1 GENERAL

1.1 Please list and briefly describe the principal legislation and regulatory bodies which apply to and/ or regulate aviation in Ukraine.

Aviation in Ukraine is governed by a large number of acts, including international treaties, Ukrainian laws and by-laws regulating different areas of the Ukrainian aviation sector. In accordance with the Constitution of Ukraine, international treaties duly ratified by the Ukrainian Parliament form part of Ukrainian legislation.

The principal legislation includes:

  1. Convention on International Civil Aviation (the "Chicago Convention") together with its 18 Annexes;
  2. International Convention Relating to Cooperation for the Safety of Air Navigation, 1960;
  3. Convention on Offences and Certain Other Acts Committed On Board Aircraft (the "1963 Tokyo Convention");
  4. Convention for the Suppression of Unlawful Seizure of Aircraft (the "1970 Hague Convention");
  5. Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (the "1971 Montreal Convention");
  6. Protocol for the Suppression of Unlawful Acts of Violence at Airports serving International Civil Aviation (the "1988 Montreal Protocol");
  7. Convention for the Unification of Certain Rules for International Carriage by Air (the "1999 Montreal Convention");
  8. Convention on International Interests in Mobile Equipment and the Aircraft Equipment Protocol (the "2001 Cape Town Convention");
  9. Air Code of Ukraine, 2011 (as amended) (the "Air Code");
  10. the Law of Ukraine "On Transport", 1994 (as amended);
  11. the Law of Ukraine "On State Programme of Civil Aviation Air Safety", 2003 (as amended) (the "State Programme of Air Safety");
  12. Rules of Civil Aircraft Registration in Ukraine, 2012;
  13. Rules of Carriage of Passengers and Cargo by Air, 2012;
  14. Licensing Terms for Providing Passengers and Cargo Air Services, 2001;
  15. Rules of Civil Aircraft Operators Certification, 2005 (as amended);
  16. Rules of Certification of Aviation Personnel in Ukraine, 1998 (as amended); and
  17. Procedure for and Rules of Mandatory Aviation Insurance of Civil Aviation, 2002.

The principal aviation regulatory bodies in Ukraine are:

  1. the Ministry of Infrastructure of Ukraine (the "Ministry of Infrastructure") – the main governing body responsible for promotion and implementation of the state aviation policy and control of Ukrainian airspace; and
  2. the State Aviation Service of Ukraine (the "State Aviation Service") – the principal executive aviation body which directly controls and supervises aviation in Ukraine by, in particular, approving the specific aviation by-laws, issuing operating licences to aviation carriers, and controlling aviation carriers' compliance with statutory licence provisions.

Apart from the above governmental aviation regulatory bodies, aviation in Ukraine is also governed by the Interstate Aviation Committee (the "IAC") as a permanent executive body authorised to coordinate and control the use and management of civil aviation in the Commonwealth of Independent States (CIS) in accordance with the Civil Aviation and Airspace Use Agreement dated 25 December 1991, to which Ukraine is a party.

1.2 What are the steps which air carriers need to take in order to obtain an operating licence?

Carriage of passengers and/or cargo may be undertaken by an air carrier on the basis of an operating licence only. The operating licence is issued by the State Aviation Service for an unlimited period to air carriers at least 50 per cent of the share capital of which is held by Ukrainian legal entities or natural persons. The procedure for the issuing of an operating licence is as follows:

  1. lodging by the air carrier of an application together with a certified copy of the Air Operator Certificate with the State Aviation Service (additional relevant information: the Air Operator Certificate is issued by the State Aviation Service and confirms the Air Operator's compliance with the requirements of Ukrainian aviation law and the recommendations of the International Civil Aviation Organization (the "ICAO"). The Air Operator Certificate is issued on the basis of the respective application (supported by a number of documents confirming the Air Operator's ability to carry out respective flights);
  2. the State Aviation Service must take a decision whether to grant the licence within 10 business days on receipt of the documents referred to in paragraph (a) above;
  3. within 3 business days of the date of the decision, the same must be notified by the State Air Service to the air carrier;
  4. within 30 days of the receipt of the notification, the air carrier must pay the fee for the issuance of the licence in the amount of one minimum salary (UAH 1,218 (approx. EUR 70)) and file the confirmation of such payment with the State Aviation Service; and
  5. within 3 business days of receipt of the confirmation of payment (usually a copy of an MT103 or SWIFT advice) the State Aviation Service must issue the operator's certificate.

