Reuters International

The letters "Mc" and the flag of the self-proclaimed Luhansk People's Republic are seen on the roof a building, which before housed a McDonald's restaurant in Luhansk, Ukraine, April 29, 2016. REUTERS/Stringer

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By Anton Zverev and Maria Kiselyova

MOSCOW (Reuters) - The McDonald's fast food chain said its lawyers were investigating after entrepreneurs in separatist-controlled eastern Ukraine started selling McDonald's-style hamburgers out of a restaurant that the company shut down two years ago.

The company said it pulled out of the Ukrainian city of Luhansk in May 2014 for security reasons after pro-Russian insurgents mounted an armed uprising there against Kiev's rule, and unilaterally declared the region's independence.

But since then, the company said, the restaurant premises in Luhansk was unlawfully taken over. Photographs sent to Reuters by a witness on Friday showed the restaurant was now open and selling fries and burgers that look similar to those served in McDonald's restaurants worldwide.

All McDonald's branding and logos had, however, been removed from the restaurant.

On the outside of the building, the McDonald's sign had been doctored to leave only the letters "Mc", and the blue-red-and-light blue flag of the self-proclaimed Luhansk People's Republic was attached to the roof.

"Our lawyers are working on this issue," said a spokeswoman for McDonald's in Ukraine.

The region around Luhansk and the neighbouring city of Donetsk are under Kiev's rule in the eyes of international law but are de facto under the control of separatist administrations which are not internationally recognised.

The United States and European Union imposed sanctions on many of the separatist leaders, and their backers in Russia, alleging they colluded to unlawfully seize the territory. The separatists and Moscow said they had to act to protect their regions from persecution by Kiev.

The region's unrecognised status makes enforcing property rights enshrined in international law difficult.

Photographs posted on social media this week showed the Luhansk restaurant selling food wrapped in McDonald's branded packaging, but Reuters could not immediately verify their authenticity.

On Friday, the packaging being used carried no McDonald's branding, and customers were instead being offered plain white plastic bags in which to take their orders home.

The spokeswoman for McDonald's Ukrainian operation said no one had asked the company if they could re-open the branch in Luhansk.

"The illegal use of trademarks, names and images of products that belong to McDonald's is an example of the violation of the company's intellectual property rights," she added. "In such cases, the corporation reserves the right to resolve questions of the illegal use of the company's names or images using the means set out by law."

It was not clear who was operating the business in the McDonald's restaurant in Luhansk. People answering the phone at two numbers listed for the restaurant said they had no connection to the business.

An official in the legal department of the separatists' trade ministry in Luhansk said he knew nothing about the issue and that officials had taken no action.

(Additional reporting by Maria Tsvetkova in MOSCOW and Pavel Polityuk in KIEV; Writing by Christian Lowe; Editing by Mark Potter)

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