President Petro Poroshenko signed the law on privatization of state and communal property during the session of the National Council of Reforms.
The Head of State reminded that six months ago the National Council had considered the relevant bill and in the process of its discussion appropriate proposals and comments aimed at improving the quality of the document had been put forward. "Not everyone believed that we could adopt this law. Why was this pessimism? It has been discussed for 20 years: the laws will be adopted, there will be a transparent procedure, efficient investors will be involved, appropriate legal regulation will be applied, relevant advisers with impeccable reputation will be involved. And that huge investment potential of Ukraine will finally be implemented," the President noted, adding that recently "the Verkhovna Rada made a miracle" and voted for the document.
The Head of State noted that he considered the adoption of that law at the level of educational, medical and pension reforms. "The law envisages fair, transparent, and competitive privatization. We didn’t have it except for literally several cases, for example privatization of Kryvorizhstal,” he stressed.
The President also emphasized that the law on privatization was an important element of anticorruption policy. "Previously, what was the privatization? So-called special conditions, qualification requirements. It seemed like Ukraine has built a wall, defending itself from investments. Why was this done? For bribery. And today, it is the exact opposite," the President said. He added: "The state is an inefficient owner. It usually receives only losses, and profits traditionally flowed into private hands through corruption schemes".
The President stressed that significant progress had been achieved recently in combating corruption at state enterprises. "There are new conditions for the competition, there are independent supervisory boards. But this is a transitional stage. I want to emphasize that the state must get rid of its nonspecific functions. We must eliminate this source of corruption," he said.
The President noted joint efforts with the Government and Parliament aimed to improve the financial position of state-owned enterprises. In particular, Petro Poroshenko drew attention to the enterprises of Ukroboronprom, 70% of which were bankrupt, and today some of them work in three shifts, create new types of weapons and modernize the existing ones. In addition, the Supervisory Board of Ukroboronprom was updated with the involvement of American partners, the audit decision was adopted, the strategy was changed. "This is one of the directions to be followed by all state enterprises," the Head of State said.
The President stressed that there were still thousands of state-owned enterprises, and the state had no resources to set all of them in order. "Therefore, only strategically important state-owned enterprises should be kept in state ownership," Petro Poroshenko emphasized. According to him, small-scale privatization objects will be sold through an open online auction, which will expand the group of potential buyers and increase the transparency of processes.
"The objects of large-scale privatization will be implemented only with the involvement of advisers. During the receipt of applications, it is planned to carry out a thorough examination of the documents, including the origin of the funds. We will not allow any schemes of fraud, money laundering through Ukrainian privatization. It will make it impossible to accept people associated with the country-aggressor to the auction. I emphasize that Russian money will not take part in privatization in Ukraine," the Head of State emphasized.
Also, according to the President, the law allows non-resident buyers to pay for acquired privatization objects not only in Ukrainian hryvnia, but also in freely convertible currency. In addition, the new owner gets immunity for some time from the attempts of old debtors to obtain assets of the company through the initiation of bankruptcy proceedings. "We must protect the investor. And for the additional guarantee, foreign investors are given the opportunity to appeal to the laws of England and Wales until 2021 - until the completion of judicial reform and the creation of new courts at all levels," Petro Poroshenko added.
The President expects the Government to take all necessary measures aimed at completing the processes of privatization of large objects designated by the State Property Fund in 2018. "The Cabinet of Ministers should find effective owners that will ensure economic growth, competitive production, investment attraction, export growth and currency revenues to Ukraine's balance of payments," the Head of State summed up.
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