The Verkhovna Rada of Ukraine approved a Government’s bill on privatization of the state property, drafted in line with the best international practices and norms of the English law. 266 lawmakers voted for the aforesaid decision.

The document was included in the package of the much-needed legislative initiatives aimed at developing of the economy and changing of the structure of industry in Ukraine.

According to the Prime Minister, a standardized and transparent privatization is a strong anti-corruption step, an effective way of attracting investment, and most importantly a tool for creation of new jobs and economic security of the country

"State-owned enterprises, that are the largest source of corruption, have been used for decades for corruption and bribery schemes... Today, we have two ways: either to stop corruption, and give a start to enterprises thereby people will get jobs, and Ukraine gets the product, or leave everything as it is which is an inefficient step," stressed the Prime Minister, the Government and the Parliament worked in synergy in order to ensure the law yields a result. It has investment protection mechanisms. It provides opportunities to create tens of thousands of jobs in Ukraine as well as to create conditions for serious economic growth."

Volodymyr Groysman thanked the parliamentarians for backing the government's initiative.

Background

At present, there are 3.5 thousand state-owned enterprises in Ukraine, a large number of which are not strategic and unprofitable for the state. Almost 90% of state assets have been put into operation 50-150 years ago At that, the State lacks sufficient resources to carry out proper modernization of enterprises and stop their destruction and depreciation. Ineffective management leads companies to insolvency, and often serves a source of corruption. That is why transparent privatization opens for a number of such enterprises the way for the revival of production, leveraging of technologies and investment.

The draft law on privatization is a legislative substitute for existing regulations in the said sector and has new rules and regulations for the sale of non-strategic public assets. In early November 2017, the bill was approved by the Parliament in the first reading.

The document determines criterions, terms and mechanisms for conducting large and small privatization, singles out the issues of bankruptcy of companies and protection of investors, defines the principles of the functioning of the Advisor Institute, the evaluation of property and the determination of its starting price. The draft law envisages a procedure of establishing of ownership rights and control over the implementation of investment obligations. A landmark innovation of the document is the definition of the dispute procedure, which enables the possibility of appeal to the International Commercial Arbitration Court and the conduct of the case following the principles of the English law rules.