Rada amends law on privatization — key changes

The New Voice of Ukraine
·2 min read
1
On July 28, the Ukrainian Parliament amends law on privatization
On July 28, the Ukrainian Parliament amends law on privatization

Bill No. 7451, which was aimed at speeding up privatization and relocation of businesses, was adopted by 233 votes.

"From now on, the procedures for the sale of state property will become faster, more transparent, and, accordingly, more convenient for business,” reads a comment on the bill posted on the website of Ukraine’s Cabinet of Ministers.

Read also: Ukraine's recovery plan calls for $750 billion in investment over 10 years

“Thanks to the updated legislative norms, farmers will be able to purchase and modernize non-functioning state distilleries and bread production plants. This will partially solve the issue of grain storage and processing, and the creation of a product with added value."

Key changes foreseen in the law:

  • A substantial shortening of the terms for holding privatization auctions and preparing assets to no more than two months from the auction announcement to the signing of a contract;

  • Minimization of risks through payment before concluding a sales contract;

  • Unblocking the privatization of state-owned enterprises with property seizures and encumbrances (including the already adopted decisions on the privatization, there are 115 such entities), while preserving the rights of creditors;

  • Carrying out large-scale privatization via online auctions;

  • The transfer of all permits and licenses to new owners, instead issuing them with a full set of new permits and licenses;

  • The digitization of key privatization processes, with online auction announcements.

Read also: Real change needed. Postwar Ukraine and its economy

Significant changes have also been made to the procedures for large-scale privatization – this concerns the sale of assets with a book value of more than UAH 250 million ($6.8 million). All such auctions have been transferred to the ProZorro.Sale government system.

"This makes it impossible to have outside influence on auction participants, saves the state money, and eliminates corruption risks regarding the completeness of providing information about assets," the Cabinet of Ministers said in its post.

Read also: Ukraine slides five spots down in global corruption ranking

At the same time, the former chairman of the legislature, Dmytro Razumkov, criticized the adopted law.

“This law stipulates that in case of the first unsuccessful auction, the starting price is reduced by 50% and the asset can be sold even if only one application for participation in the auction is submitted. At the same time, full information about the buyer will not be publicly available,” he wrote on Facebook.

In 2021, the state budget received UAH 5.07 billion ($186 million) from privatization. The annual plan was UAH 12.3 billion ($451 million).

Read the original article on The New Voice of Ukraine