On 7 November 2018, the Cabinet of Ministers of Ukraine (CMU) adopted Resolution No. 939 On Certain Questions of Disposal of Geological Data, which approves new procedures for disposal of geological data (the “New Procedure”).

New Procedure entered into force on 10 November 2018, and affects all subsoil companies and investors by simplifying disposal of private geological data and by streamlining the procedure for acquisition of state geological data. Moreover, it enhances transparency in the sector by creating catalogue of information on geological data which will be accessible online.

Please follow this link to our earlier Law-Now to read more on implementation of EITI principles in Ukrainian extractive industry.Below we capture the main changes envisaged by the New Procedure.

1. LEGAL REGIME OF GEOLOGICAL DATA

Scope of geological data

The New Procedure extends the scope of geological data to cover geochemical, hydrogeological, engineering-geological, geology-economical, technological, ecology-geological, physic-geographical, geodesic, gastronomical, aerospace, petrographic and paleontological information in hard copy and electronic form.

Secondly, the New Procedure classifies geological data in the following categories:

• initial geological data – information or data obtained during subsoil use from exploration of geological objects in places of their natural occurrence, specimens, samples and as a result of monitoring conditions, usage and protection of subsoil;
• secondary geological data – information or data saved in tangible or electronic form, obtained on all stages of geological exploration or from subsoil use from processing, interpretation and analysis of initial geological data.

Geological data catalogue

The New Procedure envisages creation of a centralised catalogue of information on geological data (the “Catalogue”). The Catalogue will be maintained by the State Informational Geological Fund of Ukraine (or Geoinform) in accordance with the procedure approved by the Ministry of Ecology and Natural Resources.

Information on geological data, irrespective of its ownership must be provided to the Catalogue, including information on location of deposits or performance of works, name, type (initial or secondary), date of creation and owner of the geological information. Geoinform will also maintain records on the creation, acquisition, transfer of ownership or provision of the right to use geological data.

Geoinform is obliged to digitise the geological data according to a procedure to be approved by the Ministry of Ecology and Natural Resources of Ukraine within three months.

The New Procedure also requires the creation of the State Depository of Geologic Information and Core Samples. Initial geological data that is owned by the state must be transferred to this depository, after it has been created.

2. DISPOSAL OF GEOLOGICAL DATA

The New Procedure confirms that geological data can be disposed, including through its contribution into the charter capital of the company.

At the same time, disposal is limited in relation to geological data with restricted access in accordance with the Law of Ukraine No. 3855-XII On State Secret dated 21 January 1994 and is prohibited for transfer to companies that are subject Ukrainian sanctions in accordance with the Law of Ukraine No. 1644-VII On Sanctions dated 14 August 2014.

Exporting geological data can be done according to Ukrainian law on foreign economic activities and the Customs Code.

Disposal of state owned geological data

Geological data created or acquired at the expense of the state is owned by the state in accordance with the New Procedure.

Secondary geological data owned by the state can be accessed free of charge. Such information must be published on the website of Geoinform in accordance with the New Procedure. However, the subsoil user is required to pay for such secondary geological information as reimbursement of the state’s expenses on exploratory works, in case of purchasing of the Special Permit (licence).

The New Procedure made transparent and streamlined the procedure for access by private companies to the initial geological data owned by the state, as follows:

• an interested party must apply to the State Service of Geology and Subsoil of Ukraine (SSGSU);
• SSGSU will review the application within ten days and if approved provide the applicant with a draft agreement for provision of services for evaluation of the initial geological data for execution;
• SSGU will provide the applicant with an invoice for the initial geological data and sale and purchase agreement of the usage right of initial geological data within 15 calendar days after receiving of the executed copy of the agreement for provision of services for evaluation of initial geological data from the applicant;
• the applicant will execute the respective sale and purchase agreement and pays for the initial geological data within 30 calendar days; and
• initial geological information will be provided to the applicant within ten calendar days after payment.

Disposal of private geological data

According to the New Procedure, geological data created or acquired with the funds of companies and individuals is owned by these entities.

SSGSU consent is no longer needed for disposal of private geological data. The only requirement is that the SSGSU be sent a notice no later than ten days before it is to take place.

On other hand, subsoil use agreements that are part of special permits for subsoil usage (the “Special Permit”) must include obligation of the subsoil user to notify the SSGSU regarding creation, acquisition, transfer of ownership or provision of the right to use geological data in accordance with the New Procedure.

The New Procedure also requires disclosure of privately owned secondary geological data in relation to the subsoil plot for which Special Permit was terminated or expired on the website of its owner or website of Geoinform within 3 years after any such event, in which case initial geological data owned by the subsoil user shall be transferred to the state.

For more information on these new regulations, please contact authors of this publication.
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Authors:

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

Anatolii Doludenko, Associate, anatolii.doludenko@cms-cmno.com