Draft laws submitted for approval to the President of Ukraine
REVIEW OF NEW LAWS
Draft laws submitted for approval to the President of Ukraine
On changes to the Law of Ukraine "On privatization of state property" (approved by the President of Ukraine on May 10, 2000)
To ban groundless and uncontrolled sale of state-owned shares at the rate of 25 or 50% of statutory fund plus one share belonging to open joint stock companies organized on the basis of Group-G enterprises or enterprises strategically important for Ukraine’s economy and defense, Verkhovna Rada of Ukraine has passed the Law of Ukraine "On changes to the Law of Ukraine "On privatization of state property".
Changes to the Law correspond to the term of monetary privatization. Should the cost of property brought in to the statutory fund by a tenant be less than 25% of statutory fund including the cost of shares purchased by a tenant, registered tenants have the right to purchase additional portion of state-owned shares at their face-value and not exceeding 25% of the statutory fund and less than 30 untaxed minimal incomes per registered tenant.
Article 18 of the Law is supplemented with two paragraphs according to which, before sale of shares belonging to the OJSC reorganized during privatization or transformed into corporate body is started, state bodies responsible for privatization or, in some cases, governing body with the OJSC may permit to augment the statutory fund of the OJSC with property purchased after the cost of statutory fund is estimated and before the OJSC is registered. Additional emission of shares covering the cost of supplemented property shall be carried out according to procedure set by the State Committee for securities and stock market.
Sale of additionally emitted shares shall be performed by the state bodies responsible for privatization on the competitive basis. Verkhovna Rada of Ukraine shall approve any sale of the state-owned shares.
Article 24 on non-repayable transfer of state-owned property has been amended with a provision that state bodies responsible for privatization may transfer objects of everyday use in possession of an open joint stock company formerly being the state enterprise and reorganized in the process of privatization. The transferred property shall be given on the basis of perpetual and non-repayable possession according to the procedure set by the State Property Fund of Ukraine and be used for specified purposes under proper custody and without resale. Further privatization of such objects shall be done in pursuance of legislation in force.
According to the changes to article 25 of the Law, employees of the enterprise being privatized have the right for first-priority purchase of shares with total nominal value of 45 untaxed minimal incomes. Heads, deputy heads, principal officers and department heads of the privatized enterprises as well as dispatchers and heads of departments with the privatized power-generating plants have the right for additional purchase of shares worth 5% of the statutory fund.
On peculiarities of privatization of enterprises under the Ministry of Defense of Ukraine
To define the peculiarities of privatization of the property belonging to enterprises subordinate to the Ministry of Defense of Ukraine, Verkhovna Rada of Ukraine has passed the Law "On peculiarities of privatization of enterprises under the Ministry of Defense of Ukraine". The Law applies to enterprises under the Ministry of Defense with an exception for state-owned enterprises and enterprises listed among business entities strategically important for Ukraine’s economy and security and thus being not subject to privatization.
Enterprises subject to transformation into corporate bodies shall be defined by the Ministry of Defense of Ukraine and approved by the State Property Fund of Ukraine and the Ministry of Economy of Ukraine. Operating schedule of reorganization supplemented with the list of such enterprises shall be submitted for approval to Verkhovna Rada of Ukraine. Transformation into corporate bodies shall be fulfilled via reorganization of enterprises into open joint stock companies. In a week’s term, the Ministry of Defense of Ukraine together with the State Property Fund of Ukraine shall consider and approve the property estimation document that should contain the estimated total cost of property belonging to the enterprise, and in a month’s term, the aforesaid institutions shall make a decision on creation of OJSC and approve its Statute. Such OJSCs shall be registered according to the effective procedure in a week’s term after the Statute is approved.
After transformation into corporate body is accomplished, not less than 51% of the shares shall remain to be owned by the state and controlled by the Ministry of Defense. In addition, 15% of shares that form statutory fund may be sold on preferential term to employees, retired workers, military personnel with the Armed Forces of Ukraine (not including active service), and officers and ensigns who left the military service by reason of age, state of health or reduction of the staff.
On ratification of the Agreement "On principles of collection of indirect taxes levied on export and import of commodities (labor, services) among the member-states of the Commonwealth of Independent States"
On April 20, 2000, Verkhovna Rada of Ukraine ratified the Agreement "On principles of collection of indirect taxes levied on export and import of commodities (labor, services) among the member-states of the Commonwealth of Independent States", according to which none of the parties to the Agreement shall levy an indirect tax on commodities (labor, services) exported to the territory of another party. This rule means that a 0% VAT rate shall be applied and that the exported commodities shall be made exempt from excise duty. Each party to the Agreement has the right to regulate the procedure for the VAT compensation according to its national legislation.
In order to secure complete collection of indirect taxes levied on imported commodities and to avoid pseudo-export, tax and customs bodies of the parties to the Agreement shall launch a mechanism of control over commodities’ transference between the parties’ customs borders.
Verkhovna Rada passed the following draft laws in the first reading:
On changes and amendments to the Law of Ukraine "On mortgage"
To liven up the credit activity of commercial banks, the Association of Ukrainian Banks initiated the elaboration of a draft law "On changes to the Law of Ukraine "On mortgage", which Verkhovna Rada of Ukraine has passed now in the first reading.
Article 21 of the Law of Ukraine "On mortgage" provides that should the auction be declared disqualified, the mortgagee, upon arrangement with the pledger, has the right to keep the pledged property as initially estimated. If the pledger does not agree, the pledged property is sold in pursuance of the effective procedure. However, this rule appeared to delay the sale of pledged property.
The mentioned draft law should comply with the following tasks: to abrogate a condition according to which the mortgagee should ask the consent of the pledger to keep the pledged property if the auction was not carried out in due course; to revoke restrictions concerning compulsory court adjudication that had to be delivered before the pledged state property could be claimed; to define legally the authority of courts; and to determine legally which bodies should give their consent to enable pledging of state-owned shares in the property of business entities (this should be done by the Cabinet of Ministers, as prescribed by the draft law).
On changes and amendments to a number of Laws of Ukraine on cession regulating and transfer of debt in the course of foreign economic activity
To settle conflict situations that can arise during foreign economic transactions, Verkhovna Rada of Ukraine has passed in the first reading the Law, which permits business entities to conclude new contracts with other business entities according to the Ukrainian legislation in force in situations when they pay off their foreign economic contracts.
Article 3 has been changed and now reads that revenues obtained by the Ukrainian residents in foreign currency under agreements of cession or under transfer of debt from foreign economic contracts shall be deposited at the account in 90 days after customs registration of commodity is completed, or advance payment is made, or bill of exchange is identified as valid, or bank paid the non-resident a sum mentioned in the foreign economic contract that gave occasion to conclude a cession agreement or contract of debt transfer. Should the set term be exceeded, individual license of the NBU is needed. All payments carried out by the residents to meet the requirements of cession agreement or contract of debt transfer shall be made in Ukrainian hryvnas under rate of exchange set by the National Bank of Ukraine for the day when cession or transfer of debt is performed.