New regulations on cross-border advertising and investments in electronic media

Content Distribution

On May 30, 2023, the Verkhovna Rada of Ukraine amended [1] the Law of Ukraine "On Advertising" and other statutes of Ukraine aimed at implementing EU acquis. Draft law No. 9206 extensively revised a number of articles of the Law, particularly those related to the advertising of goods (works, services) in a cross-border context, where a seller or advertiser is located outside Ukraine permanently or for the majority of the time.

The new provisions of the Law provide an opportunity for non-residents of Ukraine to advertise in Ukraine. They will be subject to the same regime as residents. In the case of regulated (licensed) services, goods, or works being advertised, it is necessary to indicate the corresponding permission or license in the country where such services are provided, work is carried out, or goods are sold. It is expected that this will particularly impact the advertising of financial services, excisable goods, and certified activities (personnel recruitment companies, auditors, lawyers, notaries, appraisers).

In addition, the Law of Ukraine "On Advertising" introduces extra circumstances under which cross-border advertising (radio, TV, email, social networks, etc.) falls under the legislation of Ukraine. These circumstances include when the advertiser does not restrict access to the advertisement from the territory of Ukraine, and the advertised goods are offered for sale to individuals located in Ukraine, which can be indicated by three or more of the following characteristics:

• the content is intended fully or predominantly for individuals in Ukraine;
• the advertisement is conducted in the state language;
• a seller of the goods/advertiser has a registered place of business, permanent or temporary establishment, office, branch, warehouse, or commercial premises in Ukraine;
• delivery service for the goods in Ukraine or within Ukraine is available;
• service for the maintenance of the goods or other related services is available;
• a recipient of electronic services is located in Ukraine, that shall be determined in accordance with Ukrainian rules of private international law.

However, there is an important exception to this rule - advertising in the official language of the European Union disseminated by a legal entity located in an EU member state. This is evidently a unilateral step by Ukraine towards openness with the intention of integrating into the EU in strict competition.

Furthermore, finally, residents of a state recognized by the Verkhovna Rada of Ukraine as an aggressor state (occupying state) are prohibited from acting as advertisers.

The product placement has been regulated, including a complete ban on such placement in news programs covering current events, programs on consumer rights protection, religious and kids shows. Product placement of prescription drugs, complex medical equipment, tobacco products, and products associated with tobacco use is completely prohibited, including a ban on any products by tobacco companies.

The time allotted for the placement of advertising videos and teleshopping in linear audiovisual media has been increased from 15 to 20 percent.

Media Investments

The Law has also taken steps towards transparency in the ownership of media and providers of related services by amending the provisions on advertising channels in the Law "On Media," which was recently adopted in 2022. From now on, only individuals residing in Ukraine or legal entities registered in Ukraine can be subjects in the field of audiovisual, print, and online media.

Only Ukrainian citizens can be the ultimate beneficial owners and key participants of the provider of electronic communication services for digital terrestrial broadcasting (using radio frequency spectrum). An individual registered in an offshore zone cannot be the owner of a substantial interest at any level of the corporate ownership chain.

[1] The Draft Law on Amendments to the Law of Ukraine "On Advertising" regarding the implementation of European legislation into national legislation of Ukraine through the implementation of specific provisions of the EU acquis in the field of audiovisual advertising (European Convention on Transfrontier Television, Directive 2010/13/EU of the European Parliament and of the Council on audiovisual media services of 10 March 2010 as amended by Directive (EU) 2018/1808 of 14 November 2018) and certain other laws, dated 13 April 2023, No. 9206