Ukraine passes draft laws improving its subsoil use sector legislation

Ukraine is currently preparing two bills (Draft Laws No. 14249 and 14250) for first reading in the nation’s parliament, which will modernise and improve Ukraine’s subsoil-use regulatory framework by strengthening investor protections, improving procedural clarity, and addressing challenges caused by martial law linked to russia’s ongoing invasion of Ukraine. Further changes to these bills may be introduced during the parliamentary process.

Background

Recent developments in Ukraine demonstrate the continued growth of the mineral and resource extraction sector, driven both by the signing of the Mineral Deal between Ukraine and the US on 30 April 2025 and Ukraine’s substantial mineral resource base. Ukraine ranks among the richest countries in Europe in terms of natural resources, which includes coal, iron ore, uranium, titanium, and lithium deposits (for further details on Ukraine`s mineral resources, see Picture 1 below). 

Picture 1. Ukraine`s mineral resources, as of February 2025

Source: Elements.visualcapitalist, Ukranian geological survey

Despite the challenges posed by the ongoing russian unprovoked and illegal full-scale invasion of Ukraine (which began on 24 February 2022), Ukraine’s subsoil-use sector continues to develop. Subsoil users are steadily investing resources in the extraction of minerals and are directing their efforts toward attracting additional capital. In parallel, the Ukrainian legislature is working to improve the legal framework by aligning its laws with European best practices and addressing regulatory barriers, including those arising from the ongoing war in Ukraine.

On 26 November 2025, two draft laws in the sphere of subsoil use were registered with the Ukrainian Parliament (Verkhovna Rada of Ukraine):

• Draft Law No. 14249 “On Amendments to the Subsoil Code of Ukraine to Improve the Legal Regulation of Subsoil Use and Ensure Investor Guarantees” (Draft Law No.14249); and
   
• Draft Law No. 14250 “On Amendments to Certain Legislative Acts of Ukraine to Clarify Specific Provisions in the Sphere of Subsoil Use” (Draft Law No.14250).

Both draft laws are intended to improve the existing legislative framework governing subsoil use and to address challenges arising from the imposition of martial law in Ukraine. They are currently at the initial stage of parliamentary consideration and are being prepared for the first reading, during which further clarifications and technical refinements may be introduced.

Below is a brief analysis of these draft laws and their anticipated impact on Ukraine’s extractive sector. For clarity, the analysis is divided into two separate parts, each corresponding to one of the draft laws.

Key amendments proposed by Draft Law No. 14249

1.   Improvement of the automatic extension mechanism for special permits for subsoil use

Draft Law No. 14249 provides for the automatic extension of the Special Permits for subsoil use (Special Permits) that were valid on the date martial law was introduced in Ukraine, as well as related performance deadlines. In particular, the following shall be deemed automatically extended:

• Special Permits valid on the date martial law was introduced in Ukraine (staring from 24 February 2022);
   
• deadlines for the performance of works on the relevant subsoil area as set out in subsoil use agreements, as well as other time limits established by the relevant Special Permits.

Such permits and deadlines will remain valid until the termination or cancellation of martial law, and for an additional period equal to the duration of martial law, but not exceeding 24 (twenty-four) months[1].

In summary, the proposed amendments (i.e. the expansion of activities eligible for automatic extension and the extension of the post-martial-law period to 24 (twenty-four) months) is a positive development for Special Permits holders. These changes are expected to enhance legal certainty and reinforce investor confidence in the stability of subsoil-use rights.

2.   Possibility of conducting auctions with a single participant

As of the date of this Law-Now article, electronic auctions for the sale of a Special Permit may only be held if at least two participants are registered. This requirement often creates practical difficulties during martial law when business activity and investor participation are significantly constrained due to war-related risks.

Draft Law No. 14249 proposes to remove this barrier by allowing auctions for the sale of a Special Permit to proceed even where only one participant has registered and submitted a bid.

If only one participant is registered for the auction, the Special Permit is deemed sold at a price equal to the closed bid submitted before the application deadline, increased by one auction step. The closed bid may not be lower than the starting price of the lot.

The single participant is deemed the auction winner and acquires all rights of an auction winner under the Subsoil Code and related regulations.

3.   Legislative stability guarantees

Draft Law No. 14249 introduces an important mechanism aimed at ensuring the stability of legal conditions for investors operating on strategic and/or critical mineral deposits.

By way of background, on 14 July 2025, the Cabinet of Ministers of Ukraine adopted Resolution No. 845 “On the approval of the lists of minerals and components of strategic and critical importance, and the lists of subsoil areas (i.e mineral deposits) of strategic and/or critical importance”, approving the lists of minerals and subsoil areas of critical and strategic importance. Follow the link to view our legal overview of this resolution.

Draft Law No.14249 proposes to introduce the new Article 25-1 (“Guarantees Against Legislative Changes Concerning Subsoil Use on Strategic and/or Critical Deposits”) into the Subsoil Code.

Specifically, Draft Law No.14249 provides that the rights and obligations of a subsoil user of critical and strategic mineral deposits will be governed by the legislation in force on the date the Special Permit was granted, for the entire duration of the permit.

This stability guarantee does not apply where subsequent legislation:

• reduces or abolishes taxes or fees;
• simplifies regulatory requirements for prospecting, exploration, or extraction of natural resources;
• eases state supervision (i.e. control) procedures, including customs, currency, tax, and other controls; or
• mitigates liability for subsoil users.

In such cases, the more favourable legislation will apply from the date of its entry into force. Similarly, the stability guarantee mechanism does not apply to legislative amendments relating to defence, national security, public order or environmental protection.

Key amendments proposed by Draft Law No. 14250

While Draft Law No. 14249 introduces substantive changes to key subsoil-use mechanisms. Draft Law No.14250 focuses on the introduction of additional definitions and procedural refinements. The proposed amendments are summarised in the Table 1 below:

Table 1. Overview of proposed amendments by Draft Law No.14250

 Conclusion

Draft Laws No. 14249 and 14250 collectively modernise and improve Ukraine’s subsoil-use regulatory framework by strengthening investor protections, improving procedural clarity, and addressing challenges caused by martial law.

Together, these reforms signal Ukraine`s intention to establish a more transparent, predictable, and stable regulatory environment for subsoil users and investors, while preserving regulatory flexibility in areas related to public interest and national security. If adopted, the amendments are expected to support sustainable development of Ukraine’s mineral and hydrocarbon resources and to enhance the country’s attractiveness for domestic and foreign investment in the extractive sectors.

Draft Laws No. 14249 and 14250 are currently being prepared for first reading. Further changes may be introduced during parliamentary consideration.

To learn more about Ukraine`s subsoil use market and its regulation, see: CMS Ukraine Investing and Doing Business in Ukraine 2025 Guide, available at the following link.

For more information on Ukrainian subsoil use market regulation and upcoming opportunities for investors, contact your CMS client partner or reach out to the CMS experts: Vitaliy Radchenko, Maryna Ilchuk.

_____________________________________

[1] The current version of Article 15 of the Subsoil Code of Ukraine No. 132/94-VR dated 27 July 1994 (Subsoil Code) provides for the automatic extension of Special Permits and deadlines for performing works on a subsoil area only for the duration of martial law and six months following its termination or cancellation.