1.3 What are the principal pieces of legislation in Ukraine which govern air safety, and who administers air safety?

Air safety in Ukraine is governed by an extensive body of laws and regulations. The principal pieces of Ukrainian legislation on air safety consist of: the Air Code; the State Programme of Air Safety; the Laws of Ukraine "On carriage of cargo by Air", 1999 (as amended) (the "Cargo Carriage Law") and "On liability of air carriers in international carriage of passengers", 2002 (as amended); the Decree of the President of Ukraine "On emergency measures with regard to promotion of aviation safety in Ukraine", 1998; Government Regulation "On Provisional Control Rules regarding promotion of civil aviation air safety", 1995 (as amended); "Sectoral flight safety programme for the years 2014-2016" adopted by the Ministry of Infrastructure in 2014.

The Chicago Convention and Annex 17 thereto, the 1963 Tokyo Convention, the 1970 Hague Convention, the 1971 Montreal Convention and the 1988 Montreal Protocol, being a part of Ukrainian legislation, regulate air safety in Ukraine as well.

The supervision and administration of air safety in Ukraine is performed by the State Aviation Service. In addition, in 2012 the Cabinet of Ministers of Ukraine created the Interagency Commission on Air Safety of Civil Aviation, an advisory body the main function of which is to coordinate executive authorities on the promotion of civil aviation safety.

1.4 Is air safety regulated separately for commercial, cargo and private carriers?

There is no sectoral difference in the regulation of air safety. However, Ukrainian aviation legislation provides specific rules for the carriage of military and hazardous cargo.

1.5 Are air charters regulated separately for commercial, cargo and private carriers?

Not entirely. There is a general legal framework which sets out uniform regulation for commercial and cargo air charters.

However, some enactments, in particular the Cargo Carriage Law and the Rules of Carriage of Cargo by Air, 2006 (as amended) set out specific requirements for carriage of cargo by air.

The Joint Aviation Requirement for the operation of commercial air transport (aeroplanes) and the Rules of certification of civil aircraft operators performing commercial carriage as required by OPS 1 provide separate regulation and requirements for commercial air charters.

1.6 As regards international air carriers operating in Ukraine, are there any particular limitations to be aware of, in particular when compared with 'domestic' or local operators? By way of example only, restrictions and taxes which apply to international but not domestic carriers.

The Air Code provides that international air carriers operating in Ukraine should have a licence and a certificate granted by the relevant government body. Scheduled air services are provided by international air carriers in accordance with the ICAO Rules, Standards and Recommendations, the international treaties to which Ukraine is a party, the aviation regulations of Ukraine and agreements between the aviation authorities. However, charter air services are carried out by international air carriers in accordance with the aviation regulations of Ukraine only.

The operating licence granting the right to perform flights to/from/ inside Ukraine is granted to international air carriers by the State Aviation Service.

The State Aviation Service is currently considering the draft Aviation Rules of Ukraine "On Procedure of granting and revocation of authority to provide air service" (the "Draft Aviation Rules") which, in case of adoption, will trigger new developments in the Ukrainian aviation sector. In particular, the Draft Aviation Rules envisage that only carriers which are owned (with over 50% of the share capital) or which are actually controlled (ultimate beneficial ownership) by the Ukrainian state and/or the citizens of Ukraine, have the right to operate international scheduled and/or charter air lines.

In addition, the Draft Aviation Rules stipulate that the authority to provide air service in order to perform scheduled international air transportation to and from Ukraine will be granted only if an air carrier performs scheduled air transportation within Ukraine for at least 12 months. However, this provision will become effective within a year of the date on which the Draft Aviation Rules come into force.

1.7 Are airports state or privately owned?

According to the Air Code, airports may be both state and privately owned. However, as a matter of practice, most Ukrainian airports are state or municipally owned.

1.8 Do the airports impose requirements on carriers flying to and from the airports in Ukraine?

The airports may determine the charges for ground handling operations. The charges for take-off and landing of aircraft, passenger handling and air safety support are determined by the bylaws of the Ministry of Infrastructure.

1.9 What legislative and/or regulatory regime applies to air accidents? For example, are there any particular rules, regulations, systems and procedures in place which need to be adhered to?

The investigation of air accidents in Ukraine is regulated by:

  1. the Air Code;
  2. Annex No. 13 to the Chicago Convention;
  3. the State Programme of Air Safety;
  4. the Regulation on Investigation of Aviation Accidents and Incidents, 2010; and
  5. the Rules of Investigation of Aviation Accidents and Incidents with Civil Aircraft in Ukraine, 2005 (as amended).

