Ukrainian Business Council identified critical reservation problems. What has to be changed today?

The Ukrainian Business Council (UBC) has identified the most “painful” problems in the areas of reservation and military registration, and developed a number of recommendations for their solution

The UBC is actively working on facilitating the reservation and military registration processes for the enterprises which are critical to the country’s economy. Considering the difficult realities of wartime, the Council proposes specific changes that can significantly alleviate the burden on business and ensure transparency and efficiency of the processes.

The BDO in Ukraine experts have analyzed the material and highlighted the most important information. The key aspects of the proposed changes are the cancellation of duplicative procedures, such as military registration at enterprises, as well as improvement of digital tools, such as the Reserve+ application and the Diia portal, to simplify interaction with government agencies. In addition, it is crucial to ensure that the Ministry of Defense properly monitors the implementation of reservation procedures and enters data into the relevant registers.

The Ukrainian Business Council has identified the key problems in the field of reservation and military registration and offered recommendations for their solution. Currently, the most critical issues that need to be addressed urgently are the following:

1   Cancellation of military registration at enterprises. Since the register of persons liable for military service “Oberih” already receives information from all key state registers, keeping military records at an enterprise is actually a duplication of this process. This creates a large bureaucratic and administrative burden on both business and the state, and is an additional corruption factor due to possible errors and penalties imposed on the management and the company.

2.    Improve the functionality of the Reserve+ application:  

• Add the function of communication with representatives of the TCCs and JVs via chatbot.
• Allow changing address, education and marital status information in the Reserve+ application.
• Add the possibility to remotely update all personal data through the Reserve+ application, including the function of sending a photo (scanned copy) of documents for confirmation.

3.    Improve the e-Reservation procedure through the Diia portal:

• Launch the function of generating reservation extracts on the Diia portal.
• Include all reservation orders and automatic extensions of reservations in the Diia portal database, as there are many cases when information on reservations that were not provided through the Diia portal is not displayed in the Reserve+ application.
• Use the reservation system on the Diia portal to determine the number of employees liable for military service at critical enterprises as of May 18, 2024. Currently, the Diia portal automatically determines the number of employees liable for military service using algorithms that are not fully understood by businesses. This often leads to discrepancies between the data in the Diia portal and the actual number of employees liable for military service.
•  Allow the possibility of canceling deferments through the Diia portal.

•    The e-Reservation Procedure stipulates that the formation of a notification is automatically terminated or its submission is blocked by the “Diia” portal if the information specified in the notification: is not confirmed by the information in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Formations; is provided incompletely; is inconsistent. Therefore, this paragraph should be supplemented with a provision stating that from the moment the authorized person of the Ministry of Economy or a state body using the “Diia” portal enters the necessary, accurate, and complete information into the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Formations, the submission of the notification is unblocked and its formation automatically continues.

•    Introduce the possibility of reservation for a real period of up to 12 months. The problem is that in practice, the Diia portal allows reservation for a period no longer than the expiration date of the order recognizing the enterprise as critical. In other words, if an employee is hired 1 month before the expiration of the critical enterprise status, Diia allows reserving an employee only for 1 month, which is not in line with the law.

4.    Updating the Conscription Procedure:

In accordance with paragraph 63 of the Procedure for the Conscription of Citizens for Military Service during Mobilization and for a Special Period (approved by CMU Resolution №560), persons liable for military service who have applied to the TCC for a deferment are not sent for a medical examination to determine their fitness for military service until the relevant commission makes a decision.

However, given that, according to the same Procedure, persons subject to reservations do not apply to the relevant commission for a deferment, this provision does not apply to them. Therefore, Clause 63 of the Procedure should be supplemented with a provision according to which persons liable for military service who are undergoing the reservation procedure are not sent for a medical examination to determine their fitness for military service until the end of such procedure.

5.    Mechanism for extending the reservation period:

In accordance with paragraph 2 of the Procedure for Reservation of Persons Liable for Military Service (approved by the Resolution of the Cabinet of Ministers of Ukraine №76 dated 27.01.2023), the reservation period for persons liable for military service working at enterprises, institutions and organizations that are critical for the functioning of the economy and ensuring the vital activity of the population during a special period may not exceed 12 months. At the same time, the said Reservation Procedure does not regulate the procedure for extending the reservation period.

