Zelensky enacts law on unblocking large-scale privatization campaign

Ukrainian President Volodymyr Zelensky has signed a bill into law to unblock a large-scale privatization campaign in Ukraine.

The law allows for the preparation and holding of large-scale privatization/sales of major state-owned enterprises (SOEs) at auctions, which have been suspended over quarantine restrictions imposed in March 2020 to counter the spread of coronavirus, the press service of the President's Office said in a statement on April 29.

Read alsoRada fails to back bill on unblocking large-scale privatization campaignThe document stipulates that no auctions with a reduced starting price shall be held during the quarantine period, as well as those applying the method of studying price offers. This also refers to the privatization by repurchasing facilities of the large-scale privatization campaign. State-owned property is allowed to be sold only at an auction given the bid is won by the buyer who offered the highest price and undertook to fulfill sales terms.

"Despite the coronavirus crisis, our goal to sell state-owned enterprises, which are often extremely inefficiently managed and hotbeds of corruption, remains unchanged. Moreover, we must improve the business climate and create favorable conditions for attracting investment to Ukraine to ensure the rapid recovery of its economy after the pandemic and the growth in our citizens' well-being," the press service quoted Zelensky as saying.

Large-scale privatization: Background

• On March 30, 2021, the Verkhovna Rada passed a draft law in the second reading and as a whole to unblock a large-scale privatization campaign in Ukraine.
• Earlier, the Ministry for Development of Economy, Trade and Agriculture noted that the move would allow launching preparatory measures (such as holding auctions) before the actual sale of major state-owned enterprises.
• Also, the ministry believes, this would bring as much as UAH 12 billion (US$432 million) to the national budget, as well as raise significant investment.
• After quarantine restrictions were imposed in March 2020 to counter the spread of the coronavirus, all preparations for the sale of major facilities within a large-scale privatization campaign were suspended. Previously, five to six such auctions had been scheduled to be held in 2020, but none ultimately took place.
• The 2021 national budget has laid down UAH 12 billion in privatization revenue, with the lion's share of proceeds to be expected from the large-scale privatization campaign.