Ukraine continues to take a step-by-step approach towards improving legislation on subsoil use.

The recently passed Amber Law introduced important changes to the Subsoil Code, the Law on Production Sharing Agreements, the Land Code and related legislation to simplify the issue of subsoil permits and land access required for subsoil activities (see the link below). In line with the Amber Law, the Cabinet of Ministers of Ukraine has restated the Procedure on issuance of special permits for subsoil use in a new version dated 19 February 2020. Additions to the new Procedure include:

• Abolishment of the requirement for approval by local self-government authorities, such as issuing special permits for geological surveys (exploration) and commercial development of mineral deposits of national significance; and using subsoil for other purposes unrelated to the production of minerals.
• Amending the list of cases when subsoil special permits can be obtained outside the auction procedure. Entities, which have carried out probation of mineral resources and approved their estimates with relevant authorities at their own cost, will no longer be able to obtain a special permit without an auction. The Procedure also limits the possibility of up to 50% extension of the boundaries of the subsoil area under the existing special permit to just once.
• Changing the number of documents that are submitted for obtaining special permits outside the auction. Most importantly, the Procedure cancels the requirement to carry out the environmental impact assessment (EIA) for obtaining exploration permits or full-scope exploration and production permits, since this assessment is generally required under law at a later stage of pilot or commercial production. The EIA should not be a condition for extension of the subsoil area unless it would a trigger a new EIA under the law.
• Introducing a new type of special permit for geological survey, pilot and commercial production of amber deposits.

In addition, the new Procedure makes it possible to submit applications electronically for obtaining and extending special permits by using the subsoil user's online account with the State Geological Service's web site. However, the new interaction method with the subsoil authority has not yet been tested since it will only be implemented after the Ministry of Energy and Environment Protection of Ukraine adopts an additional procedure for administering online accounts.

Authors:

Vitaliy Radchenko, Partner, vitaliy.radchenko@cms-cmno.com

Volodymyr Kolvakh, Senior Associate, volodymyr.kolvakh@cms-cmno.com

Kateryna Korneliuk, Associate, kateryna.korneliuk@cms-cmno.com