Material prepared by Natalia Slipchenko,
Senior HR Records Management Specialist/
Military Records Specialist
Department for the Provision of HR Records Management
and Payroll Accounting Services
How do changes to the rules for obtaining critical enterprise status and employee reservation affect employers, and what should businesses prepare for? This article outlines the key changes, their practical implications, and the steps businesses can take to verify their status, assess their employee reservation needs, and ensure compliance with the applicable procedures.
Effective 27 October 2026, changes introduced by Resolution No. 1328 of the Cabinet of Ministers of Ukraine dated 23 October 2026 (hereinafter, Resolution No. 1328) came into force, amending Resolution No. 76 of the Cabinet of Ministers of Ukraine dated 27January 2023 (hereinafter — Resolution No. 76).
The changes affect the procedure for designating enterprises, institutions and organisations as critical, the approval of criticality criteria, increases in reservation limits for employees liable for military service, and the powers of the new Coordination Centre for the Organisation of Reservation.
For employers, this means checking whether their company meets the current requirements, whether there are grounds for increasing its reservation limit, and whether military registration is properly maintained. At the same time, the introduction of the new rules does not automatically invalidate all previously adopted decisions on critical status or employee reservation. However, an exception applies to companies whose critical status is revoked following a review of the applicable criteria.
Changes to the criteria for critical enterprise status
Resolution No. 1328 clarifies the mechanism for approving the criteria under which enterprises, institutions and organisations may be designated as critical to the functioning of the economy, the livelihood of the population during a special period, or the needs of the Armed Forces of Ukraine and other military formations.
Attention is given to the criterion relating to the nature of an enterprise’s activities and the potential consequences of suspending or significantly reducing those activities during mobilisation.
The assessment will take into consideration whether the suspension or significant reduction of a business entity’s activities could adversely affect Ukraine’s defence capability, the operation of critical infrastructure, the livelihood of the population, or macro-financial stability.
The updated provisions cover 13 areas of activity, including:
- Defence industry
- Energy
- Utilities
- Extractive and manufacturing industries
- Agriculture and agro-industry
- Retail
- Construction
- Transport and logistics
- Information technology
- Banking
- Healthcare
- Telecommunications
- Emergency and rescue services
However, operating in one of the sectors listed above should not be regarded as automatically qualifying an enterprise for critical status. Critical status is granted in accordance with the prescribed procedure and subject to the applicable criteria.
Enterprises operating in other sectors may also be considered, but only with the approval of the Coordination Centre, based on a substantiated request from the relevant authorised public authority. However, the practical application of this provision currently requires further clarification of Resolution No. 1328. It remains unclear whether a single request will result in approval for an entire sector or whether each enterprise will need to undergo this two-stage approval process individually in order to obtain critical status.
The changes also affect the humanitarian sector, including representative offices of international organisations, charitable foundations and non-governmental organisations. Whether organisations operating in this sector may qualify for critical status depends on the importance of their activities to the functioning of the state during a special period and the need to ensure continuity of their operations.
Therefore, operating in the humanitarian sector does not guarantee critical status. It is important to demonstrate the significance of the organisation’s specific activities, explain why they are essential during a special period, and assess the potential consequences of suspending or significantly reducing those activities.
Is critical enterprise status required to be reconfirmed?
Resolution No. 1328 requires central executive authorities, other state authorities, regional state administrations, and the Kyiv and Sevastopol City State Administrations to review and approve the criteria used to designate enterprises as critical within 10 days of the Resolution taking effect, i.e., by 7 November 2026.
Resolution No. 1328 took effect on 27 October 2026, when it was officially published in Uriadovyi Kurier, No. 226. Accordingly, all amendments introduced by the Resolution have applied since that date.
Following the review of the criteria, the responsible public authorities (ministries and regional military administrations) must assess whether enterprises, institutions and organisations that have already been granted critical status continue to meet the applicable criteria.
It is important to note that the entry into force of Resolution No. 1328 does not mean that all previously adopted decisions granting critical status to enterprises cease to be valid.
Existing decisions remain valid for the period for which they were issued, unless there are grounds under the applicable legislation for their revocation or termination.
However, if a particular criterion is removed and an enterprise was granted critical status specifically on the basis of that criterion, the decision granting the enterprise critical status must be revoked.
This immediately raises a practical question: will enterprises be given sufficient time to gather the necessary documents, assess whether they meet other applicable criteria, and demonstrate compliance with the updated requirements?
Resolution No. 1328 does not provide for a separate transitional period for such confirmation. Therefore, enterprises currently have no guaranteed period in which to remedy the situation.
