Date of entry into force:
March 18, 2013
(Abstract)
The Law regulates relations arising during preparation, issue, turnover and
execution of agrarian bonds, determines the procedure for their registration,
and aims to create legal, economic and organizational conditions for the use of
these documents.
Article 1 of the Law provides definition of terms used in it. For example,
an agrarian bond is a title document that records the debtor’s unconditional
obligation, secured by a pledge, to supply agricultural products or pay funds,
on the terms determined by the bond.
According to Article 2 of the Law, agrarian bonds are used in operations
with agricultural products. Agrarian bonds can be issued to persons that hold
title to an agricultural land plot, or have a lawful right to use such a land
plot for production of agricultural products. If the title to the land plot
belongs to two or more co-owners, or the right to use is held by two or more
users, agrarian bonds are issued by them jointly. Joint issuers of an agrarian
bond bear solidary liability for the failure to fulfill their obligations.
Transfer of title or use right of the land plot does not cancel the pledge of
future harvest stated in the bond, and does not cancel the rights of the debtor
and creditor under the agrarian bond to use the land plot up until the reaping
of the appropriate harvest, but no later than the end of the current marketing
year.
The debtor under an agrarian bond is obligated to inform the persons to
whom they are transferring the title or use right for the land plot, the
agricultural products from which are pledged under an agrarian bond, of the
restrictions existing under the issued agrarian bonds. Agrarian bonds are drawn
up in two copies, one of which is stored in the files of the person that
carries out the notarial certification and registration of the bond, and the
other delivered to the creditor under the bond. At the request of the debtor
under an agrarian bond, they can be issued a certified copy of the agrarian
bond issued by them. Depending on the type of obligation, agrarian bonds are
classified as commodity agrarian bonds and financial agrarian bonds.
A commodity agrarian bond is an agrarian bond that establishes an
unconditional obligation of the debtor under the bond to deliver the agreed
agricultural products, with the quality, quantity, place and time of delivery
determined in the agrarian bond (Article 3 of the Law). A financial agrarian
bond is an agrarian bond that establishes an unconditional obligation of the
debtor to pay funds in the amount calculated according to the formula agreed by
the debtor and the creditor, with regard to the price of the specified quantity
of agricultural products of appropriate quality. Obligations under financial
agrarian bonds are only fulfilled by the debtors by bank transfer (Article 5 of
the Law).
The template of the commodity and financial agrarian bonds are established
by Articles 4 and 6 of the Law.
An agrarian bond secures the obligations of the debtor under the bond by a
pledge of their future harvest. The subject of such pledge can be exclusively
the future harvest of agricultural products (Article 7 of the Law).
The procedure for monitoring the pledge of the future harvest of
agricultural products is established by Article 8 of the Law.
According to Article 9 of the Law, an agrarian bond is issued separately
for each type of agricultural products defined by generic or individual
characteristics. A commodity agrarian bond can be issued for each batch of
agricultural product agreed on by the debtor and the creditor. At the time of
issue, an agrarian bond is subject to notarial certification, according to the
procedure provided for by the Law of Ukraine “On Notariate” for documents of
legal relations, with regard to the specifics established by this Law.
Information about the agrarian bond is entered into the Register of Agrarian
Bonds by the person carrying out the notarial actions, at the time of the bond
certification. Information about the pledge under the agrarian certificate is
entered into the State Register of Encumbrances of Movable Property by the
person carrying out the notarial actions, at the time of the bond
certification. In case of additional security for the agrarian bond,
information about such security can be entered into appropriate registers,
according to the legislation. An agrarian bond is considered issued on the day
of its registration in the Register of Agrarian Bonds.
Article 10 of the Law determines the procedure for keeping the Register of
Agrarian Bonds.
The rights of the creditor under an agrarian bond can be assigned by
endorsing the agrarian bond or its integral appendix as “Assigned” and
specifying the new creditor. This endorsement must be signed and sealed (if a
seal is available) by the previous creditor under the agrarian bond. Assignment
of rights under an agrarian bond is subject to notarial certification according
to the procedure envisaged by the Law of Ukraine “On Notariate” for documents
of legal relations, with regard to the specifics established by this Law
(Article 11 of the Law).
The specifics of fulfilling obligations under agrarian bonds are provided
for by Article 12 of the Law.
Article 13 of the Law establishes the liability.
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