Ukraine's new law on privatization comes into force March 7

Law No. 2269-VIII "On privatization of state and municipal property" came into force in Ukraine on March 7.

Yesterday, on March 6, the document was published in the Ukrainian parliament's official newspaper Holos Ukrainy.

The law contains a list of objects that are not subject to privatization, in particular, military property, property of medical institutions, mineral resources, minerals, water, forests, nuclear materials and installations, subway, state registers, property of the National Public Television and Radio Company of Ukraine, etc.

The Verkhovna Rada on the proposal of the Cabinet of Ministers should approve the list of objects not subject to privatization.

Read alsoPoroshenko says Ukraine becomes increasingly attractive for investorsPrivatization objects are categorized as large and small. The cost of objects of large privatization, according to last years' financial accounting data, is over UAH 250 million. The document also specifies in detail what objects belong to small-scale privatization.

Objects of small-scale privatization will be sold exclusively through electronic auctions. The order of their holding and other details will be approved by the Cabinet of Ministers. The procedure and conditions for the sale of large SOEs will also be approved by the government. Local councils will be able to establish a procedure for selling large privatization objects in municipal ownership.

The document also states that state and municipal enterprises cannot be acquired by:

- Potential buyers registered in offshore jurisdictions with an opaque ownership structure (whose beneficiary owners are not fully disclosed)

- Russia; legal entities, in which it has its interest, or persons under their control;

- Residents of the Russian Federation;

- Legal entities, whose beneficiary owners are not fully disclosed;

- Physical or legal entities under sanctions, as well as those related to them.

Read alsoState Property Fund starts preparations for sale of 20 large SOEsThe Special Verkhovna Rada Supervisory Commission on privatization issues, which is to be created, shall monitor the privatization procedure's compliance with the legislation.

According to the law, it is possible to challenge the sale of a large SOE within three years. Within three months, it is possible to apply to the court for a refusal to approve the bidding protocol or invalidating the results of privatization of a small-scale SOE or a contract on the sale of a small-scale SOE. Within a month from the date of publication of the results of the bidding, an appeal can be submitted against the decision of a privatization body on preventing participation in the auction or a failure to conclude a sales contract with the bidding winner.