Moratorium on land sales extended until 1 January 2019
The Ukrainian Parliament has prolonged the moratorium on sale of agricultural land for another year. The sectoral committee supported Draft Law No.7350, and it has been adopted by Ukrainian MPs.
The Law has amended Paragraphs 14 and 15 of Section X “Transitional Provisions” of the Land Code of Ukraine, under which the moratorium on purchase, sale and other ways of alienating agricultural land plots and on introduction of the right to a land share (ownership) in the authorized capitals of business entities is prolonged “till the law on agricultural land transactions comes into force, but not earlier than 1 January 2019.”
Additional measures to protect agrarians from illegal takeover
At its meeting on 6 December 2017 the Cabinet of Ministers of Ukraine adopted the Resolution Some Matters to Improve the Mechanism of Protecting Property Rights to Land Plots, by which it approved online verification of data about a land plot when registering lease contracts by exchanging information between the Land Cadastre and the Proprietary Rights Register of the Ministry of Justice.
The first database contains information on the location of land plots and their characteristics, and the second on the owner and the land tenant. Thanks to data interchange between them in real time, in case of an attempt at double registration of the lease related to the same land plot, which is the most typical way of carrying out raider attacks, the system will block registration of the agreement. This will also exclude the possibility of distorting information at the registrar level.
Procedure for residents to bring foreign currency in cash simplified
The National Bank of Ukraine (NBU) has simplified the procedure for residents to bring foreign currency in the form of cash into Ukraine.
Currently, an individual who is a resident of Ukraine can bring to the country more than EUR 10,000 in equivalent in cash, provided that the amount is declared to the Customs Service in full, and provided that there are documents confirming the withdrawal of cash from accounts in financial institutions and receipts for currency exchange transactions related to such cash, if any, when the amount exceeds EUR 10,000 in equivalent.
According to Regulation No.127 of the NBU Board of 12 December 2017 from now on Ukrainians will have the right to bring the above-mentioned sum without any supporting documents, that is, only subject to its written declaration to the Customs Service in full.
At the same time, the NBU specifies that the export of cash by individuals-residents amounting to more than EUR 10,000 in equivalent should be carried out subject to the presence of documents confirming the withdrawal of cash from their own accounts in banks and receipts for currency exchange transactions related to such cash, in case of the conducting of such a transaction, when the amount exceeds EUR 10,000 in equivalent.
Mechanism of selecting supervisory boards in banks regulated
The Government has harmonized the procedure for establishing and operating supervisory boards in banks in case of their capitalization by the state or in case of withdrawal of an insolvent bank from the market with the participation of the state.
It is established that requirements for start of competitive selection for positions of independent members of the supervisory board to be applied in two years after the state acquired ownership of the bank’s shares (previously it was one year).
During the competitive selection process, the commission will be able to review the decision on admission of applicants to the competition, if it turns out that the applicant provided incorrect information. It is stipulated that the list of documents the applicants should submit can be supplemented with a competitive proposal on development strategy or the bank’s business plan.
Moreover, some standards related to state-owned enterprises in general were updated. The period of competitive selection was changed from 30 calendar days to 30 business days with the possibility of extending it for another 15 business days.
Conditions of transfer to incentive based regulation for energy companies
The application of incentive-based regulations is settled by the Resolution of the National Commission for State Regulation of Energy and Public Utilities No. 973 of 27 July 2017, which came into force on 11 January 2018.
The conditions, under which the licensee having the right to transmission of electric energy by main and interstate electric networks may transfer to incentive based regulation, are as follows:
1) conducting of asset valuation and existence of positive review of the asset evaluation report prepared by the reviewer working for the state body performing state regulation of valuation activities;
2) implementation of the investment program for the previous year by at least 95%.
Furthermore, during the first regulatory period the licensee needs to create a system for recording breaks in the transmission of electric energy, to implement a system for monitoring electric energy quality indicators and to ensure annual investment in amounts of not less than the annual sum of depreciation.
Law on Privatization
The Verkhovna Rada has adopted Draft Law No.7066 On State Property Privatization, which is one of the requirements of the International Monetary Fund.
This is a single framework Draft which should replace seven legal acts that regulate sale of state property, and is designed to significantly simplify this procedure.
It divides state property facilities into large ones (with assets amounting to more than UAH 250 million) and small ones. The former will be sold with the involvement of professional counselors, and the latter on electronic platforms like Prozorro, where the assets of bankrupt banks, non-core assets of state-owned enterprises are sold.
There will no longer be appraisers in the process of privatization; the value of facilities will be determined by the market.
Furthermore, the new document will reduce the time for preparation for sale from the current 9-12 months to 4-5 months and will increase the time allowed for potential buyers to submit applications from 20-45 days to 20-180 days. Finally, the document provides for stepping up the protection of investors’ rights, possibility of applying international arbitration and determining the English law of a contract by the agreement of the parties. The Law prohibits the participation of buyers from Russia in privatization.