The Committee on Economic Development supported the draft law on facilitating investment attraction in the process of privatization and lease

On July 14, 2021, at its meeting, the Committee on Economic Development recommended to the Verkhovna Rada to adopt in the first reading the draft law No. 4572 on facilitating investment attraction in the process of privatization and lease of state and communal property. This draft law is part of a comprehensive package of draft laws developed by the State Property Fund of Ukraine in cooperation with MPs.

Adoption of this draft law will accelerate economic growth by attracting sustainable investment, creating new job opportunities, simplifying privatization, restoring investor confidence in the state interests and eliminating outside influence of financial and political groups on the activities of state property.

According to Dmytro Sennychenko, Chairman of the State Property Fund of Ukraine, the adoption of the draft law by the Verkhovna Rada will help attract sustainable investments into Ukraine’s economy.

“The positive decision of the Committee on Economic Development, which recommended MPs in the Verkhovna Rada to support the draft law on facilitating investment attraction is a very important step - thanks to this regulation, we cut a gap in the bureaucratic thickets on the path to economic growth in Ukraine,” said Dmytro Sennychenko.

So, the norms of the draft law envisage unblocking the privatization of those non-core state objects that have encumbrances in the form of seizures of property, debt obligations and securing court decisions. In particular, it provides for the possibility of writing off the debt of such enterprises to the budget as of January 1, 2021.

It also eliminates the possibility of sabotage of the privatization process by the heads of state-owned enterprises - the draft law provides for the automatic termination of contracts with the heads of those enterprises that are transferred to privatization.

Considerable attention in the draft law is paid to restoring investor confidence due to the legislative consolidation of transparency instruments, in particular, in the wide disclosure of data on privatization assets. In addition, an important norm is to extend the use of English law for 3 years – to January 1, 2024.

The draft law also provides for the possibility of privatizing state-owned enterprises with their existing licenses, permits and connection to various networks by transforming them into limited liability companies.

If it is adopted, the draft law will provide for the direction of 10% of proceeds from privatization of small objects that are located on their territory to local communities.

The draft law also aims to encourage public authorities to more actively transfer objects that they do not use in order to privatize, providing them with the opportunity to leave 20% of the proceeds from the privatization of the object in a transparent online auction for small-scale privatization.

In case of positive consideration of the draft law by MPs, the changes will affect the State Property Fund - for the collegial adoption of especially important decisions the Board of the State Property Fund will be created, as well as it will introduce a clear and transparent procedure for appointing the management of the Fund and defining its powers.

You can find the draft law text on the website of the Verkhovna Rada at the link - https://bit.ly/2U9HOtN.