The relevant ministry or regional military administration may provide additional time for this purpose. However, businesses should not rely on this as a guaranteed option.
It is also important to distinguish between the removal of a criterion and the tightening of its requirements, as these are not the same. For example, a criterion may remain in force while the relevant thresholds are raised or additional conditions are introduced.
Past practice in reviewing the criteria may help clarify whether such changes could lead to the automatic revocation of critical enterprise status. A similar situation arose in the summer of 2026 during the previous review of the criteria. In practice, where the requirements were tightened, enterprises were generally given an opportunity to submit supporting documents and confirm compliance with the updated requirements. However, this approach was not necessarily applied in every case.
In practice, meeting this deadline may be challenging for the relevant public authorities, particularly as the revised criteria must be agreed with the Coordination Centre by 6 November. This is especially relevant as the Coordination Centre is now involved in the criteria approval process.
Businesses should therefore closely monitor decisions and updates issued by the ministry or regional military administration that granted them critical status.
Once the revised criteria are published, we recommend checking:
- whether the criterion under which the enterprise was granted critical status remains in place;
- whether the requirements under that criterion have changed;
- whether a deadline has been set for submitting documents.
Where possible, businesses may also consider contacting the relevant public authority in advance to seek clarification on any planned changes to the criteria. This may provide greater clarity on potential developments and help businesses plan their next steps.
In summary, a review of the criteria may result in an enterprise losing its critical status. This may affect its ability to reserve employees liable for military service. Businesses should therefore closely monitor the outcome of the review of the criteria under which they were granted critical status.
It is worth noting that the review does not apply to enterprises whose critical status was granted solely on the basis of the criteria set out in Resolution No. 76, without reference to any sectoral or regional criteria. Those criteria have not been amended as part of the current review.
The review specifically applies to the criteria used to determine whether an enterprise is important to a sector of the national economy or to meeting the needs of a territorial community, as set out in subparagraph 4 of paragraph 2 of the Criteria and Procedure approved by Resolution No. 76.
What role does the Coordination Centre play in determining critical status?
Resolution No. 1328 established the Coordination Centre for the Reservation of Persons Liable for Military Service during Mobilisation and Wartime (hereinafter, the “Coordination Centre” or the “Centre”), a temporary advisory body under the Cabinet of Ministers of Ukraine.
Key responsibilities of the Coordination Centre:
- Reviewing and approving sectoral and regional criticality criteria and providing recommendations for their revision. The outcome of this approval process is documented in a formal approval letter.
- Reviewing requests from public authorities regarding the designation of enterprises as critical.
- Providing recommendations on the revocation of critical enterprise status, including where relevant grounds have been identified by law enforcement authorities.
- Approving increases in reservation limits above 50%.
It is important to note that the Coordination Centre does not replace the public authorities responsible for making final decisions. Its role is to review the relevant proposals and provide recommendations, which are considered by the competent authorities when making decisions within the scope of their respective powers.
What are the timeframes for reviewing requests?
The Resolution sets out the following timeframes for processing the relevant requests:
- the relevant public authority reviews an enterprise’s application for critical status within seven working days and, where there are grounds for further consideration, submits the relevant materials to the Coordination Centre;
- the Coordination Centre must provide its recommendations and proposals following its review of the public authority’s request within one calendar month of receipt;
- where there is a duly substantiated need for urgent consideration, the public authority may request an expedited review. In such cases, the Coordination Centre must provide its recommendations within seven working days of receiving the request;
- after receiving the recommendations and proposals, the public authority must make the relevant decision or issue a reasoned refusal within three working days.
Accordingly, enterprises planning to apply for critical status or seeking a review of an existing decision should ensure in advance that their documentation is complete and that the significance of their activities is properly substantiated.
When can critical enterprise status be revoked?
The new rules also provide a mechanism for the Coordination Centre to issue recommendations and proposals on the revocation of decisions granting critical status to enterprises. Such a review may be initiated, in particular, based on information or requests received from law enforcement authorities.
In addition to the existing grounds, such as failure to meet the applicable criteria, salary requirements or reservation limits, the new rules introduce an additional basis for considering the revocation of critical status: recommendations and proposals from the Coordination Centre. The Centre may issue such recommendations, including in response to requests from law enforcement authorities.
However, a recommendation from the Centre or a request from a law enforcement authority does not revoke an enterprise’s critical status. A formal decision by the competent public authority is still required.
The new rules also address the consequences of changes to the applicable criteria. If the criterion on which an enterprise’s critical status in a particular sector or territorial community was based is removed, this may constitute grounds for revoking the relevant decision in accordance with the prescribed procedure.
