Rada passes bill on new rules for farmland auctions

The Verkhovna Rada, Ukraine's parliament, has passed a bill on the sale of state and municipal land plots, as well as the of lease rights to them through e-auctions.

That's according to the parliament's website.

Bill No. 2195 was backed at second reading and as a whole by 272 lawmakers with the required minimum of 226 votes.

Some 776 amendments were submitted to the second reading.

Read alsoAgrarian Policy Ministry to fully launch work in May – ministerAs noted in the explanatory memo, current auctions involving farmland lots are outdated as they imply physical attendance of bidders and bid plaques. At the same time, e-auctions have already proven their effectiveness in the sale of small-scale privatization objects and also made it possible to significantly increase the cost of these lots.

"In addition, the sale and transfer of land plots for use through e-tenders will ensure transparency of procedures, since the subjective impact on land tenders will be minimized and replaced by automatic action of the electronic system," the note says.

Once the bill enters into force, online land auctions will be conducted in a single electronic trading system, in real time. Following the auctions, a contract for sale and purchase, lease, building rights (superficies) or long-term leases of a land plot will be concluded with the auction winner who offered the highest bid.

The size of the guarantee fee for the lot will also change, which will be at least 30% of the starting sale price of the land plot or the starting size of the annual payment for using the land plot.

The bill comes into force on the day of its official publication.

Farmland market launch in Ukraine

• On November 15, 2019, the Verkhovna Rada adopted at first reading a comprehensive bill on deregulation in the field of land relations (No. 2194).
• The document is considered important for land reform and the full launch of the land market in Ukraine. However, its final adoption had long been delayed.
• On April 28, 2020, President Volodymyr Zelensky signed into law the bill introducing the land market in Ukraine from July 1, 2021.
• The law provides for phased land reform: from July 1, 2021, citizens of Ukraine will be able to buy farmland plots capped at 100 hectares. At stage 2, from January 1, 2024, the cap will be raised to 10,000 hectares, while legal entities will also be allowed to acquire land plots.
• On May 13, it was reported the Constitutional Court of Ukraine on June 3 would start considering a motion filed by a number of lawmakers challenging the law on farmland turnover.