Business news from Ukraine

UKRAINIAN PARLIAMENT BACKS BILL ON CUTTING NUMBER OF MEMBERS FROM 450 TO 300

The Verkhovna Rada of Ukraine has passed at first reading presidential bill No. 1017 amending Articles 76 and 77 of the Constitution of Ukraine, which proposes to reduce the number of Members of Parliament to 300 and elect them according to the proportional election system.
236 MPs voted in favor of the bill.

FARMLAND TURNOVER BILL REGISTERED IN UKRAINIAN PARLIAMENT

Government’s bill No. 2178 about the turnover of farmland has been submitted to Ukraine’s Verkhovna Rada and sent to the profile committee.
According to information on the parliament’s website, the bill was registered on September 25. It provides for the abolition of the ban on sale of farmland of all forms of ownership from October 1, 2020.
According to the document, citizens and legal entities of Ukraine, territorial communities, and the state can buy farmland.
At the same time, the bill proposes to deprive individuals and legal entities, foreign states that are subject to the sanctions law, of the right to purchase land.
“Foreigners and stateless persons may obtain ownership rights to farmland by succession prescribed in the law, but are required to sell them within one year from the date of obtaining ownership rights,” the government said in the document.
The bill sets the minimum starting price for the sale of land plots in public and communal property at land tenders at a level not lower than the standard monetary value, ensures the right of citizens to buy back land for farming, owned by them on a permanent use right basis and inherited tenure rights in installments paid during up to five years at a price equal to the standard monetary value of such land plots.
The document provides the tenant’s pre-emptive right to purchase a land plot, provides for the obligation of the state registrar to place information on the price (value) of property rights, including use rights, in the register of ownership rights.
The total area of farmland owned by a citizen or a legal entity of Ukraine, taking into account affiliated persons: within one region should not exceed 15% of farmland of such an area and 0.5% of farmland of Ukraine, according to the bill.
In addition, in order to obtain data on the total area of farmland owned by one person and affiliated persons, the software of the State Land Cadastre must provide information interaction with the public register of ownership rights to real estate and the unified public register of legal entities, individual entrepreneurs and public organizations.

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UKRAINIAN PARLIAMENT EXTENDS LAW ON FINANCIAL RESTRUCTURING FOR THREE YEARS

The Verkhovna Rada of Ukraine on September 19 extended the law on financial restructuring for three years. Some 300 MPs voted for the corresponding decision.
According to the website of the National Bank of Ukraine (NBU), the bill supported by the MPs also provides for the clarification of legislation in order to more optimally conduct the relevant procedures by the banks. In particular, it is allowed to conduct a joint restructuring procedure for several debtors who are related parties but have different creditors, the document clarifies conditions for the assignment of claims in a financial restructuring procedure and the norms regarding concentration, which should facilitate the restructuring process in terms of coordination with the Antimonopoly Committee of Ukraine. In addition, the rules regarding the determination of the moment of reimbursement for creditors’ losses, providing for the satisfaction of claims through mortgage, were clarified.
According to the report, the National Bank believes that the next, no less important task, is creating a full-fledged secondary market for distressed debts and developing the corresponding infrastructure.
“It is necessary not only to solve the problems of working with existing bad debts, but also to think about the future. With the intensification of lending, new non-performing loans (NPL) will inevitably appear, so it is necessary to create civilized conditions and instruments for effective work with NPL in order to prevent their accumulation on the balance sheets of banks in the future,” the NBU press service said citing Kateryna Rozhkova, the first deputy governor of the NBU.

UKRAINIAN PARLIAMENT PLANS TO CHANGE CONCESSION LEGISLATION

Ukraine’s Verkhovna Rada has passed at first reading the law on concession foreseeing the amendments to some legislative acts aimed at improving legal regulation of concession activities.
An Interfax-Ukraine correspondent reported that bill No. 1046 was supported at first reading at the plenary meeting of the Rada by 293 MPs on Friday. Some 254 MPs backed shortening the terms of preparation of the bill for second reading.
According to the authors of the document, the bill should contribute to improving the legal regulation of concession activities, which, in turn, will provide the opportunity of effectively attracting domestic and foreign investment in the Ukrainian economy for infrastructure development. The document also defines a clear mechanism for selecting a concessionaire and introduces concession conditions in line with international practice.
According to the text of the bill, the term “concession” defines a form of public private partnership (PPP), which implies granting by a concessor the rights to create and/or build (repair/ re-equip, and other actions), and/or manage the concession facility to a concessionaire, and/or to provide services on the terms determined under a concession agreement, and foresees the transfer of most of the operational risk to the concessionaire.
The bill, in particular, defines: a clear separation of regulating concession and other forms of PPP implementation; a unified procedure for initiating and making decisions on the implementation of PPPs for all forms of PPPs (including concessions); introduction of a transparent procedure for selecting a concessionaire (a concession tender, a competitive dialogue), consistent with international practices, as well as the possibility of attracting advisers and independent experts to prepare PPP projects in the form of concession.
The document also provides additional guarantees for concessionaires and creditors, in particular, the determination of the right to replace the concessionaire with another concessionaire in the concession agreement.
In addition, the bill simplifies land allocation procedures for PPP projects in the form of concessions; defines the features of the concession in markets that are in a state of natural monopoly, as well as the features of the concession for the construction and operation of roads.
At the same time, the new version of the bill introduces a clear regulation of the ownership of the facility under concession, the purpose of which is to preserve the state/territorial community’s ownership of the concession facility.
In addition, the document provides potential concessionaires with the opportunity of initiating a concession.
The bill also stipulates that concession facilities cannot be forests, but aerodromes can be, and concession charges for roads will serve as a source of filling the Road Fund.
At the same time, according to the conclusion of the parliamentary committee on Ukraine’s integration with the EU, the bill does not comply with the Ukraine-EU Association Agreement and needs to be revised taking into account the relevant remarks.

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FIRST MEETING OF NEW UKRAINIAN PARLIAMENT TO TAKE PLACE ON AUG 29

A group of Members of Parliament in charge of preparations for the first meeting of the Verkhovna Rada of the 9th convocation has decided to hold such a meeting on August 29. “Our political force proposes holding the first meeting of the Verkhovna Rada of the 9th convocation on August 29,” MP from the Servant of the People Party Dmytro Razumkov, who was tapped to head the group, said at a meeting on Friday.
He put the motion to the vote, and most members of the group supported it.

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OVER 20 REPRESENTATIVES OF CONSTRUCTION AND CONSUMER MARKETS GET TO NEW UKRAINIAN PARLIAMENT

More than 20 representatives of the construction and consumer markets, including Olena Shuliak, Vadym Strunevych, Hanna Lichman from the Servant of the People party, Vadym Stolar and Dmytro Isayenko from the Opposition Platform-For Life party, and also self-nominees Oleksandr Feldman and Leonid Klimov pass to the Verkhovna Rada.
The list of the Servant of the People party included the head of the construction sector, board member of the Better Regulation Delivery Office (BRDO) Olena Shuliak (under No. 13), head of Kyivproekt and Ukrinvestbud Development LLC Vadym Strunevych (No. 39). Ukrinvestbud Development jointly with Saga Development is implementing the project of the Einstein Concept House residential complex at 24a Zlatoustivska Street in Shevchenkivsky district of Kyiv.
The list of the party also includes the head of Biant development company (Kryvy Rih), the director of the enterprise for production of concrete Rastro LLC, Yuriy Kysil (No. 42).

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