Therefore, employers should check:
- the specific basis on which the enterprise was granted critical status;
- whether that basis remains applicable;
- whether the criteria the enterprise is required to meet have changed;
- the validity period of the current decision;
- whether the relevant public authority should be contacted to clarify the requirements or update the supporting documentation.
However, this does not mean that every enterprise with valid critical status is automatically required to resubmit its documents. Whether any further action is required will depend on the specific basis on which critical status was granted, the terms of the existing decision and the applicable requirements.
Businesses should therefore not assume that an existing decision granting critical status will necessarily remain valid until the end of its stated term in all circumstances. We are now awaiting the revised criteria and hope that the existing sectoral and regional criteria will remain in place and that the review will be largely formal in nature.
How to increase the reservation limit above 50%?
One of the key changes concerns the procedure for increasing the number of employees liable for military service who may be reserved above the general 50% limit.
Under the revised rules, the reservation limit may be increased by a decision of the competent public authority, taking into account the recommendations and proposals of the Coordination Centre.
For enterprises and institutions whose critical status is determined by the relevant public authority (a ministry or regional military administration), substantiated proposals to increase the reservation limit must be submitted to the Coordination Centre through that authority.
Therefore, an increase in the reservation limit does not automatically follow from obtaining critical enterprise status. It requires proper justification, completion of the prescribed procedure and a corresponding decision by the competent public authority.
It is also important to note that decisions of the Ministry of Defence of Ukraine to increase reservation limits for persons liable for military service, adopted after 8 December 2025, remain valid for the duration of the decision granting the enterprise, institution or organisation critical status for the functioning of the economy and the livelihood of the population during a special period, but not beyond the period specified in the relevant decision of the Ministry of Defence.
What should be included in the justification for increasing the reservation limit?
In our view, when preparing a request, businesses should explain why the existing reservation limit is insufficient to ensure continuity of operations, what functions the relevant employees perform, and what consequences may arise if they cannot be reserved.
Relevant considerations may include production processes, continuity of service delivery, the performance of critical tasks, maintaining infrastructure operations, and other circumstances demonstrating the need to increase the reservation limit.
The final list of required documents and the procedure for submitting them should be confirmed with the relevant public authority responsible for the enterprise concerned.
However, the practical implementation of the new mechanism remains unclear. Unless the criteria for increasing the reservation limit, the requirements for supporting justification and the procedure for reviewing requests are clearly defined, employers have no certainty as to how such decisions will be made. This creates a risk of inconsistent decision-making and unequal treatment of enterprises.
Therefore, until clear criteria and a transparent procedure for approving increased reservation limits are established, the mechanism for increasing the reservation limit above 50% remains insufficiently defined in practice.
Employee reservation limits in the defence-industrial and fuel and energy sectors
Resolution No. 1328 also introduces specific provisions on the reservation of employees of certain critical enterprises operating in the defence industry and energy sector.
For certain categories of organisations, including those in the defence-industrial sector or those performing critical functions in the fuel and energy sector, the reservation limit may be increased to up to 95% of the relevant number of employees liable for military service. The draft Resolution had provided for a limit of 85%.
This rule does not apply to all enterprises operating in these sectors, but only to the categories specified in the relevant legislation. To apply the special reservation limit, it is necessary to consider which authority granted the enterprise critical status and on what grounds, as well as the relevant decision of the Ministry of Defence of Ukraine (hereinafter, the “Ministry of Defence”) or the Ministry of Energy of Ukraine (hereinafter, the “Ministry of Energy”).
All employees liable for military service of such organisations who are directly involved in the production processes of critical organisations are also subject to mandatory reservation.
How to increase the reservation limit above 95%
For the specified defence-industrial and fuel and energy sector enterprises, the reservation limit may be increased above 95%.
An increase above this limit requires a decision by the Ministry of Defence of Ukraine or the Ministry of Energy of Ukraine, taking into account the agreed recommendations and proposals of the Coordination Centre. For this purpose, the relevant ministry must submit substantiated proposals to the Centre.
However, this procedure should not be confused with the general mechanism for increasing the reservation limit above 50%, as it applies only to specifically designated categories of enterprises and institutions.
What information must be included in a decision to increase the reservation limit?
Resolution No. 1328 specifies the information that must be included in a decision by the relevant public authority to increase the reservation limit.
The decision must specify:
- the legal entity identification code according to the Unified State Register of Enterprises and Organisations of Ukraine (EDRPOU);
- the full name of the critical enterprise, institution or organisation;
- the increased reservation limit;
- the total number of persons liable for military service who may be reserved;
- the validity period of the decision.
It is important to note that such a decision may remain valid for no longer than one year.
