The impact of martial law on economic activity in Ukraine

Abstract

This article examines the impact of the legal regime of martial law on economic activity in Ukraine. It analyzes key challenges faced by businesses under armed aggression, including disruptions to economic ties, destruction of production and transport infrastructure, complications in logistics, and overall economic instability. Military operations caused substantial material losses and required rapid adaptation to new legal and economic conditions. The study pays particular attention to the legal framework governing economic activity during martial law, highlighting legislation that defines the economy’s specific functioning and state mechanisms influencing business operations. The application of force majeure provisions in cases where contractual obligations cannot be fulfilled due to hostilities is emphasized as crucial for ensuring legal certainty. The article also considers the effects of martial law on logistics and foreign economic activity, noting that damaged transport infrastructure, port restrictions, and reliance on alternative routes have complicated export and import operations and increased costs. Government support measures are examined, including relocation of enterprises from combat zones to safer regions, preserving production capacity, jobs, and economic activity. Simplified procedures for starting and conducting business, such as declarative permissions for certain activities, are also highlighted. The study concludes that martial law has significantly transformed the conditions of economic activity in Ukraine, while stimulating the development of flexible legal mechanisms for regulation. Effective state policy supporting entrepreneurship, improving the regulatory framework, and the ability of businesses to adapt to crisis conditions are identified as essential for ensuring economic stability and facilitating the restoration of the state’s economic activity.