Date of entry into
force:
August 2, 2017
(Abstract)
The Law establishes the legal principles for monitoring of government
aid for business entities, controlling the acceptability of such aid for
competition, and is directed at ensuring protection and development of
competition, increasing transparency of the government aid system, and
observing international obligations of Ukraine in the sphere of government aid.
Article 1 of the Law provides definitions of terms used in it.
Government aid is not acceptable for competition (Article 2 of the Law).
The Law applies to any support of business entities by providers of
government aid at the expense of the state or local resources, for manufacture
of goods or conducting specific types of economic activity (Article 3 of the
Law). This
Law does not apply to support:
·
in the sphere of
agricultural production and fishery, manufacture of arms and military gear for
the needs of the Armed Forces of Ukraine, other military formations created
according to the laws of Ukraine, special law enforcement forces, the State
Special Transportation Service, and the State Service of Special Communication
and Information Protection of Ukraine;
·
economic activity
related to: 1) investments in infrastructure objects involving government
procurement procedures; 2) providing services of public economic interest, in
the part of compensation of feasible expenses incurred to provide such
services. The list of services of public economic interest is established by
the Cabinet of Ministers of Ukraine.
According to Article 4 of the Law, government aid entails transferring
state or local resources to specific business entities, and loss of revenues of
appropriate budgets. Government aid can be implemented, in particular, in the
following forms:
·
providing
subsidies and grants;
·
providing
subventions;
·
providing tax
reliefs, granting grace periods or payment by installments for taxes, fees or
other mandatory payments;
·
writing off debts,
inclusive of outstanding debt for state services providing, writing off
penalties, compensating losses of business entities;
·
providing guarantees,
credits on preferential terms, credit servicing with preferential tariffs;
·
decreasing the amount
of financial liabilities of business entities before mandatory state social
insurance funds;
·
directly or
indirectly supplying business entities with goods or services at prices below
market prices, or purchasing goods or services from business entities at prices
above market prices;
·
selling state
property at prices below market prices;
·
increasing the
state-owned share in the statutory capital of business entities, or increasing
the value of the state-owned share on conditions unacceptable for private
investors.
Article 5 of the Law establishes that government aid is acceptable if
provided with the objective of:
·
supplying consumers
with socially important products, provided that such aid is not discriminating
on the grounds of the place of origin of such products;
·
compensating damages
to persons who suffered as a result of man-made or natural disasters, according
to law.
According to Article 6 of the Law, government aid can be deemed
acceptable if provided with the following objectives:
·
contributing to the
social and economic development of regions with a low standard of living or
high unemployment levels;
·
implementing national
development programs or solving social and economic problems of national
nature;
·
facilitating certain
types of economic activity or business entities in specific economic zones,
provided that does not conflict international agreements of Ukraine ratified by
the Verkhovna Rada of Ukraine;
·
supporting and
preserving national cultural heritage, if the impact of such government aid on
the competition is insubstantial.
The Cabinet of Ministers of Ukraine determines the criteria for
assessing acceptability of specific categories of government aid provided with
the above objectives, in particular, the following categories:
·
assistance for
ensuring development of regions;
·
support for small and
medium business;
·
aid for professional
training of employees;
·
aid for employment of
certain categories of employees and creation of new work places;
·
aid for restoring the
solvency of business entities and their restructuring;
·
aid
for environmental protection;
·
aid for scientific
research, technical development, and innovation activity;
·
aid for supporting
specific branches of the economy.
The scope of authority of the Competent Authority (the Antimonopoly
Committee of Ukraine) is determined by Article 8 of the Law.
Article 9 of the Law establishes the procedure for submitting a
notification of new government aid.