Once the decision has been made, taking into account the recommendations and proposals of the Coordination Centre, the relevant public authority submits a notification via the Diia portal to update the reservation limit in the Unified List.
How long do businesses have to use the increased reservation limit?
A further important deadline applies to the increased reservation limit.
Once a notification of the change in the reservation limit has been submitted via Diia, the relevant public authority or critical enterprise must complete the reservation process within 10 working days. If the reservation is not completed within this period, the public authority’s decision to increase the reservation limit ceases to be valid. Under the previous rules, the deadline was five working days.
In addition, once the decision to increase the reservation limit expires, the heads of the relevant public authorities and critical enterprises must, within five working days starting from the day following the expiry date, take the necessary steps via the Diia portal to cancel the deferments granted on the basis of that decision.
Therefore, these requirements have practical implications: obtaining a decision to increase the reservation limit is not sufficient in itself; the required procedural steps must also be completed within the prescribed timeframes.
Reservation of employees of donor agency representative offices and international technical assistance project implementers
Specific provisions apply to representative offices of donor agencies and implementers of international technical assistance projects that have been designated as critical organisations.
Generally, the number of employees liable for military service who may be reserved may not exceed 50% of the employees liable for military service directly involved in the implementation of a single project. In addition, no more than seven employees may be reserved.
The possibility of reserving more than seven employees is subject to a separate decision by the State Secretary of the Cabinet of Ministers of Ukraine, considering the recommendations and proposals of the Coordination Centre.
To apply for such an increase, the representative office of a donor agency or the implementer of an international technical assistance project must submit a substantiated request. One of the required conditions is that more than seven persons liable for military service are directly involved in the implementation of a single project.
Even in this case, the number of employees who may be reserved must remain within the 50% limit of the total number of employees liable for military service specified under the applicable provisions.
Therefore, while the rules allow more than seven employees to be reserved, this does not remove the other applicable restrictions.
How military registration affects an increase in the reservation limit
Resolution No. 1328 makes compliance with military registration requirements a key consideration when reviewing proposals to increase reservation limits.
The Coordination Centre may refuse to consider substantiated proposals for an increase in the reservation limit if the head of a critical enterprise is found to have systematically breached the applicable military registration requirements.
Resolution No. 1328 refers to:
- two or more documented breaches within the preceding 12 months;
- the head of the enterprise being held administratively liable for such breaches.
These circumstances are relevant when considering proposals to increase reservation limits.
However, the Resolution does not specify whether the two documented instances must relate to different obligations or may concern the same breach occurring repeatedly. Therefore, two separate observations should not be treated as two distinct breaches.
Resolution No. 1328 does not provide an exhaustive list of specific breaches. Instead, it refers to systematic non-compliance by the head of a critical enterprise with the legal requirements governing the organisation and maintenance of military registration records.
Which military registration violations may be relevant?
- failure to properly organise military registration;
- failure to comply with notification requirements in relation to Territorial Centres of Recruitment and Social Support;
- improper maintenance of military registration records;
- failure to comply with data reconciliation requirements;
- failure to comply with requirements to notify employees;
- failure to comply with lawful requirements of the competent supervisory authority.
In addition, it is important not to interpret this provision too broadly. It establishes grounds for refusing to consider proposals to increase the reservation limit; it does not provide for the automatic revocation of critical enterprise status or the cancellation of all existing deferments in every case of non-compliance with military registration requirements.
What employers should do now
Enterprises should consider conducting an internal review of their military registration procedures, including:
- up-to-date personal military registration lists and other military registration records;
- timely submission of the required notifications and information;
- properly documented orders appointing persons responsible for military registration;
- compliance with the requirements for notifying employees and liaising with the relevant public authorities;
- supporting documents demonstrating compliance with military registration obligations.
These measures will help businesses identify any deficiencies at an early stage and reduce the risk of complications when a request to increase the reservation limit is considered.
When to submit documents to obtain critical enterprise status
The Government has recommended that enterprises, institutions and organisations intending to obtain critical status submit the required documents in advance to the relevant central executive authorities, other public authorities, or regional and city state administrations.
This applies to enterprises seeking to be designated as critical to the functioning of the economy and the livelihood of the population during a special period.
However, the acceptance and consideration of applications for critical status have been suspended in certain cases, and applications are expected to resume once the relevant criteria have been reviewed.
For example, the State Agrarian Register (SAR) has announced the temporary suspension of applications from agribusinesses seeking designation as critical to the functioning of the economy and the livelihood of the population during a special period. The suspension is due to the need to review the sectoral criteria and bring them into line with the updated legislative requirements.
