaired, reconstructed, or built. Even if the actual initiative to offer assistance comes from the donor, the local government shall still send a request in this case. At this stage, it is strongly recommended to define what actually will be the structure of the project and who will be the executor and the development partner.

The beneficiary or potential recipient, in the case of receiving a proposal from a development partner to start a project (program), informs the Secretariat of the Cabinet of Ministers of Ukraine about this, issues a request to the development partner under its requirements, and submits a copy of the request to the Secretariat of the Cabinet of Ministers of Ukraine.

For projects (programs) in which the beneficiary will simultaneously perform the functions of the recipient (hereinafter referred to as the beneficiary/recipient), the procurement plan for goods works and services purchased with the funds of international technical assistance (hereinafter referred to as the procurement plan) is agreed with the beneficiary/recipient.

The development partner or executor sends the procurement plan to the beneficiary/recipient and a copy to the Secretariat of the Cabinet of Ministers of Ukraine. The beneficiary/recipient, within ten working days from the date of receipt of the procurement plan, informs the development partner or executor about the approval of the procurement plan or sends reasonable comments on the approval of the categories (types) of goods, works and services that are planned to be purchased within the framework of the project (program) for its needs and send to the Secretariat of the Cabinet of Ministers of Ukraine a copy of the letter on approval of the procurement plan or on the presence of comments on it. If the beneficiary/recipient does not express his position within the specified period, the procurement plan is considered approved without comments. In case of receiving comments from the beneficiary/recipient, the development partner or the executor, within ten working days from the day of receipt of comments, conducts consultations with the beneficiary/recipient and sends the Secretariat of the Cabinet of Ministers of Ukraine a procurement plan taking into account the results of the consultations.

For state registration of projects (programs) of international technical assistance, the recipient(s) and the development partner or a person authorized by the development partner submit the following documents to the Secretariat of the Cabinet of Ministers of Ukraine in electronic and paper form:

1) a request for state registration of a project (program), which contains information about:

the development partner (name, location, location in Ukraine of the body authorized by the development partner, name, surname, position of the work coordinator);
executor (name, location, address in Ukraine, name, surname, the position of the coordinator of works and, if available – code according to EDRPOU (Unified State Register of Enterprises and Organizations of Ukraine) or the State Register of Individuals – Taxpayers;
recipient (name, location, name, surname, the position of the responsible person, and, if available, the code according to the EDRPOU or the State Register of Individuals – Taxpayers);
beneficiary (name, location, name, surname, position of the responsible person).

The request must include the project (program) number determined by the development partner;

2) a copy of the contract concluded between the development partner and the executor, or its part, certified by the development partner or the executor, which defines the goals, tasks of the project (program), types and volumes of international technical assistance provided for the project (program), the estimated cost, term and stages of project (program) implementation, a letter from the beneficiary about support and interest in the results of the project (program) and consent to the performance of the activities specified in the contract.

If the development partner will simultaneously perform the functions of the executor during the implementation of the project (program), the beneficiary, in his letter of support and interest in the results of the project (program), expresses his consent to the implementation of the activities indicated in the document containing the description of the project agreed by the development partner (programs).

2-1) The procurement plan certified by the development partner or the executor, drawn up based on a specific form (in the event of the need to exercise the right to tax benefits provided for by the legislation and international treaties of Ukraine).

3) a document (memorandum, statement of intent, activity plan, terms of reference, partnership agreement, etc.) that confirms the agreement of goals, tasks, and activities under the project (program) between the development partner or executor and the recipient (beneficiary).

The specified document must also contain the following:

name of the project (program);
the purpose of the project (program);
project (program) implementation period;
tasks in accordance with the project (program) implementation contract;
expected results from project (program) implementation;
quantitative and/or qualitative criteria for achieving the effectiveness of the project (program);
a list of property, works and services, intellectual property rights, and other resources that are acquired and provided within the framework of the project (program);
the expected impact of the project (program) on the development of the relevant industry or region;
obligations of the development partner (executor) regarding assistance;
obligations of the recipient (beneficiary);

The state registration of the project (program) is confirmed by the registration card of the project (program), drawn up according to the specified form, which is signed by the Deputy State Secretary of the Cabinet of Ministers of Ukraine or another authorized person of the Secretariat of the Cabinet of Ministers of Ukraine, certified by the seal of the Secretariat of the Cabinet of Ministers of Ukraine and is issued to the applicant with a copy sent to the beneficiary within five working days from the date of the decision on state registration of the project (program). It is not compulsory to open a representative office in Ukraine to implement those as mentioned above.

Simultaneously with the issuance of the project (program) registration card, a corresponding entry is made in the register of international technical assistance projects (programs), and the procurement plan is posted on the Unified web portal of the executive authorities (except for information constituting a commercial secret).

Within one month of receiving a copy of the project (program) registration card from the Secretariat of the Cabinet of Ministers of Ukraine, the beneficiary decides on organizing work to supervise its implementation, determines the coordinator of the project (program), and sends a copy of the relevant decision to the Secretariat of the Cabinet of Ministers of Ukraine.