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Library of U.S. Congress - Global Legal Monitor on Ukraine: New Law on TV Ownership

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(Oct. 7, 2015) On September 3, 2015, the Verkhovna Rada (legislature) of Ukraine passed a Law that introduces detailed definitions of ownership and interest in television and other broadcast companies, provides for new rules on television station ownership, and establishes new financial disclosure requirements for owners. (Law No. 674-VIII on Amending the Legislative Acts of Ukraine Concerning Transparency of Mass Media Ownership and Implementation of State Policy in the Field of Television and Radio Broadcasting, Verkhovna Rada website (Sept. 3, 2015) (in Ukrainian).) The Law was introduced by the faction in the parliament that supports the President. (Legislative Information on the Draft Law on Amending the Legislative Acts of Ukraine Concerning Transparency of Mass Media Ownership and Implementation of State Policy in the Field of Television and Radio Broadcasting, Verkhovna Rada website (June 16, 2015) (in Ukrainian).)

 Prohibitions on Ownership

 The new Law revises article 12 of the current Law of Ukraine on Television and Radio Broadcasting of 1994, newly establishing that national and local government authorities, individuals and legal entities registered in the offshore zones, political parties, religious organizations, professional unions, and persons who were convicted by courts and are still serving their sentences cannot be owners of a Ukrainian television or radio company. Additionally, the new Law denies “physical or legal persons who are residents of a country recognized by the Verkhovna Rada of Ukraine as a state-aggressor or state-occupier” the right to own a television or radio organization or program in Ukraine. (Law No. 674-VIII, art I.2(3); Law of Ukraine on Television and Radio Broadcasting of 1994, VIDMOSTI VERKHOVNOI RADY UKRAINY [official gazette] 1994, No. 10, Item 43 (in Ukrainian).)

 The phrase “country recognized by the Verkhovna Rada of Ukraine as a state-aggressor or state-occupier” is considered a euphemism referring to the Russian Federation, which annexed Ukrainian territory in the Crimea in 2014 and supports a secessionist movement in the eastern part of Ukraine. (Ukraine: New Amended Law on TV Ownership Aimed at Oligarchs, Russia, MEDIA NOTE (Sept. 24, 2015) Open Source Center online subscription database, Document No. CEL2015092468272013.) Reportedly, there are no television or radio companies in Ukraine that are owned by Russian entities or individuals today. (Id.) Earlier, Ukraine had passed a law that banned television programs and movies that depict Russian military and law enforcement figures. (Peter Roudik, Ukraine: Movies About Russian Police and Military Banned, GLOBAL LEGAL MONITOR (Apr. 6, 2015).)

 New Definition of TV, Radio Ownership

 The Law provides a new definition of television and radio ownership, which includes all owners and participants in TV or radio organizations or providers of program services and all physical persons and owners of participating legal bodies at all levels of the chain of ownership and final beneficiary owners who have the possibility of exercising decisive influence on the management or business activity of the organization directly or through other persons. (Law No. 674-VIII, art I.2(1), translated in Ukraine: New Amended Law on TV Ownership Aimed at Oligarchs, Russia, supra.)

Transparency Provisions

 Information on the structure of ownership and on those individuals who own 10% or more of a television or radio broadcasting company will be published on the company’s website and sent to the National Council for Questions of Television and Radio Broadcasting (the national regulator). The new Law gives the Council the right to impose fines for incorrect or insufficient information on ownership. (Law No. 674-VIII, arts. I.1(3) & (4).)

 It is expected that the implementation of the new Law will ensure wider transparency of ownership of broadcasting companies; however, Ukrainian commentators call the Law weak because it does not address the financing of individual television channels and programs. Another weakness of the Law, they suggest, is found in the fact that while it prohibits transfer of funds from offshore zones, it does not exclude funding from financial sources located in Cyprus, even though “ownership of most Ukrainian TV channels is exercised through Cyprus.” (Ukraine: New Amended Law on TV Ownership Aimed at Oligarchs, Russia, supra). Some commentators also expressed doubt that the Law will be amended to include Cyprus in the future, because of the strong lobbying efforts of television business owners. (Id.)

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