State Assistance to Businesses for the Restoration of a Destroyed Production Facilities: Ombudsman

State Assistance to Businesses for the Restoration of a
Production Facilities: Clarification of the Ombudsman

Let us please remind you that on 14.10.2022 the Cabinet of Ministers of Ukraine adopted a decision to expand the state program “5-7-9% Available Loans”, whereby the state provide financial support to micro, small and medium-sized businesses for the restoration of production facilities partially or destroyed as a result of hostilities capacities.

According to the explanation of the Ukrainian Parliament Commissioner for Human Rights, Dmytro Lubinets, with this program, enterprises can receive assistance from the state in the form of compensation on loans received for the reconstruction of production.

Thus, entrepreneurs can get a loan for the restoration of production facilities at a rate of 9% for a period of up to 5 years in the amount of up to 60 million UAH (excluding previously issued loans under state support programs).

In addition, the fulfillment of obligations under such loans should be partly (up to 80%) guaranteed by the state guarantee.

The company can receive such a loan if the following conditions are met:

• the production facilities of the enterprise were destroyed in whole or in part, or were stolen as a result of war or occupation (have to be proved documentary);
• the company carried out economic activity during the year before the large-scale invasion of the Russian Federation (have to be confirmed by the data of the annual financial statements as of 01.01.2022);
• recovery production facilities located no closer than 50 km from the combat zone and are not under occupation.

In addition, Ukrainian enterprises located in the zone of active hostilities can receive state assistance in moving its facilities to the western regions of Ukraine.

The corresponding program can be used by any enterprise located in the risk zone and active hostilities. Herewith, a participant can be not only a large production, but also a small business with 10-20 people in the staff.

Bankruptcy Legislation Amended: the Law

On 20.03.2023, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amending the Code of Ukraine on Bankruptcy Procedures” (draft law No. 4409 dated 20.11.2020).

The Law stipulates that from now on bankruptcy claims can be considered in a simplified legal proceeding without summoning the parties.

In addition, the Law simplifies the work of the arbitration administrator: it provides for the creation of an automated information system “Bankruptcy and Insolvency”, which will combine the necessary registers and databases and which will include the electronic office of the arbitration administrator.

Currently, the Law is pending on the signature of the President of Ukraine.