Law on privatization No. 2269-VIII dated 18 January 2018 came into force

Law No. 2269-VIII “On Privatization of the State and Communal Property” dated 18 January 2018 came into force.

The Law replaced a range of legal regulations governing the matters of the state and communal property alienation.

The provisions of the Law shall not cover the privatization of the state housing fund, including dormitories, as well as the alienation of shares owned by the state, in accordance with the procedure provided by the Law “On Joint Stock Companies” and withdrawal from LLCs, whereto the state holds participatory interest amounting to 50 percent or less.

The Law introduces a two-level privatization system: large-scale privatization will take place by means of a multi-stage procedure having an authoritative adviser mandatorily engaged, and small-scale privatization, whereunder the objects are to be sold through an open online auction, expanding the group of potential buyers and increase the transparency of processes.

Moreover, two procedures of sale are applicable – the auction and purchase of privatization objects should the property be under lease as of the Law being adopted.

It shall be noted the buyers may not include: the state defined by the Parliament as the aggressor state, legal entities in which such participates or their controlled affiliates, natural persons and legal entities (and their related persons) which are subject to Ukrainian sanctions etc.

Privatization of agro-industrial objects subject to schedules being approved as of the day of the Law commencement, is to be carried out and completed in accordance with the requirements of the Law “On the Peculiarities of Privatization of Property in the Agro-Industrial Complex”.

Also, the decision to privatize state-owned enterprises and / or business entities, whereto the state participatory interest if more than 50% (shares), automatically ceases bankruptcy proceedings regarding such. It is also prohibited to launch bankruptcy proceedings towards debtor companies until privatization thereof is completed.