According to Article 10 of the Law, if the information in a notification
of new government aid does not correspond to the established requirements or is
insufficient to make a decision as to whether such government aid is acceptable
for competition, the Competent Authority shall inform the provider of
government aid accordingly within 15 days of receiving the notification,
forwards a query for additional information to it, and establishes the deadline
for submission of additional information – no longer than 30 days after the
query receipt. The Competent Authority can extend the above deadline based on a
substantiated petition of the provider of government aid. The notification of
new government aid is considered accepted for review after 15 days of its
receipt, if, within this term, the Competent Authority did not notify the
provider of government aid about the information in the notification not
corresponding to the established requirements or being insufficient to make a
decision as to the acceptability of such government aid, and did not forward a
query for additional information. If the provider of government aid fails to
supply information according to the query of the Competent Authority within the
established term, the notification is considered withdrawn. In that case, the
Competent Authority makes a decision to deny review to the notification, and
informs the provider of government aid accordingly in writing. Based on the
results of reviewing the notification of new government aid, the Competent
Authority, acting according to the procedure established by it, makes a
decision to:
·
declare that the new
government aid is acceptable for competition;
·
declare that the aid
for the business entity specified in the notification is not government aid
according to the Law;
·
initiate review of a
government aid case.
Article 11 of the Law establishes that the Competent Authority initiates
review of a government aid case, according to the procedure established by it,
if it finds substantiated reasons to conclude that such government aid is
unacceptable for competition, or that in-depth analysis of the acceptability of
government aid for competition is required, based on the results of:
·
reviewing a new
government aid notification;
·
verification of
information about illegal government aid or inappropriate utilization of the
existing government aid;
·
withdrawal of a
decision by the Competent Authority.
Based on the results of reviewing a government aid case, the Competent
Authority makes a decision to:
·
declare that aid for
the business entity specified in the new government aid notification is not
government aid according to the Law, including as a result of changes made to
the aid provision terms by the provider of government aid;
·
declare new
government aid acceptable for competition, including as a result of changes
made to the aid provision terms by the provider of government aid;
·
declare new
government aid acceptable for competition, subject to fulfillment of
obligations set by the Competent Authority, by the government aid provider and
recipients;
·
declare new
government aid unacceptable for competition;
·
terminate and recall
illegal government aid that was declared unacceptable for competition.
Verification of information about illegal government aid is regulated by
Article 12 of the Law.
If the Competent Authority, in the course of monitoring government aid
or from any other sources, receives substantiated information about
inappropriate utilization of government aid that comes in conflict with its
decision to declare such aid acceptable for competition, or to declare it acceptable
for competition subject to fulfillment of obligations set by the Competent
Authority, by the government aid provider and recipients, the Competent
Authority shall verify such information in the part of conformance to the
requirements of the Law. In order to verify information about inappropriate
utilization of government aid, the Competent Authority can forward a request
for necessary information to the provider and recipients of government aid
(Article 13 of the Law).
The procedure for recalling government aid unacceptable for competition
is established by Article 14 of the Law.
According to Article 15 of the Law, if the Competent Authority, based on
the results of reviewing a notification of existing government aid, or on the
results of monitoring government aid according to Chapter 8 of the Law,
discovered indications of the fact that existing government aid is not or can
no longer be considered acceptable for competition, it shall forward to the
provider of such aid a written request for information and documents confirming
such aid, to be complied with within 30 days. If, based on the results of
analyzing the information received from the provider of government aid, the
Competent Authority receives confirmation of the fact that existing government
aid is not or can no longer be considered acceptable for competition, it shall
forward to the provider of the government aid recommendations to:
·
make changes to the
government aid program;
·
implement an
additional procedure for executing the government aid program;
·
terminate
implementation of the government aid program.
The register of government aid is compiled and maintained by the
Competent Authority, based on the results of government aid monitoring and
information about current government aid supplied by providers of such aid
(Article 16 of the Law).
The Law also introduces appropriate amendments to Article 26 of the
Economic Code of Ukraine, Article 19 of the Code of Administrative Proceedings
of Ukraine, and Articles 3, 5, 7, and 22-1 of the Law of Ukraine "On the
Anti-Monopoly Committee of Ukraine".
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