Applications through the State Agrarian Register will remain suspended until the relevant issues have been resolved. The resumption of applications will be announced separately through official information channels.
What Is provided for enterprises with outstanding payments?
Resolution No. 1328 also provides an exception for outstanding amounts arising from the temporary suspension or non-payment of funds from the state or local budget intended to finance an enterprise or pay for goods supplied or services provided by it.
Such outstanding amounts are disregarded for the purposes of the relevant provision until the payments due are received, provided that they are supported by documentary evidence.
Supporting evidence may include a certificate issued by the relevant budget funds administrator or by the State Treasury Service of Ukraine.
Accordingly, where the outstanding amount arises through no fault of the enterprise, but as a result of delays in budget financing or payments for goods supplied or services provided, it is important to ensure that the relevant circumstances are properly supported by documentary evidence.
However, this exception should not be interpreted as a general exemption from the requirements relating to tax arrears. It applies only to the specific circumstances described above and must be supported by appropriate documentation.
What employers should do: a step-by-step guide
To adapt to the new requirements, businesses should review their position step by step:
Step 1. Review the critical status decision. Identify the criterion on which the enterprise was granted critical status, check whether that criterion remains applicable, and confirm the date on which the current decision expires.
Step 2. Check compliance with the current criteria. Assess whether the enterprise’s activities meet the updated requirements and whether additional justification is needed to demonstrate their importance to the economy, the livelihood of the population or Ukraine’s defence capability.
Step 3. Assess whether the reservation limit needs to be reviewed. If the current limit is insufficient, prepare a justification for increasing the number of employees who may be reserved.
Step 4. Contact the competent public authority (the relevant ministry or regional military administration). Clarify the procedure for submitting materials, the list of required documents, and whether the materials may subsequently be forwarded to the Coordination Centre.
Step 5. Review military registration compliance. Conduct an internal audit of military registration records, compliance with the deadlines for mandatory notifications, and the performance of duties by the persons responsible for military registration.
Step 6. Monitor deadlines after a decision is made. If the reservation limit is increased, ensure that employees are reserved through the Diia portal within the prescribed 10-working-day period and monitor the validity period of the relevant decision.
Step 7. Document any special circumstances. If the enterprise relies on any of the exceptions provided for in the Resolution, including those relating to budget payments, ensure that the necessary supporting documents are prepared in advance.
Changes not included in the final version of Resolution No. 1328
Two changes discussed during the drafting process were not included in the final version of Resolution No. 1328.
Employees who are entitled to deferment on other grounds have not been excluded from the calculation base for the reservation limit. In other words, they continue to be included in the total number of employees liable for military service.
The proposed reduction in the reservation limit for district heating, water supply and municipal waste management from 75% to 60% was also not included in the final version.
Key takeaways:
- Existing critical status is not automatically revoked for all enterprises. However, if the criterion on which an enterprise’s critical status was based is removed, this may constitute grounds for revoking the relevant decision.
- Obtaining critical status will involve an additional stage with the Coordination Centre. This will also affect the time required to process applications.
- Any increase in the reservation limit will also depend on the recommendations of the Coordination Centre. Systematic breaches of military registration requirements by the head of an enterprise may prevent the relevant proposals from being considered.
- An increased reservation limit must be used within 10 working days after notification of the change is submitted via the Diia portal.
Overall, Resolution No. 1328 of the Cabinet of Ministers of Ukraine, the amendments under which took effect on 27 October 2026, clarifies the procedure for designating enterprises as critical, introduces the Coordination Centre as an additional mechanism for coordinating decisions on employee reservation, and establishes specific procedural requirements for increasing reservation limits.
For employers, it is important to distinguish between three separate issues: holding valid critical enterprise status, the right to reserve employees within the applicable limit, and the possibility of increasing that limit under a special procedure. These are distinct legal matters and should not be treated as interchangeable.
Attention should be paid to compliance with military registration requirements, proper justification of the need for employee reservation, and timely completion of the required procedural steps. These measures will help enterprises assess the impact of the new rules on their operations and effectively manage the reservation of employees liable for military service going forward.
In summary, the key point for employers is that valid critical status should not be treated as automatically preserving all employee reservation options. The immediate priorities are to monitor the review of the applicable criteria, confirm that the enterprise continues to meet the relevant requirements, maintain proper military registration to avoid violations and penalties, and comply with all applicable decision validity periods and procedural deadlines. This will enable businesses to respond to changes in a timely manner and reduce risks to business continuity.
If you have questions about obtaining critical enterprise status, employee reservation or maintaining military registration records, please contact BDO in Ukraine for professional advice.