Therefore, it is necessary to supplement the Procedure for Reservation of Persons Liable for Military Service with a mechanism for automatic extension of reservation of employees of enterprises, institutions and organizations that are critical to the functioning of the economy and the livelihood of the population during a special period, if the enterprise submits a corresponding application one month before the expiration of the status of a critical enterprise.

6.    The possibility of reservation for private entrepreneurs:

Regulations should be amended to address this issue and allow for the reservation of private entrepreneurs.

7.    Reservation of an enterprise’s management:

The new version of the Reservation Procedure does not contain the previously existing provision, allowing for the possibility of reserving 100% of the heads of enterprises and their deputies and members of management bodies (members of the supervisory and executive bodies), regardless of whether the enterprise has received the critical status.

We consider it necessary to reinstate this provision in the Reservation Procedure and restore the possibility to reserve 100% of the executives, even if the enterprise does not have a critical status.

8.    Submission of justifications for increasing the number of reserved employees:

The norm providing the possibility of submitting a justification for increasing the number of reserved employees was removed from the Reservation Procedure. We consider it necessary to restore the possibility of submitting justifications and prescribe a relevant procedure to prevent unequal interpretation or application practice.

9.    Processing decisions on the reservation:

The Reservation Procedure does not specify the procedure for obtaining a decision of the Ministry of Economy on the reservation of persons liable for military service by entities that submit the relevant lists.

Therefore, Clause 12 of the Reservation Procedure should be supplemented with a provision stating that in order to grant a deferral to persons liable for military service, the Ministry of Economy sends decisions on the reservation of persons liable for military service to the enterprises, institutions and organizations that submitted the lists.

10.    The TCCs and JVs ignore company requests:

The TCCs and JVs often ignore company requests and fail to enter data into the “Oberih” system. The Ministry of Defense should ensure that such information is entered and introduce proper control over the entry of information on enrollment in the special military registration and deferral of reservists, as well as determine the procedure for enterprises to notify the TCCs and JVs of such inactivity for prompt remediation and entry of the necessary information into the register.

11.    Unification of the data on special registration entry:

There is uncertainty as to which TCC and JV should enter the data on special registration. This issue has to be resolved so that businesses do not have to visit different TCCs and JVs, where they are required to put marks on their reservation extracts. This will significantly reduce the time spent by both companies and employees of the TCCs and JVs and make the process more efficient for all participants.

12.    Confirmation of the reservist notification:

A note on the absence of a person at the address of the person’s residence, reported by this person to the MCC and the JV when clarifying his / her credentials, or a note on the absence of a person at the address of the declared / registered residence in accordance with the procedure established by law, unless this person has not reported another address of residence to the MCC and the JV in accordance with Resolution №560, is not a proper confirmation of the notification of a reservist or person liable for military service about a call to the district (city) TCC.

This provision should be removed from the resolution, as it does not apply to the fulfillment of citizens’ obligation to mobilization training and mobilization, as provided for in Article 22 of the Law of Ukraine “On Mobilization and Mobilization Training”.

13.    Personal data clarification:

It should be regulated that the clarification of personal data of persons liable for military service and reservists and the introduction of relevant changes to military registration documents may be carried out regardless of their place of registration. However, medical examination of persons liable for military service and reservists to determine their fitness for military service and to issue a call-up for military service during mobilization or for a special period should be carried out by the TCCs and JVs where they are registered for military service.
Source: Ukrainian Business Council

These recommendations are aimed at minimizing the bureaucratic burden, improving communication between the business and the government agencies, and increasing the efficiency of using state digital services to manage employees liable for military service. Adoption of the proposed solutions will allow businesses to operate more efficiently during martial law, focusing their efforts on supporting the economy and meeting the country’s vital needs.

At BDO in Ukraine, we are always aware of changes in legislation to provide you with the latest information. Follow the updates on our website regarding military registration, mobilization and reservations. If you have any questions, our experts will help you find effective solutions. Please, contact us!