The regulatory authorities in this area are:

  1. the State Aviation Service (supervises and controls the air safety and air navigation service in Ukraine); and
  2. the National Bureau of Investigation of Aviation Incidents and Accidents with Civil Aircraft (performs the technical investigation of aviation accidents and incidents that occurred involving civil aircraft in Ukraine).

In addition, the IAC may perform air accident investigation in accordance with the Civil Aviation and Airspace Use Agreement.

Its activity related to accident investigation is fully compliant with recommended international practice (Annex No. 13 to the Chicago Convention for accident investigation).

1.10 Have there been any recent cases of note in Ukraine involving air operators and/or airports?

Following the annexation of Crimea by the Russian Federation in March 2014, which was not recognised by Ukraine, the State Aviation Service and state company UkrAeroRukh limited the air space of Crimea. Similar prohibitions were introduced by the European Organisation for the Safety of Air Navigation (Eurocontrol) and ICAO.

It was reported that the State Aviation Service has fined 27 Russian airlines for the total amount of about UAH 300 million (approx. EUR 16.5 million) for violation of the rules and procedures for the use of Ukrainian airspace by flying to and from Crimea.

On 17 July 2014 a Malaysia Airlines jet carrying 298 people on a flight from Amsterdam to Kuala Lumpur was shot down in the rebel-held territory of eastern Ukraine.

2 AIRCRAFT TRADING, FINANCE AND LEASING

2.1 Does registration of ownership in the aircraft register constitute proof of ownership?

Registration of an aircraft with the State Register of Civil Aircraft of Ukraine does not constitute proof of ownership. Such registration means that the aircraft is under Ukrainian jurisdiction and the State Aviation Service is entitled to control its flights and operation. Proof of ownership in the aircraft consists of a sale and purchase agreement or another document on the basis of which the aircraft was acquired.

2.2 Is there a register of aircraft mortgages and charges? Broadly speaking, what are the rules around the operation of this register?

There is no special register of aircraft mortgages and charges in Ukraine, therefore encumbrances over the aircraft are registered with the State Register of Encumbrances over Movable Property. This Register is up to date, maintained by the Ministry of Justice of Ukraine and information contained therein has a probative value of the encumbrance over a certain object of movable property. Encumbrances over the aircraft should be registered with the State Register of Encumbrances over Movable Property based on the encumbrancer's application on the day of its submission, provided that the nominal fee in the amount of UAH 34 (approx. EUR 2) has been paid.

2.3 Are there any particular regulatory requirements which a lessor or a financier needs to be aware of as regards aircraft operation?

The Rules of Civil Aircraft Registration provide that an aircraft may be registered in the State Register of Civil Aircraft of Ukraine only if it is (i) owned by a legal entity incorporated in Ukraine or a natural person resident in Ukraine, or (ii) rented or leased by a Ukrainian operator from the non-resident owner.

Due to the volatile economic environment in Ukraine, the National Bank of Ukraine has imposed several currency restrictions of which a lessor or a financier needs to be aware, should it decide to transfer funds from Ukraine under a cross-border lease agreement.

Needless to say, Ukrainian lessees can only lease and operate aircraft which have a valid airworthiness certificate recognised in Ukraine. Currently the type of certification standard recognised in Ukraine is JAR-21 and its EU equivalent. The АП-21 IAC certification standards dated 2013 are being phased out together with the older Soviet-built aircraft, although the Ukrainian-designed AN-140/148 family of regional jets have been issued an IAC-type certificate to allow it to be operated everywhere in the CIS.

2.4 Is Ukraine a signatory to the main international Conventions (Montreal, Geneva and Cape Town)?

Ukraine has ratified the 1999 Montreal Convention (effective as of 6 May 2009) and the 2001 Cape Town Convention (effective as of 1 November 2012). The Geneva Convention on the International Recognition of Rights in Aircraft has not been ratified by Ukraine.

2.5 How are the Conventions applied in Ukraine?

International conventions ratified by the Ukrainian Parliament constitute a part of Ukrainian legislation. They are applied in the ordinary course by Ukrainian courts. ICAO Standards also form part of Ukrainian legislation as these are an integral part of the Chicago Convention.

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Originally published by Global Legal Group Ltd, London.

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